Portuguese Government to Sell State Properties and Launch PPPs to Address Housing Crisis
The Portuguese government announced a major policy shift on Thursday aimed at increasing the nation's affordable housing stock, detailing a plan to sell off valuable state-owned buildings and launch a new framework for public-private partnerships (PPPs). Following a special Council of Ministers meeting focused on housing, Minister of Infrastructure and Housing Miguel Pinto Luz outlined the strategy, which he described as essential for mobilizing underutilized public assets to serve public policy goals. The initiative is a core component of the new 'Construir Portugal' (Build Portugal) program.
The government's plan will initially see nine “emblematic” state-owned properties put up for public auction. Among them is the former headquarters of the Presidency of the Council of Ministers, a significant building located in Lisbon's desirable Campo de Ourique district. Other properties to be sold previously housed various ministries and state departments. Minister Pinto Luz stated that the objective is to have these assets ready for sale by the summer of 2026, with the revenue generated being reinvested into housing programs. “It does not make sense for the state to hold onto certain assets, given their location and potential for revenue maximization,” the minister explained.
In addition to the sales, the government is establishing a new instrument for PPPs to develop 14 state-owned plots of land. These properties are situated in high-demand municipalities, including seven in Lisbon, two in Amadora, and one each in Porto, Almada, Oeiras, Albufeira, and Faro. Under this model, the state will not alienate the land but will grant long-term concessions to private developers. The state-owned company Estamo will manage the public tenders for these concessions. The rental rates for the resulting housing units will be managed by the Institute for Housing and Urban Rehabilitation (IHRU) to ensure they remain at affordable levels for middle-class households.
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This policy represents a significant effort to involve the private sector in solving the housing shortage, a problem the minister admitted the state cannot solve on its own. “These PPPs aim to quickly bring dozens and dozens of properties into use, with the help of municipalities and the private sector,” Pinto Luz remarked. To further manage public assets, the government also approved the creation of a new public entity, Parque Cidades do Tejo, S.A., which will manage development in strategic areas like the Arco Ribeirinho and the land surrounding Lisbon's current and future airport sites.
The state property manager, Estamo, has been given an expanded mandate to complete a full national inventory of public property by September 2026 and has been empowered to challenge government departments on whether they truly need the assets they currently hold. While the government presented the package as a decisive step, initial reactions were mixed. Tenants' associations labeled the effort “a drop in the ocean,” questioning its scale, while some property owner groups expressed concern that it could lead to increased speculation in the market. The government has scheduled a follow-up Council of Ministers meeting next week to discuss related fiscal and rental law reforms.
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