Madrid to Overhaul Urban Planning Laws to Tackle Housing Shortage

The Community of Madrid is finalizing its new "Lider" law, a regulatory project designed to overhaul urban planning and tackle the region’s housing shortage. By cutting through administrative red tape, the regional government hopes this reform will serve as a model for the rest of the country. Sara Aranda, the Director General of Urban Planning, is set to present these plans at an upcoming forum in Santa Cruz de Tenerife.

The core of the proposal is to move away from the current, rigid hierarchy of planning. Instead, the government wants to prioritize competence and allow different procedures—such as urbanization, land division, and licensing—to happen simultaneously rather than one after another. Currently, these steps can take anywhere from four to twelve years; the goal is to shorten this to four or five. Officials believe this will lower investment risks and provide more legal certainty for developers.

This approach builds on recent successes. Under existing laws, the region has already approved 8,400 affordable homes in a single year by allowing office buildings to be converted into residential properties without needing to change general urban plans. The Lider law aims to expand on this, making it easier to adapt land use to social needs without waiting for lengthy, traditional planning cycles.

Economically, the regional government argues that increasing the housing supply through these streamlined processes will help keep prices in check. The draft law is currently open for public feedback until April 6, following discussions with various industry stakeholders. The government plans to submit the final text to the regional Assembly in June, with the goal of having the law in effect by 2027.

While the regional government and the national government agree that land management needs modernization, they differ on the approach. Madrid is focusing on stimulating private supply rather than direct state intervention. The Community is open to sharing ideas with other regions, noting that they are already looking at similar successful measures recently adopted in Andalusia to help shape their own future policies.