The vote was carried thanks to the support of the conservative Popular Party's mayor and has the support of the country's ruling Socialist Party. Madrid's deputy mayor Manuel Cobo said the city "cannot let this opportunity pass". This will be the third consecutive bid the city has made for the summer games.
Cobo said most of the infrastructure required was already in place, and Sport Minister Jaime Lissavetsky said €20bn in private sector financing could be raised to make the bid a zero cost one. But opponents of the scheme argue money would be better invested directly in public services.
Unemployment rateThe United Left's Angel Perez said: "Madrid's goal as a city should not be to organise an Olympic Games but instead a fairer project that is more balanced in a political and social sense." With Spain's well-publicised economic problems and an unemployment rate of 20%, many will support that view.
It's very difficult to find proof of whether staging major sporting events provides any direct benefit to the cities that stage them. Those backing the bids always make grand claims, but for every study that claims to prove the boost a major sporting event brings, there's another which counters the claim.
Stacking the numbersHow you see the numbers stack up depends on, well, how you stack up the numbers. Do you look at short or long-term spend and benefit? Do you factor in business lost or displaced alongside business gained? How can you say what would or wouldn't have happened if the bid had or hadn't succeeded?
It took Sydney, Montreal, Barcelona and Athens years to pay for the games they staged. But, that said, the Barcelona games in 1992 are widely praised for revitalising that city as a vibrant, modern European destination.
In the case of the Olympics, there's also the question of the International Olympic Committee. The bidding process it encourages appears to many to be designed to enrich the bid committee, and the IOC positively promotes grandiose projects over more sustainable ones.
Madrid has now put itself in the frame again, and so the spending will begin. Rome and Tokyo are also bidding and Istanbul is expected to declare itself too. The winning bid will be selected in Buenos Aires in September 2013.