Hundreds of tourist apartments in the Galician city of Santiago de Compostela will be forced to close due to new rules that regulate them in the city’s old town and limits their use to ground and first floors in buildings.

Santiago city council has declared illegal tourist flats that don’t comply with the General Plan for Municipal Planning (PXOM) and Special Plan for the Historic City. As such, only a handful of the hundreds of tourist properties in the city will be able to continue operating.

Tension around tourist accommodation, particularly its impact on local rental markets, has been building for some time in Spain. The closures in Santiago come amid efforts in cities such as Valencia and Palma de Mallorca to crack down on tourist rentals.

But now affected property owners in Santiago claim they’ve lost their investment due to the rule changes, and that the city, long established as a tourist draw, will have a shortage of suitable accommodation.

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Previously, owners who wanted to rent out their properties for tourist use had to register it in the Xunta’s registry, the only requirement to start operating according to the Galician law at the time.

However the PXOM, which was passed last winter and is now coming into force, means that hundreds of tourist flats (also known as VUT, or viviendas de uso turístico) could close. 

According to the Xunta’s Register of Tourist Businesses and Activites (REAT), registering in which was previously the only requirement for landlords, there are over 800 VUTs in the city that could be forced to close. Many had assumed that those already operating in the city would be able to continue, despite the rule change, but this is now unclear and they are currently considered unlicensed.

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In addition to those registered in the REAT, the council is aware of more unregulated tourist flats operating. A total of 90 closure orders have been issued so far. In addition, the council has received 283 requests from landlords waiting to obtain a permit. Of these, only 33 have been favourable.

With the explosion of holiday rental services like AirBnB in recent years, many Santiago landlords, most of whom only owned one rental property, decided to invest in more profitable tourist accommodation. An article in Spanish outlet ABC cites landlords who have put in their entire savings, as much as €35,000, into the properties.

Many now feel betrayed by local government. One owner, Maria, told ABC, “We take care of the house down to the last detail, you only need to look at the reviews we have on the platforms and how happy the people who stay here leave. Now all we can do is close the flat,” she said.

Alberto, another VUT owner, told COPE that the closures won’t necessarily mean the properties go into long-term rentals for locals. He is considering closing his property “without putting in on the long-term rental market.” In Santiago, and indeed around the country, one of the justifications for cracking down on VUTs is that it would free up flats for locals. 

Owners of tourist accommodation are unlikely to get much sympathy from other people. However, some claim the closures could damage the city’s tourism industry. “They are going to leave the city without quality accommodation,” says Óscar Soneira, housing association Aviturga’s spokesman in the city.

Owners are now calling for a change in the PXOM. Estrella Ferreiro, from the Santiago Landlords Platform, told Cadena SER that tourist flats declared illegal will likely not return to the traditional rental market because they were bought and remodelled with tourists in mind.

However, Vicente Martínez, from the Platform for the Regulation of Tourist Housing, believes many of the unregulated flats will return to the conventional market: “We are talking about 1,700 places that disappeared,” he said, adding the move could help accommodate some of the 18,000 students in the city.

READ ALSO:

• Madrid to suspend holiday let licences
• Valencia to stop issuing licences to Airbnb-style lets as rents soar past €1,000