For the first time in over a decade, I spent a few days last week flat hunting. It was not for my own benefit but rather to provide moral support to a close friend of mine who’s looking to rent a place in the same central Barcelona neighborhood where my wife and I live, Fort Pienc. The experience was a depressing one for the both of us. Not only is my friend almost certainly priced out of this highly gentrified neck of the woods, but my wife and I could also find ourselves in the same predicament the next time our contract is up, in three-and-a-half years’ time.

When we moved to this once staunchly middle class neighborhood way back in 2006, just before the collapse of Spain’s crazy housing bubble unleashed a surge in demand for rental properties, you could rent a decent three-bedroom apartment (with one of the bedrooms so tiny it’s barely large enough for a bed) for between €800 and €900 a month. Today’s prices are almost double that and Barcelona’s rental market is now so skewed in the seller’s favor that flat hunting has become a deeply demoralizing, if not humiliating, experience for all but the richest renters.

Despite a moderate slowdown in prices resulting from the recent political uncertainty in Catalonia, rents in Barcelona have still risen by around 50% since 2013, with the result that more and more local people are getting priced out of the market. But it’s not just the price of rents that are prohibitive; so, too, are the upfront fees and deposits tenants have to pay.

For a three-bedroom flat that costs, say, €1,600 a month (nearly $2,000) — a standard price in my neighborhood — a tenant needs to put down a two or three-month deposit (€3,200 or €4,800) plus a finder’s fee worth roughly one-and-a-half month’s rent (around €2,400). In Spain, it’s the tenants (and not the owners) who bear the lion’s share of the agency fees. Once you throw in tax (another €400) and your first month’s rent, you’re as good as €8,000 to €9,000 poorer, just to get moving.

There are four main reasons why rents are so high in Barcelona:

1. Supply and demand. Ten years ago Spain boasted an average home ownership rate of 78.5% — one of the highest in Europe. But the Crisis put an end to that as hundreds of thousands of people lost their homes. Since then, many thirty-something couples who would have traditionally bought an apartment with a mortgage have instead chosen (or had little choice but) to continue renting, putting extreme pressure on Spain’s already limited rental housing stock.
2. The Draghi effect. Low interest rates have made it more and more difficult to generate returns from traditional investments such as government bonds or long-term savings accounts. As a result many investors, including big global funds like Blackstone, Lone Star, Apollo, KKR and Goldman’s Madrid-based subsidiary Azora, have piled into the buy-to-let market where profits can be far juicier, especially if you can pick up big batches of subsidized housing on the cheap.
3. Barcelona’s tourist boom. With far larger profits to be made in the short-term tourist rental market, many property owners and developers have shifted their focus away from long-term rentals. It’s simple math.
4. Barcelona’s popularity for the well-heeled, footloose global professional. Well paid professionals are flocking from countries with much higher salaries and higher rental rates than Spain. For many of these people, the real estate in Barcelona is a bargain.

In a study of rental prices in 30 of the world’s most “magnetic cities” carried out by U.S. real estate website Rent Café, Barcelona placed as the 11^th cheapest location, with an average price per square meter of €17.13. That compares with €47.72 per square meter in Manhattan, $43.84 in London, $51.45 in Zurich, $51.13 in San Francisco and $50.27 in Hong Kong. In other words, Barcelona is dirt cheap — for people who aren’t on local salaries.

In real terms, average salaries in Barcelona have fallen by 6.5% in the last five years, even as the local economy has flourished and the cost of renting and other basic essentials such as electricity have soared. On average it is estimated that Catalan tenants would have to spend an eye-watering 46% of their gross monthly earnings to afford the rent on an average 80 square meter (861 square foot) apartment. And that’s all of Catalonia, not Barcelona.

Unsurprisingly, more and more people are sharing. But even that can be prohibitively expensive with some people in some central areas paying as much as €700-800 a month for a double room in a ten-bedroom apartment. That’s as much as many young local residents earn on a monthly basis. According to municipal data cited by the Catalan daily El Periodico, 64% of people under the age of 30, and a third of Barcelona residents taken as a whole, earn less than €1,000 a month.

Ironically, the right of all Spanish citizens to decent and adequate housing is enshrined in Article 47 of Spain’s 1978 constitution — the same constitution that the Spanish government cites each time it refuses to even discuss the possibility of greater autonomy for Catalonia. Yet in Barcelona as well as other Spanish cities like Madrid and San Sebastian, more and more local residents, of all ages but in particular the youngest, are finding that such a right no longer exists in the city they were born in. By Don Quijones.