Funchal City Council Halts New Short-Term Rental Licenses for Six Months
The Funchal Municipal Council announced on Thursday its decision to suspend the issuance of new licenses for Alojamento Local (AL) within collective housing buildings for a six-month period. The announcement was made by Mayor Cristina Pedra, who leads the PSD/CDS-PP coalition governing the municipality. This measure is described as a provisional and preventative step to manage the significant growth of the short-term rental market in Madeira's capital. The suspension will not affect existing, legally registered AL operations, nor will it apply to license applications for detached single-family homes. Mayor Pedra stated at a press conference that the decision was both “responsible and necessary” to allow the city time to finalize a new municipal regulation for the sector. This future regulation aims to create clear zoning rules, defining which areas of Funchal are saturated and which can support further tourism-related development. The suspension is scheduled to begin in September and will be re-evaluated after six months, or sooner if the new regulatory framework is completed ahead of schedule. All license applications currently being processed by the municipality will be concluded. According to data provided by the mayor, Funchal currently has 3,184 registered AL units, which represents a 182% increase since 2022. This inventory provides approximately 9,000 beds, a figure that amounts to more than a quarter of the city's traditional hotel capacity. The mayor emphasized that the goal is not to eliminate the AL sector but to ensure its growth is sustainable and balanced with the needs of the local community and urban planning. The preliminary studies for the new regulation are expected to be finished by December. The decision follows a recent controversy involving apartments in a publicly supported housing cooperative being used for AL, which prompted calls for stricter controls from opposition parties and the President of the Regional Government, Miguel Albuquerque. Discover rental property opportunities and regulations at realestate-lisbon.com.
