Centripetal policies and housing inaccessibility: The Portuguese case

Abstract

Like other European countries, Portugal is undergoing a severe housing affordability crisis, which started with a sudden growth of housing prices in its two metropolitan areas – Lisbon and Porto.

Based on statistical and GIS analysis, the paper will demonstrate that such growth correlates with a shift in property market dynamics that followed the 2007-08 Global Financial Crisis: real estate investment is now intensely concentrated in the main urban centres, contrasting with the diffusely distributed investment of previous decades.

Two main sets of factors caused this shift, namely: (1) international context – housing financialisation, interest rates, the use of real estate as safe-haven assets, changes in the tourism sector (Madden and Marcuse, 2016) – and (2) national policies related to housing, urban rehabilitation and investment attraction. The paper will focus on the latter, analysing such policies and showing how they promoted investment concentration and with what consequences.

In the post-crisis period, we must identify two phases regarding domestic policies.

In the first phase (2008-2015), the Government (led by a centre-right wing party under an international bailout programme) set the goal of the economy's reactivation through the liberalisation and incentive of the private property market. This led to a profound legislative reform based on: the liberalisation of the housing rental market and tourism accommodation; the promotion of urban renewal through new planning tools, tax benefits, public funding and deregulation of construction requirements; the attraction of foreign investment through tax benefits and a citizenship-by-investment programme. This reform promoted the concentration of investment in high-standard property in the country's main urban centres, contributing to the price rise and a housing affordability crisis (Travasso et al., 2020; Antunes and Seixas, 2020).

In the second phase (2017-2023), the Government (now led by a centre-left wing party) reacted to the housing crisis by creating new policies based on public investment for housing destined for the middle and lower classes (Jorge, 2022). Although intended for the whole country, we will demonstrate that the public money associated with these policies is being tendentially concentrated, once again, in the main urban centres – because there is where the problem is more evident, but also because their local governments are the ones that have the human and technical resources needed to apply for the new housing programmes (Jorge, 2024).

The two phases correspond to opposing policies, but both have led to the concentration of investment. We argue that this resource concentration exacerbates the housing problem by creating pressure on property value. It also contributes to abandoning the remaining national territory, worsening inequalities and risking territorial cohesion.

Besides contributing to a better understanding of the factors behind the housing crisis, the paper aims to show that housing policies and property market regulations must be territorialised. To meet their goals, they must be articulated with spatial planning options at regional and national scales (urban structure, housing, activities, transport). Moreover, the territorial distribution of resources and its impact must be taken into account and considered as key to resolving the housing inaccessibility problem.