On 13th October, thousands of renters and allies marched through the streets of Madrid calling for a rent strike. PM Pedro Sánchez said in response to the protests: “I don’t want to live in a country of rich landlords and poor tenants”. And yet, despite multiple legal and policy reforms since 2012-13, salaries simply are not keeping up with housing costs. Spain, like so many other advanced economies, lives in what feels like a permanent state of housing unaffordability.
The Bank of Spain’s data shows that wealth inequality kept going up during the economic crisis that followed the 2007-8 crash. The amount of wealth of the richest decile was 16 times greater than that of the poorest half in 2002, but the ratio increased to 21 times in 2011, and 38 times in 2017. In other words, the wealth gap between the top 10% and the bottom 50% more than doubled in 15 years, before, during and after the financial crisis.
It was in this political and economic context that real estate investment trusts – REITs in English, SOCIMI in Spanish law – made their entrance. At first, they did not make much noise; in fact, the first of these companies were set up in 2013, four years after the regulatory framework instituting them had been put in place. In time, however, corporations would play a central role in the private rental market. In the summer of 2013, the regional and local authorities of Madrid sold approximately 4,800 public housing apartments and other real estate assets to REITs and other companies, thus reducing the available public housing stock, because the real estate was thereby privatized. This occurred despite the relatively small size of Spain’s – and particularly Madrid’s – public housing stock and at a time of socio-economic crisis and growing demand for State support. For the UN Committee on Economic, Social and Cultural Rights (CESCR), the sale constituted an unjustified and deliberate retrogressive measure against the human right to adequate housing and other social rights (Ben Djazia and Bellili v. Spain, 2017). By the end of 2022, a quarter of all properties in the private sector in the Region of Madrid were owned by corporate landlords, REITs or not, and just 10 companies covered as much as 12% of the market. For Spain as a whole, it is estimated that corporate landlords – with 50 or more properties each – together own 10% of all residential properties for rent.
What about non-corporate landlords? The myth that landlords are people of modest means who need the rental income to get by is far from the truth. An investigation by the Barcelona Institute of Urban Research shows that 60% of the rental market in the city of Barcelona is captured by landlords with more than one property to rent out, and most of these landlords are natural persons. While a minority in number, landlords owning many properties have a lot of sway: Just over 1% of Barcelona’s landlords control 24.1% of the market. The number of large property holders – owning 10 properties or more – went up by 20% between 2014 and 2024 in Spain as a whole. Considering that the median earnings of landlords is twice as much as that of tenants, it is fair to say that the private rental market funnels wealth from mostly young and economically insecure tenants to affluent individuals, corporate landlords and a rentier class.
We Need a Social Right to Property
To tackle housing unaffordability crises in and beyond Spain, we need to think about ownership differently. It is time to recalibrate the meaning, scope and limits of the right to property in light of all the rights that States are meant to respect, protect and fulfil. In Western political theory, property has often been thought of as individual ownership, as protection from interference, or as a negative liberty. Yet this particular idea of private property has created a divide between those who have and those who have not. Historically, it created a fundamental political cleavage, both in national politics – as only landowners were allowed to vote – and in global politics – as acquiring property rights over resources was the driver of imperialism and colonialism.
Yet ownership does not exist in a vacuum. In most instances, it is not the result of mere talent and effort in a framework of equal opportunities. In reality, property is often not acquired through original possession or through Lockean labour, but inherited. And even when it is not, its accumulation relies on infrastructures and policies that enable it – such as inheritance laws, labour law, tax policies, the privatisation of services, or the deregulation of the private rental sector.
Inspired by Léon Duguit in the early 20th century and by contemporary Progressive Property scholarship, I would argue there is value in presenting property as a social right, or a positive liberty. In its different forms – e.g. public, private, communal, personal – property is and has been consubstantial to human interaction from time immemorial. Property in general, and private property in particular, is a socially created institution that confers power and is constituted by rules and regulations. This institution serves both individual and social functions. Resources are, by definition, finite and scarce, and they can ignite multiple and opposing claims, individual and collective. Property requires regulation on the basis of a plurality of values that property is meant to serve, including distributive justice, the promotion of human flourishing, the protection of physical security, and the ability to make choices with as much freedom as possible, particularly for those at the margins of society.
The idea of the social function of property has been incorporated into national constitutions primarily in Latin America and in Europe. However, its position in the international human rights system is, at most, in statu nascendi. In Chiriboga v. Ecuador (2008), for example, the Inter-American Court of Human Rights observed that “the right to property must be understood within the context of a democratic society where in order for the public welfare and the collective rights to prevail there must be proportional measures that guarantee individual rights”. In General Comments No. 17 and No. 25, the CESCR established that intellectual property has a social function, as a result of which States should prevent unreasonably high costs for access to medicines, educational material, and means of food production. Similarly, in her 2017 report on the financialization of housing, the UN Special Rapporteur on Adequate Housing called on States to ensure that public and private investment in housing “recognizes its social function and States’ human rights obligations”.
Under Article 2(1) of the International Covenant on Economic, Social and Cultural Rights, States must use “all appropriate means” and mobilise the “maximum of available resources” towards the progressive achievement of Economic, Social and Cultural Rights – like housing, health, education, food and social security. The expression “all appropriate means” is interpreted by the CESCR in General Comment No. 3 as inclusive of “legislative measures, judicial and other remedies”, and “administrative, financial, educational and social measures”.
In General Comment No. 24, the CESCR also makes the case for “progressive taxation schemes” so the State can secure the resources to discharge its obligation to fulfil human rights. This shows that taxation is not simply a legitimate form of control of the use of property, in the language of Article 1 Protocol 1 ECHR. Taxation is also an indispensable public tool to materialise social rights like housing, health, education and social security. This perspective on taxation underscores property’s social function. Since taxation is a process by which private resources become public, one could see privately owned goods and services as part of the available resources for public authorities that may be used to realise social rights. This aligns with what Murphy and Nagel argued in The Myth of Ownership (2002), i.e. that property cannot be what is owned prior to the inconvenient interference from government, but must be seen as what is left after the State levies the necessary resources to fulfil the obligations in relation to human rights and public services: “There are no property rights antecedent to the tax structure. Property rights are the product of a set of laws and conventions, of which the tax system forms a part”. In other words, private property does not determine what can be taxed; taxes determine what can be owned.
Viewing property as an institution that serves both individual and social functions, and seeing taxation as the public tool by which the State acquires the means to deliver on social rights, enables us to reimagine property’s role in society.
The role of the social right to property in the private rental sector
A social right to property would set limits to jus abutendi. As appreciated by Sprankling, an unconstrained jus abutendi – the right to dispose of the thing, including the right to transfer it, but also the ability to destroy it – would be contrary to the social function of property. A social right to property would be more than mere usufruct. It would cover free disposition, inclusive of use, transformation and transfer, but it would not condone the destruction of a good or the sort of use that is contrary to its social function. This principle could have important implications for housing. Using an asset in a way that is directly contrary to its social function – for example, keeping a residential property empty for a long period of time in an area of high demand with the purpose of speculating with its value – is tantamount to destroying the asset at least temporarily. Insofar as it contributes to the unaffordability of housing for other people living in the area, such temporary destruction of the asset could also be considered a form of misuse. A social right to property would not condone such behaviour.
A social right to property would also require distinguishing between different types of holding property, treating large landlords and small landlords differently. It would be helpful to define the substance of ownership, the minimum core content of the social right to property. By minimum core content I mean the social minimum or the minimum essential level of a right, below which no retrogression is allowed. If applied to the case of housing in Spain, for example, it justifies rent caps and the temporary expropriation of use compelling owners to put empty properties in the private rental market. Such an approach would substantiate the CESCR’s position in López Albán v. Spain (2019), when the CESCR stated that the proportionality test of evictions: “entails examining not only the consequences of the measures for the evicted persons but also the owner’s need to recover possession of the property. This inevitably involves making a distinction between properties belonging to individuals who need them as a home, or to provide vital income and properties belonging to financial institutions”. While the income from private renting may be essential or close to essential for some private individuals, this is not the case for most landlords, and certainly not for corporate landlords. Human rights law should not provide the same level of protection to all owners.
A holistic approach to human rights requires all branches of power to work collaboratively to deliver on social rights. The housing unaffordability crisis calls particularly on the legislative and the executive to design and implement laws and policies that prioritise those who are at greater risk of harm and disadvantage, looking to achieve a fairer balance between individual and general interests, and between the right to property and other social rights.
(Photo: Mathias Reding)
