Coalition Rift Over Housing Decree Amid Barcelona's Urban Planning Challenges

On January 13, 2026, Spanish Prime Minister Pedro Sánchez introduced a new housing decree offering fiscal incentives to landlords who keep rents stable, igniting fierce opposition within the ruling coalition, particularly from the left-wing party Sumar. This conflict underscores the political tension surrounding Spain's housing crisis. Sumar publicly condemned the decree as a "tomadura de pelo" (a joke), refusing to support measures they perceive as financial handouts to landlords, emphasizing concerns over housing affordability and renters' burdens. The Council of Ministers is scheduled to meet again to address these divisions and evaluate the policy's future.

Simultaneously, Barcelona faces acute urban planning challenges exacerbating the housing shortage. Data reveals a 40% decline in permanent rental housing over the past five years, attributed to legal uncertainties, stringent tenant protections, and pro-squatter laws. Critics accuse the local administration of neglecting construction efforts, choosing instead to penalize property owners and investment funds that represent a mere 5% of the market.

Barcelona's housing stock has increased by only 5% over 25 years, while its population grew by 13%. The Metropolitan Director Plan (PDUM), intended to overhaul the city’s 1976 General Plan, has expired without replacement, limiting available land for new development. Only around 70,000 plots remain for construction, with 55% designated as affordable housing. Compounding difficulties, a law mandating 30% social housing in new developments since 2018 has resulted in only 30 public units, deterring private investment. Additionally, slow administrative processing delays major construction licenses by approximately ten months.

Urban planning experts advocate revising regulations to allow increased building heights, conversion of low-value industrial land, and permitting residential use in commercial properties to expand housing supply. Critics warn that ongoing tax focus and regulatory hurdles hamper effective responses to the chronic shortage and affordability crisis.

Prime Minister Sánchez's decree and the coalition's impasse reflect Spain's broader struggle to balance fiscal policy with urgent urban development reforms necessary to alleviate housing pressures, especially in key cities like Barcelona.