Spain faces a fresh round of debate over housing availability in its largest cities. The issue is as old as time: demand for apartments in major urban centers far exceeds supply, and both rental and purchase prices keep climbing. But this time, the agenda isn’t about new construction projects or combating vacant homes — instead, it’s something far more radical: a mass shift of civil servants to remote work and large-scale administrative decentralization.
In recent years, digitalization and the pandemic experience have demonstrated that many government positions do not require daily office attendance. Nevertheless, tens of thousands of officials continue to reside in Madrid and Barcelona, even though their jobs could easily be done from anywhere in the country. This puts additional pressure on the already overheated real estate markets in the capital and Catalonia.
Experts believe that if the government commits to structural change, up to 200,000 apartments currently occupied by civil servants and their families could enter the housing market within the next few years. Madrid leads the list, with about 90,000 potential properties, followed by Barcelona with approximately 50,000. Valencia, Malaga, and Sevilla also suffer from shortages of affordable housing and are expected to benefit in turn.
A New Strategy
Instead of building new homes or trying to renovate abandoned apartments, the authorities are considering relocating part of the civil service to less populated regions. This move would not only ease pressure on the housing market in major cities, but also offer development opportunities to small towns and rural areas that have suffered for years from population decline.
Spain has more than 3 million public employees, nearly half of whom already work remotely at least part-time. However, this has not yet led to any real territorial reorganization: most staff continue to live in large cities, despite flexible schedules. The reasons are simple—infrastructure, habits, and sometimes just inertia.
If the government goes further and begins relocating ministries and agencies to medium-sized cities, this could truly revolutionize the real estate market. Vacated government buildings in city centers could be converted into residential complexes—a strategy already working successfully in the United Kingdom, where some officials moved from London to the provinces.
Impact on the market
The potential release of tens of thousands of apartments could reshape the balance of power in the rental and housing market. Young families and those who have long dreamed of moving to the capital or Barcelona but couldn’t afford the sky-high prices stand to benefit the most. Lower demand will likely stabilize or even reduce rental costs, while also giving momentum to the development of new neighborhoods.
At the same time, decentralization could be a lifeline for smaller towns where entire districts stand empty. An influx of new residents—even temporary ones—would revive the local economy, create jobs, and boost demand for local services. However, not all experts are optimistic: some fear that a mass exodus of officials from major cities could slow business activity and weaken the capitals’ standing.
The question of how quickly and effectively such a reform can be implemented remains open. It is possible that some employees will prefer to stay in their familiar surroundings, making relocation to the provinces only an option for the most flexible. Nevertheless, the very discussion of these measures shows that the authorities are open to unconventional solutions.
Technology and habits
The transition to remote work in the public sector has already become a reality for many. According to recent studies, nearly half of the employees in central government agencies work from home up to three days a week. This mainly includes administrative staff and middle management. However, without a clear regional policy, the impact of digitalization remains limited: people continue to rent or buy housing in major cities, fearing the loss of access to the infrastructure and opportunities that large cities provide.
Authorities are considering not only expanding the practice of remote work, but also creating incentives to relocate to less populated regions. Proposals include housing subsidies, tax breaks, and even free courses to help people adapt to life outside major cities. However, for now, these ideas remain at the discussion stage, and any real steps are being taken with extreme caution.
Meanwhile, the real estate market is holding its breath: developers and agencies are closely monitoring government actions, trying to anticipate how demand might shift in the coming years. One thing is clear: if the reform goes ahead, it will affect millions of Spaniards and could set a precedent for other European countries.
The potential for change
Decentralization and the mass shift to remote work can not only solve the housing shortage, but also reshape the country’s social landscape. New jobs will appear where they haven’t existed for a long time, and life in the provinces will no longer be associated with a lack of prospects. For major cities, this is a chance to reduce overcrowding, and for small towns—a chance to regain lost momentum.
However, the road to change won’t be easy. Clear coordination is needed between ministries, regions, and municipalities, as well as a willingness to experiment. Spain stands on the threshold of sweeping changes, and how decisively the authorities use this new tool will determine not only the future of the housing market, but also the entire social structure of the country.
If you didn’t know, in Spain the public sector has traditionally been considered one of the most stable employers. The number of civil servants exceeds 3 million, but their distribution across regions has long been uneven. In recent years, the government has actively implemented digital technologies and flexible forms of employment, but territorial reform is only just gathering pace. The question of how life in Spanish cities and villages will actually change remains open.
