New legislation is to prohibit conversion of whole buildings into tourist apartments in Valencia for the next two years…
The City Council has announced a two-year moratorium on the conversion of entire buildings for exclusive use as tourist apartments in 37 neighbourhoods across the city in the latest move to prevent property speculation. This action will close a regulatory gap that allowed entire buildings to be converted into tourist apartments. The regulations for tourist flats in residential buildings will remain unchanged because they are already stringent enough and include many requirements such as location (only ground or first floor) or equipment (air conditioning units).
The moratorium will be implemented by ceasing to issue licences that classify this type of accommodation as hotel accommodation. Neighbourhoods affected will be: Botánico, Arrancapins, Nou Moles, Soternes, La Pechina, La Roqueta, Pla del Remei, Ruzafa, Gran Vía, Monteolivete, En Corts, Na Rovella, Font de San Luis, Patraix , La Raiosa, Cruz Covered, part of San Marcelino, La Amistad, Albors, Camí Fondo, Creu del Grau, Ayora, part of Grau, Vega Baja, part of Malvarrosa and Mestalla, Exposition, much of Benicalap, Benimàmet and Benimaclet, San Isidro, Orriols, Torrefiel, part of San Antonio, Tormos, Marxalenes and Tendetes. Cabanyal and Ciutat Vella are not mentioned because they already have regulations that prohibit this type of activity.
The purpose of this measure is to prevent speculative investment funds from purchasing entire residential buildings and converting them into tourist apartments, says the City Council. This measure is required if Valencia is to act in a timely manner in order to avoid oversupply that leads to housing shortages for ordinary residents, such as has happened in Madrid or Barcelona, says the Council.
Unfortunately, the measure is too late, say critics, since many licences have already been issued, and many conversions have already begun. First, 16 families recently lost their apartments on Calle del Turia in the Botánico neighbourhood after the entire building in which they lived was sold to a French investor who plans to renovate it and turn it into tourist apartments. The building’s owners were able to get ten families to leave, but the remaining six are willing to fight because they have nowhere else to go. Despite the fact that they have been in the building for a long time, two businesses on the ground floor will also have to relocate.
This will not be an isolated incident; there will be others. Over the past two years, large investment funds have purchased entire buildings or large plots of land in order to gain a foothold in the lucrative tourist apartment market. It is a major investment trend in this decade, a kind of real-estate revolution that will disrupt rental markets in all of Spain’s major cities, including Valencia.
When we consider the chaos caused by the pandemic, as well as the fact that only last year, rental stock in major Spanish cities increased by approximately 80% (tourist apartments being used for long-term rental), it is safe to predict massive disruptions in the rental property market in the coming years.
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