1. Economics
May 31, 2017updated 20 Jul 2021 9:07am

Madrid’s residents are being forced out of the city centre. Blame Airbnb

By Sebastian Mann

Central Madrid is not going to “become a theme park like Barcelona, Rome or Venice”, the city’s urban development boss José Manuel Calvo pledged recently. Hundreds of thousands more tourists descended on the capital last year, adding to rental pressures that have forced 10 per cent of locals from the city centre in the past decade. And wildly increasing numbers of people are using tourist accommodation platforms like Airbnb. In the view of Madrid’s left-wing leadership, the problem is critical – and the required solutions are bold.

In many ways, Madrid is a success story. Last year some 680,000 more tourists visited the Community of Madrid, a region of 6.5m people, of whom half live in the city of Madrid. The rise represented a 13.5 per cent increase on 2015 which left Barcelona, although still more popular overall, in the shade. For a country struggling with high unemployment, especially among young people, this was good news. But there are losers.

To some the cause of the exodus seems obvious. Population in central Madrid has plunged in the past ten years, but in the last two, tourist accommodation has grown by 50 per cent. According to a study by the Madrid Higher Technical School of Engineering, the number of properties available on various platforms rose from about 4,000 to 6,000 from 2015 to 2017.

And while much media focus has been on Barcelona, Airbnb has emerged as a major force in Madrid’s tourist economy, with rentals in the city as a whole doubling to 650,000 last year. It means the Spanish capital now has more Airbnb lets per visitor than any other Spanish destination.

This meteoric growth has sparked urgent calls for action. Rents in Madrid have risen by 14.6 per cent in one year, according to recent Bank of Spain figures. And so the city is looking to policy to reduce the undeniable incentives for landlords to use Airbnb, as well as other similar platforms, to profit from their property and indirectly push up rents even further.

 As it stands, pokey one bed attic flats easily command about €60 a night on Airbnb, meaning owners can pocket up to €1,800 a month. The same flat will be lucky to fetch €1,000 on the rental market – and that’s with the rapidly inflating prices partly caused by pressure from Airbnb.

Add to this the comparative freedom property owners have compared with Madrid’s well-regulated rental market (flexibility to up prices at will, for example), and converting your pad into holiday accommodation seems like a shrewd business proposition.

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Madrid’s City Hall has recently laid out a three-pronged effort to curb the popularity of home-sharing platforms. The first measure would ensure that only someone living in a property could let it out as tourist accommodation. Speaking to EuropaPress, José Manuel Calvo said the move would be necessary “so that we don’t have intermediaries or anyone buying 17 homes in order to put them up as tourist properties”.

More interestingly, the leadership also wants to limit the numbers of days in a year for which a property can be leased out. Slightly radically, Calvo has suggested that 60 days “seems right”. But given that he plans to agree the cap with platforms like Airbnb, this seems ambitious.

Finally, Mr Calvo says, the plan would mean “part of the economic return obtained by the property owner would go to City Hall” – which is an innovatively indirect way of explaining a tax.

The central area of Madrid to be affected by these policies is often called the almendra – or almond – but so far it is proving a tough nut to crack. City Hall itself has limited power to take action. Most of that lies with the regional government of the Community of Madrid – which is in the hands of City Hall’s political opponents. And recently Carlos Chaguaceda, director of tourism for the province, suggested a national solution was necessary, while stressing the importance of not demonising Airbnb and other platforms.

Airbnb, for its part, has said it wants to be a “good partner” with the city and regional government to help “local families” who want to share their homes. But in Barcelona it is currently at loggerheads with a city hall that is breathing down its neck. 

Nestled on the outskirts of Madrid is a monstrous amusement park packed with rollercoasters. Adventurous tourists who strike out into the city’s expansive Casa de Campo park occasionally have their genteel strolls interrupted by screams from the rides.

For most, though, the disturbance is a distant hum. With their efforts to prevent the city centre becoming a theme park itself, Madrid’s policymakers are keen to keep it that way. But it seems they will have their work cut out. 

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