Tensioned area, the last obstacle to saving the residents from the housing project

PalmHe debate on housing in the Balearic Islands The question is no longer whether prices are high, but whether there are tools to prevent a point of no return in 2026. Forecasts point to a further increase in rents of between 8% and 12%, which translates to up to €4,000 more per year for residents. The increase will come primarily from the thousands of contracts signed in the post-pandemic era that, five years later, must be renewed. Without any containment mechanisms. At runaway market prices. The used housing market offers no hope either, with the price per square meter exceeding €5,000. And rising.

In this context, the declaration of the Canary Islands as a stressed residential market area has become one of the main points of political contention. The PP government refuses to activate it, arguing that it "lacks real effects," while a segment of the academic and professional community, as well as the left, defend it as a tool for immediate, albeit limited, relief. It wouldn't solve the underlying problem, but it does have the capacity to cushion the blow that's coming.

The concept of a "stressed zone" doesn't imply total market intervention, nor does it mean a generalized price freeze. According to the state housing law, activating it allows action on three fronts: limiting increases between successive contracts, setting reference indices in certain cases, and enabling tax incentives for landlords who adjust their rents.

Modest objective

According to economist and housing expert Eduard Robsy, the declaration of the Balearic Islands as a stressed residential market area was not intended to solve the housing problem, but rather to have a more modest objective: to mitigate its most immediate effects in a context of growing tension. Faced with the almost mantra-repeated idea that limiting prices "hasn't worked anywhere," the expert introduces a nuance that is often lost in the debate. The Housing Law, he reminds us, "doesn't freeze rents or impose strict limits across the board." The strictest caps only apply to large landlords and properties entering the market for the first time within a stressed area. "For everyone else," he says, "the main limitation is that the increase between successive contracts is around 2%."

In a market like the Balearic Islands, where the problem isn't so much the annual rent increase as the price jump at the end of a contract, this restraint doesn't change the system, but it does alter how it behaves. "If you have a satisfied tenant and you can raise the agreed-upon percentage, the relationship usually continues," Robsy points out. Without that limit, the incentive is different: to terminate the contract, relist the apartment, and raise the price as far as demand will bear. For the expert, moreover, the real immediate impact of the "stressed zone" designation isn't price control, but everything associated with it. "The measure with the greatest impact in the short term is the declaration of a stressed zone, especially due to the rent moratoriums." A situation that was already seen with the social safety net: "Before, evictions due to vulnerability were halted. These are measures with an immediate impact." They don't solve the housing shortage, but they contain its effects.

The problem, Robsy warns, "will worsen in 2026," when contracts signed in recent years begin to be renewed en masse. "That will generate social conflict," he cautions. Given this timeline, appealing to affordable housing as the star solution is too late. "Creating a lot of affordable housing with mixed models is not a short-term solution," he asserts. "Even if it's implemented, access will still be difficult to meet," he adds.

That's why he insists on lowering expectations. The "stressed zone" "doesn't solve the underlying problem because it doesn't address the structural causes," but it does allow for cushioning the blow until more ambitious policies are implemented. The final diagnosis is less ideological than practical: "If we let affordable housing depend on private developers, it's not going to happen." In the Balearic Islands, with tourist pressure, land scarcity, and high profitability, the market has already amply demonstrated its priorities.

Why does the stressed zone fit our needs?

From a technical standpoint, the Islands meet the criteria established by law: excessive economic burden on households, sustained price increases, and a mismatch between supply and demand. The debate, therefore, is not legal, but political.

The Government maintains that the declaration would criticize the supply. Robsy challenges this argument with historical data: "Between 2000 and 2008, approximately 600,000 homes were built each year, and the price doubled. Never before had so much been built, nor had the price ever risen so much. Why should it be any different now?" he asks.

The key, he insists, is not only how much is built, but for whom and under what rules. "We must build with regulations that lead to the desired outcome. Otherwise, the same people will continue to profit," he points out.

The value of taxation

One of the least explored aspects of the debate is the fiscal one. Declaring an area a "stressed zone" allows for powerful tax incentives to encourage stable rentals, but its implementation requires political will and institutional coordination. Real estate expert Natalia Bueno points out that, without this lever, many landlords see no incentive to remain in the residential rental market. "Here, only 50% of the income is tax-deductible," she notes. The difference is that, within a stressed zone, the law allows this reduction to be significantly increased—up to 90%—if the landlord meets certain conditions, such as lowering the price of the new contract compared to the previous one and adjusting it to the area's benchmark indices. The problem, Bueno notes, is that these incentives don't operate automatically, nor do they guarantee that supply will appear on their own. In a context of intense real estate pressure, the ordinary tax reduction is insufficient to compete with more profitable uses. "I thought declaring a zone a 'stressed area' would bring thousands of homes to light, but trusting the administration is complicated," he warns. Without effective controls, reliable records, and inspection capacity, the incentives exist on paper, but the regulation loses its ability to influence the actual functioning of the market.

Restriction on foreigners

The analysis also includes the debate on home purchases by foreigners. Juan David Janer, a professor of Public International Law, asserts that outright bans clash with EU law if they are not part of a comprehensive, proportionate, and non-discriminatory policy. Janer does not dismiss the measure in the abstract, but warns of its legal fragility if presented as a shortcut. "There is no evidence that the authorities who have promoted this initiative have developed a minimally credible and ambitious policy regarding access to housing," he points out. Restricting purchases by non-residents would only make sense as one element within a solid strategy, not as a substitute for pending domestic policies such as public housing, taxation, land-use control, and effective rental regulation.

The risk of doing nothing

Both Robsy and Bueno agree on one warning: inaction is also a choice and has consequences. "Housing is a basic constitutional right. Depriving you of it excludes you from other fundamental rights," Robsy reminds us. Without registration and residential stability, access to the system erodes. Bueno describes it in terms of the silent displacement of residents: "We are moving towards a model of expelling capable people."