Description
Housing is a problem of intergenerational justice. On one hand, the younger generations who still do not own a property are adversely impacted by soaring house prices. On the other hand, home owners, who usually belong to the older generations, stand to benefit from rising house prices, as they can sell them at a higher price or increase rents.
The “Mais Habitação” package, enacted by decree 81/XV, took effect on 7 October 2023. It created a number of measures designed to boost housing supply, reduce demand and curb the rise in rent prices. We focus specifically on two policies in our study: the restrictions on raising the rent in lease contracts, and the expansion of social housing.
Rent Control:
For the last 30 years and for rent contracts signed after 1990, the coefficient used to update rents has been based on the average inflation over the past 12 months, without housing, as estimated by Statistics Portugal. The one exception within 30 years was in 2023, when the increase was capped at 2%. Rental contracts dating prior to 1990 have been subject to even stricter rent controls.
Social Housing:
According to Statistics Portugal, public housing in Portugal amounts to 2% of the overall housing stock. This is clearly lower than in other European countries such as Italy (3.5%) or Germany (4%), and a far cry from the 40% in Sweden and 29% in the Netherlands. The gap is even wider between capitals: Lisbon public housing accounts for less than 10% of all dwellings, significantly lower than in Paris (25%), with a goal of 40% by 2035, and Vienna (43%).
Objective:
To meet families’ immediate housing needs. To ensure that everyone has access to a decent home that is appropriate to the income and size of different households. To guarantee that the government’s response in the housing market fulfils existing needs and helps regulate the whole market, by increasing supply and ensuring that housing is made more accessible.