Barcelona Metropolis

A series of misconceptions and false beliefs surrounding rental housing have been propagated in recent years, which are now being debunked by a pioneering survey in Barcelona, a city in which 40% of the population live in rented accommodation. Hardly anything is the way it was believed to be. Long-standing problems tend to be worsening and new vulnerabilities are emerging linked to the uncertainty generated by contract renewals.

In recent years, a number of clichés regarding the rental market have been repeatedly echoed, which can be summed up as follows:

1. Renting is a “young people’s” problem.

2. Renting is a problem for “the most vulnerable population”.

3. Real estate agencies and big landlords exercise no influence on rental prices.

4. Rising rents are causing a mass exodus to the poorest neighbourhoods.

5. Renting is a temporary problem, because a majority will inherit their parents’ house.

6. There are many landlords who need to collect rent to make ends meet.

This is a series of myths with no scientific basis. In fact, if some of them have been so widespread, it is precisely because there were no objective figures to contrast them with. But in 2019 we decided to put an end to this anomaly by conducting a pioneering survey in Barcelona, the city with the highest rate of renters in Spain: between 2017 and 2020, the figure rose from 38.2% to 40.1% of the population. We aimed to gain an insight into the rental market, beyond the superficial data on rent prices and supply. This year, the preliminary results of the second survey were published,[1], which debunks the myths surrounding the rental market. In this article, the main findings of this new study, the most ambitious one to date, are outlined.

Most people who live in rented accommodation are not young

Contrary to popular belief, the majority of people living in rented accommodation (65%) are over 35 years of age, the age used by the government as the threshold for defining who is young and who is not. Forty-one point two per cent are in the 35 to 50 age bracket and 23.8% are over 51 years of age. Those officially considered young, because they are under 35, account for 35.1%. In fact, the average age of renters has risen from 38 to 41 in a short period of time.

This does not mean that housing is no longer a serious problem for young people. On the contrary: it is becoming increasingly difficult for them to become emancipated and gain access to a home of their own. In 2022, the Spanish population between 16 and 34 years of age that had become emancipated and lived outside the family home was no higher than 15.9%[2], half the European Union average (31.9%).[3].

Rent is not a problem for vulnerable people

Rented housing is also often associated with “vulnerable families” or those “in vulnerable circumstances”, referring to people with low incomes and serious payment difficulties. Again, nothing could be further from the truth: a very large proportion of people living in rented accommodation who suffer from a significant level of precariousness have skilled jobs and university studies.

This, although it may seem counter-intuitive, is related to state legislation, which since 1985 has made renting synonymous with insecurity. In countries such as France or Germany, if a landlord wants to evict a family at the end of the contract, it must be with just cause: either because of the need to use it as a permanent residence for themselves or for first-degree relatives, or to sell it – in which case, the tenant has the right of first refusal. This is called security of tenure. In addition, there are regulations that ensure that the price cannot increase by more than a certain percentage between contracts.

Here, however, there is little security of tenure in renting. A family can be evicted for no reason at the end of the contract, which brings with it many adverse effects, the first and most obvious of which is living with permanent uncertainty as to whether you will be evicted, which does not allow you to build a meaningful relationship with your home. Who wants to invest in a home if they are not sure of being able to come up with a life plan beyond five years? This is why the vast majority of renters, regardless of their financial situation, suffer a great deal of residential instability: in Barcelona, 70.5% of households changed home at least once between 2017 and 2022. Of these moves, at least four out of ten were, in reality, invisible evictions: people evicted, despite having met their obligations, because the landlord did not want to renew the contract. On the other hand, the fact that 40.1% of residents are constantly moving house also has a detrimental impact on citizens as a whole. Not knowing who lives in your stairwell, who enters and leaves the building – and not being able to build neighbourly ties – lessens the sense of security.

The second consequence of having a law that does not provide tenure security is that it creates a very unequal power balance between landlords and tenants. The latter do not have the capacity to negotiate prices, nor do they have the power to demand that rights already enshrined in the law are enforced. The clearest example is the fact that the majority of the tenant population (72.8%) live in houses with at least two serious habitability issues. And those with at least three problems account for 59.1%. The worst problems are poor heat and sound insulation, the need for refurbishment, lack of adequate heating, damp, mould or leaks in walls and ceilings, and windows and doors in poor condition. The reason why so many households are living with these problems – despite paying the highest rents in history – is largely due to the legal insecurity linked to renting, the inability to make long-term plans, and the fear of being evicted in retaliation for asking for the law to be enforced.

Real estate companies and big property owners exert on prices

As a result of the unprecedented rise in rent prices over the last decade, today only three out of ten renting households spend 30% (or less) of their disposable income on housing costs, the threshold recommended by the European Union to avoid overstretched households. The remaining renters – the majority – are under financial stress. Twenty-three point three per cent are under moderate financial stress (spending between 30 and 40 per cent of their income on housing), 15.6 per cent are under high financial stress (spending between 40 and 50 per cent), and 26 per cent are under very high financial stress (spending more than 50 per cent).

Some argue it is an inevitable process due to a mere imbalance between supply and demand. But such an approach does not explain anything, since both supply and demand are in fact a dense tapestry of actors and social forces with contradictory interests, strongly determined by government policies.

The survey bears this out with new figures, showing for example that prices behave differently depending on which actors are involved. When a real estate agency is involved, there are more rent hikes. Forty-six point six per cent of households dealing with an agency have experienced rises. In contrast, in the case of those dealing directly with landlords, the figure drops to 31%. Since estate agents are involved in 71.9% of rental contracts, it can be inferred that they have played a significant role in overall price rises.

Moreover, large landlords tend to make more rent increases than small landlords. According to the survey figures, 49.6% of renters living in vertical property blocks (generally owned by large landlords) suffer rent increases, compared to 34.1% of those living in horizontal properties (owned by both small and large landlords).

No mass exodus, but residential insecurity

The high level of financial stress and the high percentage of people moving home have given rise to the myth that there is a sort of general exodus from the city centre to the suburbs. However, the figures show that seven out of ten moves are to neighbourhoods with the same or higher incomes. In fact, almost half of all moves (48.2%) are to another home in the same neighbourhood.