A man rides a scooter through a narrow, cobbled street lined by historic buildings.
The Alfama district in Lisbon. Rafael Marchante/Reuters

The new law seeks to curb runaway gentrification in Lisbon and elsewhere by prioritizing affordable housing and stopping evictions, among other measures.

A bill passed on Friday by Portugal’s parliament sets out a legal basis for housing being treated as a citizens’ right. Under the new law, the Portuguese government becomes responsible for ensuring adequate housing for all citizens as “the guarantor of the right to housing.”

The Basic Housing Law emphasizes the “social function” of housing, with the explicit goals of eradicating homelessness, prioritizing the use of public real estate for affordable housing, and prohibiting tenant evictions across Lisbon—a pressing issue in recent years—unless the state is able to provide similar accommodation nearby. Framers of the law describe it as a foundation and roadmap for future policies, albeit one with some explicitly defined targets, rather than a direct instrument for giving people homes.

A demonstration against evictions and rising rents in central Lisbon in September 2018. (Pedro Nunes/Reuters)

The law stipulates that the government will need to present a first-ever national policy for housing to the parliament by March 2020, including special protective measures for young people, the disabled, the elderly, and families with young children.

It also creates a mechanism whereby not only individuals but entire neighborhoods will be able to lodge complaints about housing quality, ongoing construction, or proposed developments, in an attempt to democratize a sector that has seen soaring rent increases amid the tourism boom in Lisbon’s city center.

A majority of support for the bill was gathered in parliament over the past few weeks, and the July 5 vote was largely a formality, according to Helena Roseta, the veteran MP who masterminded it. A coalition of the Socialist Party, the Portuguese Communist Party, the Left Bloc, and the Social Democratic Party voted in favor; the right-wing CDS–People’s Party opposed. That party’s deputy, Alvaro Castello-Branco, denounced it as “electoral propaganda that fixes nothing.”

“This victory is very important to me,” Roseta, president of Lisbon’s Municipal Assembly, told CityLab. “It’s the end result of my entire career. There are general laws for health, education, and social security, but there never was [until now] a law for housing—we must treat it as a social right, as we have with these others.”

Housing “is a genuine crisis; there is an enormous strain on middle-class people—not just the poor—and there is a weight on young people,” she added. “We are in the middle of a process of the financialization of housing, and there are powerful interests fighting to say housing should not be a right, but a market. We cannot forget this, or poor people won’t have a place to live. [Otherwise] they will live in slums.”

The Basic Housing Law is a reaction to a significant and rapid escalation of housing prices and dearth of affordable homes, predominantly in Lisbon, the capital, but also in other parts of Portugal.

In 2011, the Portuguese economy was in a terrible state, suffering from the global recession and years of austerity policy. That year it received an international bailout of €78 billion ($89 billion) from the European Union and the IMF.

In 2012, Portugal’s government set up a “golden visa” scheme through which wealthy foreign investors could gain a temporary residence permit in exchange for investment. By far the most popular means to do so was the purchase of at least €500,000 ($560,000) of real estate. More than 9,000 golden visas have been granted to date, more than 90 percent of them for real estate.

Portugal soon introduced a new rental law that significantly liberalized the housing market, while the government focused on increasing tourism. Combined with 2009’s Non-Habitual Residence (NHR) Program, which permits 10 years of tax-free foreign income, the changes created a housing bubble. House prices in Lisbon leapt an astonishing 18 percent in 2017 alone, according to national statistics.

Yet the minimum wage in Portugal is just €700 ($785) per month, and the average annual income only about $21,000. In central Lisbon, thousands have been evicted from their homes—an average of nearly six families a day, due to cost pressures. A record 12.8 million tourists came to Portugal in 2018, compared with its population of 10.3 million. Lisbon’s 4.5 million annual visitors far outnumber the 500,000 locals.

Airbnb has contributed to the crisis, too. According to the database InsideAirbnb, there are more than 20,000 Airbnb listings in Lisbon, 85 percent of which are for entire apartments that are mostly available year-round. “The top hosts on Airbnb are mainly short-term rental companies and real-estate management companies,” said Chiara Iacovone, a Ph.D. candidate at the University of Torino’s Future Urban Legacy Lab who is studying the impact of Airbnb on southern European cities.

The company has defended its role in Portugal, and revealed that it contributed €3.7 million ($4.15 million) in tourist taxes to Lisbon’s city council over the first three quarters of 2018.

“What’s going on in Lisbon is the articulation of a huge number of causes, some historical and some recent,” said Simone Tulumello, a senior researcher in urban studies at the University of Lisbon. “Portugal has never built housing as a solid part of its welfare state, for example, but the golden-visa scheme has rapidly accelerated the financialization of the housing market. It’s what happened in London over 20 years, but over just two or three years in Lisbon.”

In recent years there have been a number of high-profile protests over housing in Lisbon, and there is a burgeoning grassroots movement for the right to housing in the city where celebrities such as Madonna and Michael Fassbender have recently bought homes.  

“Of course, urban rehabilitation is important,” said Luis Mendes, an activist member of a citizens’ platform called Living in Lisbon. “But it’s being completely fueled by external, foreign investment. It’s state-led gentrification.”

Although there is not more recent data, according to the 2011 census there were there were 50,289 vacant homes in Lisbon’s inner city, out of a total of 322,865 housing units, according to Mendes. (Many homes in the capital were abandoned as the population shrank in the late 20th century.) Meanwhile, the ongoing demolition of illegal or informal settlements—there are an estimated 14,000 families living in “precarious conditions” in the Lisbon metropolitan area—penalizes the poor who lack sufficient protections and has stoked racial tensions in districts such as Bairro de Jamaica.

In the labyrinthine streets of Lisbon’s historic Alfama district, the clanking of tools and machinery fills the air. “This building is very special,” Mendes said, pointing at scaffolding across the road. He explained that it was built in the 18th century, after the earthquake of 1755, and has an unusual interior known as a birdcage.

“The new owners are going to destroy all the internal structure and just maintain the facade,” he said. “We call it facadism or Disneyfication. This is a symptom of what is going on in Lisbon.”

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