Spain, and particularly the capital region of Madrid, has long been weighed down by overly restrictive regulation and bureaucracy. These have contributed to rising housing costs, higher taxes, and an environment that is unfriendly to entrepreneurship. Atlas Network partner Foro Regulación Inteligente has taken a three-point approach to changing this paradigm, encouraging regulatory reform in Madrid to allow the region and its people to thrive. Their project focused on changing the government’s thinking around housing regulation, business regulation, and tax policy.
Between restrictive rules on land use and a permitting process that ran at a glacial pace, new housing construction in Madrid has slowed, hitting consumers right where it hurts—the pocketbook. Working with local policymakers, Foro Regulación Inteligente successfully encouraged several key changes that have opened the door to faster construction in the region. First, new rules create a much simplified system for changing a specific parcel’s official land use. A developer can now submit a piece of paperwork— a Statement of Compliance—when changing a project’s intended use, from an office building to an apartment complex for example, instead of being required to go through an authorization process. This will cut months or even years off of many building processes and will allow developers to respond much more easily to market demands. Another key rule change FRI worked toward is the freeing of over a million square meters—about 270 acres—of public land for private use and construction. Combined, these two reforms have opened the door to Madrid Nuevo Norte, one of the largest urban renewal plans in Europe. It promises to bring billions of euros and hundreds of thousands of jobs to Madrid in coming years.
With the aim of freeing businesses to operate without an undue regulatory burden, FRI suggested several cornerstone reforms to lawmakers. The first, which ultimately became the “Open Market Law,” cuts down on overly complicated licensing requirements by automatically recognizing permits granted by other regional governments in Spain. A new omnibus bill makes sweeping changes to 50 separate laws, norms, and regulations related to doing business in Madrid, either simplifying them or removing them outright. Finally, a “Red Tape Challenge” has seen the regional government evaluate more than 200 proposals for specific deregulations.
Foro Regulación Inteligente also sought to help taxpayers directly by lightening the burden of Madrid’s regional taxes. Ultimately, policymakers repealed all three regional taxes.
FRI’s work is not only helping create a better future for the region of Madrid, it’s making a national and international splash! Taking a cue from Madrid, the Ministry of Economics at the national level has established an Office of Smart Regulation and required that proposed regulations undergo an impact assessment both before and after implementation. The regional government of Galicia and the city government of Madrid are also both pursuing their own deregulation initiatives. Liberalismo a la Madrileña, by CEO Diego Sánchez de la Cruz, explores the organization’s work in Madrid, and has not only topped sales charts but has sparked conversations on deregulation in other parts of the world.
Foro Regulación Inteligente is excited to continue working toward a freer, more prosperous Spain.
About Foro Regulación Inteligente:
Foro Regulación Inteligente is a think tank that promotes the principles of Smart Regulation in Spain with the aim of promoting a constructive debate on the importance of simplifying and improving the regulatory environment in which companies and entrepreneurs operate. Their work focuses on promoting the analysis and study of the different regulations in Spain, with the aim of promoting the adoption of simpler, clearer and more favorable rules for the development of business activity.
About the Templeton Freedom Award:
Named for the late investor and philanthropist Sir John Templeton, the Templeton Freedom Award has annually honored his legacy. Since 2004, the Award has identified and recognized the most exceptional and innovative contributions to the understanding of free enterprise, and the public policies that encourage prosperity, innovation, and human fulfillment via free competition. The Templeton Freedom Award is generously supported by the Templeton Religion Trust and will be presented during Atlas Network's Freedom Dinner on November 17 in New York City. The winning organization will receive a US$100,000 prize, and all other finalists will receive US$20,000 prizes. Find out more about the award HERE.
See the related articles below to learn more about the other 2022 Templeton Freedom Award finalists.
