The dispute is now official: the Xunta de Galicia wants to allocate the state-provided funds for cities classified as zonas de mercado residencial tensionado itself. Specifically, the issue concerns around €5.1 million for A Coruña and Santiago de Compostela. Both city councils want to manage the money directly and tie it to their local housing programmes. Ministerial guidance in mid-September 2026 makes clear that the funds are earmarked for projects in the designated areas; however, who has operational responsibility remains contested.
Xunta president Alfonso Rueda announced that the money would be used for subsidised housing in the two cities. The mayors Inés Rey in A Coruña and Goretti Sanmartín in Santiago de Compostela oppose central control. They argue that only the local authorities can respond effectively, quickly and appropriately to local housing markets, for example by combining new construction, bringing vacant properties back into use, social rentals and prompt interventions in particularly pressured neighbourhoods.
The legal basis for classifying areas as zonas de mercado residencial tensionado is provided by the national Ley de Vivienda. It allows interventions in highly strained markets and links them to support measures. In Galicia, A Coruña and Santiago were recognised under this mechanism. According to information from Madrid, the funds are strictly earmarked for measures in the declared areas. Whether allocations are made project by project through the regional government or directly through the city councils is the current point of contention.
Politically, differing views of responsibility and effectiveness are colliding. The Xunta stresses the planning certainty and scalability of larger programmes across the region. The cities point to their proximity to local needs, existing tools for mobilising land and housing stock, and ongoing projects that could be delivered more quickly without additional tiers of decision-making. Behind the jurisdictional dispute lies the debate, intensified since 2025, over rent regulation and its effects on housing supply and prices.
So far, only one thing is certain: the money must be spent in A Coruña and Santiago de Compostela; the level of government given operational control will ultimately decide the pace, selection and design of the projects. Statements from the parties are on record, but no final decision on the allocation structure has been made. Forecasts of the effects on rents or construction rates therefore remain provisional and dependent on specific programme decisions.
Editor: Phillipe Schmidt-Araguin (Article created with AI assistance).