In the United States and Canada, housing policy discussions are intensifying as lawmakers in Madrid advance new housing regulations. Sources within the Prensa Ibérica group have informed El Periódico de España that the Ministry of Transport, Mobility and Urban Agenda, led by the government, plans to shield affordable rental housing through a provision in the forthcoming Housing Code announced this Friday. The aim is to ensure rents for protected housing stay within set limits as the Housing Code moves through Congress with backing from the coalition and its partners.
The reform introduces changes to the required portions of land that must be reserved for subsidized housing. Government plans indicate that in new urbanization projects the minimum reserve on developable land would rise from 30% to 40%. In cases involving urbanization reform or renewal on non-consolidated urban parcels, the reserve would increase from 10% to 20%. This framework is intended to balance development capacity with social housing needs across various regions.
The text, which will accompany the Housing Law in Congress, includes one exception: full compliance with the reserve within its territorial scope must be ensured through the planning tools used. The document seen by El Periódico de España notes that this approach respects social cohesion and the distribution of housing opportunities.
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From the ministry under Raquel Sánchez, officials guarantee the change in land transfers for subsidized housing. It could have been addressed by amending the Land Law, currently in progress, but the decision was made to pursue it through the Housing Act because it aligns better with the government’s current policy direction.
What happens if the reform stalls or evolves?
Daniel Cuervo, general secretary of the Spanish Association of Supporters and Builders, notes that a likely immediate consequence of higher minimum reserves for subsidized housing is higher entry costs for publicly funded homes. The association argues that the reform should be paired with updates to housing modules. These modules set the maximum prices for subsidized homes, which vary by region and location. In Madrid, for instance, the price caps have not been updated since 2008, a long-standing demand from the real estate sector.
The Land Code amendment to support subsidized housing could underperform if maximum selling prices are not raised. Since construction costs have climbed since 2008, developers face tighter margins and some may refrain from building under existing caps. The need to adjust the modules across all autonomous communities is urgent, as the current caps create a bottleneck when costs rise and lands cannot reach the market. If the reserve provisions shift from 30% to 40% and the reserves are relaxed in certain cases, region-by-region updates become critical for market feasibility.
The APC secretary general emphasizes that regional updates are essential. Without updated price modules, the construction costs will continue to rise and land that could be brought to market protected reserves may remain unusable. The call is clear: accelerate regional revisions to avoid bottlenecks in subsidized housing programs.
A note on timing
The targeted reform to the Land Code will move forward regardless of other norm changes the government is pursuing. Reporting from late last year indicates the Ministry of Transport, Mobility and Urban Agenda has been working for months on a legislative change to prevent urban development activity from stopping due to procedural defects. The objective is to address current problems faced by all beneficiaries and to move hundreds of city plans forward after general plans were canceled due to judicial challenges.
Recent years have seen judicial appeals halt numerous planning tools in cities like Vigo, Santander, Castellón and Santa Cruz de Tenerife. The latest tweak to the operation dates to December showed the rule reaching the Council of Ministers as a preliminary draft. By early January, the bill was in the public information phase with feedback from environmental groups, lawyers, architects, and several local governments and business associations.
From the law firm Garrigues comes a description of the change as a milestone in the legal system because it addresses recurring administrative and judicial practice issues. The reform signals a focused effort to streamline approval processes and reduce delays in housing projects that serve both public and private sectors.