Spain Caps Rent Hikes in Socialist Win Weeks Before Election

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The Spanish government won final approval on Wednesday for an emergency decree boosting tenants’ rights at the expense of landlords less than four weeks before a general election.

Prime Minister Pedro Sanchez’s Socialist administration prevailed 33 votes to 31 at the parliamentary panel that can confirm or revoke legislation when the full plenary is out of session. The measures, negotiated with lawmakers from the anti-establishment group Unidas Podemos, will cap rent increases for tenants, delay evictions for people facing economic hardship and reduce the market power of institutional investors.

Urgent steps were needed because of “the grave situation of economic and social vulnerability of a great number of families,” Public Works Minister Jose Luis Abalos said before the vote.

After dissolving Parliament to make way for elections, Sanchez put more than five decrees before the panel to boost spending or legal rights for everyday Spaniards. While his minority administration lacked the votes to pass the measures on its own, he bet that his right-of-center opponents wouldn’t shoot them down ahead of a tight election.

Most polls show Sanchez’s party is set to place first in the April 28 vote, though some signal the country’s three right-wing parties could still form a majority to drive him from power.

The decree raises costs and cuts flexibility for professional landlords, such as Azora or Blackstone, by forcing them to cap rent increases at the inflation rate and to extend rental contracts for up to seven years. Private landlords will be able to break a rental agreement after five years.

For renters, all contracts will be considered valid even if they haven’t been publicly registered, protecting tenants from quick evictions when a landlord sells their apartment.

Local governments are allowed to levy a 50 percent surcharge on property tax for “vacant” apartments, one of the more controversial measures considering how many middle-class Spaniards have a flat out in the country or near a beach.

“This is quite serious,” said Juan Carlos Girauta of the liberal Ciudadanos party, a critic of the decree. “I picture some mayors trying to increase their revenue by raising the property tax on those owners who can’t vote, because it’s their second home.”

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