Thursday, July 20, 2017

Holiday Rentals: The Charade Exposed

So, after all the build-up to the holiday rentals' legislation, we remain - or rather, apartments remain - more or less where they were: in legal no man's land. One of the government's key legislative initiatives is a greater shambles than it had appeared that it would be. It was never going to be easy to cobble together satisfactory legislation, but the result is ever further from satisfaction. Apartments, as far as tourism law is concerned, only now exist in the form of an "habitual dwelling". Otherwise, technically they have been airbrushed from the real-estate landscape.

For all the talk of fines, the level of which are hardly any surprise and mirror penalties elsewhere in Spain, of the age of property eligible to be holiday lets, of the zoning of these lets, etc., the core of this legislation was apartments. While the 2012 tourism law keeps being quoted, apartments have been on the legal periphery for very much longer. The time had come for there to be a more definitive status. The time has come and all that is definite is that nothing is definite.

The government (PSOE and Més) is mightily angered. It will, as it typically does, place a political sheen over events in defending the pact with Podemos. But it has suffered a major assault and for a "stellar" piece of legislation, to boot. Podemos bared their teeth and, unlike with previous last-minute wobbles, they were prepared to be wolves. There was no pretence this time.

Podemos had always wanted to prevent the possibility of opening up holiday rentals in apartments. Their ploy of the call for "emergency housing" in Palma and Ibiza was a strategic move to disguise the real intention: the prevention of apartment touristic letting. The government's anger is made that much greater because this legislation has been so complex and so long in the making. When it came to the time to vote, Podemos cuddled up to the Partido Popular. While Podemos were citing citizen rights to housing, the PP were remembering their friends at the hoteliers' federation.

It is said that the government had attempted to persuade Podemos to stay onside by agreeing that the forthcoming housing law would complement the rentals' legislation. Podemos were having none of that, although there is obvious sense in joining up these two legislative strands. But to do so in a totally coherent fashion would demand a different legislative approach. As it is, housing is housing; tourist accommodation is tourist accommodation, even if it is housing. Toni Reus of Més pointed this out to Podemos. The rentals' legislation was neither a housing bill nor an urban planning act.

Out of the mess we nevertheless have a curious situation whereby apartments can be eligible for licensed authorisation. This is if they are owners' "habitual dwellings". This is if these dwellings are in the right zones (which will now take a year to determine). This is if residents' communities give a majority favourable vote (Podemos are still agitating for a unanimous vote). This is if these dwellings are up to the required standards. This is if they are at least five years old (and Podemos want to make this ten).

Agreement for habitual dwellings is apparently a nod in the direction of the reality of the collaborative economy at its most basic level. A family - they always refer to families in a somewhat mystical style - that needs to add some income will be able to do so. But only for a maximum of sixty days a year.

What is it with these habitual dwellings? Will families uproot themselves for the whole of July and August? Presumably they will. Or would. Where do they go? Rent out someone else's habitual dwelling? Or do they go to one of their other dwellings? How many other dwellings do they have?

The legislative process, you may or may not be surprised to learn, has not finished. There will now be "developments" of the legislative detail. Tourism minister Biel Barceló referred to these in hinting that apartments could be salvaged, i.e. be specifically subject to the same rules as other properties for holiday rental. But so long as Podemos have anything to do with the legislation, his muted optimism appears misplaced.

All this does is exacerbate the confusion and uncertainties. These developments could also entail, if Podemos get their way, the likes of properties having to be a minimum of ten years old.

Laws, one always hopes, are designed to create certainties. This legislation does not. It is a dreadful mess. Ultimately, though, the mess has only so much to do with holiday rentals. There are the politics which hover above. Podemos have claimed victory, one to be milked for all it's worth in appealing to the housing-deprived citizenry. It is a victory which finally and transparently exposes the charade of the Armengol pact.

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