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The Spanish city in crisis as tourist house boom causes chaos for struggling traders

A Spanish city has been thrown into chaos as traders are forced to shut their doors to allow more housing to be built.

Madrid has seen thousands of shopowners close their doors as a price increase and need for housing takes over the popular city. According to data from the Madrid City Council’s census of premises, 8,333 establishments have been legally converted into dwellings.

Though this has happened in the past, the number of traders closing their doors has increased dramatically since 2022.

“It is a boom, and also a necessity,” explain the architecture studio Cambio de Uso Madrid, which specialises in this type of conversion and has doubled its activity in recent months.

With the rise of online retailing creating less footfall on once bustling high streets, many independent stores are being wiped out as they struggle with rising costs.

There has also been an increase in house prices, hitting record highs in Madrid which is already a popular city for thousands of tourists to visit.

According to local media, investors are looking at building new homes and apartment complexes for tourists, earning extra income from renting them out on sites like Airbnb.

Cambio de Uso Madrid architecture studio say they are managing around eight projects of this type every month. “There are many vacant spaces,” says its founding architect, Javier San Juan, about an ever-increasing demand in the city.

Regulations for converting a shop into a home have also recently changed, requiring flats to be at least 40m2 to prevent them from being converted into substandard dwellings.

If the premise meets these standards, the owner can apply for planning permission from the Town Hall. Other districts of Puente de Vallecas, Latina and Tetuá are also recording record high numbers for traders converting businesses into homes.

“I believe it is essential to maintain local commerce and, as far as possible, that these commercial premises continue to be commercial and not converted into housing”, said the delegate of this municipal area when announcing a measure that will try to “reconcile” economic activity, tourism and the rest of the neighbours.

In the meantime, locals are noting dozens of boarded up shops that are due to be converted, taking away from the character of the once unique region.


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