Madrid adopts rules that will shut down over 10,000 holiday apartments

The Madrid city council has approved a special plan regulating holiday rentals that will foreseeably shut down over 10,000 apartments currently used for short-term tourist stays.

The new regulations stipulate, among other things, that apartments used as holiday rentals inside residential buildings in the city center must have a separate access area from the one used by regular residents. Guests will not be able to use the same building entrance or elevators.

In practice, this means that 95% of these apartments will be unable to obtain the required license for this kind of activity, according to city officials.

Opposition groups in the council said the plan will have an economic and legal impact on an entire sector, and will likely lead to challenges in court. Manuel, the owner of a tourist apartment and member of an association named Madrid Aloja, was present at the council vote, and says that he and other owners like himself will take legal action to defend their activities.

The popular platform Airbnb has described the new regulations as “not very clear,” “unfair” and containing “disproportionate restrictions.”

The 90-day rule

The new rules target properties that are used as holiday rentals for more than 90 days out of the year, at which point they are considered to be engaging in commercial activities that require a license.

The restrictions affect an area that has been divided into three rings covering the historical city center as well districts such as Moncloa-Aravaca, Arganzuela, Latina, Usera and Carabanchel.

The city councilor for sustainable urban development, José Manuel Calvo, said that these rules are necessary because “massive tourism does not bring added value to cities, rather on the contrary, it degrades them.”

“In the neighborhood of Sol, there are two tourists for every resident. In the Cortes neighborhood, the ratio is 1.3 tourists for every resident. This is what’s known as touristification,” he added.

The Socialist Party (PSOE), which voted in favor of the initiative, said there are over 15,000 properties operating as tourist accommodation in Madrid, and that more than 10% of them are located in the downtown Centro district.

The Popular Party (PP), which voted against, placed that figure at 10,467 based on existing regional registers of licensed holiday rentals. But city officials refuse to give out any numbers because this activity is not regulated, noted Calvo.

At the very least, 9,944 registered properties would be unable to adapt to the regulations, leaving 524 in operation. But the PSOE notes that the real figure is higher if the unregistered properties are taken into account.

Mercedes González, a PSOE councilor, said there is an urgent need for regulation to prevent the city center from becoming “a tourist theme park” ruled by “the law of the jungle.”

“This is a first step, necessary to start walking towards a different kind of city where residents can live in peace,” she said, adding that the boom in holiday rentals has “a clear impact” on the real estate market, where the price of rent has been rising at an annual rate of 8%. González also cited friction between residents, gentrification and a change in the commercial fabric of neighborhoods.

Meanwhile, the PP and Ciudadanos (Citizens), both of whom voted against the plan, said that they want to regulate the sector but in a different way.

“Mayor Manuela Carmena [of the leftist Ahora Madrid party] wants to evict an economic sector, the holiday rental sector,” said the PP’s municipal spokesman, José Luis Martínez Almeida. He said that demanding an independent entrance area is just another way of banning this activity from downtown Madrid, and also noted that in any case, “there is a for-profit use from day one, not from day 91.”

The city has a team of 22 inspectors who have examined 11,936 homes in 502 buildings. Of these, 1,729 (14,48%) were being used as holiday rentals. While municipal authorities do not have the power to issue fines, they can initiate individual proceedings that could end in the closure of the unlicensed business activity.

English version by Susana Urra.