The Government lost its first housing decree by six votes. Junts had sent a counterproposal with several of the same measures, but the dispute exposed Sánchez's dependence on the radical left.
On 2 October 2026, Spain's Congress rejected the first housing decree by 178 votes to 172, a six-vote margin. The vote followed a counterproposal Junts sent that morning. Reuters reported that Junts had asked the Government to withdraw and renegotiate the texts, yet the party still joined PP and Vox in voting against both decrees.
This was more than a failed negotiation. The Government had room to strike a deal, but chose an ideological fight instead.
The two texts shared three central ideas. Both offered an IRPF benefit to owners who moderated rents, proposed a lower VAT rate for housing and included a suspension of eviction proceedings against vulnerable tenants, with the Administration paying compensation.
Spanish sources reported that the Government approved the two housing decrees on 29 September 2026. After Congress voted on 2 October, they remained in force for only about a day before being annulled.
The basic divide was over pressure on small landlords from Sumar and Podemos. Their proposals included a 2% rent cap, the forced conversion of seasonal leases and an almost indefinite extension with twelve months of compensation. The package also sought to restrict short-term and seasonal rentals, while encouraging long-term leases and new construction.
In Spain, landlords are usually families, not large property companies. If renting becomes too costly, an owner may sell, switch to temporary rentals or leave the property closed.
That is where coercion hits its limit.
The Banco de España had already warned in its latest Annual Report that rent caps without a supply response push homes toward other uses. Junts made the same case against the decrees, warning that restrictions could reduce rental availability, raise prices and make housing harder to access.
A broader housing majority would need a different mix: tax incentives for voluntary long-term leases, faster eviction of occupants without legal title, access to land and reduced VAT for new construction, plus a public guarantee against non-payment for vulnerable tenants.
Reuters reported that Junts's seven deputies were decisive because the party's position could change the outcome of Government initiatives in the fragmented Congress. Housing Minister Isabel Rodríguez urged the party to at least abstain and offered to turn the decrees into bills, allowing lawmakers to introduce amendments. The proposal did not change the outcome.
That guarantee would need strict safeguards. The proposed structure includes a landlord-paid deductible, a rent ceiling and a maximum coverage period. Social services would have to certify vulnerability; solvent debtors would have to repay the money, while AIReF would assess a fixed annual allocation.
Without those limits, public protection would become an open-ended cheque for both sides of the contract.
Junts did not lose that possible agreement. Sánchez's radical-left partners did.
Pablo Bustinduy was responsible for defending the second decree, but failed to attract the missing votes. Instead of negotiating, he accused PP, Vox and Junts of defending rentier interests. He called their position an infamy and warned that every eviction would carry the names of those who voted against the measure.
The second decree then lost even the PNV, by 184 votes to 166. It also provided for the automatic extension of primary-residence leases when a landlord could not lawfully terminate the contract. Junts criticised that provision. After the defeat, Bustinduy predicted that Junts would disappear.
Officials had little room to manoeuvre.
A minister who needs opposition lawmakers must turn a possible majority into law. Attacking the deputies whose votes are required is campaigning, not negotiation. Sánchez and Díaz had set that tone the previous day, framing the choice as one between ordinary people and speculators.
The wider calculation became clear in the chamber. Sánchez threatened to call elections so that Orriols would consume Nogueras's support. Begoña and Sánchez himself could also be left exposed before a court, with or without a jury. A negotiable housing dispute became another test of the Government's political survival.
The market is not waiting for another decree. Information from idealista, rents recorded their first quarterly fall since 2021 in September. That does not solve the shortage of affordable housing. It sharpens the central problem: tenant protection cannot be built against every owner willing to rent.
As an earlier report noted, the defeat also gave the PP an opening to campaign on its own housing plan if Sánchez calls an early election.
Protection for vulnerable tenants must so be funded with public money and controlled through clear limits. A single cap cannot carry the whole policy. That approach costs more than announcing a rent ceiling, but the failed vote showed the price of the cheaper formula: six votes, and a Government forced to choose between a workable agreement and an ideological performance.
Sánchez chose the performance. Housing policy paid for it.
