Tourism's hidden price: Mallorca's housing crisis | DW Documentary

Key Concepts

• Mass tourism and its impact on housing affordability
• Short-term vacation rentals vs. long-term rentals for locals
• Rising property prices and rents in Mallorca
• Foreign investment in real estate
• Housing crisis and its effects on locals
• New housing law and its limitations
• Empty homes and holiday homes
• Protests against tourism
• Temporary employment contracts and rental difficulties
• Basement apartments and illegal living conditions
• Landlord-tenant disputes

Housing Scarcity and Tourism in Mallorca

• The Problem: Housing is becoming increasingly scarce and unaffordable for locals on the Spanish island of Mallorca due to the boom in short-term rentals for tourists.
• Beonia Iglacias's Situation: 60-year-old Beonia, a parking inspector, lives in an old caravan with her son Ectctor because they cannot afford an apartment. She earns €1,200 a month, which is insufficient to rent an apartment in the area.
• Tourism Statistics: In 2024, 13.5 million visitors came to Mallorca, with 2 million in July alone, which is around twice the island's population.
• Foreign Ownership: Beonia notes that 90% of the houses near her work belong to German and English people.
• Ectctor's Situation: Ectctor, Beonia's son, works as a waiter. They lost their apartment after Beonia's separation, and renting the motor home is their only option. They pay €250 a month for it.
• Combined Income: Beonia and Ectctor have a combined income of €2,500 a month, which they consider sufficient for their needs, but they lack space and privacy.

The Plight of Renters in Palma

• Christopher Natanel's Basement Apartment: 22-year-old medical student Christopher Natanel rents a 10-square-meter basement apartment in Palma for €600 a month.
• Living Conditions: The apartment has no light, is stuffy and hot (almost 40°C), and smells bad due to sewage flowing underneath the room. The waste water for the building runs underneath the room, which is illegal.
• Housing Costs: Rents on the Balearic Islands rose by almost 20% in 2023, with an average price of almost €20 per square meter. Christopher has been looking for an apartment for two years but cannot afford the starting price of €1,200.
• Competition with Tourists: Apartments are increasingly being rented out to well-off tourists, creating competition with locals for housing.

Luxury Real Estate and Foreign Investment

• Luxury Villa Example: Property developer Marco Schmidt showcases a luxury villa with four bedrooms, a spa area, and a pool, priced at €8.4 million.
• Target Market: The villa is targeted at wealthy foreigners, mostly Germans, British, and Scandinavians, who will only live there for a few months a year.
• Population Growth: In the past 20 years, Mallorca's population has increased from around 700,000 to more than 1 million, with new residents from abroad bringing significant capital.
• Market Trends: Even modest properties in Mallorca now cost around €6,000 per square meter, higher than in many major German cities and the highest in Spain.
• Impact on Locals: Finding affordable housing has become a challenge for normal earners, who may earn an average of €1,200-€1,500 a month, which is the same as the cost of a two-room apartment.

Perspectives on the Real Estate Market

• Rebu Vince's View: Rebu Vince, a real estate agent specializing in luxury properties, believes the cityscape has improved and welcomes the developments in the city's real estate market.
• Luxury Apartment Block: Vince's employer built a luxury apartment block in Portichol, with the cheapest apartment costing €1.1 million. All units were sold before completion.
• Vince's Blame: Vince blames the housing crisis on politics, arguing that the state earns a significant share of every transaction through VAT (10.5% for new buildings, 8%-11.5% for existing properties) and could use that money to solve the housing problem.

The Exodus of Locals

• Hema Marcha's Investigation: Journalist Hema Marcha investigates the growing number of people leaving the island due to the housing crisis.
• Moving Company's Experience: Orlando Garcia, who owns a moving company, says they are helping 20 to 30 families a month move away from the island, mostly middle-class Mayorcans moving to the mainland with no plans to return.
• Expansion of Tourist Areas: Tourist areas are expanding beyond traditional hotspots, causing a housing shortage in inland areas as well.

Housing Shortage in Inland Mallorca

• Sensei's Situation: In Sensei's, the population has doubled in 15 years, but there are many empty homes not rented or for sale.
• Empty Homes and Holiday Homes: There are 105,000 empty homes and over 100,000 holiday homes belonging to foreigners across the island.
• Resident's Experience: One resident is moving to Asturias on the mainland, where they bought an unrenovated house for less than €9,000, which would have cost half a million in Mallorca.

Protests and Government Response

• Protests Against Tourism: Sensei's residents organized a protest in Palma against tourism, attracting almost 25,000 people.
• Demands: The protesters want to declare a housing emergency and implement immediate measures to protect people's right to a home.
• Lack of Action: Organizers feel powerless and worried that the housing shortage is spreading.

Challenges Faced by Renters

• Beonia and Ectctor's Struggles: Beonia and Ectctor regularly apply for apartments but are rejected due to their temporary employment contracts.
• Landlord Requirements: Landlords often require half a year's rent in advance, which is difficult for them to afford.
• Ectctor's Concerns: Ectctor wants to start a family but lacks privacy and sees limited support from the state. He is considering leaving the country.

The Impact on Young People

• Limited Future: Young people feel they have no future in Spain due to the economic situation and housing crisis.
• Living with Parents: Many young people are still living with their parents in their 30s because they have no other option.

The Situation in Palma

• Tourist-Oriented Businesses: The center of Palma is now full of shops and restaurants for tourists, competing for space with residents.
• Christopher's Challenges: Student Christopher Natanel struggles to study in his basement apartment due to the lack of light and heat.
• Rea's Health: Christopher regularly checks Rea's blood pressure, the oldest resident, who suffers from hypertension, diabetes, and heart problems exacerbated by the heat.

Landlord-Tenant Conflict

• Court Ruling: A court ruled that the basement could not be rented out as living space, and the landlord was fined.
• Allegations Against Landlord: Christopher and other residents allege that the landlord is trying to force them out by destroying electricity cables, removing doors, and tampering with the septic tank.
• Landlord's Denial: The landlord denies all allegations and accuses the residents of illegally occupying the basement, even though they have valid rental contracts.
• Reporting the Landlord: Christopher decides to report the landlord and seek a preliminary injunction to force him to repair the electricity.

Conclusion

The housing crisis in Mallorca is driven by mass tourism, foreign investment, and a lack of regulation, leading to unaffordable rents, displacement of locals, and illegal living conditions. While some benefit from the booming real estate market, many residents are struggling to find affordable housing and are considering leaving the island. The situation is exacerbated by a lack of government action and conflicts between landlords and tenants. The focus on attracting high-end tourists is further marginalizing locals and threatening the social fabric of the island.