Lisbon Shows Why Only Radical Change Can Solve the Housing Crisis

In the Portuguese capital, a centre-left mayor was elected on a pledge to fight the city's runaway housing crisis – but his efforts show that real change only comes from challenging the logic of the market.

Lisbon's abandonment of rent controls in 2011 led to a free-for-all in the city's housing market. (Credit: Patricia de Melo Moreira/Bloomberg via Getty Images)

On the very first day of 2021, the fado singer Carlos do Carmo died at the age of 81. Carmo, a lifelong communist, was best known for his song Lisboa Menina e Moça (which loosely translates to ‘Lisbon Girl and Lady’), an ode to Portugal’s capital, personifying the city as a warm, familiar street figure. Carmo’s death felt particularly poignant to me because it marked the end of a year in which I had played the prodigal daughter, spending several months in my hometown after living in London for fourteen years.

Of course, on holiday visits over the years, I had noticed a proliferation of moody coffee houses, with their insipid workspaces. Alongside them, taking over the characteristic Lisbon cafés and other local trade, came the indie boutiques, the overpriced second-hand shops, and all the other trappings of so-called ‘hipster’ culture. In the last ten years or so, Lisbon has also witnessed an outbreak of ‘local accommodation’ signs marking properties used for short-term tenancies, usually for tourism. With this phenomenon came a hollowing-out of entire neighbourhoods through sharp rent increases and rampant property speculation. I only saw snippets of this horror tableau: whenever I came home, it was brought to my attention by the disappearance of beloved buildings and the prestidigitation of construction sites, or, otherwise, by a once bustling area now gone eerily quiet.

The takeover of the city was so swift that my visits to Lisbon felt akin to time travelling. What had been a sleepy cul-de-sac only a few months prior became the natural habitat of diggers, cranes, and other iron beasts. Every other building was suddenly a hotel. On streets where traffic had always been problematic there was now an army of precarious workers mounting novelty rides, offering tourists the chance to see Lisbon atop a tuk-tuk or sidecar or amphibian yellow bus. It was only in 2020 that I found myself confronted with this transformed Lisbon on a daily basis, after the coronavirus pandemic prompted me to move in with my mum.

The most alarming development was the eviction of the SEARA mutual aid centre, which provided support and shelter to homeless and vulnerable people in the neighbourhood of Arroios. The centre functioned out of a squatted building, a one-time kindergarten, empty since 2018 and derelict until the arrival of the SEARA volunteers. Before the eviction, the building was sold by a charity associated with the Communist Party to property shark Spark Capital. In the early hours of a Monday in June, ten armed private security officers barged into the centre to forcefully and illegally evict the people inside. The police were called by the SEARA volunteers, but they sided with the eviction, dispersing residents and their supporters with tear gas and baton strikes. Among those assaulted by the police throughout the day were journalists trying to cover the event.

SEARA lawyer and housing activist Vasco Barata calls the case a ‘perfect broth’ — the point of confluence of a series of legal and economic tragedies that have made Portugal a haven for speculative capital, with Lisbon as its arrhythmic heart.

The inception of Lisbon’s ravenous transformation can be dated back to 2012, when a coalition government comprising the conservative PSD and the Christian democrat CDS implemented a series of liberalising economic policies, many of which targeted the housing market. Perhaps the most infamous was the Golden Visa programme, which exchanged Portuguese residency for foreign investment. Foreign citizens buying properties worth €500,000 or over would be given access to the country’s public education system, national health service, and — perhaps most important in the eyes of non-European speculators — an entry-point to the Schengen area. In eight years, the scheme yielded over €5 billion, and created chaos in cities like Lisbon and Porto. The current centre-left government has announced an end to this scheme, but it will only come into force on 1 July this year.

Not all the destructive housing policies brought in by the conservative coalition have an end in sight. The legal framework around long-term letting had an overhaul in 2012 that made rent increases and tenant evictions easier than ever before. Together with a tourism boom and the Golden Visa incentives, this resulted in thousands of families outpriced or forcibly removed from Lisbon’s city centre, which in turn gave room for the expansion of Airbnbs and gentrification.

All this hit a country that already had one of the lowest rates of social housing stock in Europe. ‘The right to housing was never built as a foundational pillar [of Portuguese society]’, says Vasco Barata. He is also the founder of Chão das Lutas (Fighting Grounds), an association for the right to housing, staffed predominantly by lawyers active in struggles like that over SEARA. ‘In Lisbon you have a brutal scenario in which there hasn’t been public housing policy since 1974/75. And you’ve now got the added financialisation of housing, in which a house is no longer seen as a home but as a financial asset that one must monetise.’

In 2020, with social crises worsened by Covid-19, housing was the first item Lisbon’s Socialist Party mayor Fernando Medina decided to tackle. But despite his much-publicised scheme to turn Airbnbs ‘into homes for keyworkers’, campaigners believe the initiative showed more concern for landlords than for the average Lisboner looking for an affordable place to live. Medina is no Ada Colau, the housing activist-turned-mayor who has strived to effectively ban Airbnb from Barcelona. Barata says that the Lisbon mayor ‘thinks he can solve the problem of housing without touching the housing market — that’s impossible!’

This ‘safe rent’ programme is a ‘failure’, Barata added. It relies on landlords—who once made a whopping profit out of short-term rentals, the price of which they could increase whenever they wanted—to put their properties into the management of local authorities for a longer period of time. According to Barata, this doesn’t happen because ‘people are taught to believe that in housing they have a business that is more profitable (in holiday rentals), and they don’t want to give it up.’

The pandemic nonetheless presents an opportunity to rethink housing and to transition from a speculative system cripplingly dependent on tourism to something fairer. There are still many empty, derelict buildings like that of SEARA across Lisbon. There is nothing that says they could not become affordable homes for Lisboners, with a little help of state investment and controlled rents.

Mayor Medina has made Lisboa Menina e Moça Lisbon’s official anthem. Carmo’s city is a carefree one, defined by its residents. But today, the city resembles an amusement park for big capital, its charms commodified for tourists, lauded by one Western liberal commentator as a place where ‘one might almost imagine oneself somewhere Nordic’. Carmo’s girlish Lisbon is no more. To free her from her enslavement, the song needs to be rescued from its cheap appropriation. It needs to be reimagined as a call to arms — with the right to housing as its very first fighting ground.