Politics
Madrid City Council Approves Limits on Tourist Rentals and New Social Housing Fund
The measures cap short-term lets in central districts and direct 42 million euros toward new units in Vallecas and Usera, shifting availability toward year-round residents.
How we reported this
Madrid City Council passed two linked measures on July 7 that restrict short-term tourist rentals and create a dedicated fund for social housing. The votes approved a cap of 90 days per year on new listings in the Centro and Chamberí districts and allocated 42 million euros from the 2026 municipal budget to build or acquire 1,800 units elsewhere in the city.
The decisions follow a 2025 regional housing report that counted 18,400 active short-term rental listings inside the M-30 ring road. Council records show the measures respond to repeated complaints from neighbourhood associations about rising rents in those same postcodes.
Long-term tenants in Centro now face fewer competing bids when leases turn over. Property owners who relied on platforms for higher seasonal income will lose that option once the rules take effect. Families on waiting lists for social housing in Vallecas and Usera are projected to see new units come online first.
Budget and Allocation Figures
The 42 million euros comes from the housing section of the 2026 municipal budget, which totals 1.9 billion euros. Council documents specify that 28 million euros will purchase existing buildings in Usera and 14 million euros will fund new construction on city-owned land in Vallecas. The legislation states that units must remain under public management for at least 30 years.
Implementation Steps
Enforcement begins January 1, 2027, with municipal inspectors checking listing platforms and issuing fines up to 30,000 euros for violations. The regional housing authority will manage the new units and apply the same income and residency criteria already used for existing social housing. City records indicate the first 400 units are scheduled for occupancy review by late 2028.