Mayors gang up against government and slam More Housing package

 In House prices, Housing, News, SIL

The Portuguese Government failed to adequately consult local municipal councils when it designed its controversial More Housing package aimed at helping to solve Portugal’s chronic housing shortage problem.

This was the opinion of several mayors and senior council officers who took part in the debate ‘SIL Cities – The Challenges facing Housing’ which opened a cycle of debates linked to real estate which took place at SIL – the Portugal Property Exhibition which runs in Lisbon until Sunday.

The Mayor of Lisbon, Carlos Moedas said that “two poisonous chalices” had resulted from the More Housing package that had created the mirage of giving more autonomy to municipal councils, specifically measures on coercive rental and Local Accommodation.

However, the mayor did say that Portugal’s chronic shortage of affordable housing could not be solved without the support of local councils.

Carlos Moedas explained that pushing the coercive rental of empty properties onto the municipal councils was “somewhat of a poisoned chalice” and was of the opinion that the policy would not work and that people would “never accept the measure”, a measure in which the State (which has thousands of empty or underused properties) is not leading by example.

“If I’ve got 2,000 empty properties, how on earth can I expect people to do something I’m not prepared to do!?” said the mayor in front of a panel that included Ricardo Leão, the Mayor of Loures, Carlos Mouta, the Deputy Mayor of Matosinhos (near Porto), Pedro Baginha, the council officer in charge of Housing, Public Spaces and Urban Planning at Porto City Council, Ricardo Gonçalves, the Mayor of Santarém, and Paulo Silva, the Mayor of Seixal.

“Handing over State buildings is something the Government would never do”, criticised Carlos Moedas at the debate which took place on Thursday at FIL in the city’s Parque das Nações.

The Mayor slammed the coercive rental measure as having “negative effects both for the owners and investors”. “This measure is causing enormous instability among investors and is the worst thing we could do when we’re seeing concessions with private entities for affordable housing and subsidised rent in Lisbon”, he said.

The More Housing package also results in municipal councils, that are stating that they have a lack of housing, will end up with suspended Local Accommodation (AL) licenses which didn’t make sense in cities other than Lisbon and Porto.

“This is another poisoned chalice. In neighbourhoods where LA is more concentrated than it should be, more AL is already no longer allowed” said Carlos Moedas.

“The Decree-Law on AL nationwide seems rather exaggerated since AL has nothing to do with a lack of housing. There will always be a lack of housing and now we have to reduce this lack of housing as much as possible”, added Carlos Moedas.

And continued: “The lack of housing in Lisbon, by definition, means that in spite of the more we do, it will never be enough” he added, stressing that the city is “receiving people from overseas and other cities”, and as such has to reduce this lack of housing as much as possible”.

The mayor recognised the need for more construction in Lisbon with the backing of private investment, and added that the city would not be able to solve the housing problem with private money and European funds alone, even if that included investment in social housing and from housing cooperatives.

Local councils left to invest in housing alone for decades

The other local council guests on the panel who were invited to debate the Government’s More Housing package and its application in practice, as well as the digitisation of the planning process, also had criticisms and comments to make.

Agreeing in the Mayor of Lisbon, Pedro Baganha, the Porto City Council officer in charge of Urban Planning and Housing, said that when the Government’s programme was presented to Porto for the first time, the city council “roundly criticised it, pointing out the more glaring problems”.

“Housing is a constitutional right” and it is “down to the State to sort it out”. In the case of the new measures, there had been “a complete lack of prior consultation with municipal councils” and added that for decades local councils had been left to their own devices to invest in housing and its public housing stock”.

Pedro Baganha added that the programme had “broken the bond of trust and understanding between the public and private spheres”. As far as he understood, “the measures that were announced, which in the beginning seemed so benign (Coercive rental, ceilings on rent charges, and Local Accommodation) have since had “a pernicious effect”.

Ricardo Leão, the Mayor of Loures, said that the IMI property tax and IMT property transaction tax are two sources of revenues for local councils, but that the new legislation was encouraging exemptions and the More Housing policy was “encroaching on local power”.

“Ever since the PER (Special Re-accommodation Programme) we never heard anything more on housing,  and now they’re talking about housing and that is an important point, regardless if it is doing more harm than good, which is another question”, he said, adding that Loures too had been a victim of house price speculation since it bordered on Lisbon.

Ricardo Leão said it was important to provide affordable housing for the middle classes which currently can’t even rent, let alone buy homes at the current pricing rate they are, and suggested that the law governing land use should be changed since there are agricultural plots of land that have lain fallow for years that could be employed for housing use.

The Mayor of Santarém, Ricardo Gonçalves said that there had been an influx of residents from all over the world and that there was a lack of housing and that the council was planning to renovate existing housing and build new ones.

“The authorities tell us what we have to do when drawing up a Municipal Master Plan, and that it can’t be done in any other way, and it is always subject to approvals from higher up,” he said, lamenting a lack of flexibility from planners and influence from the local authority on them.

The Mayor of Seixal, Paulo Silva said that for decades there had been an idea that only private developers should resolve housing problems, with an “abdication from the public sector”, adding that the two had to work together to solve the problems.

“In Seixal we don’t have problems with private investment , but there is a lack of public investment and it should be up to the government to make it in our view”, adding that it was currently impossible to rent a T2 for less than €800 in Seixal.

Paulo Silva gave Holland as an example where “30% of all the housing stock is public, while in Portugal only 2.5% is public”.

The Government, in his opinion, needed to create the conditions for the private companies to invest. “Who knows, perhaps we should create public housing stock which pays for itself from rental income,” he said.