The housing access crisis, which is hitting Lanzarote hard with exorbitant prices and an urgent lack of supply for the local population, has just received key backing from Europe.
The European Commission has presented the Affordable Housing Act, a regulatory package designed to provide legal certainty to municipalities and regional governments that decide to intervene in stressed areas to curb speculation and prevent the housing stock from continuing to lose its usual residential use.
With this step, the European Union seeks to respond to a problem affecting 50% of European citizens, protecting municipalities from the usual threat of legal action when restricting these types of activities.
The legislative proposal, which is now beginning its processing in the European Parliament and the Council, has sparked political debate in the EU capital over the impact on the free movement of capital.
Faced with the reluctance of conservative sectors, the Commission has repeatedly clarified that the application of these tools is voluntary and strictly adheres to the principle of subsidiarity, leaving the final decision to intervene or not in the hands of local authorities in their territory.
Lanzarote: a stressed area according to the EU?
The case of Lanzarote is emblematic. In the last decade, it has experienced one of the most acute real estate tensions in the Canary Islands. While average salaries linked to the service and hospitality sectors have grown moderately, the price per square meter and the cost of rentals have skyrocketed by more than 80-100% in several parts of the island.
The first criterion to determine if an area is stressed for the EU is the relationship between housing prices and household disposable income. For example, if the purchase cost is equivalent to a high level of years of salary (8 or more years) or if this ratio has suffered a constant deterioration in the last 10 years. Both are applicable to all municipalities on the island.
For the second, local authorities must identify the specific causes that are stressing the market (tourism pressure, scarcity of supply, boom in holiday rentals) and justify with demographic and market data that the situation will not resolve itself in the next 3 years.
In the case of Lanzarote, being an island with limited geographical space, scarce urban land, and a growing volume of homes intended for short-term rentals or acquisition by non-residents, the long-term residential supply is practically frozen.
Before applying drastic limits (such as prohibiting vacation rental licenses, capping the purchase of second homes, or increasing property tax on empty houses), the administration must demonstrate that this non-principal use has caused a direct adverse impact for at least 3 consecutive years and that there are no milder or equally effective alternative measures.
This legally enables imposing restrictions without them being judicially overturned for infringing European market freedom.
Measures that could be applied in stressed areas
From Brussels, it is openly acknowledged that the advance of vacation rentals and the hoarding of properties by non-residents or legal entities limit labor mobility and the right to a home.
The fundamental objective is that housing does not function exclusively as a mere financial asset or speculation within the single market.
This legislative initiative seeks to address the high litigation faced by local administrations when they try to limit tourist apartments or tax empty houses.
To benefit from this legal protection and apply restrictions, local authorities will have to prove that the economic activity they intend to curb—be it vacation rental or non-habitual acquisition—has adversely impacted housing affordability for at least the three years prior to the adoption of the rule.
Likewise, the Affordable Housing Law addresses the phenomenon of prolonged vacancy and allows for the implementation of measures such as fiscal penalties for empty properties, provided it is objectively demonstrated that they reduce the supply of residential rentals.
To avoid arbitrariness, the European framework excludes justified cases from these sanctions, such as absences due to health reasons, temporary transfers for work or study, inherited properties, or uninhabitable properties.
The text also dedicates a specific section to acquisitions made by legal entities and large property owners. Local authorities will be able to set conditions and quotas to prevent the hoarding of homes in high-pressure areas.
Also to reserve plots and properties at affordable prices for families with medium incomes or young people looking for their first home. These measures will always be applied towards the future, guaranteeing the legal certainty of those who acquired properties previously.
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