Madrid enables affordable rental housing on tertiary hospitality plots and temporary accommodation on industrial plots

The Urgent Housing Measures Law 2/2026, approved on 4 June 2026, amends Law 3/2024 and introduces significant developments for affordable rental housing, publicly protected housing and temporary accommodation

The final text was published in the Official Gazette of the Region of Madrid on 15 June 2026 (entering into force on 16 June), and as available at the following link.

What's new

In line with the policies promoted by Madrid's Regional Government to encourage investment in the region, the following measures have been adopted;

• the implementation of affordable rental housing (arrendamiento asequible) on vacant or built plots with a hospitality use (previously only permitted on tertiary office plots);
• the implementation of affordable rental housing (arrendamiento asequible) on undeveloped plots or plots with remaining buildability designated for private endowment use (uso dotacional privado);
• the increase of the assigned buildability and density on (i) undeveloped plots expressly classified by the general master plan for the construction of housing subject to some form of protection and (ii) on undeveloped plots intended for public infrastructure networks intended for the construction of affordable housing; and
• the implementation of temporary accommodation on vacant industrial plots located on consolidated urban land within urban areas (i.e., the now well-known flex-living concept that the Madrid City Council also intends to approve through a Special Plan for the amendment of tertiary services, currently under processing).

As already provided for in Act 3/2024, once again, all these measures are permitted without the need to amend the general master plan (or applicable urban planning instrument), although they require each municipality to decide on their applicability (or restrictions or applicable terms) in its territory within a maximum period of four months from entry into force.

Licence applications may be submitted within a period of two years from the decision approved by the corresponding municipality or from the expiry of the referred four-month period (Final Provision One). It should be noted that this deadline also represents an extension of the licence application period for the change of use of plots with a tertiary office use provided for in the original wording of Law 3/2024, of 28 June, on urban planning measures for the promotion of protected housing.

Each of these measures and their specific features are set out below.

Affordable Rental Housing: what requirements must be met to allow the change of use?

Plot conditions:

• located on urban land (consolidated or otherwise) or on sectorized developable land with detailed zoning;
• vacant or built plots with a tertiary office or hospitality use; and exclusively vacant plots for those designated as private endowment use; and
• being suitable for direct construction (solar) or having a regime that allows simultaneous urbanisation and construction works.

Each of these measures and their specific features are set out below.

Planning use conditions: the implementation of affordable rental housing: (i) will be as an alternative use without the need to process an urban planning amendment; (ii) will be across the entire building (partial implementation or implementation in an independent building on plots classified as private endowment use not being permitted, without prejudice to permitted compatible uses); and (iii) must be allocated to a form of protected rental housing applicable in the Community of Madrid.

Building conditions: the buildability, height and other urban planning conditions applicable to the plot shall apply, as well as the conditions of the relevant sectoral regulations on protected housing. It shall not result in an increase or decrease of the development rights recognised by the urban plan, nor shall it count for density purposes in cases where the plan sets a maximum number of dwellings.

Sector limitation: as already required in the original wording of Law 3/2024, in sectors with a global tertiary use, the alternative residential use may not exceed 30% of the buildability of the tertiary use within the area or sector. Once again, this limit determines a priority order for licence applications in the sector.

Zoning standards: as already required in the original wording of Law 3/2024, compliance with the zoning standards set out in article 36 of Law 9/2001, of 17 July, on the Land of the Community of Madrid, must be demonstrated within the higher reference area of global residential use to which the plot belongs.

Once again, the licences granted shall describe the new alternative use and the rental regime must be registered at the Land Registry.

New regime for increasing buildability and density on affordable housing plots – What requirements apply?

As a consequence of the change-of-use measures described above, the Region of Madrid has approved the possibility for (i) plots classified by the relevant general master plan for the construction of affordable housing subject to some kind of protection, and (ii) public infrastructure networks intended for publicly protected housing, to increase their buildability and density.

In other words, this measure applies exclusively to those plots whose urban plan expressly classified as affordable housing, and the public infrastructure networks intended for affordable housing, and not to private plots that have undergone a change of use under Law 3/2024.

Accordingly, these plots may increase their buildability by up to 20% and their density by 30% without the need to amend the applicable general master plan, provided the following conditions are met:

• Vacant plots;
• Located on consolidated urban land, non-consolidated urban land or sectorized developable land;
• Having sufficient detailed zoning to carry out its development;
• Being suitable for construction or having authorised the simultaneous execution of the urbanisation and construction works; and
• Implementation across the entire building (without prejudice to the compatible uses regime).

The remaining parameters applicable to the plot shall be those established by the urban planning instruments in force, although the building height may be increased by a maximum of two storeys without the need to amend the urban plan applicable.

In any event, as provided for in the change-of-use provisions under article 1 of Law 3/2024, in the event the increase in buildability implies that the standards established in article 36.6 of Law 9/2001 are not guaranteed, it shall be necessary to assign to the competent authority the land for public infrastructure networks (or its monetisation), which shall be materialised during the processing of the relevant works licence, without the need for any additional urban planning instrument.

Accordingly, as is the case for change-of-use provisions under Law 3/2024, if as a result of the increase in buildability and density it becomes necessary to expand the public infrastructure networks outside the urban planning area, the liability and execution costs shall be borne by the developer of the project.

With respect to the transitional regime for licences under processing, the increase in buildability and density may be applied, at the developer’s request, to plots with building licences under processing or already granted, provided that (i) construction has not commenced and (ii) there are no purchasers or awardees who have entered into purchase or option-to-purchase agreements, award titles, or made payments on account of the price in respect of the dwellings forming part of the development.

Temporary Accommodation: what new developments are enabled for temporary accommodation on industrial use plots?

Without prejudice to the measures adopted to promote permanent housing, the Act also adds a new article four to Law 3/2024, allowing municipalities to grant licences for the implementation of temporary accommodation on vacant plots classified with industrial use without the need to amend the general master plan.

In particular, the requirements for the implementation of such temporary accommodation are:

• Plot conditions: the plot must (i) be vacant, (ii) have an industrial use designation; (iii) be located on consolidated urban land and integrated into the urban land (trama urbana); and (iv) be within a higher reference area or sector whose global use is residential.
• Use conditions: the temporary accommodation must be implemented across the entire plot, without prejudice to compatible uses that may be implemented, which may not exceed more than 20% of the building. The temporary accommodation may include typologies comprising several independent accommodation units with shared spaces serving their users.
• Restrictions: the accommodation may not be used as the habitual and permanent residence of its occupants, nor may horizontal division be implemented in the building. This condition must be recorded in the municipal licence and the conditions under which it is authorised must be registered at the Land Registry.
• Community facility standards: compliance with the standards set out in article 36 of Law 9/2001, of 17 July, on the Land of the Region of Madrid, must be demonstrated within the higher reference area or sector of global residential use to which the plot belongs.

This measure establishes the regional framework that the Madrid City Council has already initiated with the Special Plan currently under processing (initially approved on 21 May 2026) regarding the amendment of the tertiary hospitality use under zonal regulation 9, grade 3, and on plots with a qualified industrial use within areas of non-industrial global use.

What other developments does the Act introduce to expedite the construction of publicly protected housing?

In addition to the measures described above, the Act introduces, in its articles two to six, a series of specific amendments to the regional sectoral legislation (Land Act, Territorial Policy, Land and Urbanism Measures Act, Roads Act, Livestock Trails Act and Tourism Regulation Act) with the aim of simplifying the urban planning processing of planning instruments and expediting the construction of publicly protected housing.

Our services

Ashurst Perkins Coie Madrid has professionals with expertise in the legal regulation of the housing sector and in the urban planning processing of housing developments. We would be happy to review any specific situation or asset portfolio and the implications that this new Act may have for it, as well as to recommend the most appropriate courses of action in each case.

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Other key contact: Maria Antonia de Prada, Senior Associate.

The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.

Readers should take legal advice before applying it to specific issues or transactions.