Government will “improve” ‘More Housing’ policy

The Portuguese government will not totally abandon the ‘More Housing’ package policy announced by the previous PS Socialist Party government in February, 2023 but will keep some aspects and improve upon them.

This is according to the new minister of Infrastructures and Housing, Miguel Pinto Luz, who addressed the CNN Portugal Summit on Housing which took place on Thursday at Portugal’s annual property fair SIL (Salão Imobiliário de Lisboa) in Lisbon.

The minister for the new Aliança Democrática government said that the plan would be officially presented “in the coming weeks”.

“What we’re going to do is improve what needs to be kept and will be kept. We won’t be tearing up the policy”, he said.

Miguel Pinto Luz also made it clear that funds from the Recovery and Resilience Plan (RRP) would be allocated. “If we don’t meet the targets, we’ll lose the money”, he warned.

And he stressed that the measures would only be achieved it there was a consensus and dialogue between the parties involved: the State, property owners, and tenants. “No one should be seen as enemies and we’ll succeed”.

Simplex – an ongoing programme that aims to make various aspects of public administrative procedures faster and simpler by reducing red tape and employing technology, will also continue in relation to speeding up housing planning processes.

Simplex aims to make it easier for housing stock to be put on the market. Despite having raised doubts within the sector when announced, Miguel Pinto Luz admitted that it would be “an effort to reduce bureaucracy” in order to get more (new and refurbished) houses on the market in a short space of time, adding that processes needed to be simplified.

On the question of housing rent hikes that the previous António Costa government sought to control by limiting the amount landlords could put up rents on contracts in force by 2%, but was widely contested by property owners, Miguel Pinto Luz refused to be drawn into details, but did say there would be “no rent controls”, adding that the government was “far from taking any initiative” on the matter.

“We’ve seen what has happened in some cities like Barcelona where the problem is quite recent and nothing was solved, but exacerbated.

The minister was referring to the high proportion of overseas buyers in the Catalan capital which hit a new record in 2023 while a worsening lack of supply had made life unaffordable for many, swallowing up 40% of average take-home salaries.

The average rent in Barcelona rose 25% in 2022, according to the Spanish property portal Idealista. In Q1 of 2023, for example, apartment prices in the city hit a fresh peak of €1,087per month according to the Catalan public agency Incasól.

Rent controls were put in place by the regional government of Catalonia but were declared unconstitutional by the Spanish courts in March 2022 since when landlords have been able to charge going market prices. With the new government in Lisbon, there are fears that the same will happen in the Portuguese capital.

“We believe that the market works and that the necessary financial incentives needed to be created so that the market could operate according to certain rules”, said the minister.

During the election campaign, the AD coalition of parties had said that holding down rents artificially had never worked well in Portugal or abroad, and simply resulted in new rental contracts shooting up by 30%.

The minister also said that the government was revisiting all of the rental support and subsidies in order to increase them.

Text and Photo: Chris Graeme