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. The vote came after Junts sent its own counterproposal that morning. Reuters reported that Junts had asked the Government to withdraw and renegotiate the texts. The party still joined PP and Vox in voting against both decrees.
That was more than a failed negotiation. The Government had room for 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. Both proposed a lower VAT rate for housing. Both included a suspension of eviction proceedings against vulnerable tenants, with compensation paid by the Administration.
The Government approved the two housing decrees on 29 September 2026, but after the Congressional vote on 2 October they remained effective for only about a day before being annulled.
The main gap involved 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. It encouraged long-term leases and new construction.
In Spain, the landlord is usually a family rather than a large property company. If renting becomes too costly, that owner may sell, switch to temporary rentals or leave the property closed.
That is the limit of coercion.
The Banco de España had already warned in its latest Annual Report that rent caps without a response from supply push homes toward other uses. Junts made the same argument against the decrees. The party warned that restrictions could reduce rental availability, raise prices and make access to housing harder.
A broader housing majority would need a different mix. It could use tax incentives for voluntary long-term leases, faster eviction of occupants without legal title, land and reduced VAT for new construction, plus a public guarantee against non-payment for vulnerable tenants.
Junts’s seven deputies were decisive because the party’s position could change the result of Government initiatives in the fragmented Congress. Housing Minister Isabel Rodríguez urged the party at least to abstain and offered to turn the decrees into bills so that lawmakers could introduce amendments, but the proposal did not change the outcome.
That guarantee would need strict safeguards. The proposed framework 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. 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. He 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 no choice.
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 already set that tone the previous day. They framed 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. According to idealista, rents recorded their first quarterly fall since 2021 in September. That change does not solve the shortage of affordable housing. It does sharpen 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 therefore be bought 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.
