Solving Portugal's Affordable Housing Crisis Hinges on Cutting Construction Costs and Bureaucracy, Argues Legal Expert
A comprehensive solution to Portugal's persistent lack of affordable housing cannot be achieved without fundamentally addressing the high costs of construction and the chronic inefficiencies within the state's administrative and licensing bodies. This is the assessment of Patrícia Viana, a partner at the law firm Abreu Advogados and a leading voice in the real estate sector. In a recent analysis, she outlined a series of interconnected policy challenges that she argues are the primary obstacles to increasing the supply of accessible homes. The policy objectives, according to Viana, must include a significant reduction in the fiscal burden on construction, a genuine acceleration of licensing approvals, and a commitment to legislative stability to attract and retain investment. The implementation strategy for these changes would require a dual approach: simplifying laws, as attempted with the 'Simplex' program, while simultaneously modernizing and properly staffing the administrative bodies responsible for their execution. The target population for these reforms includes not only Portuguese families struggling with housing costs but also the developers and international investors who are essential for funding and building new projects. Viana noted that the current system actively deters investment, citing the case of a foreign fund that abandoned future development in Lisbon due to extreme delays in the licensing process, which she described as a “trauma.” This directly impacts the supply of all types of housing. Stakeholder consultation has been ongoing for years, with industry associations consistently calling for a lower VAT rate on construction and faster approvals. While there is political support for the idea of affordable housing, Viana suggests a disconnect between political rhetoric and the practical realities of the market. The economic impact of the current situation is a bottleneck on growth, and the social impact is a deepening housing crisis. Viana firmly refutes the political narrative that blames programs like the Golden Visa and Alojamento Local (AL) for rising prices. She argues these programs were instrumental in reviving a “moribund” sector after the financial crisis and points out that prices have continued to rise even after real estate was excluded from the Golden Visa. The core issue, she insists, is that the high costs of taxes, land, licensing, and materials make affordable housing projects financially unviable for developers. Without a solution to the construction cost equation, she stated, “there is no laboratory-created model that can solve the problem.” Future policy developments, she suggests, must focus on creating a stable, efficient, and fiscally attractive environment for construction. Understand policy impacts on your Portugal property plans at realestate-lisbon.com.
