July 25, 2024 | 3:36

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City councils begin to close illegal tourist apartments

City councils begin to close illegal tourist apartments

Jeickson Sulbaran

June 19, 2024 | 11:00 a.m.

A stressed real estate market and tourist pressure

In Santiago de Compostela, some 600 homes for tourist use (VUTs) will be forced to close or return to the residential market after the city council's decision not to legalize them. The municipal ordinance, which establishes a clear separation between vacation rentals and habitual residence, leaves businesses that operated without the necessary municipal authorization without the possibility of regularization. According to the local government, these owners should have processed the regularization at the time. “They eliminate us from the map,” laments the president of the sector association, anticipating a long legal fight. The Urban Planning councilor defends the measure, arguing that operating outside the law is “very serious”. The controversy is served.

City councils begin to close illegal tourist apartments

The Galician capital, with less than one hundred thousand registered inhabitants, faces a complex situation. The floating population, which includes university students, is around 30.000. In five years, the average rental price has risen 33%, going from 424 to 564 euros per month, while housing availability has decreased dramatically. Currently, there are barely more than one hundred homes on the free market, and it is estimated that after June 30, when the rental contracts for university students end, the supply for the next academic year will be around 300 homes, according to the Galician Association of Real Estate Agents. (AGALIN). This forces many students to look for accommodation in neighboring municipalities. The city council has requested the Xunta to declare it a stressed area.

Added to this situation is the tourist pressure derived from being the goal of the Camino de Santiago. ANDIn 2023, almost a million people spent at least one night in the city. More than 446.000 compostelas were delivered, certificates that prove having traveled at least 100 kilometers. This year, for the first time, 100.000 compostelas were reached in the first semester.

Urban planning regulations and illegal VUTs

In February of last year, the PSOE municipal government modified the General Urban Planning Plan (PXOM) to regulate the characteristics of tourist rental homes. Already prohibited in the Historic Center, they are only allowed on the first or ground floors with residential use. Three months before the municipal elections, the ordinance that should specify these uses was awaiting the next government. Now, the bipartite formed by BNG and Compostela Aberta has made a decision that affects all tourist accommodation without a municipal permit.

The Town Planning Councilor, Iago Lestegás, clarifies that the ordinance only regulates the way in which the use of housing for lodging and the use of housing must be communicated to the city council. “famous 60 days”. This allows a person who lives in an apartment for half a year to rent it out to tourists for two months. This formula, designed for the collaborative economy, allows students to rent during the course and then obtain extra income in the summer. However, the owners of VUTs expected that this ordinance would regularize their businesses without a qualifying title, which has not happened.

The president of the Galician Tourist Housing Association (Aviturga), Dulcinea Aguín, feels cheated. She assures that in the modification of the PXOM An expectation of regularization was generated that was not met. For his part, Lestegás insists that these accommodations operated without the corresponding prior communication and without a qualifying title. Although they have been registered in the Registry of Tourist Companies and Activities (REAT) of the Xunta, the regional authorization does not exempt the municipal authorization.

Impact on the residential market

Since the city council's decision, conservative media has highlighted the difficulties that affected homeowners will face. Some testimonies talk about selling the homes or not being able to pay the mortgage if they are not rented to tourists. Aguín understands these concerns and points out that the investment in qualities for tourist rentals is much greater than for long-term rentals. However, Lestegás believes that these apartments will return to the residential market, as does Vicente Martínez, from AGALIN. Martínez assures that, although the profitability of tourist rentals is higher, the long-term market offers sufficient guarantees for owners.

The decision to close the illegal VUTs in Santiago de Compostela reflects a clear political will to promote and favor access to housing, although it has generated a conflict between the authorities and the owners of these tourist accommodations. The measure seeks to balance the real estate market and meet the demand for residential housing, although controversy and legal challenges persist.

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