On Thursday, Madrid City Council approved two special plans at an extraordinary plenary session that expand the scope for building social rental housing and developing accommodation on certain industrial sites. In the residential sector, it estimates a potential of over 18,400 homes, a figure that combines those already approved through the alternative use of plots with those that could be created by extending this possibility and increasing buildable area and density.
The first measure incorporates into the municipal planning framework the provisions of Law 3/2024 of the Community of Madrid and its amendment by Law 2/2026. The latter extends the possibility of developing social rental housing to private public facilities and tertiary accommodation sites – a possibility that was initially limited to plots designated for offices – and extends the timeframe set out in the regulations by two years. The 2028 deadline refers to the timeframe for qualifying for the measures, not to a handover date for the homes.
Since the City Council agreed to implement the initial regulations in October 2024, 5,806 homes have been processed over 21 months. It is estimated that more than 8,100 could be added to this figure over the next two years: more than 4,900 on office land, more than 3,000 on privately-owned public facilities land, and more than 130 on accommodation plots. The council’s figures thus put the total number of units associated with this alternative land use at around 14,000.
Greater buildable area and density for collective social housing
The second residential measure allows for an increase of up to 20% in the buildable area and 30% in density on plots zoned for social housing without amending the planning regulations. The municipal plan specifies that this incentive will apply exclusively to collective housing, thus excluding single-family dwellings.
According to the City Council’s calculations, this provision would enable the creation of more than 4,400 additional units, which would fulfil the announced residential potential. The instrument also maintains the incompatibility between residential and industrial uses established in the 1997 General Urban Development Plan.
Serviced apartments and other accommodation types on industrial land
The second special plan, which has also been definitively approved, removes the restriction that previously only permitted hotels in certain industrial areas and now allows other forms of accommodation, such as serviced apartments, B&Bs and guesthouses. Its scope covers more than 240 plots spread across eight districts: Arganzuela, Chamartín, Fuencarral-El Pardo, Usera, Ciudad Lineal, Hortaleza, San Blas-Canillejas and Barajas.
The amendment affects areas regulated by Grade 3 of Zonal Regulation 9 and industrial plots situated in areas where the overall land use is residential or commercial. Having examined more than 3,000 plots, the Town Planning Department considers that these areas have lost some of their industrial character due to the expansion of commercial activities, which justifies broadening the categories of accommodation permitted.
The locations included feature plots in the industrial estate on the Burgos road, the Aeropuerto neighbourhood, Calle Josefa Valcárcel, the area around Costa Rica next to the M-30, and Avenida de Andalucía. The council’s aim is to increase the supply of short- and medium-stay accommodation outside the city centre, in line with the decentralisation of accommodation sought by the RESIDE Plan.
The previous restrictions were intended to curb the covert conversion of industrial properties into housing, particularly lofts that were authorised as holiday apartments and subsequently sold for residential use. The approved relaxation applies to accommodation and does not constitute authorisation for housing on industrial land.
Traditional industrial estates regulated by grades 4 and 5 of Zoning Regulation 9 are excluded from this general extension. However, the City Council may consider other areas on a case-by-case basis, through the relevant planning process, where they are undergoing a transformation towards tertiary uses comparable to that of the areas now included.
