Government approves urgent measures to improve access to housing and promote affordable rents

Moncloa Palace, Madrid

The Royal Decree-Law on urgent measures to improve access to housing and promote affordable rents, approved by the Council of Ministers, provides for amendments to five laws that affect the sector, allowing improvements to be made to provide better conditions to rental agreements for tenants and prevent evictions.

Among other measures, the minimum legal term in which a tenant can remain in rented accommodation is increased from three to five years, while the tacit extension period of the contract is raised from one to three years when the landlord and tenant do not declare their intention not to renew the contract. Furthermore, additional guarantees to the deposit are limited to a maximum of two-months rent, unless it is a long-term lease.

The Minister for Public Works, José Luis Ábalos, considered it to be "absolutely necessary" to bring to an end the current rental market situation which, with much higher prices and increasingly more contractual demands, makes "the possibility of maintaining a horizon in these properties" more difficult and "poses a drama that affects the life project of many people, especially the young".

Pool Moncloa/JM Cuadrado José Luis Ábalos also expressed his concern at the 5% increase per annum in evictions enforced for unpaid rent, compared with the decline in mortgage enforcements. That is why, he explained, the eviction procedure is being reformed so as to offer more protection for vulnerable households and so that, in coordination with social services, "alternative accommodation" can be obtained "for those affected".

As regards tourist apartments, the minister pointed out that "the possibility is being studied that, by a qualified majority of three-fifths of the members of owners' associations, agreements can be adopted that limit or impose conditions on the exercise of this activity".

Other reforms contained in the Royal Decree-Law are aimed at encouraging works to remove physical barriers in buildings and to improve access. At a fiscal level, the regulation on Local Property Tax is amended to foster the rental market and the exemption on paying Stamp Duty is established when signing a rental agreement for stable and permanent use.

The Minister for Public Works announced that the government will continue to approve new rules on housing, such as a new State Law and the Plan for 20,000 rental properties, and the assignment of use with limited rental prices. "As well as being a right, the social function of housing must be advocated, which, for this government, is something more than a market element or simply the exercise of private property", he claimed.

10 billion euros for railway services

The contract between Central Government and Renfe, which the Council of Ministers approved on Friday, will allow an investment to be made over the next 10 years of almost 10 billion euros to guarantee railway services subject to a Public Service Obligation on suburban, medium-distance, metric gauge and AVANT trains. More than 322 million passengers use these trains each year.

José Luis Ábalos highlighted that these 10 years, which may be extended for another five years, "give Renfe a very significant horizon and will finally allow tenders for rolling stock that we need to improve some particularly critical lines".

Reduction in motorway tolls

The Council of Ministers approved the application, as from 15 January 2019, of an average reduction of 30% in tolls on seven motorways managed by the State Land Transport Infrastructure Enterprise. Furthermore, there will be no toll charge between the hours of midnight and 6 am.

Greater supervision of financial system

Pool Moncloa/JM CuadradoThe Council of Ministers approved a Royal Decree-Law that provides the Bank of Spain, the Spanish Securities Market Authority and the Directorate-General of Insurance and Pension Funds with new macro-prudential tools.

The Minister for the Economy and Business, Nadia Calviño, explained that the aim of this measure is for supervisory bodies to have suitable instruments available so as to prevent and mitigate possible obstacles to the provision of financial services that may end up affecting the real economy.

As regards the Bank of Spain, the minister highlighted that the institution will be provided with the capacity to establish quantitative restrictions aimed at the granting of loans to complement management instruments and indirect actions they already had power over by establishing capital buffers or requirements.

Nadia Calviño stated that the Spanish Securities Market Authority will be provided with new tools to require entities under their supervision to have a minimum volume of particularly liquid assets with which to tackle position whereby large volumes of funds are withdrawn at any given time in a context of market tension.

The minister added that the Directorate-General of Insurance and Pension Funds will be empowered to establish limits on the exposure of certain services to economic activities and categories of assets, as well as limits on operations to transfer risks and insurance portfolios.

By doing this, she said, "Spain becomes a pioneer in establishing macro-prudential tools in the field of investment funds, insurance companies and pension funds".

Macro-prudential authority

Simultaneously, the Ministry of Economy and Business published, for public consultation, the draft Royal Decree creating the Financial Stability Council of the Macro-prudential Authority (Spanish acronym: AMCESFI) so that institutions, bodies and citizens can make requests.

Nadia Calviño specified that the text establishes its functions as "the analysis of possible risk factors, the issuing of opinions, the publication of warnings and recommendations to sector supervisors". Two important aspects also stand out in its design: its independence and cross-cutting nature.

The Minister for Economy reiterated that this is a step forward in strengthening the supervisory capabilities of our financial system, to prevent crises and guarantee that the system contributes to stability, economic growth and the well-being of our citizens.

New Education Act

Pool Moncloa/JM CuadradoThe Minister for Education and Vocational Training, and Government Spokesperson, Isabel Celaá, presented the Council of Ministers with a report on the future Education Act. This law completely repeals the Constitutional Law on Improved Education Quality (Spanish acronym: LOMCE) and amends the previous Constitutional Law on Education (Spanish acronym: LOE), which was reformed by the LOMCE.

The minister stressed that the draft bill is absolutely respectful of the Constitution and "respects both the powers of the State and of the regional governments", establishing a 55% reservation of the State's powers in those regions with their own language and a 65% reservation in other regions.

Isabel Celaá announced that the law analysed on Friday establishes that primary education should again be organised in educational cycles, definitively abolishing the system of reválidas [exam process in fourth year of ESO to define whether or not the pupil will go on to study advanced secondary education with the possibility of then going on to university] and early school timetables. It prevents the dual qualification system for the ESO [obligatory secondary education] which pupils could be guided towards even while studying Basic [first cycle] Vocational Training. This is a very flexible system of inclusive schooling, "which attends to the brightest students while catering for the needs to provide extra support for slower learners", she said.

In this regard, the Government Spokesperson claimed that "repeating the year will be the last resort" and that students that repeat a year will have a tutor assigned at the centre to guide them. This thus puts the focus on customised plans and on the pupils themselves.

"We are modernising the system in such a way that no-one is left behind, that everyone leaves with a qualification, with the preparation and accreditation necessary to find a decent job in their lives. Vocational Training will be ranked as first class the same as training through the Bachillerato [advanced secondary education]", underlined the Minister for Education.

Isabel Celaá specified that the draft law affects more than 8 million students, 700,000 teachers and 28,000 education centres.

More vocational training qualifications

The Council of Ministers approved the creation of five new higher cycle Vocational Training qualifications, applicable throughout the country: Higher Technician in Aero-mechanical Maintenance of Turbine Engine Helicopters, Higher Technician in Aero-mechanical Maintenance of Piston Engine Helicopters, Higher Technician in Aero-mechanical Maintenance of Piston Engine Aircraft and Higher Technician in Maintenance of Electronics Systems and Avionics in Aircraft.

The approval of these new qualifications is framed within the strategic plan pushed through by the government and social stakeholders to modernise vocational training. Isabel Celaá recalled that "the insertion of vocational training in the job market is now above 75%".

Early retirement for local police officers

The government regulated the early retirement of local police officers that substantiate 37 years of effective activity with National Insurance contributions as from 59 years of age. The new legislation will allow them to request early retirement for their remaining time by applying a reduction coefficient of 0.2% to the number of years actually worked as a police officer.

Isabel Celaá explained that officers must notify their intention to sign up to early retirement prior to 31 January each year and have a minimum number of 15 years of National Insurance contributions as police officers. This agreement is backed by a positive report from the different tiers of government and responds to "a widely sustained demand from the sector and by the General Social Security Act", she said.

Weekly assessment

Pool Moncloa/JM CuadradoIn her summary of weekly affairs, Isabel Celaá referred to the appearance by the President of the Government, Pedro Sánchez, in the Lower House of Parliament in which he reiterated that the government's position on Catalonia is dialogue within the law.

"This government is determined to channel a resolution to the conflict in Catalonia through political processes that require looking at the bigger picture, time, dialogue, loyalty and a sense of State", underlined Isabel Celaá.

The Government Spokesperson also highlighted that the President of the Government took part in the Inter-governmental Conference on the Global Compact on Migration in Marrakesh at which he announced that Almeria will host the International Conference on the relationship between desertification and global migration in 2019.

Non official translation