The fragile coalition government of Prime Minister Pedro Sánchez is reeling after the Spanish parliament soundly rejected its emergency housing legislation on Friday.
The proposed decrees, which included heavy-handed measures such as banning property purchases by investment funds and imposing long-term rent controls, failed to secure a majority as even former allies abandoned the administration.
The defeat of these radical proposals has left the minority government in a state of paralysis, fueling speculation of an early general election. As the government’s legislative agenda crumbled, thousands of protesters took to the streets across major cities, including Madrid, Valencia, and Barcelona.
In Valencia, the situation turned violent as demonstrators clashed with police near a real estate summit, tearing down barriers and throwing objects at officers. Law enforcement was forced to respond with rubber bullets to restore order.
The unrest follows months of agitation by tenant unions demanding government intervention in the housing market, a sector currently struggling with a supply shortage of 700,000 homes. While the left blames 'vulture funds' and market forces for rising prices, the reality is a fundamental failure of supply and construction.
By attempting to force through market-distorting regulations—such as freezing evictions until 2030 and mandating lease renewals—Sánchez sought to appease his base rather than address the underlying lack of housing stock.
With the conservative People's Party and Vox standing firm against these interventions, and even regional nationalist parties withdrawing their support, the government is now facing a total loss of authority.
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