[harperlee]

> you're also making it more risky and thus less profitable to buy and rent out apartments

You would be surprised about the sheer number of spaniards that would welcome this second-order effect.

In the last ~10 years, renting has skyrocketed, due to the discovery of the spanish renting market by international money, and renting laws relaxation (demand side). Meanwhile, this has not increased the supply of homes, as it is felt that there is oversupply, the demand is very concentrated on selected cities, and the turnaround of building to rent or sell is long. This double-whammy has made renting quite onerous, and buying directly out of reach, for a lot of people.

Some extra tidbits:

- Buying: Upwards of 40% of home purchase is without mortgage (not a pattern of someone buying for the first time)

- Renting: In Madrid, on average 62% of salary before taxes goes to renting; 58% in Barcelona (https://www.fotocasa.es/fotocasa-life/alquiler/los-espanoles...) (how is that even feasible? well, young people end up just renting a room)

[Manuel_D]

I think you misunderstood what the above commenter meant when they wrote that risk of squatters makes it "less profitable to buy and rent out apartments".

Because of the additional risks of squatters, landowner will either have to take additional security measures (and make up the costs with higher rent) or accept the risk of squatters (and make up that risk with higher rent). In either case, the rent getsor expensive.

[harperlee]

No, I got it. I just think that would mainly mean investors exit the market.

If it is less profitable, they either further raise the prices or they get out of the market; the ratio of those two options depends on price elasticity. And prices don't have a lot of room to grow further in my opinion... unless of course the wages grow quickly (and minimum wage indeed has done it in the last 5 years). But then the country needs to be more productive or people get poor (fired!), which is also not good for the renting business, etc.

At the end of the day you're betting on the spanish market either squeezing people further, or gaining productivity real quick. And real estate is not very liquid, yet is typically long-term, and those investors are risk averse. So... there will be some that will exit the market.

[Manuel_D]

And what happens when people leave the rental market? Fewer apartments for rent. And what happens to rental prices when there's a scarcity of apartments to rent? Prices go up.

[harperlee]

Well, no one can pack the apartment and leave the country. At worst they are left unoccupied, but that's a lot of money to have it parked, and can be discouraged with taxes; so alternatively people sell them... so buy and rent eventually go down.

[Manuel_D]

And what will the buyers do with the apartments? Rent them? Well, then they'll either have to spend money on security or price the risk of okupas into the rent. In either case rent goes up.

This is as nonsensical as the proposals in San Francisco to prohibit the construction of apartments to try and reduce rent. Dissuading people from renting out apartments reduces the supply apartments. There is zero possibility this results in better rental prices.

[zrn900]

> And what will the buyers do with the apartments? Rent them?

Yes.

> This is as nonsensical as the proposals

Its not nonsensical. Its what is happening. Use it or lose it. Works. Find a good tenant, rent it for decades - like how it is supposed to be.

[peter335]

Yes, exactly. This is what I was getting at!

[Manuel_D]

You think a lot of Spaniards want higher rental prices?

Edit: ah, sorry I had mixed you up with the previous commenter.

[peter335]

Of course not, I think misguided policies like the one we’re talking about lead to higher rental prices

[zrn900]

> No, I got it. I just think that would mainly mean investors exit the market.

Great. They should get the hell out asap.

[carlosjobim]

> Because of the additional risks of squatters, landowner will either have to take additional security measures (and make up the costs with higher rent) or accept the risk of squatters (and make up that risk with higher rent). In either case, the rent getsor expensive.

When renting becomes less profitable, real estate prices fall as landlords want to get rid off their bad investments. That means people can buy instead of rent, which means more rentals become vacant as renters become owners, which means that rents go down.

> and make up the costs with higher rent

This is not how it works. Landlords will always extract maximum rent possible from tenants.

[f33d5173]

> Landlords will always extract maximum rent possible from tenants

Landlords are competing in a market. The maximum possible rent has to do with how much the rest of the market is charging. That in turn is capped from above by how much a would be landlord would pay to buy a unit and start renting it out. If that price goes up, then landlords can charge more.

There is also a maximum amount that people can pay, but they have little choice but to pay whatever the market is charging, or else live on the street.

[carlosjobim]

Renters are already paying the maximum they can. No landlord would let that juicy money go unmolested.

If landlords prefer to let their investments sit empty instead of selling, because their profits from renting aren't enough, then that is a foolish decision. But you shouldn't annihilate a whole nation because of such folly.

[themaninthedark]

If the problem is outside investment in the housing market is causing issues, why not just just address the issue?

Pass a law either limiting or banning outside real estate speculation.

[zrn900]

Even worse, now the digital nomad phenomenon is increasing rents - ~19% of the demand in the rent market in Madrid in 2023 is from foreigners. As a result, the locals learned the phrase 'digital nomad' and they are now fighting back.

https://madridnofrills.com/gentrification/

[yazzku]

Why is this downvoted?

[zrn900]

People dont like to be the gentrifier. In digital nomad forums or 'investment' forums the reaction to any news about gentrification is the same - downvoting, denial, blaming someone else. Most blame the locals for letting it happen. Some more educated try to blame 'the corrupt politicians' (whatever the f that means, they plug it everywhere as if its applicable), others blame the 'real estate sellers'. They want to blame anybody but the ones who are doing the actual gentrifying, themselves. This is especially prominent among those from Angloamerican countries where being rich amongst the poverty is something admirable and respectable and you should definitely not hate them and the poor should keep their voice down. Or some variant of that mentality. They are dumbfounded when they find locals openly cursing them and calling them derogatory names and publicly doing politics against them. There's so much cultural difference.

[yazzku]

I read through your other comments and don't exactly agree with many of your points, which appear to be pro-squatting? But you certainly seem to have a good handle on the problems. Is there a way we can connect outside of HN? Not really sure how to PM somebody here or if it's even possible.

[zrn900]

> which appear to be pro-squatting?

As the constitutional right to housing is being basically circumvented through just not protecting that right, yeah, squatting seems to be the best way to protect that right.

I have a good handle of problems regarding this, and a lot of other things, however I unfortunately don't have the time to take action on any of them. So, sorry, I wouldn't be able to get in contact or do anything else.

[yazzku]

That website is pretty good, by the way. I was not aware of the extent of the problem.

[zrn900]

Yes, reading it made me realize that it was far worse than what I thought too.