Current trends in Spain

At the moment we are seeing a real trend in Spain towards simplifying the change of use of properties and making the process more flexible. And this is paving the way for a significant increase in the conversion of office buildings to tertiary uses, such as exclusive lodging. This phenomenon responds to the growing demand for tourist accommodation and the need to repurpose buildings that have become obsolete.

An important development in this area is a new piece of law in the Madrid region, which will come into force in July 2024, allowing the transformation of offices into affordable rental housing. This measure aims to increase the supply of affordable housing in the Madrid region and optimise the use and repurposing of underused office buildings.

Meanwhile, in the Canary Islands, there is a decree which allows the conversion of offices into housing, although unlike Madrid, these new dwellings will not have specific protection. This decree aims to address the high demand for housing and repurpose disused office buildings, providing a solution to the shortage of available housing.

How Spanish planning regulations work

In Spain, the urban planning instruments comprise the set of regulations and plans that establish the permitted uses for each plot of urban land in each municipality. This regulatory framework is fundamental for the analysis of any urban planning development, as it determines how land can be utilised in different areas, ensuring the orderly and sustainable development of cities. Permitted uses can include residential, commercial, industrial and tertiary, amongst others.

The process to change the use of a property has different administrative routes that must be followed, depending on the applicable regulations in each region of the country, because the regions control urban planning rules. The main methods are: (i) the planning licence, (ii) the so-called “responsible statement”, or (iii) prior communication.

1. Planning Licence: this requires a resolution from the local administration authorising a specific activity or action. Public control takes place prior to the commencement of the activity, meaning that a favourable resolution from the City Council is needed before any work, activity, or change of use can start.
2. Responsible Statement: under this regime, the investor/operator submits a document to the City Council declaring, under their responsibility, that the activity complies with the requirements established in the current urban planning regulations and that they possess the relevant documentation. This regime allows the activity or intended action to begin once the responsible statement is submitted to the local authority, but it is always subject to subsequent controls by the municipal administration to verify the accuracy of the information disclosed to the authority. For example, in Madrid, this is the applicable regime for changes of uses where the main use of the building is not changed.
3. Prior Communication: this regime involves the investor/operator reporting to the City Council about the urban planning change intended, providing identifying details and the required conditions of the new activity. This new activity can commence once the notification is submitted and is also subject to subsequent controls. This regime is applicable in Catalonia, except in cases of change of use to residential use.

In some cases, it may be necessary to modify the planning regulations to allocate a property to a use not foreseen in the current urban plan. This process is complex and can take a long time, as it involves review and approval by the competent planning authorities, and the change of use must be justified in terms of public benefit and compatibility with the sustainable urban development of the area of the city in which the change of use is proposed.

In conclusion, we are seeing a significant trend to simplify and make more flexible the change of use of properties in Spain at the moment. This is causing a significant increase in the conversion of office buildings to tertiary uses, responding to the growing demand for tourist accommodation and the need to repurpose buildings that have become obsolete. Any change of use will require analysis of the relevant local urban regulations and administrative proceedings to ascertain steps which need to be taken as the process varies region by region.