Barcelona has announced plans to purge the city of tourist rental licences by 2028 to increase the housing supply, but it won’t move the needle whilst other policies discourage housing investment. Legal tourist rental licences are but a drop in the ocean.

Just like many other places in Spain you CAN’T rent a Barcelona property to tourists on a short-term basis unless you have the right type of tourist rental licence issued by the city government, and yesterday Jaume Collboni – the current Mayor of Barcelona – announced that no more licences will be granted or renewed, which means that legal tourist rentals will have gone from the city by November 2028 when the last licences expire. It’s a sunset policy for holiday-letting licences in Barcelona.

The move is being sold as a way to ease the city’s housing crisis, which is a major source of frustration and anxiety for local residents / voters. “More supply of housing is needed, and the measures we’re presenting today are to provide more supply so that the working middle class does not have to leave the city because they can’t afford housing,” said Collboni at yesterday’s press conference to announce the move. “This measure will not change the situation from one day to the next. These problems take time. But with this measure we are marking a turning point.”

Barcelona is a city with 1,660,000 residents, 830,000 residential properties (see the latest Barcelona property market report), and 16 million tourist visitors (according to the Barcelona Tourism Observatory). City Hall say there are currently 10,101 tourist rental licences outstanding, though the National Institute of Statistics says 8,842 as of February 2024. Whichever figure you use it’s fair to say that around 1% of Barcelona homes have a tourist rental licence. This helps you understand how much impact the move can have. Not much.

It won’t move the needle

“Tourist apartments represent just 0.77% of Barcelona’s housing stock,” said Enrique Alcantara, President of the Barcelona Tourist Apartments Association APARTUR, in response to the news. “Getting rid of them will not solve the housing access problem. All it will do is increase the number of illegal tourist rentals.” APARTUR will fight the policy in court in what could be a long and difficult legal dispute. 

Opposition politician Damià Calvet has pointed out a different problem. “Pretending that all 10,000 will have a residential use is not realistic,” He told the press. Not all homes with tourist rental licences are actually rented out to tourists. Many owners keep the licence if they have one because they are considered gold dust that add value to a property if you ever need to sell. I assume that 80% or less of homes with tourist rental licences are actually rented to tourists at any time in the year. So sunsetting licences won’t mean 10,000 more homes available to local residents, regardless of what Collboni claims.

That said, every little bit helps, and I fully understand local resentment towards tourist rentals. That last thing I want is a tourist rental flat in my building or even close by, so I’m not against this move. But the real problem is Barcelona’s massive deficit of homes, and a few thousand tourist apartments isn’t going to move the needle when bigger forces determine supply and demand.

Barking up the wrong tree

Barcelona is a relatively small but attractive city with a growing population (exclusively due to immigration) and more tourist visitors than ever where there will never be enough accommodation unless they reclaim land from the sea or radically change the planning laws to build upwards because the city’s footprint is not big enough – there is just not enough physical space in a city hemmed in between the hills and the sea for everyone who wants want to find a bed for the night. There is no solution to this problem, only trade-offs, but policies can make the situation better or worse. Purging tourist rentals from the city might increase the supply of homes for long term accommodation by around 0.5%. Better than nothing but almost insignificant, and it won’t solve the problem. 

A much bigger problem that Collboni could actually solve is the massive decline in long-term rental accommodation brought on by the Socialist Housing Law he supports that penalises and demonises landlords and owners. 

As a result of Socialist policy the long-term rental supply in many Spanish cities has declined dramatically, especially in Barcelona, where 30% of rental adverts are now for seasonal rentals, up 53% in a year, whilst long-term rentals have declined 15% YoY, according to property portal Idealista (although from what I can tell close to 100% of adverts today are for seasonal / mid-term rentals). The Socialist Housing Law has destroyed the long-term rental market, which shrank by more than half between 2019 and 203, according to this report. This is a much bigger cause of Barcelona’s housing crisis than 10,000 tourist rental licences, which are small fry in comparison.