Spain’s housing debate widens after pensioner’s death following Madrid eviction

Madrid, Spain. Prime Minister Pedro Sanchez has blamed speculative investors for Spain’s worsening housing crisis amid public anger over the death of Maricarmen Abascal, an 87-year-old pensioner, two weeks after her eviction from her Madrid home.

Emergency measures and rising costs

On October 6, Sanchez said emergency housing legislation would “stand up to vulture funds” and “target only those who regard housing as just another commodity to be speculated on.” The legislation was passed after he dissolved parliament and scheduled a snap election for November 29.

Over five years, rents have climbed 44%, while home prices have increased 58%. Demonstrators have demanded an end to speculation by investors known in Spain as fondos buitre, or vulture funds, which many hold responsible for numerous evictions, including Abascal’s.

However, identifying precisely which businesses fall under that description has proved difficult for many Spaniards.

A small consultancy behind the eviction

Abascal’s landlord was Urbagestión, a small consultancy rather than a prominent private equity business. According to the Association of Spanish Registrars, two brothers own the company, which employs eight people, owns two properties and recorded a net profit last year of 2,990 euros ($3,350).

The tenants’ union representing Abascal said Urbagestión bought her apartment eight years ago and raised the monthly rent from 570 euros to 1,650 euros, exceeding her monthly pension.

Court records show that the company brought proceedings against her after finding that her regulated rental agreement had expired.

Housing Minister Isabel Rodríguez characterised Urbagestión as a vulture small and medium-sized enterprise, even if it was not a fund.

Debate extends to smaller landlords

The vulture-fund label became established in Spain following the financial crisis of 2008-2014. It referred to private equity investors or investment banks that purchased rent-controlled apartments and sharply increased rents.

Bank of Spain figures show that companies, including investment funds, represent only 8% of the country’s rental market.

Fernando Rodriguez de Acuña, general director of Acuña, a property analysis firm based in Madrid, said the government had broadened its focus to encompass anyone earning a profit from housing. That approach, he said, also caught small landlords, who account for most of Spain’s rental market.

He argued that seeking a profit was a natural reason for participating in the market and that, without that prospect, people would not enter it.