Spanish Parliament Reins in Property Sector

October 12th, 2006

Parliament on Thursday approved a bill aimed at curbing near out-of-control urban development and spiraling property prices in Spain. The legislation, to come into force in July, was backed by all political parties except the conservative opposition Popular Party.

“With the instruments of this law we have to put the brakes on exorbitant house prices,” Prime Minister Jose Luis Rodriguez Zapatero told parliament. Housing Minister Maria Antonia Trujillo called it a “project against urban speculation and in favor of transparency and citizen participation.”

For more than a decade, the real-estate boom has seen large-scale housing developments, golf courses and holiday complexes spring up across Spain. Trujillo said the new legislation would help guide the property market to a soft landing, rather than a crash.

Concern also has grown after a number of local officials were arrested recently on charges of suspected fraud, money laundering and corruption related to urban development. Spanish media has reported almost daily about under-the-table commission payments. In the biggest case, nearly 60 people were arrested on charges relating to real-estate fraud in the southern jet-set resort town of Marbella, including a former mayor, several councilors, developers, art dealers and even a well known singer.

The new legislation would oblige all owners of land in the five years previous to its development to be listed in official documents, and would compel senior local government officials to declare their assets. It would impose more stringent checks on projects that would increase a town’s population by more than 20 percent. Thirty percent of new housing in major development projects would have to fall within government-controlled subsidized housing programs.

Last year, several protests gathering tens of thousands of people in Madrid, Barcelona and Valencia called for an adjustment in housing laws to enable young people to have easier access to affordable housing.

Story from International Herald Tribune

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