Madrid has introduced a new plan to regulate tourist rentals in an effort to protect the city’s historic center.
Known as the Plan Reside, this initiative from the Madrid City Council aims to preserve the residential nature of the central area, reduce the loss of local population, and foster a better balance between tourism and local life.
According to Madrid’s Mayor José Luis Martínez-Almeida, the plan seeks to expand residential offerings, organize tourist accommodation, and improve coexistence between residents and visitors.
Under Plan Reside, individual tourist rentals will no longer be permitted in residential buildings within the city’s central zone, often referred to as the “Almendra central.”
This means that only entire buildings can be used for tourist accommodations, eliminating the possibility of scattered short-term rentals in residential structures. Licensed tourist rentals already operating in these buildings will be allowed to continue, but no new licenses will be issued for dispersed units in the historic area.
The plan also prohibits converting commercial properties into tourist accommodations in key areas. However, buildings not designated for residential use, such as commercial spaces or hotels, can still transition to tourist lodging without restrictions, as these conversions do not impact the housing supply. In certain non-central areas outside the historic district, scattered tourist rentals will be allowed, provided they have separate entrances.
Madrid’s central district, which includes the Centro district, has seen a sharp increase in tourist rentals over recent years. Currently, this area holds 6,755 tourist rental units with over 25,000 beds, representing 42% of all such accommodations in the city.
The surge in short-term rentals is partly driven by financial incentives, with property owners reportedly earning an average of €19,737 per year from tourist rentals compared to €10,138 from long-term residential leases. This trend has led to a decrease in local services and amenities, as commercial spaces have been transformed to accommodate the tourist market.
Since 2017, the number of tourist rentals in Madrid has doubled, reaching a total of 16,100 units offering over 55,000 beds. However, only 1,131 of these properties are fully licensed, underscoring the prevalence of unregulated short-term rentals. In response, the city aims to curb the proliferation of illegal tourist rentals and protect the residential fabric of central Madrid, especially within the Centro district.
One of the most visited Spanish cities, Madrid has already faced challenges from residents frustrated with the impact of tourist rentals. In 2023, Madrid’s Inspection and Discipline Service received 686 complaints about tourist rentals, a 51% increase from the previous year. Most complaints (73.4%) were filed by local residents, emphasizing the growing tension between residents and the influx of tourists in residential areas.
With Plan Reside, Madrid hopes to establish a more structured and professional approach to quality tourism that supports the local economy while promoting peaceful coexistence between residents and visitors.
Plan Reside replaces the previous regulatory framework from 2019, which the current administration found ineffective in controlling the rise of illegal rentals. The earlier regulations permitted tourist rentals on ground floors, which often led to neighborhood stores being converted into short-term accommodations. The new plan aims to address these gaps by designating specific zones for tourist rentals and limiting conversions that diminish local commerce and residential spaces.
With this new approach, Madrid signals its commitment to balancing the benefits of tourism with the needs of its residents. As the city continues to attract international visitors—who spent €13.4 billion in 2023, marking a 38% increase from the previous year—the council’s regulations strive to ensure that tourism growth does not come at the expense of local communities.
