A fundamental right
Housing is a basic human need, yet in Portugal rental policies have prioritised the interests of real estate funds and large investors, catapulting prices for residents, writes Sandra Pereira.
Housing is fundamental to meeting people’s basic needs and providing stability to family life. Above all, it is enshrined in Article 65 of the Constitution of the Portuguese Republic.
Successive Portuguese governments have made policy choices that, in turn, have been subjected to extensive constraints by the European Union, limiting public investment.
These have condemned housing to disinvestment, leaving intervention in the sector to economic, financial and speculative groups and excusing the State from its constitutional role.
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The result is a lack of housing in Portugal today. Only two percent of housing stock is state-owned and high rents condition the lives of families.
Therefore, measures are needed that will promote steady growth in the public housing stock, because only then can the shortage in housing be met.
“A family should not spend more than 30 percent of its income on housing. In Portugal, the average figure is 58 percent”
One sign of the dearth of management and public policy measures and solutions aimed at promoting and improving public housing property, for instance, is the more than 7,000 empty homes in an already stretched public housing stock.
Instead of considering populations, rental policies have prioritised the interests of financial markets and large investors. In 2012, a new urban lease law was passed, also known as the “evictions law.”
It imposed a brutal increase in rents and even a “special procedure for evicting the rented property”, mercilessly affecting thousands of families and a vast array of economic, social and cultural activities, especially in major cities.
By way of example, average rents between 2013 and 2018 increased by a staggering 68 percent nationally. Recently, amendments to this law have put a stop to some of the more serious measures but the legal framework is still inadequate.
The enormous increase in rents, the expansion of local accommodation kept for temporary use in Portugal’s most important cities, and the phenomenon of gentrification that grows with the uncontrolled increase in house prices, all create a situation in which a home with minimal conditions has become a luxury that few can afford.
A family should not spend more than 30 percent of its income on housing. In Portugal, the average figure is 58 percent. Between 60 and 70 percent of people feel that they rent a home they cannot really afford and make enormous sacrifices to be able to pay rent.
“Only when the State becomes involved in social housing policy can various strata of the population be served through government sponsorship”
The high rents also mean that 40 percent of young people between the ages of 18 and 34 still live with their parents because they cannot achieve financial independence.
A vast number of town and city civil parishes have so much stock of “Alojamento Local” (AL) - short-term tourist accommodation - that if the occupancy of those accommodations reaches 100 percent, there are more temporary residents than there are locals.
Lisbon has one of the highest ratios of short-term tourist accommodation per resident in the world: there are 32,000 ALs for 507,000 inhabitants.
All these factors led to the population of Lisbon shrinking by 63,000 residents between 2011 and 2017. This situation must change in order the meet the human right to housing.
In our view, the State must play a decisive role in land, buildings, regeneration and rental policies, assigning public housing stock to supported rent or conditioned rent schemes, where the rent charged is means tested according to the real incomes of families and young people.
Only when the State becomes involved in social housing policy, providing state budget allocations to enable the development of housing schemes, can various strata of the population be served through government sponsorship, breaking the link with the interests of private groups and real estate funds. In addition to being socially just, it is also a way of combating poverty and social exclusion.
We have looked at Portugal as an example, but we believe the problem is similar in other EU Member States. We recognise, however, that this type of public investment is only possible with different EU budget policies, without constraints, rules and impositions.
We recently asked the European Commission about their willingness to put forward concrete proposals to address the problem of precarious housing and the burden of housing expenditure.
In particular, it would be important for the European Commission to be willing to support the eligibility of public investment in housing under the Cohesion Fund (e.g. by improving existing public housing stock and/or possibly new building) as well as exclude this type of investment from the deficit criteria, and revise the government aid rules in this area.
Obviously, regarding the next multiannual funding framework, there need to be no cuts in the Cohesion Fund and the Fund needs to be increased so that Member States can respond their populations’ problems appropriately.
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