Ciutat Vella, the old town of Barcelona, ​​used to be eccentric and mysterious.

Now it has become a parody of itself, with locals being driven out for tourism and ripe investment. Combination key safes line the door, a clear sign that the apartment is rented to tourists. The two-century-old 100-year-old pharmacist and shirtmaker on La Rambla has been replaced by shops selling flamenco dolls and ceramic bulls.

Cities across Spain tell a similar story, with real estate speculation and a boom in tourist apartments leading to a slow transformation - high rents driving out residents and traditional businesses, and community stalwarts giving way to global chain stores, souvenir shops, burger joints and nail salons.

The statistics explaining Spain's housing crisis are equally shocking. Rents have risen by 80% over the past decade, outpacing wage increases, and a recent Bank of Spain report estimated that nearly half of tenants in Spain spend 40% of their income on rent and utilities, compared with the EU average of 27%.

The crisis - exacerbated by rising living costs due to real estate speculation and a boom in tourist apartments - has become Spaniards' biggest worry and the focus of the latest policy duel between the ruling socialists and their conservative rivals in the Popular Party . ).

In a speech last Monday, Spanish Prime Minister Pedro Sánchez outlined a 12-point plan to alleviate what he described as the country's "housing emergency", noting that social housing only accounts for 10% of Spain's total 2.5% of the stock, compared with 14% in Spain. France and the Netherlands are at 34%.

"If we don't act, European and Spanish society will end up divided into two groups of people," he said. "Those who get one or more houses from their parents and can spend most of their income on things like education and travel, and those who work all their lives to pay rent and end up as elderly people without a house in which they live in."

He said Spain had lacked a national housing policy for nearly a decade before he came to power in 2018, and accused his Popular Party predecessors of gambling instead on relying on "an ideological neoliberal policy that has been disastrous" social and economic consequences”.

Sanchez's minority coalition government has introduced a law allowing authorities to limit "disproportionate" rental prices in certain areas and announced the transfer of 3,300 homes and 2 million square meters of land to a newly formed listed company to Build “thousands of homes.” Providing affordable social housing units for young people and families. He also proposed incentives for those who rent out vacant properties at affordable prices, as well as higher taxes and tighter regulations on tourist apartments.

Perhaps his most high-profile move, however, was to impose a tax of up to 100% on properties purchased by non-residents from countries outside the EU, such as the UK.

"In 2023 alone, non-EU residents purchased around 27,000 houses and apartments in Spain," he said. "They're not doing it to live in it, they're not doing it to give their families a place to stay. They're doing it to speculate."

The proposal, which must be submitted to parliament and could be challenged in the courts, has not gone down well with some sections of the British media. One newspaper called it a "war on Britain's holiday homes", while another condemned the "brutal tax rise".

Sánchez's speech came a day after the Popular Party unveiled its own housing proposal, based largely on tax cuts, and said it would not support the government's "xenophobic" measures in areas under its jurisdiction.

On Sunday, Sanchez hinted that he was ready to go further, saying his government proposed banning non-EU foreigners from buying homes in our country "because neither they nor their families live here, they only use them for speculation."

Housing has been at the top of the political agenda over the past 12 months. Concerns about overtourism - largely due to its distorting impact on the property market - led to a series of massive demonstrations across Spain last year, with marches demanding affordable housing also held in Madrid, Barcelona and other cities.

"The prime minister used the term 'housing emergency' and I think that's true in many ways," said Ignasi Marti, director of the Social Innovation Unit at Essade Business School and head of the Decent Housing Observatory.

"Supply is non-existent, people are unable to access housing and over the past few years degrading housing conditions have become normalized."

So why did it take the government and the PPP so long to provide a solution?

"Until recently, all of this mainly affected the disadvantaged social classes, but now it is affecting the working class and the middle class," Marty said. "From a political perspective, more potential voters are affected - the middle class realizes they can't afford apartments, renting is really difficult and people don't leave home until the average age in Spain reaches about 10. 31 ”

He acknowledged that a 100% tax on non-resident, non-EU buyers was eye-catching, but Marty suspected it might be more of an ideological move than a real solution.

"That's not going to solve the problem," he said. "The numbers we are talking about are not that big and you can't impose that on EU buyers anyway."

Claudio Milano, a researcher at the Department of Social Anthropology at the University of Barcelona and an expert on overtourism, said that when the number of housing units reaches 3.8 million, or 14% of the total supply, there will be more opportunities for those who rent apartments at affordable prices. It is not enough for people to provide tax relief. Spain lies empty.

"They need to work harder on this problem and they need to stop people buying apartments to speculate," he said. "This needs to stop now and then we can start talking about tax relief. But before we do anything else we need to put the fire out and to do that you need to ban people from buying apartments for speculation."

Pablo Simón, a political scientist at Madrid's Carlos III University, said the question now is whether socialists and the People's Party can agree on how best to do so at a time of deep polarization and within the constraints of Spain's complex centralized system. Can we agree on a timely solution to the housing crisis? Regional and municipal governments.

On the positive side, he said, the basic analysis is the same on both sides: There is a basic lack of housing in Spain.

“One party is betting more on state intervention and the other party is betting more on markets, as you would expect parties on the left and parties on the right to do,” Simon said. "But the diagnosis is relatively similar."

Sanchez's proposal received a cold reception in Spain's two largest cities. The Madrid Tenants Union called the measures "insufficient, misguided and cowardly" and said the government was prioritizing landlords over tenants and "betting on construction as a long-term panacea" rather than solving the immediate emergency.

There has been a similar reaction in Barcelona, ​​where the rapid popularity of tourist apartments over the past 15 years has been a key factor in driving up rents and house prices.

Jaume Artigues, spokesman for the residents' association of Eixample, Barcelona's most populous neighbourhood, said the proposals were vague and "very general". There is one tourist apartment for every 57 residents here. But he said at least the government had recognized that speculation was the main cause of the housing crisis, whether it was tourist apartments or luxury apartments sold to investors.

"The need for more public housing does not arise because of population growth, but because existing housing is unaffordable, which leads to more evictions, which in turn increases the need for affordable public housing," he said. "It's a vicious cycle, but the root of the problem is speculation."