Portugal on Thursday announced a sweeping package of measures to tackle the housing crisis, including ending its controversial “golden visa” scheme and banning new licenses for Airbnbs and other short-term vacation rentals.
Rents and house prices are skyrocketing in Portugal, one of the poorest countries in Western Europe. Last year, more than 50 percent of workers earned less than 1,000 euros a month while in Lisbon alone, rents are set to rise by 37 percent in 2022.
Housing groups say low wages, a booming property market, policies encouraging wealthy foreigners to invest and an economy dependent on tourism have made it difficult for locals to rent or buy for years. Portugal’s inflation rate of 8.3 percent has compounded the problem.
Prime Minister Antonio Costa said the crisis was now affecting all families, not just the most vulnerable.
It is unclear when the measures, worth at least 900 million euros ($962.19 million), will take effect. Some will be approved next month and others will be voted on by lawmakers, Costa said.
He added that a mechanism would be introduced to control rent hikes, and the government would offer tax incentives to landlords who convert tourist properties into houses for locals to rent.
Left Bloc Party MP Mariana Mortagua criticized the measures, saying the government was giving tax breaks to landlords who had already benefited from “(housing) speculation”.
New licenses for tourist accommodation, such as Airbnbs, will be prohibited – except in sparsely populated rural areas.
The Social Democrats said the measures were an “attack” on the rights of property owners and businesses.
To address the housing shortage, Costa said the state would rent vacant homes directly from landlords for a five-year period and put them on the rental market.
Portugal will end its golden visa program, which gives non-EU citizens EU passports in exchange for investments, including real estate, and has been criticized for driving up house prices and rents.
The scheme has attracted €6.8 billion in investment since its launch in 2012, with most of the money going into real estate.
Housing groups said the measures would not make sense if the government continued to promote other policies to attract wealthy foreigners to Portugal, such as the “digital nomads visa” introduced in October. Foreigners get more monthly income from remote work and live and work in Portugal without paying local taxes.
At a smaller housing protest in Lisbon, 23-year-old activist Andrea Galva accused the government of failing to keep promises it had made in the past to tackle the housing crisis.
“The aim was that all Portuguese would have access to quality housing by 2024 – it doesn’t look like that will happen,” he said. “The situation is dramatic.”
The “Housing is a Right” group said the measures do not change the “system in place” in which large real estate investment funds control a significant portion of the market.
“For the majority of people, rent will remain unaffordable and buying a home will remain a dream,” he said.
($1 = 0.9354 Euro)