Canary Islands Enacts Landmark Law for Holiday Rentals, Allowing 100,000 Tourist Apartments

The Canarian Parliament has made a historic move by passing a new holiday rental law that permits the allocation of up to 100,000 apartments for tourism purposes. This legislation signifies a major regulatory transformation in the region, aiming to balance the booming tourism sector with the needs of local communities.

Legislative Journey and Political Dynamics

After more than two years of intense discussions and negotiations, the law received official approval on Wednesday. It garnered support from the ruling coalition, which includes Coalición Canaria, Partido Popular, ASG, and AHI. However, the passage of the law was not without controversy, as it faced significant opposition from parties such as PSOE, Nueva Canarias, and Vox. This division underscores the contentious nature of the legislation, reflecting differing views on how best to manage tourism and housing in the Canary Islands.

The law has sparked considerable debate among various stakeholders, including tourism rental operators who are concerned about the potential impact on their businesses. Local municipalities are also feeling the pressure, as they will be tasked with enforcing the new regulations. Additionally, the law has led to disagreements within the Economic and Social Council of the Canary Islands, further complicating the implementation process.

Key Features of the New Legislation

The newly enacted law introduces a cap of 10% on the number of tourist accommodations permitted in each municipality or neighborhood, based on the overall housing stock. According to data from the National Statistics Institute (INE), the Canary Islands boast over one million homes, which means that a maximum of 100,000 can be designated for tourism use.

In certain areas known as the Green Islands—specifically La Palma, La Gomera, and El Hierro—the limit can be increased to 20%. This provision is particularly aimed at municipalities facing demographic challenges, such as depopulation or economic decline, as identified by the regional government. This flexibility is designed to help these areas revitalize their economies while managing tourism effectively.

Municipalities are granted a five-year period to develop planning tools that will allocate these percentages for local holiday housing. During this time, they can propose higher limits, but must provide justification through capacity studies. Importantly, no new licenses can be issued until the necessary regulations are established, allowing local governments to take a measured approach to tourism management.

Licensing Framework and Transitional Provisions

The law stipulates that licenses granted under this new framework will be valid for five years, with an extension available for up to ten years for the Green Islands and municipalities facing demographic challenges. This represents a notable shift from the original draft of the legislation, which had different stipulations.

Current holiday homes that are already registered with the General Tourist Registry of the Canarian Government—over 70,000 in total—will also be subject to the five-year validity period. This includes properties that have made responsible declarations to operate, although it is worth noting that only about 47,000 of these are actively in use, according to data from ISTAC.

To ease the transition to the new legal framework, existing properties will benefit from a transitional regime. This allows them time to adapt to the new regulations. If property owners can demonstrate that the adjustment period is insufficient to mitigate the loss of their licenses, they may request an additional five-year extension, providing a safety net for those affected by the changes.

The law also acknowledges ongoing issues related to gentrification and tourist saturation, recognizing that these challenges are expected to persist for up to a decade. It highlights the need for sustainable urban development and addresses the problems posed by outdated and unsustainable urban models, aiming to create a more balanced approach to tourism and local living conditions.

Key points

• The Canarian Parliament has approved a holiday rental law allowing for the use of 100,000 tourist apartments.
• The legislation received backing from the ruling coalition but faced significant opposition from several political parties.
• A cap of 10% on tourist accommodations is established for each municipality, with a potential increase to 20% in designated areas.
• Municipalities are given five years to develop planning tools for local holiday housing.
• Licenses issued under the new law will be valid for five years, with extensions available for specific regions.
• Current holiday homes will have a transitional period to comply with the new regulations.
• The law addresses critical issues of gentrification and aims for urban sustainability in the face of tourism pressures.