This chapter first discusses land use and housing trends in Castilla y León, and their relationship to demographic decline in the region. It then reviews the current spatial planning system in place, before providing analysis and policy recommendations to help the region better adapt to demographic change through a more efficient use of land use and spatial planning instruments.
Preparing for Demographic Change in Castilla y León, Spain
Abstract
Castilla y León is an Autonomous Community (AC) (TL2 level region) in northern-central Spain. It is landlocked and mostly flat with some mountainous regions, with the largest surface area and lowest population density of all regions in Spain. The region has seen increases in built-up surface area across the region despite consistent population decline since 1990, which is projected to fall another 18% between 2023-50. Its proximity to the national capital of Madrid, located along part of the region’s southeast border, has significant impacts on population outflows and land use, including large increases in low-density development among municipalities along this border. Strategic co-ordination of land use in Castilla y León is also undermined by municipal fragmentation: the vast majority of its 2 248 municipalities (Figure 3.1) have fewer than 1 000 inhabitants; almost half have fewer than 500; and one-third have fewer than 100.
Source: OECD local data portal
The majority of land in Castilla y León is covered by crops as well as some forests and grassland (Figure 3.2). With the Duero River running through the centre of the region, agriculture, rural tourism, and wildlife play an important role in the regional economy and ecology, underscoring the need for preservation efforts. Due to their economic and ecological importance, forests, pastures, and agricultural fields must be preserved, requiring strategic constraints on the expansion of artificial land use.
Land cover in Castilla y León and surrounding regions, 2021
Source: OECD local data portal
Among the 19 TL2 regions in Spain, Castilla y León experienced the highest difference in built-up surface area (BUA) increase relative to population change with a BUA increase of 12.2% between 2010-20 despite a population decrease of 5.7% during roughly the same period (2011-21) (Figure 3.3).
Change in built-up surface area (2010-20) and change in population (2011-21) (OECD TL2 regions, %)
Note: Data is sorted in order of largest discrepancy between change in BUA and population loss.
Source: OECD Local Municipal Database; Global Human Settlement Layer supported by European Commission, Joint Research Centre and Directorate-General for Regional and Urban Policy.
Increased land development despite persistent depopulation may be a sign that demographic trends are not being sufficiently incorporated into relevant spatial plans. In the absence of spatial planning that accounts for demographic trends, depopulation and municipal fragmentation can lead to increasingly inefficient land use, strained service delivery and infrastructure provision, and environmental degradation.
Conversely, spatial planning that aligns land use with demographic trends can help to preserve valuable ecosystems, mitigate environmental degradation, and promote compact development patterns that reduce fiscal burdens related to infrastructure expansion.
This chapter examines the land use patterns and spatial planning framework of Castilla y León, offering policy recommendations to improve resilience against demographic decline. The discussion begins with an overview of land use trends, focusing on the region’s settlement and development patterns. The chapter then explores housing market trends, with a particular focus on the prevalence of secondary housing and its impact on the region. Castilla y León’s spatial planning framework and associated instruments are also analysed. Finally, recommendations are provided for aligning spatial planning with demographic realities to create a more economically and environmentally sustainable development model.
A key challenge within the land use planning system of Castilla y León is the lack of effective co-ordination between planning levels. Municipal urban plans are not always aligned with provincial or regional spatial strategies, resulting in fragmented urban development, inefficient land use, and limited capacity to respond to broader demographic and environmental challenges. The region also faces a housing supply mismatch, particularly in rural areas. New construction continues to occur in certain areas with a large share of housing stock that is in disrepair or remains mostly unused due to secondary home status. Such cases of new development in lieu of optimising use of existing housing stock unnecessarily increase land consumption and infrastructure needs.
In terms of environmental performance, many urban plans – especially older ones – do not reflect current sustainability and climate resilience priorities. Developments have taken place in ecologically vulnerable areas, in zones prone to flood risks and in productive agricultural land, often without sufficient safeguards. Furthermore, many planning documents still lack provisions for energy efficiency, greenhouse gas (GHG) emission reduction, and climate change adaptation measures. These shortcomings highlight the need for more integrated, forward-looking urban planning across governance levels.
BUA increased and population declined in all nine provinces of the region (Figure 3.4). In all but one province of Castilla y León, BUA increased more than the EU TL3 average relative to population change (Figure 3.5).
Change in built-up surface area (2010-20) and population (2011-21) (provinces in Castilla y León, %)
Source: OECD Local Municipal Database; Global Human Settlement Layer supported by European Commission, Joint Research Centre and Directorate-General for Regional and Urban Policy.
Change in built-up surface area and population (OECD TL3, 2010-20, %)
Source: OECD Local Municipal Database; Global Human Settlement Layer supported by European Commission, Joint Research Centre and Directorate-General for Regional and Urban Policy.
Increased BUA combined with population decline indicates sprawl and inefficient land use with adverse consequences on the economy, environment, infrastructure, and quality of life. Sprawl can consume valuable agricultural or natural land and require expansion of infrastructure, leading to more costly maintenance of roads, utilities, and public spaces that are underused due to declining demand and a lack of economy of scale and a declining revenue base to pay for it (OECD, 2022[1]). Spread-out development can also contribute to social fragmentation, isolation, and a diminished sense of community (Power, 2001[2]). Environmentally, unstructured expansion increases the carbon footprint due to greater distances between homes and amenities, while also removing green spaces crucial for sustainability (Jia et al., 2024[3]) (Wang and Zhu, 2024[4]).
While in absolute terms the BUA of Castilla y León is low, BUA per capita is very high, indicating that settlement patterns are inefficient. All nine provinces rank in the upper third (above the 66th percentile) of the 1 162 EU TL3 regions in terms of increase in BUA per capita between 2010-20 (Table 3.1). Zamora is in the highest percentile (92nd) with the greatest increase in BUA per capita in this period at more than 25%. Growth patterns and expected population decline suggest that inefficiency is getting worse.
Source: OECD Local Municipal Database; Global Human Settlement Layer supported by European Commission, Joint Research Centre and Directorate-General for Regional and Urban Policy.
Many municipalities located in the vast rural areas of the region, especially between León, Burgos, and Valladolid (excluding the Palencia FUA) have seen substantial increases in BUA despite broad population stagnation or decline (Figure 3.6). Large increases in BUA in such rural areas and in heavily depopulating municipalities indicate sprawling and scattered low-density development.
Percentage point difference between built-up area change (2010-20) vs. population change (2011-21)
Source: OECD Local Municipal Database; Global Human Settlement Layer supported by European Commission, Joint Research Centre and Directorate-General for Regional and Urban Policy.
Development is low-density
The built environment of the region has become substantially less dense. While BUA has increased by at least 10% in each province of Castilla y León between 2010-20, built-up volume, e.g. the three-dimensional space occupied by buildings, decreased in all but one province (Soria) over the same period (Figure 3.7). While efforts by the regional government may have helped encourage development in and around functional urban areas (FUAs) of the region’s provincial capitals which saw population increases, evidence also suggests that new development across the region has been low-density, which exacerbates challenges related to sparse development and land consumption.
Change in built-up surface area and in built-up height (%, 2010-20)
Source: OECD Local Municipal Database; Global Human Settlement Layer supported by European Commission, Joint Research Centre and Directorate-General for Regional and Urban Policy.
As shown in Figure 3.6, BUA increased mainly in municipalities within FUAs that surround the urban centres. This trend is in some ways positive, since development within FUAs helps promote greater population density and economies of scale close by service centres, which can help offer residents greater access and proximity to opportunities. On the other hand, since FUAs are travel-to-work areas, they can sometimes extend into quite rural areas – so development within FUAs is not necessarily compact. Indeed, changes in built-up height (Figure 3.8) show that development in many municipalities within FUAs (excluding provincial capitals) has become less dense – suggesting that while development is successfully being promoted close to urban centres and provincial hubs, this development is nonetheless low-density, consuming a high share of land compared to increases to the housing supply provided. This is particularly concerning given the high share of secondary homes and abandoned properties in the region, meaning new low-density development is occurring despite suboptimal use of already existing assets. Such low-density developments consume large swaths of land, undermining environmental sustainability goals. They also undermine economies of scale around transport infrastructure, which may make them less appealing for prospective workers seeking housing options well-connected to job opportunities. Likewise, private sector actors may decline to establish production in rural areas that lack well-connected, dense housing options capable of housing potential workers.
Average net built-up height change (%, 2010-20)
Source: Global Human Settlement Layer supported by European Commission, Joint Research Centre and Directorate-General for Regional and Urban Policy.
Outward expansion of low-density development may be occurring for several reasons. One cause may be the conversion or extension of existing homes, leading to horizontal rather than vertical expansion. Another cause may be a preference for building new homes that are more modern and higher quality, possibly to meet the accessibility needs of the growing ageing population, rather than retrofitting existing homes for accessibility or other modern amenities. Increased support or incentives for renovations and denser development – as well as a tax on second single-family homes or underoccupied homes – could help deter construction of new homes when renovation is possible and encourage development of modern, accessible flats within denser housing types instead of single-family homes. Urban plans and planning regulations may not adequately incentivise denser development or limit horizontal expansion of development in a strategic manner.
Low-density development patterns may be contributing to high transport emissions
Most provinces in the region have among the highest road transport-related greenhouse gas (GHG) emissions per capita in Spain and all of Europe (Figure 3.9). In Castilla y León, road transport alone accounts for approximately 40% of total GHG emissions, with total GHG emissions per capita significantly exceeding the EU average. This can largely be attributed to the region’s combination of low population density and car-dependent settlement patterns (Figure 3.10). While reliance on private cars is common in rural areas, continued low-density development can lead to greater reliance on emitting private vehicles in lieu of public transport options that are most efficient when operating in denser areas. Even when compared to other EU provinces with similar population densities, Castilla y León's per capita emissions remain notably high.
Sparse development in the region increases dependence on private vehicles while limiting the viability of public transport, which is most effective in denser areas. As settlement patterns become more spread out, public transport becomes less feasible due to reduced service frequency, higher costs, and insufficient infrastructure investments. Sparse population distribution also hinders the adoption of alternative energy solutions. Initiatives aimed at renewable energy development may face logistical challenges due to remote and scattered settlements, necessitating compact development.
Road transport sector GHG emissions per capita and population density (%, EU TL3 regions, 2022)
Source: OECD Local Municipal Database; Global Human Settlement Layer supported by European Commission, Joint Research Centre and Directorate-General for Regional and Urban Policy.
Private motor vehicles per 1000 people, by municipality
Note: Data is from 2023 or latest available.
Source: OECD Local data portal
The region is nonetheless investing in environmentally sustainable development, such as through the establishment of the Environmental Business Park (PEMA) in Garray, Soria, which is designed to promote the production of renewable energy while creating jobs and enhancing the attractiveness of rural areas (Box 3.1). Projects like PEMA demonstrate how the region is strategically leveraging rural land development to both increase attractiveness and promote environmental sustainability.
As part of its broader strategy for green industrial development, the region of Castilla y León is establishing an ambitious 800 000 m² industrial park focused on renewable energy, sustainability, and innovation. The green hydrogen production plant, located in the Environmental Business Park (PEMA) in Garray, Soria, is driven by the region’s Public Company for Infrastructure and Environment of Castilla y León (Sociedad Pública de Infraestructuras y Medio Ambiente de Castilla y León – SOMACYL), first approved by the regional government in 2015 and now nearing completion. The plant will be the first in the region to produce hydrogen using renewable energy, reinforcing the region’s commitment to decarbonisation and sustainable development. Hydrogen production is already underway and will be supplied for industrial use to the entire industrial park.
PEMA is located next to the Duero River, just 10 minutes from the provincial capital of Soria and easily accessible from the N-111 highway. The extensive road system surrounding the industrial park also includes pedestrian and bicycle routes that connect the park internally, as well as with the town of Garray.
This site is also home to pioneering carbon capture technology, a pilot hydrogen refuelling station for heavy vehicles, and a growing circular economy ecosystem, including materials recycling. Biomass energy is particularly relevant here, with local forest materials used both to reduce wildfire risk and fuel renewable energy systems. A firm is also producing methane gas onsite.
The industrial park is designed not only as an economic engine but also as a model for sustainable regional development. Public support through land incentives, infrastructure, and housing is central to its success. Nearly 70% of the park is already confirmed to be occupied, and 28 homes have been built nearby to attract workers, powered mostly by renewable energy. A full suite of amenities is planned, including EV charging stations, a cafeteria, training centres, and shuttle transport from Soria. Tailored training programs led by the regional government will be offered to connect local jobseekers with incoming employers’ specific needs, creating a pipeline for green jobs at various skill levels, from plumbers to aeronautical technicians. PEMA is expected to support around 3 000 daily workers and serve as a national benchmark for integrated industrial, energy, housing, and workforce planning.
Source: Interviews during OECD site visit; (Suelo Soria[5]); (Lean Hydrogen[6])
The demographic decline in Castilla y León has had profound implications for the region’s land use efficiency, housing stock and housing market dynamics. With a steadily shrinking and ageing population, housing is increasingly being converted to secondary homes or abandoned in lieu of rehabilitation. Despite this, new development is occurring, often at very low densities. The exodus of younger generations in search of economic opportunities elsewhere has left behind an ageing housing stock, much of which is underutilised or in need of rehabilitation. These trends pose significant challenges for local governments, developers, and residents, requiring innovative strategies to optimise use of existing housing, promote regeneration, prevent further deterioration, encourage denser development, and protect the environment. While programmes and policies from the regional government aim to address these concerns, the region’s housing challenges remain characterised by a high share of secondary homes, a relatively limited supply of housing used as main residences, high housing prices in many places with population decline, and an increasing rate of new housing construction projects compared to renovations or rehabilitations. Despite demographic shrinking in many areas, housing affordability remains a concern in parts of Castilla y León as in regions across the EU, prompting EU-level policy action (Box 3.2). Policy recommendations in this chapter explore how the region can benefit from EU Cohesion Policy funds and the mid-term review to increase housing affordability, which can in turn help support young people seeking to stay in or relocate to Castilla y León.
EU house prices have risen by 52% since 2015 (European Commission, 2025[7]). This affordability crisis has threatened to relocate vulnerable groups away from opportunity-rich areas, weaken communities and local economies and undermine regional competitiveness. Recognising these challenges, the European Commission has established housing as a key priority area and a fundamental right within a modernised Cohesion policy framework (Eurostat, 2025[8]).
EU Cohesion policy and the mid-term review
Cohesion Policy stands as the EU’s principal investment instrument, commanding nearly one-third of the EU budget (EUR 392 billion) for the 2021-27 programming period. Through its various funding mechanisms, it drives targeted investments to strengthen economic, social and territorial cohesion across Member States. The current programming period has unfolded against a backdrop of unprecedented challenges, including the COVID-19 pandemic and Russia's war of aggression against Ukraine, which have fundamentally reshaped the EU's strategic priorities. The mid-term review aims to propose amendments to Cohesion policy legislations that integrate the EU's emerging priorities into existing Cohesion programmes and accelerate investment delivery through simplification measures.
Affordable housing proposals in the mid-term review
The mid-term review aims to modernise Cohesion policy by addressing the growing housing affordability crisis across Europe, in alignment with the proposed European Affordable Housing Plan and the recommendations of the newly established European Parliament's Special Committee on the Housing Crisis.
It proposes to double Cohesion policy's support for affordable housing through legislative amendments that widen possibilities for Member States to reprogramme their 2021-27 allocations toward housing investments. To provide adequate incentives, investments reallocated to affordable housing will benefit from enhanced pre-financing of 30% in 2026 and an increased EU co-financing rate of 100%.
Additionally, a model financial instrument has been prepared jointly with the European Investment Bank (EIB) for combining Cohesion policy funding with resources from the EIB and other financial institutions. This approach aims to increase the impact of Cohesion policy resources on affordable housing supply by leveraging private and concessional financing.
The mid-term review strongly encourages Member States to 1) double their allocated funding for affordable housing, 2) utilise financial instruments effectively, 3) accelerate and streamline permitting and planning processes at the local level and 4) support housing projects consistent with the New European Bauhaus initiative.
Source: European Commission (2025[8]), Communication from the Commission to the European Parliament and the Council, https://ec.europa.eu/regional_policy/information-sources/publications/communications/2025/a-modernised-cohesion-policy-the-mid-term-review_en.
As of 2023, there are 1 842 239 housing units in Castilla y León, an increase of 4.88% from 2013, or 85 727 units. The most significant increases in housing stock occurred in 2016 and 2020, but growth subsequently slowed to less than 1% total during the period 2020-23 (Instituto de la Construccion de Castilla y Leon, 2024[9]). By province, the increase of housing stock 2013-23 ranges from 21 341 new units built in 2023 in León (a 6.38% increase) to 3 021 new units built on Segovia (a 2.39% increase). When assessing the increase in share of housing stock by province, Soria has seen the greatest increase at 8.12%, and Segovia the lowest.
Residential built-up area increased at a much higher rate 2010-20 than the rate of new housing units during roughly the same period (2013-23) despite depopulation (Figure 3.11), further indicating a decline in density in the region that undermines economic productivity and environmental sustainability.
Changes in population (2013-23), housing units (2013-23), and residential BUA (2010-20) (by province, %)
Note: Data provided by the region covers 2013-23, while data from GHSL covers 2010-20.
Source: Source: OECD Local Municipal Database; Global Human Settlement Layer supported by European Commission, Joint Research Centre and Directorate-General for Regional and Urban Policy. ; (Instituto de la Construccion de Castilla y Leon, 2024[9])
Secondary homes make up a large share of housing
One likely driver of this increase in low-density housing despite depopulation in Castilla y León is the growing proliferation of secondary homes1. As of 2021, 43% of the region’s total housing stock is composed of non-primary homes, about 13.5% higher than the national average, up from 39% in 2011. Across the region, the number of secondary homes has increased by 123 430 between 2011-21, while the number of primary homes decreased by 12 287. This number of secondary homes increased while the number of primary homes either stayed virtually the same or decreased in all nine provinces (Figure 3.12), suggesting many homes have been converted from primary to secondary use. The shift has been particularly extreme in Zamora and León provinces, which saw a marked increase in secondary homes combined with a loss in primary homes, suggesting such conversion may be particularly common in these two provinces. Virtually half of all conventional family dwellings built between 2011-20 were secondary homes (20 615 secondary versus 21 005 primary), meaning more than 80 000 new secondary homes were not newly built – another indication that the increase in secondary homes is likely due to converted use of existing flats (Instituto de la Construccion de Castilla y Leon, 2024[9]). This conversion trend may be tied to depopulation trends in the region: if a member of a family that own multiple houses moves out of the region, the family may opt to retain the vacated home as a secondary or seasonal home.
Change in number of housing units by province (2011-21)
Source: (Instituto de la Construccion de Castilla y Leon, 2024[9]). (INE[10]), "Censos de Población y Viviendas 2011". D. G. de Presupuestos, Fondos Europeos y Estadística de la Junta de Castilla y León con datos del INE, "Censos de Población y Viviendas 2021".
In a context where the population is declining and 43% of housing units are secondary homes, an increase in new residential construction projects combined with a decline in renovation or demolition work (Figure 3.13) suggests a disconnect between housing supply and actual local demand. The decision of families to not rent out homes they own can lead to construction of new homes to meet demand that does exist, even though more than two out of every five homes in the region sit empty most of the year. Despite this, secondary homes are not counted as vacant – and because they are rarely rented out or sold due to personal preferences of owners, they are often not available on the market.
Lack of access to existing housing stock due to the prevalence of secondary homes can negatively impact labour mobility and economic productivity more broadly, making it more difficult for workers to live near potential job opportunities, while investors may be hesitant to start a business in an area with limited housing options for prospective employees. Prevalence of unused or underused secondary homes may also negatively impact community cohesion, reduce local economic activity, and strain public services, as resources and infrastructure are allocated for homes that are rarely used in practice.
Renovations and demolitions are underused mechanisms
This high rate of secondary homes seems to have led to new construction of homes to match demand in lieu of more sustainable methods, e.g. renovations or demolition and development of existing properties. The share of renovations and demolitions among total housing production has steadily declined in recent years while the share of new construction projects has steadily increased (Figure 3.13). While the gradual increase in the share of multi-family buildings among new construction projects potentially indicates an incremental success by the region to promote denser development, the comparative decline in renovations and demolitions represents a missed opportunity to optimise the re-use of existing developed land, which can promote settlement density and minimise environmental impact.
New residential buildings by type of construction, 2011-21
Note: “New – Single family” and “New – Multi family” refer to construction of new residential buildings.
More than 60% of homes in Castilla y León are considered in good, very good, or excellent condition while just 3% are considered in “bad” condition (Instituto de la Construccion de Castilla y Leon, 2024[9]). As of 2021, one-third of Castilla y León’s housing stock was built before 1961, and more than half was built before 1981. However, many older homes located in rural and depopulating municipalities, including secondary homes, may not be worth rehabilitating due to poor connectivity to services and infrastructure. Older homes may also be poorly equipped for the evolving accessibility needs of the ageing population in the region, or otherwise may be prohibitively disconnected from services that ageing residents require. Thus, despite the relative quality of housing in the region, these considerations may make new construction of a modern, accessible and better located home more appealing than rehabilitating or renovating existing ones.
In addition, older buildings often require extensive and costly upgrades to meet modern energy efficiency standards, safety regulations, and contemporary living expectations, including better accessibility for ageing or disabled residents. In many cases, these renovations can be more expensive or complex than constructing a new home, particularly if structural deficiencies, outdated materials, or poor insulation make refurbishment impractical. Additionally, planning regulations and zoning laws may not provide sufficient incentives for renovation, while new construction projects can benefit from government subsidies, streamlined permitting processes, or more flexible design possibilities.
Housing demand often shifts towards larger, more modern, or differently configured homes, making it financially more attractive for developers to build new rather than retrofit outdated properties or demolish and rebuild. In depopulating areas, the lack of demand for older homes combined with fragmented ownership and patrimony-related challenges can further discourage renovations, leading to a preference for constructing new, market-ready housing units to meet demand. Thus, incentives may be insufficient, or regulatory barriers may be excessive, to entice homeowners to demolish dilapidated homes and combine land plots or acquire permits to replace demolished homes with denser development. In other cases, poor connectivity and access to services may mean that renovation or demolition and replacement of a rural home is unattractive.
In Spain, the division of powers regarding land use policy is specified in the Constitution and in other national legislation (OECD, 2017[11]). The Constitution assigns responsibility for spatial planning to the regions, but the national government prepares framework legislation that guides regional laws (Figure 3.14). It has important powers in policy fields related to spatial planning, is responsible for environmental legislation, and prepares a sectoral plan for national infrastructure, e.g. for transport and energy. However, it has no authority to prepare a general national spatial plan, thus no general national spatial plan exists. Article 47 of the Spanish Constitution states that society will participate in the land value gains that the urban actions of public entities generate, providing the legal framework for land value capture (OECD/Lincoln Institute of Land Policy, PKU-Lincoln Institute Center, 2022[12]).
Within the boundaries set by national regulations, regions establish their own comprehensive planning systems. This includes defining the requirements for municipal master plans, which classify land as “suitable for urban development,” “not suitable,” or “protected according to its environmental, natural, cultural, etc. value”. Additionally, they determine the content and function of various planning instruments. Most regions follow a hierarchical system in which the regional government develops a regional spatial plan that municipal governments are required to follow. Depending on the region, regional governments may also be responsible for granting building permits for certain types of developments, such as large-scale or environmentally sensitive projects.
Municipalities are the main actors in land use planning. They prepare and enact local plans, which vary in their details between regions. In general, midsize and smaller municipalities adopt a simplified version of the Master Plan, maintaining similar core elements. Only very small municipalities have no land use plans. In such cases, the conditions and restrictions for urban development are usually established by the Provincial Subsidiary Regulations. In most cases, municipalities are also responsible for assessing applications for building permits.
Source: (OECD, 2017[11])
Recent planning reforms seek to acknowledge demographic decline and promote sustainable development, but adaptation lags
The foundation of the current spatial planning framework in Castilla y León was established in 1998 with the adoption of the Territorial Planning Law of Castilla y León (Ley de Ordenación del Territorio de Castilla y León or LOTCyL) (Figure 3.15). It introduced key instruments such as the Directrices de Ordenación del Territorio (Territorial Planning Guidelines) and the Directrices de Ordenación de Ámbito Subregional (Subregional Planning Guidelines), aiming to promote balanced and sustainable development across the region.
Law 5/1999, the Urban Planning Law of Castilla y León (Ley de Urbanismo de Castilla y León), established general rules on land use, protected areas for conservation, development conditions and some reference densities (depending on the size of the municipality). Its contributions to the region’s planning framework include establishing a system to classify land as either urban, urbanisable, or rustic, and promoting the concept of sustainable development as part of urban planning.
Article 106 of the Law 5/1999 also endows municipalities with the power to require property owners to carry out certain works on their buildings or land to make sure they are safe, well-maintained, and in line with environmental and urban regulations. They can require property owners to carry out basic repairs and upkeep; make improvements to facades and visible areas, clean vacant lots, or remove elements that negatively impact the environment or cultural heritage; upgrade buildings to meet accessibility, safety, and energy efficiency standards; and take part in urban regeneration projects (Moreno, Maria and Teruel, 2024[13]). Owners must usually cover the cost of these works, though if the cost goes beyond what the law requires, the municipality might cover the extra. If owners do not comply, municipalities can either do the work and charge them or apply repeated fines and may even raise the amount the owner is required to spend to as much as 75% of the cost of rebuilding the property (Comunidad de Castilla y León, 1999[14]). However, in practice, Article 106 is rarely applied.
Building upon the LOTCyL of 1998, Law 3/2008 was enacted to approve the Essential Territorial Planning Guidelines of Castilla y León. These guidelines provided a more detailed and updated strategic framework, discarding outdated technical instruments from the 1998 law and ensuring that land development initiatives aligned with more contemporary objectives of the region. These include balanced and sustainable socio-economic development; the improvement of the quality of life of the population through better access to public services, infrastructure, and natural and cultural heritage; the responsible management of natural resources and the protection of the environment in line with growing resource needs and with respect for local characteristics; and rational and balanced land use. The guidelines are legally binding without any possible exemptions, but its content is strategic in nature, without zoning or specific plans. The guidelines aim to strengthen territorial infrastructure required for future prosperity, increase competitiveness and capacity for innovation, and enhance quality of life, while recognising the demographic trend of population loss and the peripheral location of the region.
Law 7/2013, officially the Law on Territorial Planning, Services, and Government of the Territory of the Community of Castilla y León (known as LORSERGO), was enacted in 2013 and introduced a new model for territorial organisation and governance within the region. The law featured several clauses relevant to challenges faced by the region in light of demographic shrinking. It established Basic Units of Territorial Planning and Services (Unidades Básicas de Ordenación y Servicios del Territorio - UBOST) intended to serve as functional geographical areas to support the organisation of territorial planning and service delivery, which can be classified as either rural or urban depending on their characteristics. Municipalities with at least 20 000 inhabitants typically constitute an urban UBOST, while rural UBOSTs are formed by grouping together municipalities with populations of 20 000 or fewer. A rural UBOST typically includes a minimum of five contiguous municipalities collectively housing between 5 000 and 30 000 inhabitants or with a population density of less than 15 inhabitants per km2.
The law requires that the zoning of services provided by the regional administration be adapted to align with UBOSTs, ensuring consistency in service delivery amid demographic shifts. LORSERGO also mandated the creation of a territorial map delineating these units, which would serve as a reference for planning and service provision and promoted the formation of voluntary associations of municipalities, called Mancomunidades de Interés General (Mancomunidades of General Interest, or inter-municipal co-operation entities - MIGs) to manage municipal services more collaboratively and with greater efficiency. However, as of 2025, the map of UBOSTs has still not been approved, a necessary condition for advancing the measures provided for in the LORSERGO, including the constitution of rural MIGs (see Box 3.3 for more).
In 2022, the Audit Office of Castilla y León submitted an audit report to regional parliament assessing the impacts of the LORSERGO law and the associated effort to form UBOSTs and encourage participation in MIGs. The report found that while LORSERGO represents a crucial step toward an approach to spatial planning (and service provision) that better reflects and incorporates the reality of demographic change in the region, some critical aspects remain unrealised. As of 2025, the map of UBOSTs has still not been approved, a necessary condition for advancing in the implementation of the measures in the LORSERGO. The only stable functional areas defined so far are urban, while the mapping of rural areas is still pending completion, which substantially limits the impact of LORSERGO. The regional administration has still not created integrated offices where information, registration, and administrative procedures can be provided in a common manner, since these would be based on the map borders of UBOSTs. The lack of approval of the map of rural UBOST also prevents the constitution of rural MIGs.
For the 14 urban functional areas that have been defined, only five MIGs have been established, and of the 302 municipalities located in these areas, less than one-fourth have joined an MIG. In light of these findings, the 2022 audit report recommended that the region complete the planning of the territory in rural areas by approving the law that includes the map of UBOSTs of the rural territory; promote measures aimed at reorganising the current ordinary associations by dissolving them or transforming them into MIGs; adopt measures for inter-administrative co-ordination and efficiency of services; ensure the five existing MIGs and their municipalities adopt the agreements provided in their statutes; and work to complete the regulatory development of LORSERGO (Board of Accounts of Castilla y Leon, 2022[15]).
Important laws related to sustainable urban development were adopted at the national and local levels in 2013 and 2014, respectively. National Spanish law 8/2013 aims to promote the rehabilitation of existing buildings and the regeneration of urban areas to enhance energy efficiency, sustainability, and overall quality of life. It seeks to address challenges posed by climate change and to revitalise the construction sector by focusing on sustainable practices.
Subsequently, Castilla y León passed law 7/2014 on Measures for Rehabilitation, Regeneration, and Urban Renewal, and on Sustainability, Co-ordination, and Simplification in Urban Planning, introducing significant amendments to Law 5/1999. Its aim is to incorporate rehabilitation and regeneration as objectives in public urban planning activities, prioritise vulnerable urban areas, and streamline administrative processes to encourage rehabilitation and regeneration projects. The Urban Regeneration Strategy in Castilla y León (ERUCyL) programme is directly linked to Law 7/2014, providing criteria, methods, and indicators to guide municipalities in designing and managing urban regeneration projects (Box 3.4) (Rodrigo González and Fernández Maroto, 2018[16]).
The Urban Regeneration Strategy in Castilla y León (ERUCyL) is a regional policy framework designed to guide municipalities in planning and implementing co-ordinated, sustainable urban regeneration projects. It is intended to support urban rehabilitation, regeneration, and renewal efforts based on five main goals: prioritising the most vulnerable urban areas; integrating regeneration actions into urban planning; promoting rehabilitation over demolition and new construction; evaluating potential intervention areas through a detailed understanding of the region’s urban characteristics; and fostering innovation in urban management, including smart city approaches, energy efficiency, and resilience.
ERUCyL also introduces the Regeneration Needs Index (INR), a diagnostic tool used to assess regeneration needs across municipalities and neighbourhoods. This index considers variables such as building age, socio-economic conditions, and the state of urban infrastructure. Based on this data, municipalities can define specific Urban Regeneration Areas (Áreas de Regeneración Urbana, ARUs) as targets for intervention.
Once a municipality identifies a priority area using the ERUCyL methodology, it prepares a project proposal outlining the scope, objectives, and financial plan for regeneration. This proposal must align with ERUCyL’s principles, addressing both physical improvements (e.g. housing and public spaces) and broader social or environmental objectives, such as energy efficiency, accessibility, or social cohesion. The regional government evaluates these proposals, and if approved, the area is formally designated as an Urban Regeneration Area—qualifying it for public funding and technical support, often from national or EU sources.
Following approval, the municipality carries out the project, co-ordinating construction, infrastructure upgrades, and resident support. These projects typically involve public-private collaboration, with co-financing and engagement from property owners and tenants. Municipalities are also required to monitor outcomes using ERUCyL’s indicators to ensure transparency, effectiveness, and replicability.
Pilot projects have been launched in Ávila, Ponferrada, and San Andrés del Rabanedo, and the strategy has been promoted across the region, although detailed evaluations are still limited.
Law 7/2014 introduced deadlines requiring municipalities to demonstrate the viability of development for land classified as “urbanisable”; otherwise, it would revert to its previous status as rural land. Any undeveloped urbanisable land without approved detailed planning was automatically reclassified as rural. The process aimed to curb speculative development and better align land use with actual demographic and economic conditions, particularly in shrinking areas. As a result, between 2016 and 2018, 283 million square metres of land across 87 municipalities were reclassified as rural land, promoting more sustainable and realistic urban planning across the region (Idealista, 2018[17]).
However, despite these efforts, rehabilitation, regeneration and renovation do not appear to be occurring at a sufficient rate to meet demand and prevent new development. The share of renovation and demolition projects related to housing appear to have declined since 2015. This suggests that the incentives for the updating of local land use plans and simplifications to administrative procedures contained in the law may not be substantial enough, and thus could be evaluated and updated. For tools such as ERUCyL, municipalities may require additional technical support or incentives to participate.
Land use and spatial planning instruments can be updated and streamlined to adapt the region to demographic decline
The spatial planning framework in Castilla y León operates through a structured hierarchy of regulations, from regional and provincial guidelines down to municipal urban plans. While regional-level regulations provide strategic direction, municipal plans adapt these principles to specific municipal needs.
As described above and in Box 3.5 below, the Territorial Planning Guidelines of Castilla y León guide the region’s territorial model and act as a reference framework for all other land use planning instruments. Subregional Planning Guidelines focus on specific areas that require co-ordinated territorial planning. At the provincial level, Provincial Land Use Planning Guidelines guide spatial development across the whole province, while Provincial Regulations act as urban plans for municipalities within the province without one.
While the focuses and goals of the Guidelines are still relevant, they are now 17 years old and are likely predicated on outdated demographic and economic projections for the region. Thus, they could benefit from a re-evaluation and substantial update to better reflect not only the demographic trends of the past two decades and the current demographic reality, but also embed adaptation measures based on demographic projections. More robust incorporation of demographic trends and projections into the Essential Territorial Planning Guidelines of the region could support incorporation of these trends and projections into local land use plans. Offering financial incentives and technical support for municipalities in exchange for updating plans in line with demographic realities could also be part of such updates.
Regional and subregional planning instruments
The Territorial Planning Guidelines of Castilla y León serve as the highest-level spatial planning instrument, establishing the region’s territorial model and acting as a reference framework for all other land use planning instruments. They aim to ensure coherent and sustainable development, economic and social cohesion, and structured growth.
Subregional Planning Guidelines (Directrices de Ordenación de Ámbito Subregional) focus on specific areas that require co-ordinated territorial planning, such as rural regeneration or economic development zones. These subregional guidelines must be consistent with the Territorial Planning Guidelines of Castilla y León and are positioned below them in the hierarchy but above municipal-level planning instruments. Subregional planning guidelines have been adopted for several cities and their surrounding areas, including Valladolid (2001), Segovia (2005) and Palencia (2009), as well as sub-regional management guidelines for the Central Cantabrian mountains (2011).
At the provincial level, two key instruments regulate land use:
Provincial Land Use Planning Guidelines (Directrices de Ordenación del Territorio de Ámbito Provincial) are intended to harmonise urban and rural development across multiple municipalities and align local plans with broader regional strategies. They also provide support for municipalities in drafting or updating their local plans.
Provincial Regulations (Normas Provinciales) apply to municipalities without their own urban plans. These serve as a basic framework in the absence of a PGOU (General Urban Development Plan) or NUM (Municipal Urban Planning Regulations).
Municipal-level planning instruments
At the municipal level, local authorities rely on a series of planning tools that must align with higher-level regulations (Figure 3.16):
The General Urban Development Plan (Plan General de Ordenación Urbana, PGOU) is the most comprehensive municipal planning instrument, typically required for municipalities with 20 000 or more inhabitants. It regulates zoning, infrastructure, and development policies and undergoes periodic updates. For example, the PGOU of Cigales balances historic urban regeneration with modern expansion.
Municipal Urban Planning Regulations (Normas Urbanísticas Municipales, NUM) provide detailed rules on land use, construction, and urban development. They apply to municipalities with at least 500 residents and complement the PGOU.
Municipal Subsidiary Regulations (Normas Subsidiarias Municipales, NS) are created by and for specific municipalities. They function as a temporary urban planning tool for small municipalities that lack a PGOU or NUM, ensuring basic land-use regulations until a more comprehensive plan is established.
Urban Land Delimitation (Delimitación de Suelo Urbano, DSU) defines the boundaries of urban land, distinguishing between developable and non-developable areas. This helps municipalities control urban expansion and infrastructure planning.
In addition to these instruments, Territorial Urban Planning Regulations (Normas Urbanísticas Territoriales, NUT) regulate land use for multiple municipalities, namely small and rural municipalities. Their aim is to provide basic urban planning for the everyday urban development of small towns in the region that lack sufficient resources to develop their own general urban planning instrument, co-ordinate more sustainable and efficient land use planning across municipalities, replace outdated Provincial Regulations, and promote sustainable development, with sufficient flexibility to treat the different contexts of small municipalities.
Source: (Junta de Castilla y Leon[18])
Key planning instruments in Castilla y León
As shown in Box 3.5, there are five main types of local planning instruments in Castilla y León. However, almost all NS and DSU are out of date, making the PGOU, NUM, and NUT the primary instruments.
PGOU and NUM plans
PGOU and NUM plans are the main planning instruments at the local level in Castilla y León, but are mostly outdated. Fifty-nine out of 66 PGOU (89%) were adopted in 2020 or earlier, and more than half are from 2010 or earlier. Likewise, 668 out of 699 NUM (95%) are from 2020 or earlier, and 407 (58%) are from 2010 or earlier. In addition, more than 400 municipalities eligible for either a PGOU or NUM (with more than 500 residents) lack either plan. Outdated plans or the lack of dedicated local plans are likely due either to a lack of technical capacity or ineligibility due to small size, which may be preventing these municipalities from limiting unnecessary low-density development or tailoring development to local needs. Conversely, some municipalities may not have sufficient incentives to prevent inefficient land use, instead viewing new development as an opportunity to attract new residents and counteract shrinkage, hoping to ensure the short-term survival of the town. These plans, which together govern 85% of the region’s population, must be updated to ensure better alignment with regional priorities of urban regeneration, sustainable development and land conservation based on current and future demographic trends.
The PGOU of Cigales, adopted in 2024, is a strong example of an updated PGOU that incorporates demographic trends and place-based urban regeneration. The plan makes a detailed study related to aspects of population and demographic projections, and based on analysis establishes the proposed urban structure and the necessary urban development facilities. It articulates two urban realities that coexist in equal parts in the centre: a traditional urban space that emerged centuries ago and a young urban fabric, until recently in rapid expansion. The main objectives for the former include regeneration and requalification, while objectives for the latter will be oriented towards new growth in the urban fabric within the time horizon of the PGOU, in accordance with reasonable needs and expectations and in those areas which guarantee the coherence of the urban model. The region could incentivise similar updates to other PGOU, ensuring that any new growth takes demographic projections into account, is sufficiently dense to minimise sprawl, and is well-connected to services and amenities.
NUT plans
Territorial Urban Planning Regulations (Normas Urbanísticas Territoriales - NUT) regulate land use for small and rural municipalities. The NUT is a relatively new planning instrument that the regional government considers fundamental for small municipalities that lack their own urban plans, and for fulfilling its commitment to increase urban planning in all municipalities (Diputación Provincial de Soria, 2023[19]). Their aim is to provide basic urban planning for the everyday urban development of small towns in the region that lack sufficient resources to develop their own general urban planning instrument, co-ordinate more sustainable and efficient land use planning across municipalities, replace outdated Provincial Regulations, and promote sustainable development, with sufficient flexibility to treat the different contexts of small municipalities.
The NUT is a compelling solution to insufficient planning coverage in rural areas because they can cover large parts of a province and facilitate rural economic activity, that can help increase the attractiveness of the region, including through supporting the establishment of agri-food industries and renewable energy facilities. They establish land classification for the entire surface of municipalities as either urban or rustic, regulate the development of urban land, and establish protection rules for rustic land. NUT also carry out a territorial analysis of demographic evolution that has led to decline in these municipalities. Based on these studies, the NUT establishes objectives such as the promotion of the recovery of rural nuclei, rehabilitation, and urban requalification.
By replacing old Provincial Regulations that often date back to the 1990s and are not adapted to the needs and socioeconomic or demographic reality of rural areas, the NUT can make it easier to establish businesses and conduct economic activity in municipalities by categorising different types of rural land, including as common or unprotected rural land where exceptional uses and economic activities of general interest can be permitted. They can also set perimeters of urban land and catalogue buildings and land with cultural protection.
The first NUT was adopted in 2022, and NUTs now apply to 311 municipalities in the region. The NUT has been adopted in three provinces so far: in Valladolid in 2022, encompassing 98 out of 225 municipalities; in Soria in 2023, encompassing 128 out of 183 municipalities; and in León in 2024, encompassing 85 out of 211 municipalities. The Soria NUT, the largest of the three, covers nearly 70% of the province’s total municipalities, almost 50% of its surface area, and more than 9% of its population. It contains several provisions aimed to support and co-ordinate more sustainable and efficient land use planning across municipalities, including an agreement between the Regional Ministry for the Environment, Housing, and Land Use Planning and the Soria Provincial Council to split the costs 50/50 for drafting the plan, for EUR 200 000 total. Implementation and monitoring of the plan is the responsibility of a Joint Committee composed of representatives from both entities.
The need for a co-ordinated inter-municipal spatial plan based on the demographic contexts of multiple municipalities such as the NUT is clear. Indeed, high increases in BUA 2010-20 appear to have occurred in many municipalities lacking a PGOU, NUM or NUT (taking into account that the NUT did not exist during the full period). The NUT could offer a viable solution to the challenge of insufficient technical capacity and inter-municipal co-ordination on spatial planning among rural municipalities. By co-funding and guiding the development of NUT plans, the regional government can ensure greater spatial cohesion, coherence and coverage among rural municipalities and ensure greater alignment with its strategic vision for spatial planning in the region.
NS and DSU plans
In principle, Municipal Subsidiary Regulations (NS) and Urban Land Delimitation (DSU) plans hold important functions in land use planning for the region, providing regulations to municipalities without formal local land use plans and classifying land as urban or rural (e.g., developable or not), respectively. However, these plans are out of date. Only one out of 236 NS is from 2003 or later and 31 (13%) are from 1990 or earlier. All but two of 366 DSU are from 2003 or later and half are from 1990 or earlier. 604 municipalities (26% of the region) have these plans in place, while another 568 (25%) municipalities are without any local land use plan whatsoever (Figure 3.17), meaning that more than half of municipalities in the region have either no land use plan or one that is more than 20 years old. This presents a significant barrier to ensuring cohesive spatial and territorial planning across all municipalities in the region.
Share of municipalities by spatial plan (%, out of 2 248 total municipalities)
Note: Original Spanish names of plans are as follows: PGOU = Plan General de Ordenación Urbana; NUM = Normas Urbanísticas Municipales; NS = Normas Subsidiarias Municipales; NUT= Normas Urbanísticas Territoriales (de ámbito provincial); DSU = Delimitación de Suelo Urbano; Without general planning = Sin planeamiento general (aplicable Normas provinciales).
Source: Castilla y León Siu
Because NS plans apply to municipalities without a PGOU or NUM, including those too small to have either plan, they can play a significant role across the region, considering that roughly half of Castilla y León’s 2 248 municipalities have fewer than 500 inhabitants. Indeed, while only 10% of the region’s population live in municipalities with either no plan or a NS plan, 804 of the region’s municipalities (35.7%) and 29.4% of its surface area (Figure 3.18) have either no plan or an NS. However, municipalities with NS have seen some significant increases in built-up surface area since 2010 – in many cases, within FUAs or just outside them (Figure 3.19) – suggesting that they are not sufficiently capable of promoting efficient land use development in light of demographic shrinking.
By population, municipalities, and square kilometres (% of regional total)
Source: Castilla y León Siu; Global Human Settlement Layer supported by European Commission, Joint Research Centre and Directorate-General for Regional and Urban Policy.
BUA change among municipalities with NS plans (2010-20, %)
Source: Castilla y León Siu
In response to these large BUA increases, NS plans could be updated and revised to better align with demographic trends and regional priorities by promoting renovation, rehabilitation, and demolition of existing land assets whenever possible and enforcing strict limits on unnecessary new and/or low-density development that is insufficiently connected to transport and service networks. Otherwise, new low-density development may continue to spring up in small, rural municipalities despite population decline, leading to unnecessary land consumption and straining service delivery. The region could also prioritise and incentive the replacing of NS plans with PGOU, NUM, or NUT plans as appropriate.
DSU represent an important mechanism to prevent urban sprawl, but almost all are significantly out of date. These could be updated as well based on demographic trends. Such updates, along with strong enforcement, should help limit unnecessary land consumption in areas facing decline and low demand, which could drive development closer to areas with stable populations and stronger connectivity, and supports environmental sustainability goals. Redundant responsibilities between the DSU and other subregional land use plans that classify land should also be addressed, suspending DSU plans where appropriate.
Alternatively, the region could consider replacing NS and DSU plans altogether and consolidating these responsibilities into other existing instruments, thus streamlining the suite of local land use plans and associated administrative procedures. For instance, PGOU plans also classify land as either urban, urbanisable, or rustic. If this capability of the DSU was diffused to all broader urban plans, e.g. PGOU, NUM, NUT, and NS, this would cover the entire region and remove any redundancies in plans.
Housing policies within the spatial planning system
Housing policies can play a critical role within the broader spatial planning system of regions experiencing demographic decline, including in rapidly shrinking rural and remote areas. Housing policies are essential tools for aligning the supply and condition of dwellings with evolving demographic realities as populations shrink and age, helping support a shift in spatial planning from managing growth to ensuring the sustainability, accessibility, and adaptability of the built environment. Housing policies can help prevent vacancy and abandonment, promote the renewal or repurposing of underused housing stock, and support the development of age-friendly and energy-efficient homes. Integrated with spatial planning, such policies can help align housing supply with population trends, guide public and private investment, and foster more compact, liveable, and socially cohesive settlements, even in the face of long-term population loss.
Two key initiatives that demonstrate how Castilla y León is using housing policies to promote more rational land use relative to demographic challenges are the REHABITARE and TUYA programmes. Both aim to make better use of existing housing stock and support population retention, particularly in rural areas affected by depopulation. REHABITARE focuses on the rehabilitation of unused municipal properties for affordable rental housing, while TUYA targets young people, helping them access housing through rental support, mortgage guarantees, and subsidised public housing.
Together, these programmes support two important objectives of the region, namely promoting sustainable land use through urban regeneration of housing stock and leveraging land use to provide affordable housing suitable for young people, helping to make the region more attractive to this demographic group. However, these programmes may prove difficult to scale up due to costs, participation of municipalities and risks, e.g. related to mortgage guarantees. Thus, the region may need to reallocate resources and/or engage other sectors to scale up and expand these efforts.
REHABITARE programme
The REHABITARE programme aims to increase the region’s public stock of social rental housing and establish a population in rural areas by restoring unused municipally owned properties which, while well-located in their localities, are unused and deteriorating. The primary objective is to meet the housing needs of the specially protected groups listed in Article 5 of Law 9/2010 on the right to housing in the region, particularly young people under 36 years of age. It aims to combat inefficient land use and limit unnecessary new development by refurbishing unused municipally owned properties for occupation, including former teachers' residences, old schools, pharmacists' or doctors' houses, unused barracks, and rectories (Valladolid Plural, 2024[20]). This optimisation of scarce municipal resources and existing building stock also helps to revitalise traditional urban spaces in rural settings, which can promote strategic density and support service delivery for rural populations. By providing affordable rental housing, the programme seeks to attract and retain working age residents in these areas.
Since its inception in 2016, and in collaboration with religious institutions and provincial governments, the programme has rehabilitated 449 properties across the region with an investment of EUR 21.23 million. There are plans to refurbish an additional 294 homes in the coming years, requiring an estimated EUR 26 million.
While the goals of the REHABITARE programme are well-aligned with the spatial planning principles of the region which promote rehabilitation and renovation of building stock to support housing demand and limit land consumption, its impact is likely to remain limited due to its scale. The region can explore ways to scale up the number of properties rehabilitated, perhaps through EU Cohesion Policy funds or engaging the private and third sectors. It could also identify properties to strategically prioritise for rehabilitation based on municipal population trends and projections, and where population is shrinking and housing demand has declined precipitously, encourage demolition.
TUYA programme
The TUYA programme is another initiative by the region aimed at facilitating access to affordable housing for young people under 36 years of age in Castilla y León. This programme offers both new and refurbished public housing options, aiming to enable young individuals to establish their first homes in the region. With TUYA, the region is betting that support for young individuals to access affordable housing can help promote demographic sustainability and economic vitality within the region (Junta de Castilla y León[21]).
Key components of the TUYA programme include home purchase support, mortgage guarantees, rental assistance, and housing development. The programme provides support for home purchases through a 20% discount on the price of public rural housing for eligible young buyers. It also offers guarantees covering up to 17.5% of the property's value, allowing financial institutions to grant mortgages covering up to 97.5% of the property's price, and thus significantly reducing the upfront financial burden on young purchasers. As of March 2024, 317 mortgage guarantees have helped mobilise EUR 30.5 million in housing purchases, with an average property price of 95 881 (Europa Press, 2024[22]). For those opting to rent, the programme offers subsidies of up to EUR 375 per month to assist with rental payments.
The region plans to construct more than 1 200 cohousing units as part of TUYA, providing more economical (and thus, affordable) rental options tailored to the needs of young residents. While the programme is available across the region, there is a particular focus on rural areas, and implementation relies heavily on proactive engagement from individual municipalities. Local governments are responsible for identifying suitable land, developing urban plans, and collaborating with the regional government to execute housing projects under TUYA. This means that the success and presence of TUYA initiatives can vary significantly between municipalities, depending on local priorities, resources, and planning capacities. For example, the municipality of Carracedelo (León province) has consistently partnered with the regional government, including through the TUYA programme, to successfully develop affordable, energy-efficient homes for young families, which has helped retain the local population and maintain the local community (Box 3.6). However, the municipality has cited several challenges to developing affordable housing in its small municipality, including access to land and updating local plans.
Despite successes, the region may want to re-evaluate which parts of TUYA are proving most effective, as well as potential risks associated with the TUYA programme longer term. As an approach that favours mitigation of demographic trends rather than adaptation, it could inadvertently shift the decline in the young adult population from certain parts of the region to others. Subsidies and mortgage guarantees may be prove expensive or financially risky to the region. Mortgage subsidies may also drive up house prices and exclude young people who are not able to qualify for a mortgage. For instance, the region could consider the benefits of shifting spending on TUYA from subsidies to increased construction in strategic areas based on population trends and service access, as well as technical capacity support for municipalities eager to participate but lack the resources.
The municipality of Carracedelo (pop. 3 434) has made proactive use of the regional TUYA programme to address rural depopulation through affordable homeownership. It recently completed the construction of 32 new homes for young buyers under the age of 36, all of which have already been sold. This project is one of several similar initiatives in the municipality, which has developed over 150 social and affordable housing units since 1994.
The 32 newly built energy-efficient homes are designed with moderate density as multi-family dwellings with three-bedroom layouts suitable for families, with one disability accessible unit. Early interest was generated through the construction of a pilot home and a targeted communications campaign.
Access to suitable land has proven to be a key challenge for small rural municipalities, along with the need for active local engagement in planning and acquisition. Carracedelo’s approach involves close collaboration with the regional government, early-stage land preparation, and the development of clear municipal urban plans. Low property and vehicle tax rates – among the lowest in the region – also contribute to making the area attractive to new residents, although the impact of such incentives on the environment and settlement patterns must be considered.
Between 50-60 additional housing units are being planned in Carracedelo under TUYA, supported by parallel investments in capacity, e.g. in schools, parks, and childcare provision. Most new residents previously lived nearby, often moving from rented homes. The municipality believes that without these new housing options, many may have left the area, making housing policy a central tool in the municipality’s broader demographic strategy.
According to the OECD local data portal, Carracedelo has experienced less population decline between 2012-22, has a slightly higher share of children and working-age residents, and a lower share of adults aged 65 and older compared to many neighbouring municipalities of similar-size located outside the service centre of Ponferrada.
Source: Interviews during OECD site visit
The region of Castilla y León has already made efforts to better integrate demographic change into planning frameworks, such as through the establishment of UBOSTs via the LORSERGO law, and to promote urban regeneration, such as through ERUCyL. However, more efficient land use in line with demographic trends does not appear to be occurring at a significant rate, possibly because many small municipalities still have outdated land use plans or no plan whatsoever, and because many lack the technical capacity to take advantages of programmes dedicated to this goal. Active land use policies – including short-term actions – could be helpful to increase attractiveness and align land use with demographic trends. Additional reforms, updates and investments in more strategic land use and spatial planning that reflects the demographic reality of the region can promote more sustainable development that economises service delivery and boosts attractiveness, including for young people.
Demographic projections should be systematically integrated into planning decisions at all levels – regional, provincial, inter-municipal, and municipal – ensuring that land use choices are both forward-looking and realistic. This includes evaluating whether areas with severe and long-term population decline are better suited to regeneration or to strategic demolition followed by the return of land to rural or ecological use, in line with sustainability and territorial cohesion objectives. Castilla y León could explore using Cohesion Policy funds related to Policy Objective 2 (a greener, low-carbon Europe) to support returning land to natural use in shrinking areas with little demand.
Local land use plans should be updated to encourage denser development and provide deeper incentives for renovation. Smart densification can help address these challenges through approaches aligned with the New European Bauhaus principles, creating attractive, sustainable and inclusive spaces that appeal to the educated, mobile workforce essential for escaping the talent development trap. Efficient spatial development is essential to protect Castilla y León’s precious and valuable environmental landscapes integral to the region's identity. Higher densities can also facilitate the provision of affordable and social housing, a recognised priority in the EU Cohesion Policy mid-term review, directly addressing the housing challenges that contribute to youth outmigration. Smart densification can deliver co-benefits by reducing emissions, preserving natural capital, and creating inclusive, vibrant communities that can successfully compete for talent in an increasingly mobile European labour market, in line with Cohesion Policy Objectives 1 (a smarter Europe) and 2 (a greener Europe). A more proactive approach to vacant and abandoned properties by the region – through expropriation, rehabilitation, demolition, property management or other types of interventions – can alternatively help adapt housing stock to housing needs close to service centres, or return land to natural state.
Tying housing construction permitting to demographic trends and future projections can prevent new construction in low-density, poorly connected areas and support net zero land take goals. The upcoming Cohesion Policy mid-term review should present an opportunity to channel additional ERDF resources toward strategic housing rehabilitation and rural housing projects that address both demographic decline and affordability challenges. For instance, the region could tie housing-related recommendations designed to address demographic change to Cohesion Policy Objectives 4 (a more social Europe). Castilla y León can also build on current efforts to provide youth-friendly housing to prioritise the reuse of buildings for co-housing for students, young single people, and families, as well as co-working hubs and creative industries, aligning such efforts with schemes to attract youth-led start-ups or returning graduates. The following policy recommendations aim to better align spatial planning in the region with population projections, support smart and sustainable densification where feasible and practical, resolve distortions in housing supply and demand, and improve inter-municipal co-ordination to ensure more strategic development patterns, especially in rural declining areas.
1. Align spatial planning with population projections
Update Territorial Planning Guidelines to reflect demographic trends
The Essential Territorial Planning Guidelines of Castilla y León, Law 3/2008, should be updated and revised to reflect demographic trends since that year as well as demographic projections for the region. While the aims of Law 3/2008 are still pertinent – including to promote balanced and sustainable socio-economic development, improved access to public services, infrastructure, and natural and cultural heritage, environmental protection, rational and balanced land use, and increased competitiveness – the context of the region has shifted due to population decline, ageing of infrastructure and housing stock, and inefficient land use.
Updating the Essential Territorial Planning Guidelines to reflect these shifts and address the consequences can ensure that subordinate plans are updated based on realistic demographic trends, aiming to promote urban regeneration and limit new land consumption. Practically, while the Guidelines are not binding, they could provide guidance for aligning land use classifications, zoning, density targets, housing typologies and infrastructure plans with population trends and projections, particularly in areas affected by decline, ageing or shifting household structures. Castilla y León could explore using EU Cohesion Policy funds related to Policy Objective 5 (a Europe closer to citizens) to support more granular spatial planning that reflects its demographic reality. Ensure all municipalities are subject to an updated land use plan
All municipalities in the region should be subject to either a PGOU, NUM, or NUT. Each plan should be as up to date as possible to align different elements, e.g. land use classification, zoning and housing permitting, with demographic trends and with proper incentives for urban regeneration and restrictions for consumption of new land as appropriate.
Universal coverage of all municipalities with some land use plan is an essential first step to prevent shortsighted development that is not aligned with regional priorities of sustainability, strategic density, and limited land use consumption in declining areas. PGOU and NUM are effective instruments for local urban planning that nonetheless could be updated to better reflect the demographic realities of municipalities and offer a mixture of incentives and restrictions to orient land development in a way consistent with the needs and priorities of the region. NUT could be installed wherever possible, according to relevancy, to replace outdated NS and DSU plans and provide basic urban plans for municipalities without one. Approval of the UBOST map would also support more strategic territorial planning based on demographic trends.
Revise urban development and municipal planning regulations
Updates to PGOU and NUM plans can strengthen their abilities to incentivise development in line with demographic trends and discourage low-density development that strains infrastructure and service delivery. The incorporation of demographic trends into planning and classifications should be mandatory and updated frequently. Height allowances can be adjusted to support vertical rather than horizontal expansion, thereby promoting denser development of multi-family dwellings.
Financial incentives and technical support for municipalities to engage in urban regeneration, renovation, rehabilitation, and dense development, e.g. through ERUCyL, should be provided and enhanced, whether in the forms of subsidies, density bonuses, administrative and permit fast-tracking, or tax breaks. At the same time, low-density and/or new development in areas with high potential for urban regeneration should be restricted and disincentivised. Finally, co-ordination with other sectors (e.g., education, health, transport) and surrounding municipalities should be increased and incentivised to ensure that these plans are aligned with trends, resources, and development opportunities within the broader metropolitan areas. The PGOU of Cigales, approved in 2024, can serve as a strong model for updates to other PGOU.
Urban planning regulations can also be revised to facilitate and incentivise the repurposing of underused or secondary housing stock. This could involve reclassifying land in areas with very low demand for mixed-use or non-residential purposes. For example, a home unfit for habitation could nonetheless serve as a school or care facility that may require less rehabilitation.
Assess impact of NUT and expand use for small municipalities
Territorial Urban Planning Regulations (NUT) represent a potentially compelling solution for many small rural municipalities facing demographic decline that lack their own urban plans, are subject to outdated plans such as the NS, or lack the capacity to update existing or establish new plans. The region should assess the preliminary impacts of NUT so far on limiting land use consumption and attracting investment to rural areas, with an intention to maximise the utility of NUT to regulate and rationalise land use in the municipalities.
Based on assessments findings and priority areas identified, the region should consider embedding in current and future NUT i) incentives for suitably dense housing development and for homeowners to either rent out secondary homes or demolish unfit ones, and ii) strict limits on low-density housing developments. The region should also prioritise adopting NUT in areas with similar contexts, especially those either relying on NS or with no plan whatsoever.
NUT can help increase the attractiveness of the region by replacing outdated provincial subsidiary standards, making it easier to establish businesses and conduct economic activity in small rural municipalities. NUT may prove especially useful for co-ordinating planning among small rural municipalities in the absence of a finalised UBOST map or the existence of rural MIGs. Clauses could also be included in NUT to support repurposing depopulated areas for sustainable agriculture or eco-tourism can help balance land use, foster local regeneration, increase attractiveness, and support the region’s already strong rural tourism sector.
Replace outdated subsidiary and delimitation plans to streamline planning
The region could encourage municipalities to replace outdated technical planning instruments such as the NS and DSU plans with updated versions of planning instruments with the capacity for integrating demographic trends and projections into land use decisions. Streamlining the suite of planning instruments on offer in the region in this way can also help reduce bureaucracy and simplify processes for municipalities as well as developers.
NS plans could be replaced by NUT (or PGOU or NUM, if eligible) to reflect demographic trends and projections; promote renovation, rehabilitation, and demolition of existing land assets whenever possible; and enforce strict limits on unnecessary new and/or low-density development that is insufficiently connected to transport and service networks. Otherwise, new low-density development may continue to spring up in small, rural municipalities despite population decline, leading to unnecessary land consumption and straining service delivery. The responsibilities of NS and DSU can be folded into other existing instruments. For instance, PGOU plans also classify land as either urban, urbanisable, or rustic. If this capability of the DSU was diffused to all broader urban plans, e.g. PGOU, NUM, and NUT, this would cover the entire region and render DSUs redundant.
Updates to the Territorial Planning Guidelines could incentivise or require the replacement of these plans with one of three updated plans that integrate demographic trends and projections and provide technical and capacity support to municipalities to do so.
2. Support smart densification to enhance environmental sustainability and public service efficiency
Reform fiscal policies to reduce property vacancies
Tax incentives for selling secondary homes, converting them into primary residences, or offering them as affordable rental units can help reduce high rates of underused housing stock due to secondary homes, optimise the use of existing housing supply, and increase attractiveness in rural areas. Tax incentives or subsidies could also be used to encourage the conversion of vacant or unfit housing units for non-residential uses, helping to reduce unnecessary new construction while providing additional space for services in rural areas. A differentiated property taxation system could be introduced, creating a financial incentive to return empty properties to the market. Complementary measures could include tax exemptions for properties undergoing renovation and providing affordable housing, with revenue reinvested in urban regeneration initiatives, particularly in municipalities facing housing pressures or demographic decline.
Facilitate land adjustment and transfer of development rights in rural areas
In rural towns experiencing high vacancy rates, land readjustment mechanisms could incentivise the reuse or demolition of unused or unfit housing and/or facilitate the consolidation of fragmented plots. Transfers of development rights could enable landowners to contribute portions of their land for public infrastructure and compact residential development in exchange for better-located, well-serviced plots. Consolidated plots could then be developed into industrial parks, as has been done already in Garray (Box 3.1). Such land adjustment and transfer mechanisms could be particularly effective if included in NUT, which have the capacity to support more rational and co-ordinated land use across many small rural municipalities, with the aim of promoting investment and increasing attractiveness.
Stronger fiscal and technical incentives could be introduced for demolishing unfit properties and replacing them with denser multi-use developments, industrial parks or nature reserves, coupled with stronger restrictions on new construction that would expand land consumption in rural or declining places. Streamlining expropriation procedures for long-abandoned properties would also support efforts.
Leverage developer obligations to limit urban sprawl
The region can use developer obligations to internalise the externalities that arise from sparse development patterns to deter low-density sprawl in remote areas. To discourage further dispersed, low-density land consumption, the region could also apply a differentiated fee structure, reducing charges for projects in designated densification zones while applying higher fees to developments in peripheral or ecologically sensitive areas.
The region could promote these practices in any updates made to the Territorial Planning Guidelines, encouraging their use in local land use plans. To overcome limited technical or administrative capacity, the regional government could also establish a centralised technical team to streamline the processing of developer obligations and offer training, guidance, methodologies, and legal support to municipalities, ensuring effective and co-ordinated land management across the region. Such efforts could be linked to EU Cohesion Policy Objective 5 (a Europe closer to its citizens).
3. Match housing supply with demand can alleviate housing pressures and support labour needs in rural areas
Evaluate housing construction permits based on current and future demographic trends
The region could require municipalities to evaluate housing construction permit approvals based on demographic projections contained in updated local land-use plans, using the permitting process to limit new and low-density construction and to prioritise and incentivise renovation, rehabilitation, and dense and vertical development in well-connected areas. By creating a formal link between evidence of demographic trends and construction permitting, municipalities can better balance development rights with efficient resource allocation, ensuring that limited land resources are utilised to meet genuine housing needs rather than speculative development.
Implementation would require municipalities to develop standardised assessment frameworks as part of their updated PGOU and NUM, establishing clear decision-making criteria based on quantifiable demographic indicators and spatial considerations. The region can provide guidance and support to municipalities with low technical or administrative capacity to develop these frameworks. The assessment framework should strongly favour infill development, brownfield redevelopment, and projects within or immediately adjacent to existing urban fabric, especially where infrastructure capacity already exists. Construction permit applications could be required to include a spatial impact assessment demonstrating how the proposed development addresses identified housing needs and conforms to appropriate urban form. Applications for developments in environmentally sensitive areas, prime agricultural land, or disconnected from existing settlement patterns should face heightened scrutiny or outright rejection.
Establish mechanisms to manage vacant land and housing
The region could establish a land bank, e.g. a public or semi-public entity that acquires and manages underused or vacant properties with the aim of returning them to productive or natural use, and encourage the development of community land trusts (CLTs), which are non-profit, community-led organisations that retain long-term ownership of land to ensure housing remains affordable. Through land banks, the region could use tax incentives (e.g. for donations) as well as subsidies and expropriations to acquire properties, consolidate fragmented plots to enhance their value, and facilitate rehabilitation for rent or sale in line with local housing needs. These properties could then be plugged into the REHABITARE or TUYA programmes.
In the short to medium term, Cohesion Policy investments could be utilised to repurpose vacant properties and land towards more relevant uses, such as public service centres and social and affordable housing, in line with Objectives 4 (to increase access to housing) and 5 (as part of local housing strategies). Alternatively, the region could explore linking efforts to return unused developed land to natural use to EU Cohesion Policy funds related to Policy Objective 2 (a greener Europe).
The region could also establish a dedicated regional agency to provide administrative and financial support and incentives to municipalities and private owners for acquisition, demolition, renovation, and/or management of vacant properties. Likewise, social rental agencies (SRAs) could be established and used to facilitate renovations and rental agreements. Public-private partnerships and community-led initiatives capable of transforming vacant properties into vibrant housing or community spaces can also stimulate local economic development and attract permanent residents, plus support the region in scaling up efforts.
Reassess REHABITARE and TUYA programmes
The regional government should review and adapt its REHABITARE and TUYA programmes to ensure they align with long-term demographic trends and territorial goals. To scale up the impact of REHABITARE, the region could explore new funding sources, such as EU Cohesion Policy funds, and engage more actively with private and third-sector actors. The ongoing mid-term review of EU Cohesion Policy offers a concrete opportunity to reallocate ERDF resources toward strategic housing interventions in rural and shrinking areas. Castilla y León could request programme modifications to enable co-financing of rehabilitation projects under REHABITARE, particularly where they support labour mobility, ageing, or rural attractiveness. It could also explore synergies between ERUCyL and REHABITARE, e.g. by supporting municipalities in identifying priority properties for rehabilitation based on population projections and access to services. In areas where housing demand has collapsed, the region may consider strategic demolition rather than rehabilitation.
The region should also assess which components of TUYA are most effective relative to demographic realities and consider reallocating resources away from purchase and rent subsidies and toward supporting housing construction in strategic areas. It should also invest in technical assistance for municipalities that wish to participate in TUYA or REHABITARE but currently lack planning or administrative capacity.
At national and European level, Castilla y León could also engage more actively in the ongoing consultations under the European Commission’s Affordable Housing Plan and contribute to shaping future regulatory and funding frameworks. Lessons from REHABITARE and TUYA could help inform broader EU approaches to housing in low-demand territories, where the link between demographic revitalisation and housing policy is particularly strong.
4. Improve inter-municipal co-ordination
Embed inter-municipal co-ordination in planning updates
Updates to the Territorial Planning Guidelines should include financial incentives and technical support mechanisms to increase co-ordination of spatial and land use planning among Mancomunidades of General Interest (MIGs, or inter-municipal co-operation entities). While Castilla y León has the highest number of mancomunidades, or voluntary inter-municipal co-operation entities, of all regions in Spain (see Chapter 4), urban planning is a shared competency in only roughly one-fourth of MIGs. In addition, the delayed implementation of the 2013 LORSERGO law has prevented the establishment of rural MIGs, preventing inter-municipal planning among many smaller rural municipalities which could benefit from a co-ordinated approach.
In lieu of a finalised UBOST map that enables the establishment of rural MIGs, inter-municipal planning can be achieved by ensuring all municipalities ineligible for PGOU or NUM plans are subject to Territorial Urban Planning Regulations (NUT). NUT appear to be a practical solution for inter-municipal spatial planning for small municipalities often lacking the necessary resources, with guidance from the region.
Finalise UBOST map, incentivise inter-municipal plans, and establish rural service centres
The region should prioritise the approval of a final version of the UBOST map, which would enhance inter-municipal territorial planning and resource-pooling by helping to establish service centres within functional geographical areas as well as MIGs in rural areas. In the interim, service centres in rural areas could be identified through Territorial Urban Planning Regulations (NUT).
The region could provide financial and technical support mechanisms through a regional programme that combines grants for developing inter-municipal plans with bonuses for successful implementation, complemented by technical planning expertise, legal guidance, and mediation support. Establishing service centres within these inter-municipal plans could be incentivised and encouraged as well.
Cohesion Policy funds – particularly under ERDF Policy Objective 5 (Europe closer to citizens) –could be mobilised to support investment proposals backed by inter-municipal spatial plans. Projects could aim to improve service accessibility, optimise infrastructure use, or co-locate public functions such as healthcare, education, and administrative services within rural service centres. Castilla y León could use the ongoing mid-term review to prioritise this type of integrated territorial investment, and to formalise the role of UBOSTs and MIGs as planning and delivery units.
References
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← 1. The term “secondary home” is used here for simplification. Data from the regional government of Castilla y León classifies these homes as “non-primary”.