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The Portuguese have a saying that goes “Each monkey to its own branch,” but the government has a problem with empty branches.
Portugal’s Ministry of Infrastructure and Housing wants to force owners of vacant homes to make them available to long-term tenants at economical costs to correct a growing housing crisis, Bloomberg reported Monday.
All That Glitters
While the government says the measure will address a dearth of affordable housing, property owners say it violates their constitutional rights. The Portuguese Association of Real Estate Developers and Investors is even calling it “an attack” on private property. Housing Minister Marina Goncalves defended the decision saying, “The state does not enter and occupy people’s homes and then say, ‘Now I’m here.’ We have steps that will be taken.” That’s a relief, we think.
Portugal has remained on the poorer end of the spectrum of Western Europe for quite some time. Following a financial crisis and a 2011 bailout by the European Union, Portugal has managed to raise $7.3 billion through its Gold Visa — established a decade ago to attract non-EU investment — with 90% of it going into the real estate sector, according to Bloomberg.
Unfortunately, the program worked all too well:
- While Portugal attracted a sustained wave of wealthy, foreign investors, communities are now facing low housing stock and high prices, meaning the same locals who were struggling financially 10 years ago are hurting even more.
- In 2015, the average price of a home per square meter in the capital city of Lisbon was €1,300. By 2023, it had shot up nearly 200% to €3,800, and the Portuguese government estimates 730,000 homes are going unused.
Sorry, Ponyboy: Last week, Prime Minister Antonio Costa announced Portugal will stop issuing new gold visas as part of its effort to curb the housing crisis. In addition, the country’s “More Housing” plan aims to limit rent increases, fast-track new building permits, and ban all new short-term rentals in cities. The measures are still under discussion, and some will require Parliamentary approval.