The Special Plan regulating the tertiary services use in the accommodation class in Madrid was initially approved

On 26 July, the Madrid City Council's Governing Board initially approved the Special Plan, regulating the tertiary services use in the accommodation class (PEH, for its Spanish acronym), the public information period of which ends on 28 September.

According to its supporting memory, the purpose of the new PEH is to restrict the implantation of accommodation uses, motivated among other reasons to limit (i) the high intensity of floating population housed in lodging establishments, especially in the centre zone; (ii) the expulsion of the resident population in the affected neighbourhoods, which has produced a tertiarization process of urban areas; and (iii) the reduction of the housing stock in the centre zone of Madrid, leading to an increase in rental prices.

The PEH divides the planning zone into three concentric rings that are conceptually assimilated to: the Central District (Ring 1), Historical Centre (Ring 2) and the area known as "La Almendra" (Ring 3), although the latter also includes neighbouring neighbourhoods with planning needs as in the southern zone. The PEH carries out a new regulation of compatible and authorisable uses, seeking to limit the substitution of permanent residential use by tertiary services use.

As regards to the tertiary services use, the PGOU Monitoring Commission adopted the Agreement of 23 January 2018, in which it was concluded that the tertiary services use in its accommodation class should include dwellings intended for tourist use under the principle of business exploitation unit, in the conditions regulated in the Decree 79/2014 of 10 July, of the Governing Council of the Madrid Regional Government, regulating tourist apartments and dwellings for tourist use in the Community of Madrid: In its entirety and for a period of more than three months a year. Such dwellings must hold a tourist authorisation to carry out this activity. On the other hand, dwellings that are destined for tourist activity directly by their owners, under conditions different from those regulated in Decree 79/2014, are considered to be included in residential use: not rented in their entirety and/or rented for tourist purposes less than three months per year.

This interpretation implies that those dwellings that fit within the definition of dwellings of tourist use contained in Decree 79/2014, are considered tertiary services in their accommodation class, and are therefore subject to the PEH. Those that do not fit within the definition, mainly because they are rented for tourist purposes less than three months a year or are not rented in their entirety, are not subject to planning requirements for their implementation and are therefore outside the application of the PEH. This interpretation implies a deviation from the new Madrid tourist regulations, in process, that will amend Decree 79/2014 and that proposes the elimination of the "frequency" criterion; therefore all dwellings destined for tourist use for a period of less than three months per year would not be, a priori, excluded from the application of tourist requirements.

The CNMC has filed a contentious-administrative appeal against the Agreement of the Monitoring Commission of  23 January 2018, and against the Agreement of the Governing Board of the Madrid City Council of 1 February 2018, which suspended the execution of land use acts, the construction, and the implementation of activities of tertiary services use in its accommodation class for its different modalities in the Central District, and in various neighbourhoods of the Districts of Chamberí, Moncloa-Aravaca, Arganzuela and Salamanca. The CNMC considers that these measures that restrict tourist services in housing try to prevent the entry of new operators, and consolidate the providers of tourist accommodation services already installed, causing higher prices in tourist accommodation and reducing quality, investment and innovation in tourist accommodation.

As for the measures proposed, the PEH includes specific regulations depending on whether the accommodation use is implanted in the entire building or not:

• When the accommodation use affects the entire building in plots with qualified residential use, the implantation of such use in several zones of Rings 1 and 2 is not allowed, since such zones are what the plan calls the purest zones. However, the accommodation use may be implanted as an alternative use, through an urban planning license, when the existing use is different from the residential use in any of the three rings and when the existing use is residential, only at the level of uses D (tertiary axes within APE 00.01) in Rings 1 and 2, and in the tertiary axes defined in zonal regulation 10 of Ring 3. In the remaining situations, the implantation of the accommodation use requires the processing of a Special Environmental Urban Use Control Plan (PECUAU), and in the case of buildings categorised as "protected" due to their artistic, historical or other characteristics with Level 1 or 2 (higher protection categories), the implementation regime is maintained as an authorisable use through a Special Protection Plan.
• When accommodation use affects part of the building in plots with qualified residential use: conditions of location (floor of the building where the use can be implanted), conditions of access or both are established in the three rings. Thus, in residential buildings in Rings 1 and 2, the requirement of independent access is generalised. In Ring 3, the requirement for independent access will be for cases where the building does not support the implantation of other classes of tertiary services use. Likewise, in the purest residential areas of those rings, the accommodation use shall only be admitted in situations where other classes of tertiary use are permitted. The generalization of the requirement of independent access is complemented by the limitation of that access, which may not be direct from the public road to the property or tourist apartment, and without it being possible to use common elements of the residential building, that is, access must be through common elements of the accommodation use, which greatly restricts the possibilities of implantation of the use.

In conclusion, the Madrid City Council, following the trend initiated by other city councils such as Barcelona or Palma de Mallorca, proposes a legal framework that is going to make it practically impossible to implant dwellings for tourist use in the Almendra Central, and which leaves existing dwellings in an irregular situation if they do not meet the requirements or do not currently have a municipal license. The independent access requirement makes it difficult to imagine in which specific cases such requirement can be complied with. The PEH will not be of application to dwellings that are rented for tourist purposes for a period of less than three months a year, or if the dwelling is not rented in its entirety, because in those cases it is understood that it is not a professional activity. It will be key to know how the complicated task of differentiating between 'professional' tourist housing and private housing is resolved, taking into account the difference in criterion between the Community of Madrid and the City Council on this point, and the necessary collaboration between them in this matter.