Sánchez tries to revive Spain’s rejected housing laws after calling election

Prime minister Pedro Sánchez may have just called a snap general election for November 29, but his Government is not waiting for voters to decide the future of Spain’s controversial housing policies.

Just days after Congress rejected two Government housing decrees, Sánchez plans to use another method bring similar measures back to the Council of Ministers on Tuesday.

The timing is shocking. Parliament is being dissolved for the election, meaning the new decrees would not be voted on by the full 350-member Congress. Instead, they are expected to go before the Diputación Permanente, the smaller parliamentary body which continues to exercise certain powers while Congress is dissolved. The Government believes the different composition of this body could allow it to succeed where it failed in the full chamber.

Why is Sánchez doing this?

The two original housing decrees were defeated last Friday after PP, Vox and Junts voted against them. Sánchez has now argued that urgent housing protections cannot simply be left in limbo while Spain heads towards an election. His Government says the new measures are needed particularly to protect vulnerable people from losing their homes.
The move is legal, but it is already politically highly controversial.

With Parliament dissolved, the Government can use the Diputación Permanente to seek approval within the legal 30-day period for emergency decree-laws. The Government would not need Junts’ support in the same way as it did in the full Congress. Critics could therefore ask whether Sánchez is using a legitimate constitutional mechanism to get around the practical consequences of a vote he has just lost. The Government’s answer is that the mechanism exists precisely for periods when Parliament is dissolved.

What could it mean for renters?

The exact wording of Tuesday’s decrees will matter because the Government is expected to modify the measures rejected last week. However, renters should watch for the return of measures including:

• Protection against eviction for vulnerable households, which Sánchez’s Government is particularly keen to restore.
• Greater security for some existing rental contracts, although the proposed automatic renewal system may not return in its original form.
• Measures affecting rent increases and contract extensions.
• Further restrictions affecting large property owners and investors.

The Government’s main priority appears to be rescuing the measures protecting vulnerable tenants. The more radical proposal to introduce long-term automatic rental renewals faces greater political difficulties. For renters, the important point is that Friday’s defeat does not necessarily mean the end of the housing measures.

Sánchez and the ‘vulture fund’ question

There is another issue likely to attract attention during the election campaign. In his speech announcing the election, Sánchez attacked what he called powerful economic and social elites, saying his Government wanted to “double down” against elites and “speculators” seeking to profit from Spain’s future. He has also repeatedly attacked property speculation and what the Spanish political debate calls fondos buitre (investment funds accused of buying large property portfolios and contributing to housing pressures).

Yet Sánchez has also spent years courting major international investors. He has met BlackRock CEO Larry Fink and representatives of major investment organisations including Soros Fund Management during his time in office. Those meetings do not prove that investment funds have influenced Government housing policy. But they raise an obvious question for voters: if some of these major investors are now portrayed as part of the problem, why has Sánchez previously gone out of his way to attract their investment to Spain?

Housing becomes an election battleground

Sánchez made housing one of the central themes of his election speech, saying that access to housing remained one of Spain’s major unresolved problems. He accused powerful interests of putting pressure on ordinary people and called for a stronger progressive majority to push through further reforms. That means Spain’s housing crisis is unlikely to disappear during the election campaign.

For renters, Tuesday could bring back protections they thought had disappeared on Friday. For landlords, it could mean another round of uncertainty over rental contracts and property rules. And for Spanish voters, there is now an unusual question hanging over the election: Will the housing measures rejected by their elected Congress last week be approved instead by a smaller parliamentary body before voters get their say on November 29?