When you think about Spain, the first thing that pops into mind is undoubtedly one word: elevators.
No? Well, maybe it should be.
At face value, there’s a pretty simple reason why. Spaniards are some of the world’s pre-eminent apartment-dwellers. In 2012, roughly 65 percent of the population lived in apartment buildings, much higher than the euro-area average of 46 percent. (The only other European countries that compare to Spain in terms of apartment-living are Latvia and Estonia, which are both also around 65 percent.)
Share of Populace Living in Apartments
That seems straightforward enough, except when you consider the fact that unlike many of the other big apartment-dwelling nations, the Spanish don’t rent. They own. In fact, only Ireland has as high a rate of homeownership, and yet only 5 percent of the Irish live in flats.
Homeownership Rates in Select European Countries
Spain hasn’t always been such a hotbed of homeownership. In fact, well into the 1950s, less than half the population owned their homes. That jumped to more than 80 percent over the next half century.
Before the hostilities began, Spain had had an influx of rural migrants into the cities. That resumed after the war, exacerbating a shortage of housing.
Meanwhile, in an effort to short up popular support, the Franco regime instituted heavy-handed regulations on the rental sector, starting with the Urban Tenancy Law of 1946. As a Spanish central-bank economist, Juan Mora-Sanguinetti, wrote in 2011:
The interventions were severe. The tenant’s protection against eviction was unlimited. Even close relatives of the tenant were able to succeed him as tenants in the same dwelling and benefiting from the same conditions. With respect to rents, the Law established fixed one-time increments in the rent paid for apartments leased before 1939 and freezed [sic] the rents in respect of all new contracts.
Overly restrictive regulation made it difficult for landlords to earn profits on their properties, discouraged maintenance, and deterred additional building. Housing quality deteriorated sharply and the supply of housing continued to run short.