Author: Carles Huguet

Source: El Economista

Squatting has increased by 10% in Catalonia over the past three years. For some, it is an exaggerated issue pushed by conservative sectors, while for others, it represents one of the main challenges facing the region’s economy. What is clear is that unauthorized entry into properties continues to rise, with owners blaming the permissiveness of the authorities towards squatters, leading to Catalonia accounting for over 40% of all squatting cases in Spain.

According to data released by the Ministry of the Interior, there were 7,345 squatting complaints in Catalonia in 2021. This represents 42.5% of the 17,274 legal proceedings opened nationwide on the same issue. The percentage has remained almost stable since 2019: two years ago, there were 6,638 cases, or 45.4% of the 14,621 across Spain, and in 2020, there were 6,547 cases, or 44.2% of 14,792 nationwide. Authorities acknowledge that squatting is an ongoing issue in Catalonia, but argue that it is increasing at the same rate as elsewhere in Spain.

However, the Generalitat has displayed a dual approach in recent months: lenient towards tenants with needs and strict towards those committing crimes. In February, the Catalan Parliament approved a new anti-eviction law, replacing the one annulled in 2021 by the Constitutional Court due to a procedural flaw. This law increased the obligations for large property holders regarding tenants in economic vulnerability.

Under this law, companies owning more than 10 properties or individuals with more than 15 are required to offer social rental housing, even if the squatters do not have a contract because they occupied the property illegally. The obligation lasts five years if the major property holder is an individual; seven years if it is a legal entity; and twelve years if it is a bank or investment fund.

Catalonia Prepares a Second Law to Address Conflictual Squatting

On the other hand, the Catalan government is preparing a second regulation to tackle problematic squatting. Last week, it presented a proposal allowing not only property owners to initiate eviction proceedings in cases of illegal activities in squatted properties but also enabling municipalities and neighborhood associations to act if property owners fail to do so, a situation often encountered with large property holders.

This new regulation would allow administrations—municipalities—to request processing. Property owners will have one month to respond to these requests, and if they ignore them, they could face fines ranging from €9,000 to €90,000, must cover the eviction costs, and could potentially lose the property, which would be handed over to the competent authority for social use.

The real estate sector is calling for more tools for the police regarding evictions. The police currently cannot remove illegal occupants without a court order if they are not committing a crime, are willing to stay peacefully, and are not breaking any laws.

The regulation addresses the demands of the Barcelona Urban Property Chamber, which seeks to speed up eviction procedures. The institution believes that a law is needed to align with European standards, where the police have the power to evict squatters. It also counters the notion that most conflicts occur in properties owned by large landlords; most actions are in second homes or rental properties that are vacant due to renovations or tenant changes at the time of occupation.

Xavier Vilajoana, President of the Catalonia Promoters Association (APCE), laments the lack of legal mechanisms to prevent squatting and points out that illegal entries have surged even in unfinished homes. “The conflict is concentrated in Barcelona and its metropolitan area,” he says. He also criticizes the authorities for their perceived leniency, a view shared by most in the sector.

Although Barcelona province has the highest number of squatting cases, the number of illegal entries in the capital has decreased. Data provided by the city council—facilitated by the Mossos d’Esquadra—shows that illegal entries dropped by 7% from 2019 to 2021, from 1,610 to 1,502 over three years.

The Impact of Squatting on Property Value

It’s worth noting that the government banned evictions of vulnerable individuals in 2020 due to the pandemic, extending the moratorium into this year. As a result, many properties have been affected for three years, while the normal judicial processing time in Catalonia is just eight months.

Squatting not only affects the occupied property but also impacts the entire building. According to Institut Cerdà estimates, a property in a building with squatters loses between 25% and 40% of its value. Thus, a home valued at €250,000 could immediately drop to between €150,000 (in the worst-case scenario) and €187,500 (in the best-case scenario).

The impact is even more severe on the affected property. According to the same research center, the price can plummet by up to 60%. Therefore, an asset valued at €250,000 could immediately be worth only €100,000. Rural areas are the most affected by this depreciation.