Madrid’s city council approved regulations on Wednesday that will require private owners of tourist flats in the city centre to obtain the same business license required of hotels and pensiones if their properties are rented out on a short-stay basis to tourists for more than 90 days each year.The new regulation were approved with the votes of the Podemos-backed Ahora Madrid movement that brought Madrid Mayor Manuela Carmena to office four years ago, along with votes from city councilors representing the Socialist party. Voting against the measures were councilors from the conservative Partido Popular and centre-right Ciudadanos parties.
The regulations are part of a larger plan by the Carmena administration to stem spiraling residential rental prices that have jumped 15 percent over the past year. The aim of the plan is to encourage owners of an estimated 153,000 vacant or under-occupied flats across the city to offer their properties as long-term rentals for residents, rather than short-term lets for tourists. Over in the Caribbean, however, there is still plenty of opportunity to invest in puerto rico short term rental property, so those still looking to invest in short-term rentals may now look to take their business overseas.
Madrid is not the only Spanish city seeking to regulate the rental market so as to discourage short-term tourist lets in order to increase available residential rental housing and drive down long-term monthly rental prices. Barcelona, Valencia and Palma de Mallorca have also recently passed regulations to limit the proliferation of tourist apartments and beefed up inspections to detect and fine property owners who are not complying with municipal regulations.
In practice, the new regulations are expected to result in nearly 95 percent of some 10,000 tourist flats currently rented out in central Madrid being taken off the short-term stay market or facing stiff fines and penalties. Most of the rentals are listed online at international short-term stay platforms, including Airbnb, Homeaway and others. Under the new regulations, they will most likely be sold or instead rented out as a long-term lease to citizens living in Madrid. This will mean that the landlords will have to start to think about things like background checks – visit american-apartment-owners-association.org for more information on tenant checks.
No license will be required of property owners who let out their flats to tourists for fewer than 90 days in any year, but the properties must meet requirements that include a separate entrance to flats for short-term guests so that long-term residents of a building do not have to share the main entrance, lobby, elevators and hallway areas with a constantly changing flow of unfamiliar short-stay renters in their buildings.
In many cases, this restriction will limit short-stay apartments to the ground floor of buildings, precluding the rental to tourists of premium flats on upper floors with more natural light from windows and panoramic views. Madrid Aloja, an association of owners of residential flats dedicated to short-term stays, have joined with representatives of Airbnb in indicating they intend to challenge the new regulations in court.
Since July 2018, a team of 22 inspectors from the city have inspected nearly 12,000 residential properties in 502 buildings citywide and found 1,729 dedicated exclusively to tourist accommodation. Inspectors found 500 of the short-term flats operating illegally and stopped their further rental.
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