The housing shortage in Spain is becoming increasingly severe, affecting both buyers and renters. In this context, a recent report by Colliers and APCEspaña highlights one of the main contributing factors: the lack of available developable land. The study emphasizes that the lengthy process of converting rural land into buildable land not only hinders the construction of new homes but also drives up real estate prices. Additionally, bureaucratic complexity, lack of coordination between administrations, and legal obstacles further aggravate the situation.
The accumulated housing deficit in Spain
The process of converting rural land into developable land available for construction is slow and complicated in Spain. According to the Colliers report, the necessary administrative and urban planning procedures typically take between 10 and 15 years—and in some cases, over 20 years. These delays make it difficult to respond to the growing demand for housing, especially in areas where it is most needed. Furthermore, legal uncertainty and a lack of clarity in regulations present additional obstacles for developers and construction companies.
The sluggish process is caused by several factors: outdated urban planning regulations, frequent changes in local and national policies, legal disputes, and complex property structures. These factors not only delay the availability of developable land but also drive up its price due to scarcity. When combined with increasing construction costs, this further limits the production of affordable housing.
Economic and social consequences of land scarcity in spain
The lack of available land has significant economic and social consequences. Economically, rising land and housing prices reduce developers’ profit margins, discouraging new construction. This creates a vicious cycle where limited supply fails to meet growing demand, further driving up prices.
On a social level, this situation disproportionately affects the most vulnerable groups, who face increasing challenges in securing housing. In high-demand areas, many individuals must allocate a significant portion of their income to rent or mortgage payments, exacerbating inequality and limiting geographic mobility. Additionally, the current housing deficit is concentrated in areas where new homes are most needed, leaving behind regions with lower demographic pressure and unsellable housing stock.
This leads to a growing social issue: young people find it increasingly difficult to move out on their own. According to data from Idealista, two out of three people between the ages of 18 and 34 still live with their parents due to economic constraints.
Furthermore, according to the Bank of Spain, 55,000 new households were created in the first quarter of 2024, with projections reaching 360,000 by the end of the year. Since 2022, Spain has also received approximately 1.5 million new residents, increasing the foreign population from 9.5% in 2015 to 13.6% by the second quarter of 2024. This population growth exerts significant pressure on cities like Madrid and Barcelona, which account for one-third of the accumulated housing deficit, along with Valencia, Alicante, and Málaga, where the gap between supply and demand continues to widen.
Solutions to alleviate the problem
To tackle this crisis, the Colliers report proposes the development of a comprehensive plan to streamline administrative processes and improve coordination among the various public administrations involved in land management. Potential solutions include adopting tools such as self-certification procedures and digital permits, which could significantly reduce approval times. The report also recommends promoting regional planning strategies that integrate multiple municipalities to prevent contradictions between local and regional regulations.
In the short term, some measures could include incentives to rehabilitate existing housing, greater flexibility in land-use changes to allow for more residential developments, and completing stalled construction projects. While these initiatives would not solve the structural problem, they could help alleviate some of the current pressures.
An uncertain future If no action Is taken
The shortage of developable land and its impact on housing supply require an urgent and coordinated response. If the necessary reforms are not implemented, Spain risks facing an exponential increase in the housing deficit in the coming decades, further worsening the housing accessibility crisis. This challenge also presents an opportunity to rethink land management and seek solutions that benefit both the real estate market and citizens.
