Lisbon city hall steps up PPPs in housing

Lisbon City Council has introduced new rules to make investments “more agile and appetising” for developers to build affordable council housing in the city.

It means there will be more social housing for affordable rents on council-owned land built with private finance with the replacement of the current PPP model.
According to Negócios, the idea is to “have a more attractive model, make the whole process easier and more flexible, but without cutting corners” in terms of the number of homes and rental charges” said Filipa Roseta, councillor for Housing.
The new model will still have to be passed by the other councillors at city hall today (Wednesday, 17 Jan), but if passed the first public auctions for the tender should proceed rapidly and will involve two projects in Benfica and Parque das Nações to build a total of 550 homes to be completed within three and a half years.
The construction of homes for affordable rent on city council owned land is not a new idea, but has taken time to roll out. It was originally presented by the then mayor of Lisbon, Fernando Medina, but the competitions dragged on and were not sufficiently interesting to attract developers.
Said Filipa Roseta: “The council has the land but not the means to build more than it is doing now, and so these PPPs are important”.
Using a different model, the council is abandoning the traditional public contracts concessions model which is too complicated and time consuming. The option now is to adopt surface development rights sold at public auction with a 90 year lease, while the council retains the property ownership rights. The developer can build and manage future properties and has the right to transfer these rights to third parties.
Also, the projects already come with outline planning permission with urbanisation works approved. All the developer that wins the auction has to do is to inform the council beforehand that it intends to advance with the project, which will “significantly reduce the construction time and the costs of the operation”, says Filipa Roseta.