Real estate crisis in Portugal: “I will have to go back to live with mom”

“The landlady has been after me since 2018, she says she needs the apartment, now there is an eviction order.”

Georgina Simões is a caregiver at a nursing home in the Portuguese capital, Lisbon. She earns just above minimum wage.

His rent, at 300 euros (£262) a month, is low by current city standards. But he still has to work two jobs to pay for it. And the conditions on the property are bad: you can’t take a shower because the water leaks into the neighbors’ apartment.

“I am not leaving because when I look for houses my salary is not enough, not even to pay the rent. The rental prices are above the salaries we have in Portugal.”

Georgina’s circumstances are far from unique. Median rent in Lisbon is now just over €2,000, while the minimum wage is around €760.

Portugal is currently facing a severe housing crisis, caused by an increase in foreign investment in property and a lack of new affordable housing.

But it is not simply a matter of supply. Researcher and activist Rita Silva, who helped create the Habita housing movement, says there are “more houses than people, but prices aren’t going down.”

She adds that the current crisis, which has sparked numerous campaigns pushing for more affordable housing, has raged across the country for several years after the 2008 financial crisis.

Georgina the caretaker’s case is already in court and she hopes to stay on her property for another six months. Her lawyer is trying to buy her that time.

What if she loses? I ask.

“I’ll be on the street,” she says. “I have no chance, I don’t know what will happen. I just need a roof to sleep under; I spend my life at work.”

Joelsy Pacheco, for her part, juggles two jobs as a nurse on average for 16 hours a day, working in an intensive care unit at one of Lisbon’s main hospitals, as well as at an NGO.

“Most of my salary goes to rent, not to mention bills, food and transportation,” he says. “With just one job, it would be almost impossible.”

Your lease will end at the end of this year and you are worried that your rent will go up.

“Where would I go next?” she asks. “I’ll probably have to move back in with my mom, away from work, and I’ll have to restructure my whole life.”

Earlier this year, Portuguese comedian and activist Diogo Faro inadvertently became one of the faces of the affordable housing movement, after posting a video on social media about rising rental prices in Lisbon.

Soon, his inbox was flooded with messages.

“There are divorced couples who can’t move because they can’t afford it, which I find brutal. Older people who are choosing between paying rent or medication, so they cut their lives short to have a roof over their heads,” she said. says.

As he received more and more stories like these, the comedian got together with some friends and started the movement. House is a Right (Housing is a right).

His and other housing movements planned a demonstration that drew more than 30,000 people to the streets of Lisbon. The protests later spread to other cities, such as Porto and Braga.

“We have called the protests a house to liveBecause people are desperate. They want a house to rest, play with their children, to live”, says Diogo Faro, who sees this as only the beginning of the fight.

The mayor of Lisbon, Carlos Moedas, has described the housing problem as “the biggest crisis of our generation”.

He made the comment in April, as construction broke ground on a new affordable rental development in Entrecampos, which will provide 152 new homes.

Programs have also been set up to help those who cannot afford the high rental prices, with local authorities offering to pay a third of the cost, says Lisbon housing and development councilor Filipa Roseta.

A third of Lisbon’s historic center is unoccupied, according to geographer and housing researcher Luís Mendes, and recent cases suggest the state is making the situation worse.

When some shanty houses were destroyed in March, eight families were left homeless and had to be sent to emergency accommodation.

“We’re talking about rental prices in Lisbon that are higher than in some of the wealthier areas of Berlin, for example, where there has been a rent cap. Not to mention the difference in wages,” says Luís.

“In Lisbon there are areas where an 80 m2 house costs €1,200 per month. Well, that’s the average salary of a Lisbon citizen. [Lisbon resident]. So we are talking about prohibitive amounts, I would even say obscene.”

He says the factors leading to the country’s current housing crisis include what he calls “touristification,” when the rise in popularity of vacation rentals diverts homes from residential use to tourism.

Areas like the historic neighborhood of Alfama, known as the home of the Portuguese music genre Fado, now have 60% of their homes for short-term rental.

“What are the tourists going to see? Each other?” jokes Diogo Faro.

Then there are government measures aimed at attracting foreign investment through tax-free schemes for investment funds, digital nomads and, above all, Portuguese Golden Visas.

“Golden Visas allowed investors from outside the EU to obtain a resident visa in Portugal to invest, and that would work as a way to enter the Schengen Area.

“Often they would redo a house, but it was still empty. Many times those properties were sold over and over again, and that created a distortion in the housing market and is one of the causes of the housing crisis,” he says. Luis.

As part of a new housing program, the government is ending golden visas and short-term rental permits, as well as capping rent increases at 2%.

For most, however, it is too little too late.