Sánchez revives housing measures with €10bn loan plan as Spain heads towards election

Sánchez announced the package after a cabinet meeting at La Moncloa, a day after calling an early election following the parliamentary defeat of his previous housing proposals. ALSO READ: Pedro Sánchez calls a general election in Spain for 29 November.

Although both decrees have received cabinet approval, their implementation will follow different paths. The first, which includes protection against evictions, will take effect upon publication in the Official State Gazette (BOE), pending parliamentary ratification. The second, proposing automatic renewal of rental contracts, will only become operational if lawmakers approve it.

With Parliament dissolved, the decisions will fall to Congress’s 69-member Standing Committee, known in Spanish as the Diputación Permanente, which exercises certain parliamentary powers between legislatures. Its composition gives the government a possible route to securing the first decree without the backing of the Catalan pro-independence party Junts per Catalunya (JxCat). ALSO READ: Spain’s housing decrees defeated as pressure grows on Sánchez to call snap election.

Eviction protection and help for first-time buyers

The first decree revives the core of the package widely referred to as the ‘Maricarmen decree’, named after the 87-year-old Madrid woman whose eviction became a rallying point for housing protests across Spain. ALSO READ: Spain’s housing protests intensify as tenants’ unions push for general strike.

Its provisions include extending protection against evictions for vulnerable households until 2030, regulating room rentals, introducing additional taxation on short-term rentals, restricting speculative and corporate purchases of residential property, and offering tax incentives to landlords. The package also includes measures to limit rent increases.

A major addition is a €10 billion financing scheme providing loans of up to €50,000 at zero interest for the purchase of a first home. The government says it is intended to help people who have reliable incomes but insufficient savings to enter the property market.

Sánchez said the two decrees contained 21 measures that ‘maintain the essence’ of the rejected legislation, alongside ‘some very positive additions’.

Defending intervention in the housing market, he drew a parallel with the Iberian mechanism introduced to contain energy prices.

‘We intervened in the energy market with the Iberian solution. And it worked. Why shouldn’t we be able to do the same with a market that goes far beyond the laws of supply and demand? With this decree we are intervening in the market, something that has very broad support in Spain. This government neither throws in the towel nor abandons people.’ ALSO READ: Spain & Portugal’s electricity cost-cutting plan gets EU approval.

He also argued that speculation had distorted the operation of the housing market.

‘They protect the most vulnerable and, in some way, begin to bring order to what is currently a deeply dysfunctional market that does not operate according to the logic of supply and demand because of rampant speculation,’ he said.

A different parliamentary calculation

The government’s immediate priority is to secure ratification of the first decree. The second, which would establish recurring automatic extensions of rental contracts, faces a more difficult parliamentary outlook.

The Standing Committee has 69 members, compared with the 350 seats in the full Congress, and broadly reflects the relative strength of the parliamentary groups. Both JxCat and the Basque Nationalist Party (EAJ-PNV) have one representative.

JxCat voted against both previous decrees. EAJ-PNV supported the first, containing stronger eviction safeguards, but opposed the second, covering automatic rental renewals.

That distribution means the Basque party could provide the support needed to approve the first decree without JxCat. State broadcaster RTVE reported that the potential supporting bloc would have a narrow majority when Congress speaker Francina Armengol, a socialist, is included. However, Sánchez acknowledged that the EAJ-PNV’s backing had not yet been guaranteed. 

‘I ask the parliamentary groups to ratify these decrees in the Standing Committee. It is not a question of ideology, but of humanity, of plain common sense,’ he said.

The prime minister confirmed that the rental-renewal decree would await a vote before taking effect, recognising that the government currently lacked sufficient support for it.

Protests keep pressure on the government

The renewed legislative push follows demonstrations across Spain over the weekend and a large protest in Barcelona on Monday evening.

Organisers had postponed the Barcelona march because of a severe weather warning. Tens of thousands subsequently took to the streets in what began as a peaceful demonstration, before groups of hundreds clashed with police, threw stones and set rubbish containers alight.

In Madrid, hundreds of protesters have maintained an encampment in the Puerto del Sol following the eviction of Maricarmen from the home where she had lived throughout her life. ALSO READ: Protesters vow to stay in Madrid’s Puerta del Sol as housing camp puts pressure on government. 

Demonstrators have called for stronger tenant protections, action against fraudulent rental practices and a ban on evictions when those affected have no alternative accommodation. There have also been calls for a general strike before the election, which Sánchez said his government would respect.

The mobilisation reflects mounting frustration over a shortage of available housing and rising purchase prices and rents, which have left many households struggling despite Spain’s strong economic growth.

‘We will not allow another eviction like Maricarmen’s. Neither in what remains of this legislature nor, we hope, in the next one if citizens give us a more decisive majority,’ Sánchez said. ALSO READ: Evicted Madrid pensioner could return home under eight-year rent agreement.

Housing becomes an election dividing line

Sánchez presented the election as a response to Parliament’s inability to support measures addressing one of the country’s most pressing problems. The vote brings forward an election previously expected in 2027, despite his repeated earlier assurances that he would complete the parliamentary term.

‘I am convinced that if the majority in Parliament turns its back on citizens on an issue such as housing, citizens must choose a new Parliament,’ he said.

He also signalled that the government would continue using its powers to introduce further measures before the election.

‘When Congress turns its back on the street, the government is not going to look the other way. This is the government of the people; I proudly reaffirm that commitment to public service. We owe it to those people who live with the anguish of seeing that their wages are not enough to pay the rent or the mortgage.’

Asked why measures of this kind had taken eight years to emerge, Sánchez pointed to initiatives adopted during the previous legislature, including the housing law. He blamed the parliamentary alignment of the right-wing opposition People’s Party (PP), far-right Vox and JxCat for blocking much of what his government had attempted during the current term. 

Nevertheless, while criticising the PP and Vox, he largely avoided a direct confrontation with JxCat leader Carles Puigdemont, whose party helped defeat the original decrees despite participating in negotiations over the first package.

Sánchez said he had no regrets about the pardons or the amnesty for figures involved in the Catalan independence process, arguing that they had helped restore normal political life in Catalonia. ALSO READ: Puigdemont cleared to return to Spain as judge lifts arrest warrant after amnesty ruling.