Housing in large urban regions, namely in Lisbon, is a prominent topic that has exploded in public opinion, especially after the package of measures announced by the Government. I couldn’t help noticing the comments that an opinion article on the same subject, written by a college student, managed to gather. Some of the expressed counter-arguments left me intrigued, to say the least.
Rent prices in Lisbon are too high to be able to reconcile with the low wages of most Portuguese people, the main objective being to reduce these charges. Many speak of the right to housing being fundamental, which is an undeniable truth, however, for this right to be possible to materialize it is necessary to invest in construction and rehabilitation of houses. If private entities are doing it themselves, it is likely that the prices charged will remain high, despite the greater supply, due to the fact that this is an expensive project. No private company will invest millions of euros in projects whose return takes many years to compensate for the initial investment.
On the other hand, if the State is the driver of the process, there is a guarantee that the rent value will be lower as it does not depend on the market adjustment mechanism. Companies have the guarantee that the State will pay, so their investment becomes much safer.
It is also essential to realize that forcing rents to fall “artificially” is just patching up a problem that will only continue to grow more and more in the medium and long term. Fixing rents will reduce the possibilities for landlords to make a profit through renting, making the option of selling a home more attractive. If these properties are sold for housing, the number of houses for rent reduces, which is reflected in an increase in price.
Another aspect, and perhaps the most controversial for the theory of building new houses, was information about the fact that Portugal is one of the countries with the most houses per thousand inhabitants, making no sense to build more. 18.5% of households in Portugal they are for seasonal or secondary use, taking into account figures presented in the 2021 Census. However, it must be borne in mind that our country has a large community of emigrants, who possibly have homes in the national territory.
Another aspect is that of people displaced within their own country. Someone who is born in Guarda, and has inherited a house there, but who lives in Lisbon, will always have an unused home. The fact is that the statistics represent the country as a whole, ignoring the specificity of each region. Certainly, a second home in Guarda does not cause as much controversy as one in Lisbon.
This happens because we observe a depopulation of the interior, which puts pressure on the market of the big coastal cities. Thinking that it is not necessary to build more houses in urban areas due to statistics that portray Portugal as a uniform territory is not respecting the demographic characteristics of the country. Probably promoting the repopulation of the interior was one of the ways to solve the real estate problem we face, but it is a time-consuming solution and often left aside. As can be expected, the price of real estate in the interior areas would increase with this measure, but it also allows for the repopulation of the territory, contributing to the rejuvenation of the population in these areas and alleviating the pressure existing in the big cities.
Having said that, it is the State that has the responsibility of promoting investment policies in construction and decentralization: the only concrete ways to combat the high prices of the real estate market.