Barcelona outlaws short-term-rental (Airbnb and other platforms) by the end of 2028! What's going on?

The major of Barcelona mentioned that purchase (+70%) and rental (+40%) prices have increased so much over the last decade, that especially young people suffer from a lack of affordable housing and are forced out of the city. Barcelona addresses this and the short-term-rental ban is one measure aimed at doing that.

1️⃣ The big question though: will it help?

My estimation is that it will not. Yes, for sure short-term-rental has had its effect on purchase -and rental prices. But we cannot see that apart from an era where interest rates were kept at 0% for a very long time and as such demand for real-estate skyrocketed over the last 10 years or so.

2️⃣ Secondly, and that’s not unique to Barcelona, the composition of households is changing rapidly.

Especially single-person households are a fast-growing segment. In 2018 published research report by the municipality found that between 1991 and 2011 this group grew from 14.5% to 24.7% of all households. That’s a 70% increase (and counting). In other words, demand for housing is increasing rapidly.

3️⃣ And lastly (for this post), some numbers.

Currently a little over 10,000 properties have a short-term-rental license. These units will then enter the housing stock (assuming they are fully utilized as tourist properties at the moment). The metro pole region of Barcelona has, according to the same 2018 report, roughly 1.4 million residential units. So these 10,000 units represent 0.7% of all residential units.

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Availability of (affordable) housing is a challenge in many, mostly urban, places across the globe and it’s a tough challenge with many interacting variables. The complexity goes way beyond a LinkedIn post and I haven’t run the models, but I can tell you that adding 0.7% additional units to a market that is very tight with high demand, will not make any difference.

Short-Term Fixes vs. Long-Term Solutions in Urban Policy

Failing policy making, from global monetary policies to local housing and tourism management policies, have put many cities in a position where residents now suffer. The harsh reality is that there is no quick-fix and banning short-term-rental is such a quick-fix. Long-term planning and policy making that aims at achieving those long-term goals is the only thing that might turn the tide. But in the modern world, where instant satisfaction is more important, for both politicians as well as residents, than actual (but long-term) results, we are still far away from turning any tide.