Portugal Bid For Foreign $ Fuels Housing Crisis For Locals: Golden Visas, Digital Nomads, Gentrify

Portugal’s bid to attract foreign money backfires as rental market goes ‘crazy,’ The Guardian, July 29, 2023. Ed.

- Government incentives and deregulation have brought digital nomads, Airbnbs and ‘golden visas’ – but steep housing costs for locals -

By 7.30 on a summer night, Lisbon’s steep, beautiful streets are beginning to fill with visitors taking selfies in the soft light, trailing from bar to bar and wrestling with the nightly conundrum of where to have dinner. Margarida Custódio, who sits at home with her 3-year-old daughter, Pilar, has more pressing matters on her mind. Like so many people in Portugal, where rental prices make a mockery of the low salaries, Custódio lives through a monthly agony when it comes to covering the costs of her flat. Despite a good job in human resources, she earns €930 (£795) a month after tax – of which €700 goes on rent.

“Here, you spend almost 90% of your salary on rent each month,” she said. “Whatever you have left over goes on gas, water, electricity and food. It’s like living on the edge.”

Meanwhile, in the Bairro da Jamaica, a rundown housing development in the city of Seixal, which lies on the other side of the 25 de Abril Bridge that is linked to Lisbon in the north, Lizandro Batista de Sousa Pontes and his children are in even more perilous straits. The once abandoned housing estate that has been home to the 47-year-old bricklayer’s family since he came to Portugal from the African island nation of São Tomé and Príncipe in the late 1990s is scheduled for demolition. The local council says the blocks need to come down as they were never properly finished before they were occupied and consequently lack “habitable conditions”.

Although Seixal council has so far rehoused 545 people from 185 families, De Sousa Pontes is hanging on & has brought a legal challenge to the demolition of his block, arguing that he and his children are better off there than squeezing into his sister’s 2-BR flat - already home to 5 people. "They demolished the next-door block last week,” he said, while sitting in the room that was once his mother’s cafe. Outside, children were playing among the rubble & steering clear of the drug users who have already moved into the now skeletal blocks. “We were inside the house when they were knocking it down. The house was shaking. My 6-year-old started crying when he saw the demolitions because he was afraid we’d be out on the streets.”

Custódio and De Sousa Pontes know only too well what it is like to live in a country that narrowly escaped the maw of the 2008 financial crisis only to crawl, exhausted, into the waiting jaws of a resultant housing crisis.

Portugal’s economic recovery, fuelled by deregulation and a series of schemes designed to lure foreign investment, has distorted the housing market beyond all recognition in a place where the monthly min. wage is €760 & where 50% of people earn less than €1,000 a month. The liberalisation of the rental market, the issuing of “golden visas” that confer residence permits in exchange for buying properties worth €500,000+, the introduction of tax-saving “non-habitual residency scheme” for foreigners, and, recently, the creation of a digital nomad visa to allow well-off foreigners to work remotely & pay a tax rate of just 20% have all played a part. Add in snapping up flats to be converted into lucrative short-term rentals. The crisis now playing out in Lisbon, Porto & other cities, was not exactly unforetold.

Six years ago, the UN’s special rapporteur on housing warned that “unbridled touristification” would undermine the right to housing for Portugal’s most vulnerable people.. the emergence of a "new poor"...

https://www.theguardian.com/world/2023/jul/29/portugals-bid-to-attract-foreign-money-backfires-as-rental-market-goes-crazy