The directive from the mayor of Santa Cruz, José Manuel Bermúdez, has called for Housing, Projects, and Municipal Works, SA to prepare a report analyzing attendance in the municipality as a whole or in a specific territorial area to potentially be designated as a stressed residential market area, as stated by the city councillor.
In addition, Bermúdez has instructed to “provide detailed conclusions based on the conditions outlined in article 18 of Law 12/2023, regarding the potential request to the Government of the Canary Islands to commence the necessary procedures for obtaining such a designation,” emphasizing that “any potential impact on the real estate market and other relevant circumstances should also be specified.”
Ultimately, the request must be put forth by the Government of the Canary Islands and should be accompanied by a specific plan outlining required measures to rectify identified imbalances in the area under consideration for the designation.
It is essential to highlight the importance of this directive and instruction, driven by the imperative of preparing a report that substantiates, with factual data indicating a specific risk of inadequate housing supply for the resident population, should the average burden of mortgage or rent costs on personal or household incomes, alongside basic expenses and utilities, exceed 30% of the average income or household income.
Alternatively, if within the five years prior to being designated as a stressed housing market area, the purchase or rental price of a property has surged by a percentage at least three points higher than the accumulation percentage of the consumer price index in the corresponding autonomous community.
Finally, among the significant implications of this designation as stipulated by the Law, is the potential regulation of housing rental prices, which must fall within a predefined range based on factors such as the year of construction, square footage, location, etc. This range should serve as a benchmark for determining the value of new rental agreements, particularly for properties owned by individuals classified as major stakeholders under the Law and for properties being rented out for the first time within five years.
