0133 GMT January 23, 2020
Ruth Melida is in a jam. In April, she found out that the monthly rent of her flat where she lives with her unemployed husband and two children would rise from €605 to €999 ($710 to $1,170), AFP reported.
That leaves the family with under €200 to spare for other expenses. And the situation could get worse if her husband's unemployment benefits run out next month.
"What do we do, those of us who don't have the means? Do we go live in the woods?” asked the 41-year-old, who lives in San Sebastian de los Reyes outside Madrid.
Like her, more and more Spaniards are having trouble paying their rising rents, with many forced to move, particularly in Madrid and Barcelona, as they struggle on low salaries or benefits.
"People who have lived all their lives in a neighborhood have to leave for increasingly peripheral districts that are adapted to their budget," warns Marta Montero, the spokeswoman of an association for the right to housing in Madrid.
In the second quarter, rents rose 15.6 percent year-on-year in Spain, according to real-estate website Idealista.
Since 2010, they have increased by 35 percent in Barcelona and 30 percent in Madrid.
"Every time I've left an apartment, its price has then risen €50 to €100 on Idealista," said Angel Serrano, a consultant in Madrid.
Spain's Prime Minister Pedro Sanchez has promised a housing law whose exact details remain unclear but would likely include a rise in the minimum length of a rental contract from three to five years.
The leap in rents comes as Spain is still reeling from a devastating economic crisis that kicked off in 2008 when a housing bubble burst, leading to the eviction of thousands of indebted families who had bought their homes on credit.
As a result, "most people resorted to renting by necessity", said Beatriz Toribio, the head of research for real-estate web portal Fotocasa.
One company caused a scandal this month in Barcelona, offering tiny, three-square-meter (32 square-feet) ‘capsule’ rooms built one on top of the other in a house with shared living spaces for €200 a month.
According to the EU Eurostat statistics agency, 43 percent of Spaniards who rent private housing spent more than 40 percent of their earnings on rent in 2016, compared to an average of 28 percent in the European Union (EU).
Waiting for eviction
"We're living in a rent bubble," said Montero, who blamed investment funds that have snapped up billions of euros in real-estate assets from banks, which themselves seized them from indebted families.
That's what happened to Melida's flat complex, which was social housing when she moved there in 2014 but was then snapped up by an investment fund that raised rents, forcing dozens of residents to leave.
They can't pay the new rent and are waiting to be evicted.
But for Fernando Encinar, the cofounder and head of research at Idealista, talking about a ‘bubble’ is wrong as he said the current rise in rents is not due to speculation but the consequence of an economic recovery that began in 2014.
Spain forecasts economic growth of 2.7 percent this year after three years of growth of 3.0 percent or over.
Encinar said lower rental prices ‘weren't real’ several years ago and corresponded to ‘a crisis situation’.
From 2010, thousands of homeowners chose to rent out their places rather than sell them as there were no buyers in a country where the norm had been to own your flat or house, and they had to charge low prices.
Still, faced with the current rise, Madrid's left wing city hall is battling Airbnb-type seasonal rentals they accuse of driving up prices.
The city hall in Barcelona is trying to encourage owners of empty housing to rent their properties out.
Far-left party Podemos, meanwhile, has submitted a bill in parliament regulating rents and banning the eviction of tenants who cannot be rehoused.
But others say that is not the solution.
Toribio said more social housing should be built in a country where it only represents 2.5 percent of all housing, according to the Housing Europe foundation.
The government wants to build 20,000 units of social housing in four to six years.