The recently approved Law on Sustainable Tourist Use of Housing introduces limits, requirements and a complex set of transitional rules to make vacation rentals compatible with access to housing and urban coexistence in the Canary Islands.
The regulation of vacation rentals or tourist use housing has become one of the most talked-about topics in the Canary Islands in recent years. With more than 50,000 registered units and an exponential growth in the islands’ capitals, the pressure on the housing market has generated an intense social and legal debate, fueled by the different interests and constitutional rights at stake: right to adequate housing, the urban environment, right to private ownership or free enterprise, among others.
In this context, after a long process the Canary Island parliament finally approved on November 12 the Law on sustainable tourist use of housing (not yet published on the date of writing), with the stated aim to “regulate without prohibiting” tourist use housing.
One of the aims specifically mentioned in the preamble to the law is to bring about an actual reconciliation of the lawful vacation rental economic activity and the organization of the internal rules for populated areas, and enable the coexistence of stable and permanent residential needs with an activity characterized by its transitional nature and lack of permanence, by responding to circumstantial accommodation needs.
The new law contains material changes to this type of tourist accommodation. One of the most important points, in line with the path initiated by other Spanish autonomous regions, is that the solemn declaration for renting a property for tourism is not indefinite: in principle it is for a five-year term and must be renewed if all the legal requirements are met and this use continues to be allowed in the area. Furthermore, registration can be canceled and the license can expire if the dwelling is not rented uninterruptedly for more than a year.
The law also introduces additional requirements and restrictions. For example, 90% of all the existing dwellings in a municipality must be put to residential use and only 10% can be put to use as a vacation rental (20% on the green islands: La Palma, La Gomera and El Hierro), unless the municipal planning regulations provide reasons for a different proportion. A minimum property age requirement is also laid down: new dwellings cannot be used as vacation rentals until after ten years from their construction. The idea behind this is to ensure that they fulfill their original “intended status” as housing for a minimum period. The law further provides that “official protection” affordable dwellings cannot be put to tourist use, nor can licenses be issued in declared stressed housing areas.
In the absence of express determinations in urban planning instruments, the authorization of accommodation use on land classified for residential use must follow the determinations applicable on a secondary basis set out in the law itself; namely: an upper limit of 10 beds, prohibited for ground floor dwellings if they have come from the conversion of retail properties, allowed for first floor dwellings, subject to certain requirements, and allowed for dwellings on higher floors generally, if no lower floor is put to residential use.
Another key element is the application, in the same way as for other tourist accommodation establishments, of Law 7/2011, on Classified Activities and Public Shows, which makes vacation rental a classified activity, requiring a local authority license or prior notification, technical reports and the fulfillment of requirements planned for potentially nuisance or hazardous economic activities. This suggests that to avoid diverging interpretations by local authorities there might be a need to set uniform criteria in the various municipal ordinances, which will bring greater legal certainty to operators.
To modulate the effects of these stricter new rules, the law contains a complex set of transitional rules determining that owners holding licenses under Decree 113/2015, of May 22, 2015, which is repealed, can elect, within five years, to make the “solemn declaration for existing tourist use of the dwelling”, which implies that, if it is not licensed for tourist use in the local authority planning instrument, it will be granted a special legal status allowing existing tourist use. This means that permission will only be granted for maintenance, preservation, reform and modernization work and their “useful life” for tourism cannot be extended. Otherwise, the license will end in five years (it can be extended to 10 or even 20 years under certain circumstances), except where the person concerned operating the vacation rental is not the owner, in which case the solemn declaration will not expire until the end of the term of contract or instrument executed by the owner to allow it to be operated as a tourism business.
Other aims of the transitional rules in the law are to facilitate the conversion to tourist use of residential buildings used entirely for vacation rentals on the date the law comes into force, together with enabling the transition of buildings used for tourism (condo hotels, tourist apartments or similar) to residential buildings where all or part of them are put to tourist use.
Lastly, the law contains an amendment to Law 2/2013 of May 29, 2013 on Renovation and Modernization of Tourist Areas in the Canary Islands, in relation to plans for modernization, enhancement and increasing competitivity, and to Law 4/2017 of July 13, 2017 on Land and on Protected Natural Spaces in the Canary Islands.
