Government Vows No Mid-Game Rule Changes for Housing, Secures €1.34 Billion EIB Loan
The Portuguese government has secured a €1.34 billion financing agreement with the European Investment Bank (EIB) to develop 12,000 affordable homes, with Prime Minister Luís Montenegro pledging to combat market distrust by ensuring regulatory stability. At a ceremony in Lisbon, Montenegro stated that a past decline in housing investment was largely due to "instability, lack of predictability, and lack of confidence in the market," and assured that with his government, "the rules will not change a meio do jogo (mid-game)."
The announcement was made during the official signing of the first €450 million tranche of the EIB loan, an event attended by Minister of Infrastructure and Housing Miguel Pinto Luz and Minister of Finance Joaquim Miranda Sarmento. The funds are designated for the construction and renovation of approximately 12,000 housing units aimed at providing affordable rental options for the middle class, a key objective of the government's housing policy, which Montenegro described as a "pedra de toque" (touchstone) of his administration.
Montenegro addressed the economic rationale for the initiative, linking the housing crisis to broader challenges in public services. He noted the difficulty in retaining essential professionals such as doctors, nurses, and teachers in urban centers where housing costs have become prohibitive. "The lack of access to housing at affordable prices has negative consequences for the lives of companies and citizens alike," he remarked, framing the investment as crucial for both social well-being and economic stability.
Ioannis Tsakiris, Vice-President of the EIB, signed the contract on behalf of the European institution, underscoring the bank's support for Portugal's housing strategy. Montenegro assured the EIB of prudent management of the public resources, highlighting Portugal's current standing as "a reference in terms of economic and financial stability." He added that any future changes to regulations would be "for the better," reinforcing his message of a reliable investment climate.
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The government's plan extends beyond public financing, aiming to stimulate private sector participation. Montenegro detailed a strategy that includes simplifying administrative procedures, accelerating licensing, reducing bureaucracy, and creating a "more investment-friendly" tax environment. This approach is intended to run parallel to the state's role as a direct provider and regulator, ensuring a multi-faceted response to the housing shortage.
In addition to new construction, the government is taking stock of its existing assets. Following up on an earlier announcement, Montenegro confirmed he has directed ministries to conduct a comprehensive review of state-owned property. The goal is to identify underutilized land and buildings that can be repurposed for housing or other societal uses. "That which is not needed for heritage, for which there is no utility or projects, must be made available to society, to other public entities, for companies, and for private individuals," he stated.
This policy signals a significant move to unlock public assets for development, potentially creating new opportunities for public-private partnerships and private developers. The government's commitment to both direct public action and market incentives represents a comprehensive strategy aimed at resolving one of Portugal's most pressing socio-economic issues.
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