Housing affordability has become a pressing issue in many high-income countries, with Spain now experiencing heightened political and public unrest over rising rents and property prices. The country’s ongoing housing crisis recently intensified after the rejection of Prime Minister Pedro Sánchez’s flagship housing bill by parliament, prompting speculation that he may call an early election to address growing dissatisfaction.
The recent turmoil was triggered in part by the case of 87-year-old Mariacarmen Abascal, who faced eviction when her rent-controlled apartment was acquired by a corporate landlord demanding rent well beyond her means. This incident has fueled widespread protests, with critics focusing on the role of so-called “vulture funds” — large-scale investors buying up residential properties and pushing up rental costs. Sánchez’s government has proposed banning such investors from purchasing homes until 2028 as part of its response.
However, experts warn that these measures only address symptoms and not the root cause of the crisis, which lies in a significant housing shortage. Spain has constructed fewer homes per capita over the past decade than almost any other wealthy nation. Consequently, more than half of Spanish young adults now live with their parents, a marked increase from 33 percent in 2005, while rents have soared to some of the highest levels in Europe.
Spain’s challenge is compounded by both demand and supply factors. A government-driven immigration boost and a surge in tourism and digital nomads have heightened demand, pushing market rents beyond what many locals can afford. The presence of affluent visitors often sets rental price benchmarks, exerting upward pressure on housing costs. Although attracting migrants and tourists can support economic growth, experts suggest this must be matched by a substantial increase in housing supply to stabilize the market.
Similar housing shortages are evident in countries like the United Kingdom and Ireland, where disputes over rent-controlled properties involve both corporate landlords and local councils. In many cases, families resist vacating properties after a tenant’s death or departure, reflecting the scarcity of affordable housing options. Both the UK and Ireland currently face deficits of roughly one in seven homes needed to meet population demands, contributing to extensive waiting lists for social housing.
Spain’s policies so far, including tenant protections and investment bans, are seen by some as piecemeal solutions that fail to address structural issues. Some observers point to Ireland’s recent decision to relax rent controls in part due to concerns they were dampening new construction, thereby worsening the supply shortage underlying the affordability crisis.
Experts agree that resolving housing affordability problems is complex and requires comprehensive reforms. Stronger regulations alone are insufficient without tackling the fundamental imbalance between supply and demand. Sustainable improvements depend on coordinated efforts to boost housing supply significantly while ensuring policies do not inadvertently discourage construction. Only through addressing these deeper challenges can countries hope to alleviate the housing pressures affecting millions of young adults and lower-income households.