The Forum for Civil Society, which comprises groups who are critical of Mallorca’s tourism (though not exclusively, it should be said), has presented conclusions from a report on economic, social and environmental transition in the Balearics from 2019 to 2023. A key one is that the current tourism model is worsening social imbalances. People are worse off.
As well as highlighting issues with accessing housing, the forum’s report pointed to the high school dropout rate. This is hardly a new phenomenon since 2019 as early school leaving has been a concern for many years. The islands’ tourism generates a whole load of jobs that teenagers are only too content to take, but this doesn’t do much for their long-term prospects.
The crisis caused by the pandemic highlighted the need for a change to the tourism model. In this respect, and making a link to often low-paid jobs in the tourism sector, the report stated that economic diversification has still not occurred. As a lack of diversification has been a Balearic economy structural weakness ever since the advent of mass tourism in the sixties, it is too much to have expected that there would have been meaningful post-pandemic diversification.
Hydrogen is diversification
One of the main areas for diversification is renewable energy. Predominantly solar, there have been obstacles to the building of solar parks. Environmental reasons have been cited, as they were when there was a plan for a huge park in Marina de Llucmajor. This is now where a Dubai-based company, Go Energy Group, wants to build a green hydrogen and ammonia plant – the largest in the Mediterranean and with hundreds of jobs. The company has acquired the land and is looking to hold talks with the Balearic Government.
But the announcement immediately raised the prospect of objections because of the location. The Forum for Civil Society referred to social imbalances. Where diversification is concerned, achieving an environmental balance is a regular challenge.
Meanwhile, and on green hydrogen, Redexis is creating the first hydrogen pipeline in Spain. This will take hydrogen from the plant in Lloseta to the Cas Tresorer power station in Palma. It will pass through points where hydrogen is being used, e.g. the port and the EMT bus depot.
The Redexis project states: “Hydrogen is set to enhance the integration of renewables into the Balearic Islands energy system … driving the region towards full decarbonisation of its economy.”
Tourist segments “that do not interest us”
In general, the forum’s analysis doesn’t differ greatly to that of the Balearic government, but there is a clear difference in that the forum proposes de-growth. This is most unlikely to ever be considered by the government, and a leading hotelier – Aurelio Vázquez – is dead against against all talk of de-growth. A supporter of the government’s social and political pact for sustainability, he believes that Mallorca could “die of inaction” rather than of success. (There have been repeated references over the years to Mallorca dying of success.)
A former president of the Mallorca Hoteliers Federation and now with the Summum Hotel Group, Vázquez is firmly against lowering prices. If prices are lowered, this would mean demand from tourist segments “that do not interest us”. “We must put a product on sale that those profiles that I don’t want cannot afford.”
Fining holiday rentals
Vázquez has also spoken about holiday rentals. He was referring to legal rentals when observing that a problem lies with apartment buildings. Allowing apartments to be rented out was “a very serious mistake”. “It makes no sense for any building to potentially be a hotel.” The hoteliers normally confine their remarks to illegal rentals in blaming these for overcrowding and housing problems. Vázquez surely stated what most of them actually believe.
Two buildings like a hotel had attracted the attention of the Council of Mallorca’s tourism inspectorate and Palma town hall some while ago. There has been a ban on holiday apartment rentals in the city since 2018, but seventeen apartments in these two buildings had been operating with apparent impunity. The Council’s tourism department has now issued fines totalling 1.36 million euros – 80,000 euros per apartment.
The Balearic Parliament has meanwhile unanimously approved a motion for fining owners of holiday rental properties that do not prevent clients from holding parties that disturb neighbours. To be forwarded as a bill, this contemplates fines up to 30,000 euros and the loss of the holiday rental licence. Parliament’s view is that owners can’t simply “wash their hands” of instances where coexistence is undermined.
House prices keep rising
A shortage in the supply of homes – holiday rentals are a contributory factor – mean that there is an imbalance with demand, a point made by Maria Martos of the Fotocasa property website. She has pointed out that there is also a limited supply of land. Along with a “totally insufficient amount of social housing”, these factors all lead to increasing house prices.
Ricard Garriga, CEO of mortgage brokers Trioteca, estimates that property prices will rise by 8% by the end of this year. Others in the real-estate sector agree with him, a fall in interest rates also influencing prices.
Economist Pau A. Monserrat, a professor at the University of the Balearic Islands and a member of the Economics and Social Council, a Spanish Government consultative body, says that there is decreasing supply because not enough is being built. “Until we have a serious debate, one without absurd ideologies, we will find ourselves with a very serious problem. If we do nothing, it will only be solved when no one wants to come as a tourist or come and live here.”
Some success with squatters
Squatting, a by-product of the housing emergency, has affected the government just as it has private owners. In 2019, the Ibavi housing agency had 120 squatters, both those who illegally occupy properties and the tenant-squatters who initially pay rents but then stop paying and refuse to vacate the properties.
The agency has had some success in reducing the number to 36. One way has been by getting squatters to join the housing list in exchange for moving out. Another has been the installation of alarms and anti-vandal doors to prevent occupation of vacant properties.
But getting onto the housing list implies a wait. There are around 4,300 people on the list. The agency has a total of 2,375 homes in the Balearics, most of these – 1,853 – in Mallorca. As Maria Martos of Fotocasa noted, there is a “totally insufficient amount of social housing”. Private owners, meanwhile, don’t have the possibility of offering a place on a housing list.
Rural luxury homes … and contamination
It would seem that the luxury property market in the Balearics has been affected by a rise in prices. Hans Lenz, president of the ABINI association made up of agencies at the luxury end of the market, says: “There is a significant trend towards a slowdown. The market is moving much less than before.” He anticipates that this will in fact lead to a fall in prices. It would be good for the market “to normalise” following a boom period.
This boom, he notes, has entailed a shift from the coasts – the traditional location for luxury properties – to the rural interior. A proliferation of houses on so-called rustic land has meanwhile become a significant cause of aquifer contamination. The latest revision of the Balearic Islands Hydrological Plan has highlighted this contamination, which has previously been principally attributed to intensive or inappropriate agricultural use of fertilisers.
The reason lies with those properties not connected to the sewage network and with septic tanks or cesspits. These should have autonomous wastewater treatment systems, but not all do. The plan envisages an inventory of homes that aren’t connected in order to check on whether there are purification systems.
