The Spanish government is looking for a way to force the Balearics and other regions that have declared themselves “rebellious” to declare areas under pressure and cap rent increases in their respective territories. If the Balearics do not do so, they will be penalised with less aid from the Ministry for housing construction in the coming years, according to the draft Housing Plan 2026-2030 presented to the regions by Minister Isabel Rodríguez. The Balearic government has already submitted arguments against it, as, according to the government, it undermines the autonomy of the region and calls into question its powers in the area of housing.
The clash is inevitable, and the two administrations, together with the rest of the autonomous communities, are planning to hold a working meeting, possibly this week, to outline their positions on this proposal. The plan presented by the government to the communities stipulates that the declaration of a stressed area and the limitation on rental prices will be the key to accessing funding for housing construction. If an autonomous community refuses to declare itself a high-pressure area, it will receive less aid to promote both home ownership and renting, which will be around 20% less, according to initial estimates.
The plan envisages mobilising up to €7 billion for housing construction throughout Spain in the coming years, but here too there are discrepancies between the regional government and the national government. In previous plans, the government financed 70% of the total cost of the plan, with the communities contributing the remaining 30%. Under the new proposal, the government will contribute 60% of the resources and the communities will finance the remaining 40%. The government has also submitted arguments to modify these percentages and recover the tranches that have been signed to date.
The regional government has resisted declaring the Balearics a stressed area despite the fact that rents are among the highest in Spain, at around €17 per square metre, and with house prices skyrocketing, with the price per square metre above €4,000, according to data provided last week by the Association of Registrars. The measure has worked in Barcelona, one of the first cities where it was implemented, with a drop of around 4%.
However, at the same time, part of the residential housing market has shifted to the seasonal market, causing supply to fall. This is the regional government’s justification for not declaring areas of tension in the islands. The regional government is confident that the national government will reconsider and not penalise the Balearics with less aid. Together with Madrid, it is currently the region with the most expensive housing in Spain. The average mortgage signed in the islands currently amounts to €1,408 per month; the average for Spain is almost half that, at €786.2.