Digital nomads flood Andorra, language exam to combat gentrification – Gebiedsontwikkeling.nu

Displacement is a huge challenge for drivers worldwide. It represents the forced departure of the original inhabitants of an area, for example due to rising rental and purchase prices. In the American cities of New York and San Francisco, policymakers have been struggling for decades with the challenge of keeping the city affordable for everyone. American researchers noted last year that this dynamic makes local administrators anxious to build more expensive homes. Wrongly, they say.

Research from the University of Berkeley shows that building a mix of social housing, medium-priced (rental) homes and expensive owner-occupied homes offers a solution. The homes in the different price categories complement each other. This balance ensures that the original residents are not pushed out of the city. Mixed building, therefore, is something that has been happening in Dutch public housing for much longer.

Additional tax

In Andorra, the dwarf state with about 80,000 inhabitants between Spain and France, administrators have also used the mechanism of displacement to make. But the ‘culprits’ here are not the rich residents of the city, as in New York, for example. Since the corona pandemic, the country has been dealing with a large group of wealthy people YouTubers, influencers and others digital nomads from surrounding countries. They are shaking up the housing market in Andorra, writes Bloomberg. The advantage of Andorra is the combination of beautiful nature and (especially) the favorable tax system and banking secrecy. This combination has always appealed to wealthy French and Spanish people. But according to Bloomberg, the pandemic has attracted a whole new, young group to the dwarf state.

It is a development that has not gone without consequences and that forced the administrators in Andorra to take action. To understand the processes of gentrification and displacement To put a stop to it, the government announced two measures, according to Bloomberg. First, a legal ‘two-stage rocket’ has been established. This makes Andorran real estate less attractive to people from outside. A temporary law bans residents of other countries from buying property in Andorra for the next three months. This time-out is needed so that lawmakers can finalize a final bill. This does not make it completely impossible for foreigners to buy property in Andorra, but the extra tax is a discouragement. The money raised with this law will also be used to create affordable rental and owner-occupied homes.

By detour

Experts question this measure, because they fear a demographic development that previously took place in tax havens such as Monaco. To avoid the tax, the new, wealthy residents are looking for a way to become citizens of Andorra. And this is possible if someone earns more than three times the minimum wage in Andorra and invests at least 600,000 euros in the country. Anyone who meets these conditions only needs to be in Andorra 90 days a year to be able to call themselves a resident of the dwarf state.

To prevent a possible influx of only the very rich, a second measure has been announced. A mandatory language exam should become the instrument to cool down the overheated housing market in the country. This instrument can be very effective in practice, because Catalan, not Spanish or French, is the only official language of Andorra. The first ‘new’ residents have already spoken negatively about the law.

Free to work

Other European dwarf states are also struggling with large groups of new residents from outside. But where the problems are comparable, countries such as Liechtenstein, Monaco and Luxembourg have not yet managed to find a clear solution (if they even wanted to). In Liechtenstein, potential real estate buyers must have lived in the country for at least three years and have government permission. But countries like Monaco, San Marino and Luxembourg do not have these types of barriers. In practice, they already encounter negative consequences. In Luxembourg, the government has introduced free public transport to ensure that everyone can get to work, because people with lower incomes can no longer live in the country itself.