# OECD Brick by Brick explained: what the 2021 housing report recommends for Spain

> The OECD's 2021 report Brick by Brick: Building Better Housing Policies judges housing policy against three goals at once, inclusive, efficient and sustainable housing, and names three levers that serve all of them: more investment in social and affordable housing, land-use rules that let supply follow demand, and moving property tax from transactions to annual taxes based on land. It treats mortgage tax relief, rent control and green building standards as trade-offs that need gradual reform and compensation. For Spain, with social rental housing under 2% of the stock and transfer taxes of 6% to 13% on resale homes, the report points to a package: build a social sector, free up land, swap sales taxes for land taxes and track it all with comparable data.

- URL: https://www.radicalcentre.eu/en/articles/oecd-brick-by-brick-housing-policies-explained
- Language: en
- Publisher: radical centre / centro radical
- Published: 2026-10-28
- Topic: Housing
- Author: radical centre
- Licence: CC BY 4.0

## Key points

- Brick by Brick (OECD, 2021) sums up the OECD's Horizontal Project on Housing and judges policy against three goals: inclusiveness, efficiency and environmental sustainability.
- Three levers help on all three fronts: investment in social and affordable housing, land-use reform that lets supply respond, and a shift from transaction taxes to recurrent taxes based on land.
- Public investment in housing development across the OECD fell from 0.17% of GDP in 2001 to 0.06% in 2018.
- Mortgage interest relief, rent control and stricter green standards involve trade-offs; the OECD advises gradual reform with compensation, such as more social housing or renovation subsidies.
- Spain has social rental housing below 2% of its stock and regional transfer taxes on resale homes from 6% to as much as 13%, so the report's agenda applies to it squarely.

The OECD published *Brick by Brick: Building Better Housing Policies* in 2021. It sums up the OECD's Horizontal Project on Housing, run across several of the organisation's committees in 2019-20, and it is the starting point for this week of our programme on housing. It earns that place because it puts in one document instruments that Spanish politics usually keeps in separate camps.

The report begins with costs. Between 2005 and 2015 the share of income that households spent on housing rose by five percentage points on average, reaching 31% for middle-income households across most OECD countries. The OECD traces much of this to a supply that fails to keep up where demand is strong, in the job-rich cities, partly because of geography and partly because of land-use and zoning rules. And it adds the climate: the residential sector accounts for 17% of energy and process-related greenhouse gas emissions worldwide.

From there the whole report runs on three goals held together. Housing should be inclusive, so people on low and middle incomes can find a decent home near work. The housing market should be efficient, so supply responds to demand and people can move for jobs. And housing should be environmentally sustainable.

## The levers that help on every front

The first is social and affordable housing. Public investment in housing development across OECD countries fell from 0.17% of GDP in 2001 to 0.06% in 2018. The report wants more, because social housing protects vulnerable households and adds to supply, which eases prices for everyone. It wants it energy-efficient, in mixed neighbourhoods, with eligibility people can carry from one region to another. Its showcase is Austria, where social housing was 24% of the stock in 2019 and 43% in Vienna, and where limited-profit associations build 12,000 to 15,000 homes a year at cost-based rents on average 23% below for-profit rents. See [the Vienna model](/en/articles/vienna-model-social-housing-middle-class).

The second is land use. The OECD recommends removing overly tight building height limits and minimum lot sizes, revisiting the boundaries for urban growth regularly, avoiding overlapping responsibilities across levels of government and planning for the needs of whole metropolitan areas instead of each municipality on its own.

The third is tax. The report recommends relying less on taxes on buying and selling homes and more on annual taxes on property, with the base moving from buildings to current land values. Transaction taxes punish moving house, which means they also punish moving for a better job. A recurring tax on land encourages building on valuable plots and gives local government a stable income. The Netherlands is its example: the Dutch cut their transaction tax from 6% to 2%, permanently from 2012, and phased down mortgage interest relief year by year.

## The trade-offs

Other reforms help one goal and hurt another for a while, and the OECD handles them with gradualism and compensation. Mortgage interest relief mostly benefits higher earners and gets capitalised into prices where supply is rigid, so the report recommends phasing it out slowly. Very strict rent control discourages investment and can shut out renters with insecure jobs. Yet the OECD still sees a case for giving tenants reasonable security over their tenure and rent, and proposes rent stabilisation as the compromise: rents regulated in line with the market during a contract, reset at renewal, with more social housing for vulnerable tenants alongside. And since tougher green standards raise building costs, it suggests renovation subsidies paid for partly by recurring property taxes.

The report sits inside a Housing Policy Toolkit with a dashboard and country snapshots, so a government can compare its policy settings with its peers': rent control stringency, the share of recurring taxes in property taxation, or an index of how fragmented land-use governance is.

## What it means for Spain

Spain fits the diagnosis closely. The OECD's Affordable Housing Database puts social rental housing at 8% of the stock on average in the EU, and below 2% in Spain, one of the smallest sectors it records (we compared it with Europe in [Spain's social housing against Europe](/en/articles/spain-social-housing-europe-housing-europe-2025)). *Brick by Brick* itself notes that over 70% of young people aged 20-29 in Spain live with their parents. And Spain taxes housing transactions heavily: according to consumer group OCU, in 2024 the general regional transfer tax (ITP) on resale homes ran from 6% in Madrid to 10-11% in Catalonia and Valencia and up to 13% in the Balearic Islands, plus stamp duty on the deed.

That last point connects to a live proposal. At its launch in October 2026, Democracia 21's Miriam González proposed lowering all housing-related taxes for under-35s until someone earning €1,300 a month pays no more than €350 for rent, as Infobae reported (see our [overview of the party's proposals](/en/articles/democracia-21-miriam-gonzalez-proposals-radical-centre)). The OECD's logic supports cutting transaction taxes, for everyone and permanently, and replacing the revenue with an annual tax on land. We looked at who gains from the under-35 version [here](/en/articles/housing-taxes-under-35s-spain-who-gains), and at the [rules that raise the cost per square metre](/en/articles/rules-that-raise-housing-cost-per-square-metre-spain) in another piece.

Read as a whole, the report gives Spain a programme that combines what each side usually keeps to itself. From the left comes a real social housing sector, built by public bodies and limited-profit associations, with tenants given security through rent stabilisation. From the market-liberal side comes land that can be built on where people want to live, planned at metropolitan scale, and a tax system that stops fining people for moving. The pieces fit: social housing adds supply, freer land makes it cheaper and a land tax rewards building. What holds them together is the OECD's method, which belongs to neither camp: one housing system, judged against three goals, with Spain publishing every year the same indicators as its peers, its social housing share, its land-use governance score, its rent rules and its tax mix, and adjusting course when the numbers say so. A Spanish housing law could write that annual report into its first article.

## FAQ

### What is the OECD Brick by Brick report?

Brick by Brick: Building Better Housing Policies is a 2021 OECD report that pulls together the findings of the OECD's Horizontal Project on Housing, run across several committees in 2019-20. It reviews why housing has become less affordable and which policies improve housing for people, for the economy and for the environment. It is part of the OECD Housing Policy Toolkit, together with a housing dashboard and country snapshots.

### What does the OECD recommend on housing policy?

More public investment in social and affordable housing, land-use reforms such as removing overly tight height limits and minimum lot sizes, planning at the scale of whole metropolitan areas, and relying less on housing transaction taxes and more on annual property taxes based on land values. It also recommends phasing out mortgage interest relief gradually and favouring rent stabilisation over strict rent freezes.

### What does the OECD say about rent control?

It finds that very tight rent control and tenancy rules can discourage investment and make it harder for people with insecure jobs to rent. It still sees a case for reasonable security over tenure and rent, and suggests rent stabilisation, where rents are regulated during a contract and reset at renewal, combined with more social housing for vulnerable tenants.

### How does Spain compare in the OECD housing data?

Spain's social rental stock is under 2% of all dwellings, against 8% on average in the EU, according to the OECD Affordable Housing Database. Brick by Brick also reports that over 70% of young people aged 20-29 in Spain live with their parents.

## Sources

- [Brick by Brick: Building Better Housing Policies](https://www.oecd.org/content/dam/oecd/en/publications/reports/2021/05/brick-by-brick_eb010639/b453b043-en.pdf), OECD (2021)
- [PH4.2 Social rental housing stock](https://webfs.oecd.org/Els-com/Affordable_Housing_Database/PH4-2-Social-rental-housing-stock.pdf), OECD Affordable Housing Database (2024)
- [Tipos del ITP en 2024 por comunidades autónomas](https://www.ocu.org/fincas-y-casas/compraventa/fiscalidad/analisis/2024/06/tipos-itp-2024-por-ccaa), OCU (2024)
- [Democracia 21, el nuevo partido de Miriam González, se presenta a las generales del 29N por Madrid y Barcelona](https://www.infobae.com/espana/2026/10/10/democracia-21-el-nuevo-partido-de-miriam-gonzalez-que-busca-romper-los-dos-bloques-ferreos-del-bipartidismo-se-presenta-a-las-generales-del-29n-por-madrid-y-barcelona/), Infobae (2026)