Housing Crisis Escalates as Government Passes Two New Decrees
The Spanish government passed two new decrees regarding housing on Tuesday (06/10/2026) local time, just days after parliament rejected the policies. This rejection previously prompted Prime Minister Pedro Sanchez to accelerate the general election.
The two policies include rent price caps, a temporary ban on evictions, and restrictions on the purchase of residential properties by corporations.
Sanchez stated that the regulations were formulated based on reasonable considerations. He also noted that several surveys indicate general public support for government intervention to address issues within the housing market.
“These rules protect the most vulnerable groups and, in some respects, begin to regularise a market that is currently highly dysfunctional and not operating based on the logic of supply and demand due to rampant speculation,” Sanchez said during a press conference, as reported by Reuters.
Previously, Sanchez announced on Monday that the election, originally scheduled for 2027, would be moved forward to 29 November. The decision was made after his administration failed to secure sufficient support to implement proposals to tackle the housing crisis.
With parliament now dissolved, Sanchez can now implement these rules with the support of a smaller interim parliament.
Sanchez stated that the policies will take effect temporarily once the decrees are published in the official state gazette. However, the regulations must subsequently be submitted for approval by the remaining members of the interim parliament serving after the dissolution.
According to the state broadcaster TVE, the interim parliament, consisting of 6 handles 69 members—including Speaker of the House Francina Armengol of the Socialist Party led by Sanchez—holds a slim majority to support the policy.
Meanwhile, the second decree, which proposes the automatic extension of rental contracts, can only take effect if it receives approval from the interim parliament. Sanchez noted that the government does not possess a large enough majority to enact it independently.
The government’s policy has faced opposition from property developers. The President of the Association of Property Developers of Madrid, Carolina Roca, warned that such restrictions risk driving investors away at a time when Spain requires additional housing supply.
“The legal uncertainty inherent in both decrees will cause a sharp slowdown in investment, which is already limited for the development of affordable housing,” said Roca.
Housing issues have become a primary political issue ahead of the election. National protests also erupted following an attempt to evict an 87-year-old woman in Madrid.
These actions even led to calls for a national strike before the election. Sanchez stated that his government would respect such decisions.