“I feel scared, I feel lost,” says Chaymae, sitting at her small kitchen table, chewing a fingernail.

Three heavy-duty locks are fitted to the inside of her front door. Police are about to evict her from her home.

A white kitten plays with a crumpled banner on the floor of her gloomy living room, pawing on the plastic and nibbling its tail. The banner reads: “Free quality houses for all!”

Chaymae is at the sharp end of Barcelona’s rental crisis. She is a 26-year-old Moroccan immigrant and a single mother, who works in a restaurant. She would have no chance of renting a home in Barcelona on the open market, given her salary and circumstances.

So she is squatting. A tenants’ union helped her find this flat in the El Born neighbourhood, close to where her four-year-old son goes to school. Sometimes unions help to negotiate cheaper rents on behalf of tenants, or identify vacant properties to squat in. They insist all these properties have been empty for at least two years.

Barcelona has 1.7 million residents but 32 million visitors each year. Foreign investors have snapped up lucrative real estate, and locals are struggling to find affordable places to live. Rents have risen steeply over the past decade, even as real wages have stagnated.

The scarcity of homes in Barcelona is as much of a problem as their cost. The Catalan daily El Periódico has reported that some property listings for the average rental price of €1,193 a month have received more than 500 requests within 24 hours of going live.

Locals blame foreigners and a boom in holiday lets for driving up rents. A quarter of Barcelona’s residents are foreign nationals, a number that grew 10.4pc last year. The number of Spanish nationals grew by just 0.1pc.

The situation has fuelled a backlash. Hard-Left tenants’ unions mobilise their members to protest against dozens of daily evictions. Their opponents on the right believe they are exaggerating the extent of the crisis for political gain, and that the crackdown on landlords is forcing them out – further reducing supply.

Over the summer, protesters drenched tourists with water pistols to highlight the damage they believe they are doing to their city. Jaume Collboni, the city’s Leftist mayor, has announced plans to eliminate all tourist apartments in the city by 2029 – including Airbnb.

Catalonia has also enacted rent controls after the Socialist-led government in Madrid brought in a law that strengthens tenants’ rights. But there are signs that these radical moves are backfiring, and will worsen the problem they were designed to solve.

‘Evictions can get violent’

On the street below Chaymae’s third-floor flat, a crowd of 40 protesters form a physical line of defence at the building’s entrance, huddled under umbrellas in the pouring rain. Many of them are young, with mullets and piercings, smoking cigarettes.

Evictions can get violent, says Joan Mateau Parra, a photographer who has covered the rental crisis extensively. He shows me a video of a burly police officer dressed in riot gear smashing a front door with a battering ram.

A woman in her 60s beats a small drum as the crowd chants and sings songs. “Neighbourhood, wake up – there’s an eviction at your door”, “If you sow misery, you reap rage”.

Cars honk their support and neighbours watch on. Two policemen pace the end of the street. A group of bemused tourists wander past, and some of the protesters heckle them in Catalan. It’s more performative than aggressive, but the message is clear.

‘Landlords are almost criminalised’

The 2008 financial crisis burst Spain’s property bubble. Hundreds of thousands of families defaulted on their mortgages as the market crashed. House prices bottomed out in 2013 when the government opened the housing market to international investment funds, and foreign money flooded into tourist hubs, including Barcelona, as investors came in search of buy-to-lets with their bumper returns.

Despite house prices cooling around the time of the Catalan independence referendum in 2017 and the pandemic, they have risen steadily for a decade in Barcelona. And while rental prices have increased by 77pc over the past 10 years, real wages in the city fell by 5.4pc between 2010 and 2022, according to municipal council data.

“The reasons for the housing crisis are very simple,” says Mark Stücklin, founder of the website Spanish Property Insight. “Too much demand and too little supply – which is limited in Barcelona for structural reasons. You have the sea and the mountain, and there’s not much land in between.”

Governments have recently been shifting the balance of power in the market towards renters – at the expense of landlords. Over the past six years, the minimum length of long-term rental contracts has been extended to up to seven years, tax deductions for landlords have been reduced, and it has become more difficult to evict tenants.

This year, the Spanish government has dealt a one-two punch to landlords and property investors, banning short-term holiday rentals, and imposing rent controls.

The introduction of Spain’s Housing Law earlier this year allowed Catalonia to cap rents in “stressed” areas, where rents are deemed to be unaffordable relative to income. Around a quarter of the region’s municipalities, home to 90pc of the population, have been said to meet the definition, including the whole of Barcelona.

In these areas, “small” landlords – defined as owning fewer than five properties – are only allowed to raise rents by 3pc relative to the previous contract. Those with five or more properties are subject to a rent cap based on an index based on the ratio of average earnings to rental prices in that area, as well as the specifications of the property in question.

The conservative People’s Party has called the legislation “armed robbery”. It backed an appeal to Spain’s constitutional court, which in May ruled that while minor elements of the legislation were unconstitutional, rent caps in “stressed” housing zones were not.

“Landlords are almost criminalised,” says Francisco Iñareta of Idealista, a real estate firm. “They are seen as the cause of the rental problem, when really they are the most important part of the solution.

“Rent control and punitive measures against landlords not only fail to improve access to rental housing but also destroy the market.”

However, Mohammad Butt, of estate agents Lucas Fox, says investors can often absorb the hit, as rental yields are typically between 4pc and 5pc. “In Catalonia, landlords are used to having complications that come every few years relating to rent controls and affordable housing. Many landlords are in the business because of the rise in the underlying asset price, rather than rental income.”

Rent controls redux

Rent controls have been tried in Catalonia twice before. General Franco capped rents in 1946, which hollowed out the rental market and caused investment to tank. The second time was during the pandemic, when the Catalan government unilaterally imposed rent controls in spring 2020 until early 2022. These were deemed illegal and struck down by Spain’s constitutional court.

The impact of Barcelona’s rent caps – during Covid and now – is hotly contested.

Idealista’s figures suggest that there has been a dramatic reduction in housing supply over the past five years. The number of long-term rental properties listed on the site has fallen by 65pc in Barcelona since 2019, compared to 41pc across Spain.

Competition between families for rental properties has also intensified. In the second quarter of 2019, an average of nine families competed for each rental property on Idealista’s site. That number had risen to 63 by the second quarter of 2024.

It has also had a huge effect on housebuilding. “The threat of rent controls practically killed all investment in the sector during 2023,” says Geoff McCabe, of consultants Cushman & Wakefield. The firm works with large investment funds and financial institutions looking to invest in the housing sector.

“Confusion and uncertainty had a huge impact on the market. In Barcelona, with no rental caps, you would expect around €150m of investment per annum. Last year this fell to nearly zero.”

Airbnb ban

The tightening of the screws on Barcelona’s landlords has coincided with the holiday let crackdown.

In 2021, Barcelona became the first European city to ban private room rentals of 31 days or fewer. The government hopes getting rid of Airbnb entirely will bring more than 10,000 properties back on to the residential market.

The number of short-term listings in Barcelona has already fallen from around 25,000 in 2018 to roughly 14,000 today, according to data from industry analyst AirDNA.

The listings that remain are in extremely high demand. Occupancy rates for short-term lets have hit 85pc. “We usually see those levels during a Taylor Swift concert [in any other city], but that’s now standard for Barcelona,” says Bram Gallagher, of AirDNA.

The reduction in short-term lets has been driven primarily by hostile policies, he adds. “Eliminating this sector from the market is politically expedient, but even if the number drops to zero, it’s not going to help with affordability. We’re not talking about a large number of properties.

“Plus, only 29pc of short-term rentals are available ‘full time’, which is classed as 180 days or more. You wouldn’t expect the 71pc to re-enter the [long-term rental] market – these are properties that the owners live in and only rent out during high season.”

“The solution [to the affordability problem] is more development, and that’s a much trickier proposition.”

A fatal loophole

While getting the Housing Law over the line was a big win for the Left, it was a negotiation in which both sides had to give ground. Crucially, the rent control legislation does not apply to “seasonal lets” which last for between one and 11 months.

The loophole has meant that many landlords have simply switched their rentals from long-term to seasonal. This has reduced the supply of properties for Spaniards looking for a permanent home.

Idealista data shows that between March 2023, when the rent controls were announced, and September 2024, the number of long-term rental listings in Barcelona fell by 47pc, while seasonal rentals increased by 68pc.

“We’ve seen a lot of landlords shifting from long-term to seasonal,” says Mohammad Butt. “It means rent controls have had the opposite impact to what the government wanted. It’s led to more supply issues.

“The narrative is that local people are getting priced out by foreign investors. But the local government needs to build more houses.”

Rodrigo Fernandez, an assistant professor at University College London, co-authored a paper isolating the impact of Barcelona’s Covid-era rent controls. The study found that the policy succeeded in reducing rents by around 5pc over the course of a five-year contract – the equivalent of around €45 per month – without having any significant impact on supply.

However, using these findings to justify the latest version of policy is problematic, he says.

“It is difficult to say that because it worked then, it will work now because the economic context is so different. Interest rates were lower then, so landlords did not see an attractive alternative to selling up.”

Fernandez believes it’s too early to tell whether rent controls are working this time, and fears the omission of seasonal rentals “compromises the efficiency” of the legislation. “In the long term, if rent control is too strict it can lead to lower supply, and if there are no incentives to keep properties in a good state of repair it can lower housing quality.

“Rent controls are not a silver bullet. They can be an effective measure to reduce rents in the short term. But they must be accompanied by other measures to make housing accessible and affordable, while maintaining incentives for landlords to stay in the market.”

The flaws in the law

The Housing Law’s flaws are accepted even by those who pushed hardest for it.

Carme Arcarazo is the spokesman of Sindicat de Llogateres, a tenants’ union that was instrumental in getting the Housing Law passed. The law was announced in May 2023, but it wasn’t until March 2024 that it was enacted. This left 10 months for landlords to “increase rents massively”, she says, and gave them time to switch to seasonal rental contracts. “Everyone knew this was going to happen. Rent controls aren’t the problem, the problem is that they didn’t apply to all the rental market.”

Between the first quarter of 2023 (when rent controls were announced) and the first quarter of 2024 (when they came into force), average rental prices in the city rose by 9.8pc, according to data from the Catalan Land Institute, Incasòl. However, rents rose by 12.6pc in the 12 months before the controls were announced. It suggests that the threat of rent caps did not prompt unusually high price increases from landlords.

Property owners face €900,000 fines for renting a home for more than 30pc over the reference index, or for lying about the nature of their rental to circumvent the rules. But Carme says the rules are not well enforced. “There are no sanctions if you don’t comply. If you have a law that has loopholes and no inspectors and sanctions, then people are going to break it and exploit it.”

There was recently a proposed amendment in the Spanish Senate to expand rent controls to cover seasonal rentals. But the amendment failed.

I ask Carme whether extending the legislation to cover seasonal rents would simply cause landlords to exit the market altogether. “I don’t think most landlords will sell up. The ones that will sell are investment funds that want to make massive profits.

“The worst thing that will happen is that house prices decrease, and that’s not a bad thing. If investment funds leave the market and the country, that would be welcome. These firms are destroying people’s lives.”

‘Our future is out of our hands’

Even with rent controls, Barcelona’s housing squeeze is affecting everyone from the very poorest to the moderately well-off.

Maria Coll, 27, and Francesc Aparicio, 28, are a couple living in Eixample, a rapidly gentrifying central neighbourhood that encompasses the Sagrada Familia. She is a freelance translator, he is a drummer and music teacher.  Pastel-coloured tiles cover the floor of their flat and the spacious living room is neat and clean.

They share with two other flatmates and each pays €260 a month, a steal in the current market. Tenants have come and gone over the past 10 years, but because no group has moved out en masse, they are still governed by the original cheap contract – and so is the landlord.

The couple recognise that they are in an enviable position. Their great deal means they can afford their rent with their salaries. But it also means they are effectively trapped in the property.

“We are very privileged compared to other people,” says Maria. “But the situation is still very sad. We cannot afford a place of our own in Barcelona. We know it’s not possible.”

They are originally from Mallorca but have spent the past 10 years in Barcelona. The rental situation is so grim they are considering moving back home. However, the property market in Mallorca is possibly even worse than in Barcelona, so they would have to live with family members.

“We built our lives here. We don’t want to leave. I mostly feel frustration. My future is out of my hands. It makes it hard to plan the next step in life. My parents had me earlier than the age I am now, but we can’t afford a place of our own.”

Rent controls aren’t making a difference, Maria says. “I’ve lived in seven different flats in 10 years. Many of them were offering one-year contracts, and then the landlords switched to holiday lets.”

Gold-plated profiles

Marouan Daif, 43, is in a far less fortunate position. I meet him at the headquarters of Arrels Fundació, a homelessness charity.

He arrived in Spain from Tangier, Morocco, aged 17. His aunt had settled in Barcelona, so Marouan came to live with her on a tourist visa. She turfed him out when he told her he was gay. He has been effectively homeless for the past 25 years.

“There’s a classic stigma that you’re on the street because you want to be,” he says. “But it’s difficult. Day-to-day life is stressful. Every day I get insulted, hit, robbed.”

Bob Walker, a tall Yorkshireman with flowing white hair, is one of the foundation’s caseworkers. Five years ago, he says, you could get a room in central Barcelona for €150 to €200 a month. Now it’s more like €400. “Three-quarters of rough sleepers have no income, so are instantly locked out,” he says. “The rest cannot afford it. People are having to move to towns 70km away after having lived in Barcelona all their lives.” For people in Marouan’s position, rent controls are irrelevant.

Guillem Fernández Evangelista, Bob’s colleague, says Barcelona is living with the consequences of Spain’s social policies over the past 30 years. “The building of social housing was reduced in the 1990s when the focus shifted to giving people money to pay their rents instead. There was no increased supply.”

In Spain, only 1.5pc of the housing stock is social housing, far less than the EU average of 9pc. Spain’s housing model promotes homeownership, rather than renting.

Even if Marouan were able to afford rent, landlords have the power to be extremely picky with the tenants they accept. Listings for reasonably priced flats are inundated with requests.

Mark Stücklin believes rent controls have made the problem worse. “Tenants need to have gold-plated profiles to be considered,” he says. “The problem with the free market is that people who afford it pay, and a lot of people can’t afford to live in Barcelona – that appears to be unjust. But at least you get a more efficient rental sector, and get people investing in the sector and maximising supply.

“With rent controls, you get shortages because people don’t invest.”

Until next time

Chaymae heads down on to the street. Across the road are a small group of officials – a deputy judge, two lawyers representing the property owners, and social services from the local authority. They are all required to be present when an eviction takes place. Chaymae, flanked by two friends, goes over to negotiate.

I stand with Joan, the photographer, in the middle of the crowd. He has been priced out of renting in Barcelona and now lives in Badelona, a municipality further up the coast.

He remembers renting a three-bedroom flat with friends in 2014. It was in the Gràcia neighbourhood, near the Gaudi-designed Park Güell. The whole property cost €800 a month in rent; two years later, this had risen to €1,500. Now the rent for just one room is €2,000. Some of his friends faced paying 60pc of their income on rent in Barcelona, and are being forced to move out of the city.

At the same time, he says, in-fighting between Socialist and Communist housing unions means they have lost the support of “normal people”.

Chaymae offers to pay “social rent” at the property, below market rate. The firm’s lawyers reject her offer. They refuse to speak to me. But it becomes clear that the police will not come today. Evictions are carried out by the same officers who carry out drug busts and counter-terrorism operations. Often, the only reason police aren’t used in evictions is that there is a shortage.

The judge’s deputy says she can stay in place until 4 November. He adds that on that day, “police will definitely come” to remove her. The paperwork is signed.

Although her situation is just as precarious as before, the decision is a reprieve. The good news makes its way through the crowd, who strike up a defiant chant – “We will fight for socialism, olé olé olé!” They clap and cheer as Chaymae holds up two sheets of yellow paper in triumph.

“I’m very happy”, she says. “But in a few weeks, it will be the same thing.”