Yes, the situation is dire. I live in Lisbon as a foreigner for more than 12 years now. We pay a rent for a small flat that used to be very expensive and now is on the cheap side in our quarter of the city. Luckily, we have an older contract that cannot be changed as easily as newer ones. I'm not thrilled by the possibility that our landlord might cancel it some day, however, e.g. for relatives to move in. Rents in the city have skyrocketed, we'd have a hard time finding anything, even though we both work full-time and have salaries above average. It's crazy because all new homes and apartments are "luxury apartments" with insanely high pricing both for buying and renting. They're mostly empty or are (often illegally) rented out as holiday apartments. It's incomprehensible to me how ordinary Portuguese families survive in Lisbon. I guess most of them have inherited property.
Quite honestly, apart from the generally increasing gap between rich and the poor, one big problem in societies nowadays is that you can simply get richer and richer just from owning property. For example, if you own three ordinary apartments in Lisbon, you can live in one of them and easily make a good living by renting out the other two as holiday apartments. Because cleaning services, guys who do repairs, etc., are cheap in Portugal, this involves almost no work. Moreover, the net worth of your property will continually increase while you do (almost) nothing. I'm not saying I blame these people, I would do the same if I had the opportunity, but this is a huge structural problem in my opinion.
Airbnb and uber for all their benefits have taken away a lot of urban planning capabilities of local govts. At the same time, they expose the general unwillingness of local govts to accomodate the need of the population or those who bring in economic value (tourists, transplants).
If you are becoming a tourist hub, then create an off-town tourist area and add a convenient transit line/people mover to the central parts of town. Tourists get reasonable housing, locals don't get displaced and the influx of population does not destroy the cultural vibe of your town.
Prohibition never works, and piracy is a reflection of an unmet need. Banning things merely airs out open wounds, and leads to grey-markets such as shady uber/airbnb equivalents within the city. If you want to reduce abortions, banning merely leads to riskier abortions. Examples of this are dime a dozen.
When demand arrives, the cities MUST adjust to incoming demand. Couple examples of working uncomfortable compromises are: 1. Paris - Choose a small district and allow it to go full skyscraper. The rest of the town maintains its architectural identity. 2. Barcelona - Go full superblock. Means that tourist activity gets neatly distributed across the city (removing bottlenecks) and tourists do not lead to increase in car traffic.
I could go on and on, but 1 fundamental truth stays. Bottlenecks only help those who control access to it. The key is to eliminate the bottleneck (more housing). Band-aids (rent-control) or equitable distribution of bottleneck gains (no-renters->only-homeowners/ more single-family-housing) never works. It only leads to the situation festering (see Bay Area / SF), and makes for an even harder problem in the future.
I'm not sure if my comment conveys any cohesive point, but I hope folks get something out of it.
The compromise Barcelona made is not enough. Sadly, that beautiful city is IMHO the prototypical case of getting ruined by too much tourism.
In their defense, I think it's safe to state all mid-to-large cities in EU are quite crowded and unaffordable. For example, Copenhagen used to be a place where citizens enjoyed great purchasing power. Despite rent control and sale taxes, a single person in a well-paying job can hardly afford a mortgage for a decent flat right now. The same can be said of Munich, Madrid, London and many, many other places.
Sure, but why on earth would any tourist choose to stay at some off site tourist hub? The whole point of visiting a historic city like say Lisbon, is that you get the stay in an historic city, not some modern off site tourist hub where you get to take a crammed full tourist bus to the centre..
Or would you propose strict accompanying zoning laws with strict enforcement? I think that would meet stiff resistance from property owners but would be feasible. I do think all of this would make the destination much less attractive to visit though so it really comes down to how much you want/need the tourists.
> Prohibition never works, and piracy is a reflection of an unmet need. Banning things merely airs out open wounds, and leads to grey-markets such as shady uber/airbnb equivalents within the city.
What do you mean by "works"? Yes, grey markets will pop up, but if Portugal banned AirBnB style renting that the market for that housing wouldn't shrink?
It seems to me that prohibition might be a useful tool in a more comprehensive set of policies to address the problem.
Not all additional tourist revenue is worth the marginal costs. And cities have no obligation to host visitors they don’t want.
Hotels are usually limited because they are unpleasant neighbors for actual residents. It’s not really a surprise that’s the main issue people have with AirBnB rentals.
I'm generally a YIMBY and in favor of housing, but are we really so sure that new housing will solve the problems in cities like Barcelona or Lisbon (where tourists and people coming in attracted by the good quality of life generally have higher disposable incomes than most locals).
If you just add housing, isn't it possible that the effect is like adding roads to prevent traffic congestion? The number of people coming in just increases even more until the marginal attractiveness is the same. From the point of view of locals this means that there are even more outsiders, and the affordability is just as bad.
In Bucharest, the city started cracking on AirBNB, the problem is that the landlords are greedy and will risk legal action to get that sweet foreigner money. Not sure how much we can blame the local governments on this one.
I’ve literally seen this same exact comment many, many times except with different locations. Eastern Mass, New York, Ontario, Britain, and even starting to hear it from suburban areas.
The exact same concepts: cheap grandfathered lease, hoping the landlord doesn’t cancel, can’t afford rent despite making >100k, “luxury apartments”, empty apartments, illegal renting (e.g. AirBnB) and shadiness.
The underlying issue is that demand for these places has increased in our new globally-connected world. That's not going away. Cute little lake houses aren't going to be a local secret anywhere in the world, anymore, and the sooner people realize that, the sooner they can think about how to adjust to it.
We are currently in the "denial" phase. We can't get to "acceptance" fast enough.
Practically every single capital is like that these days. People of all nations can copy paste same rant and it would be 100% valid. This is how it is, too much buying power with new generation of higher level office workers compared to blue collar ones, on top of financial speculation with either prices skyrocketing, or airbnbs. Let's not forget there is more and more of people in general, and more and more coming for work, education etc. to bigger places and rarely going back.
Or to put it in reverse - I am not aware of any metropolis/capital where this isn't true, regardless of regime.
> The nice thing about indoor space is that we can make pretty much as much of it as we'd like.
What? Have you ever been in Lisbon? The city is pretty dense as it is. You could mostly just build higher, and that has its limits too, depending on the structure and foundation.
Adding more housing outside the core of the city might not be attractive enough. And increasing the density of people also means you need to increase the density of services (public and private) and utilities, which also comes with its own problem.
Nope, that’s the ultimate illusion. Portugal is already one of the EU countries with more houses per capita. More houses means more houses for foreigners. Locals would never be able to afford them.
This is just the dark side of globalism cheered by Portuguese politics for decades. Competition is global now. Local middle class is having their lunch eaten by foreign rich people or even middle classes from wealthier countries while the unrestricted influx of emmigrants from poorer countries keep sallaries down.
Nope. Zoning and licensing is in the hands of politicians and construction lobbies vying for the best places to build high-value housing, which is where they get the most return.
In what way is building more housing simple? If it were that straightforward, California (which has much more space and money) would have done it, and Californians wouldn't be moving to Portugal.
Yeah, Portugal should simply tear down all the old mouldy buildings of Lisbon and replace them with shiny skyscrapers, so each and every Portuguese can have their very own flat in Lisbon.
Or if they're crazy enough to want to keep these old buildings they could just build all the skycrapers in the park surrounding peak Monsanto, easy.
Many dislike the idea, but this is why people turn to "nationalism".
If you want to decrease unemployment, you add tariffs for imports enabling more businesses to open domestically (i.e. tariffs effectively increase import costs).
Similarly, you can loosen building codes to increase production of homes, limit visa duration, require citizenship for home ownership, etc. Those are some obvious fixes, why is the government not doing it?
Beyond the obvious potential fixes, all EU countries are facing the same issue:
- supporting immigrants (high level of immigration)
- no controls over ones border(s) (anyone can move between EU countries)
- over regulation and too many social programs (reducing peoples willingness to work & increasing burden on the current tax base)
- over regulation of industry and farming has left the only option to survive being to work in a city (as an example, see nitrogen reduction regulations in the Netherlands)
It's all "give-and-take" you have to decide how you want to live... To me it sounds like the EU is hitting a critical state, but is there a will to make the tough calls yet?
Basically all of what you said is empty populist propaganda that doesn't pass a basic sniff test. You're painting the EU as the bad guy with a broad brush and it's just total nonsense.
* depends on how you define "high" levels of migration, but few EU countries fit that. Portugal does, because they explicitly encourage it. Why? Nothing to do with the EU, they're trying to fight negative population growth.
* social programs aren't an EU thing, they're purely local. And the "too much social spending makes people not want to work" ia such bullshit.
* there are more local regulations than EU regulations. Which ones specifically are you referring to as too much?
* farming is explicitly subsidised to make it profitable. What are you talking about?
* not everyone can move between EU countries, you need to be a citizen. Like the Portuguese that have moved all around (e.g. there are probably millions of people of Portuguese descent in France)
It's annoying how popular empty nationalistic populists have gotten. Can't nobody bother to fact check their bullshit?
The problem is not immigrants, of people freely crossing borders -- the problem is rich people and the power we give them. Which is pretty clear from the OP, they know what's up. Most immigrants in the world, of course, are not rich. Blaming other people who are struggling as much or more than you, instead of the people profiting of it all, is helpful for the people profiting off it all.
none of those things gets rid of the root causes: too much financialization and speculation
alot of these things used to be regulated, discouraged or prohibited, but with deregulation of much of finance more and more wealth is generated from speculation, rents and leverage... if people can make money passively from doing nothing but owning something (real or virtual) there is less motivation for "real productive work" and squeezes out the rest of the economy.
this compounds over time and get the results you see today: high land costs, rents, inflation etc.
blocking immigration or adding tariffs etc will do nothing to stop any that....
> If you want to decrease unemployment, you add tariffs for imports enabling more businesses to open domestically (i.e. tariffs effectively increase import costs).
Unless your domestic business requires imported goods to run its business. Then you've just increased costs for your domestic industry.
> "Portugal's unemployment rate is at 5.7%, near a record low.
Employers' confederations have been asking for the immigration rules to be streamlined, pointing to an economic situation close to full employment"
The narrative of unemployment in Portugal driving dissatisfaction across the population is very tenuous in light of these latest developments and policies
>>> If you want to decrease unemployment, you add tariffs for imports enabling more businesses to open domestically (i.e. tariffs effectively increase import costs).
This is very simplistic. You first start building local expertise/domestic businesses and then increase tariffs to wean off imports. Don't put the cart before the horse.
You're right that any negative trends foster radical views such as nationalism and communism. However, the arguments you mention wouldn't work in Portugal.
Portugal used to even have a negative net migration rate and suffers a labor shortage. Right now, the net migration rate is positive and low at around 0.5. That's a good trend, but there is still too much emigration of skilled Portuguese people due to weak economy and structural problems.
The problem is not immigration, the problem is that wealth is distributed very unevenly. Average salaries are low in Portugal, many people have to do with very low salaries and few people in Lisbon and Porto make a lot of money. Although it luckily went down from nearly 0.4, the Gini index in Portugal is still relatively high for a Western European country at 0.33. This wealth disparity in combination with laws and politics that favor landlords, property speculation, and building hotels instead of apartment buildings lead to the housing crisis.
> Many dislike the idea, but this is why people turn to "nationalism".
I have to call Grade-A bullshit on your comment.
At best, nationalist political movements take advantage of sticking points with their highly opportunistic, ideologically incoherent and empty promises hoping to buy arguments while pinning the blame of everything on whoever is the incumbent at the time.
Some things I noticed as a foreigner exploring the Portuguese house market for the past 6 months:
Indeed, prices in Lisbon and Porto are insane. Yet, even in those cities (especially in Porto) there are quite a lot of old buildings, often in bad shape, and often empty, or sometimes inhabited by just one elderly tenant. You don't see that elsewhere in Europe in cities with similarly high prices. You would expect someone to buy these properties, renovate them and then rent them out. Clearly, the rental market desperately needs this new supply.
That this doesn't happen, could be because there is a lack of capital, but to me the actual problem seems to be over-regulation and especially an over protection of tenants. If, as the article states, foreigners buy multiple apartments, and then let them sit empty, it's because they are afraid of renting them out. Especially with elderly tenants, you can't increase the rent, and you can't terminate the contract. Once you start looking around for a house to buy, you'll almost certainly bump into some homes costing only a tenth of similar houses in the neighborhood, and any Portuguese knows what that means: there is an elderly tenant, paying only 20 euros of rent per month, and your only hope of ever getting them to leave, is wait till they pass away (and even then, their children might try to continue the lease at the same conditions).
> I live in Lisbon as a foreigner for more than 12 years now. We pay a rent for a small flat that used to be very expensive … Rents in the city have skyrocketed, we'd have a hard time finding anything
I know this comment won’t be received well, but aren’t you describing gentrification & how you participated (maybe unknowingly) in what has caused prices to skyrocket. And you’re now complaining because someone even more rich than you has caused prices to exceed your means, just like you did to a local person when you moved in as a foreigner.
Gentrification is a "dysphemism" (opposite of euphemism). It's basically a buzzword made up to give a negative connotation to something that isn't inherently negative.
People move around. Some cities grow, others shrink. New jobs get created, old jobs disappear. Some housing gets more expensive, some housing gets cheaper. Some cities get wealthier, others get poorer.
We'd still be living in caves if our goal was to forever keep all cities and towns the exact same way they've always been. Which is basically the goal when people criticize "gentrification".
Gentrification is an overblown concern. No one has the right to live in a specific area. Migration is human tendency. Just like poor people have a right to move from a rural area to a city in search of better employment opportunities, people with money have right to move to cheaper locations to get a better bang for their buck.
Yes and No. I described gentrification. No, I did not participate in it because I received a Portuguese salary from the start. I'm working at university where the salary levels are fixed by state institutions. (Which is a huge problem if you want to attract senior researchers from abroad, and also a problem because it causes talented people to emigrate.) The reason why I paid a rent that was then higher than usual was because landlords in Portugal assume foreigners are wealthier and therefore it was very hard as a foreigner to get an apartment at the low pricing that my Portuguese colleagues were paying.
This seems to be a problem everywhere around the world in big cities.
What’s propping all of these property prices up? Supply and demand rules don’t seem to apply at all. You might have thousands of empty apartments in a city yet the price only keeps going up.
Everything is broken, but housing is particularly broken.
I've been thinking about this I think it is the end result of globalization. First we could ship stuff overseas, then we could ship jobs overseas, now people are realizing they can ship their house overseas, and Portugal has a much nicer climate and weather than Shanghai so why not move there. Basically with the advent of the internet and the rise in remote work there's no more reason people really feel tied to a place, so in the most desirable places in the world you are no longer just competing against the people in your state or country, that real estate is now on the global market against 7 billion other people.
I live in another EU country, that in 5 years I could easily see being as this article describes Portugal. I'm not sure if it's the same in Portugal, but this is only really accurate for major cities in my country.
Smaller cities and towns are cheap. I've seen government auctions selling apartments for under €5000 which nobody wants. Why? Because people are moving to larger cities. People want opportunities, and the idea of working in some chicken factory (which may have been a perfectly respected career for our parents) is not appealing for the current generation. And the problem in these small towns, is the chicken factory is really the only career prospect you have, so people move elsewhere.
Of course there are rich foreigners buying apartments as investments and renting them on Airbnb, but that's a very small percentage of the housing market. And even if they rented them normally, they'd still be asking for prices that are unaffordable for the average person. I know that because that was me, I emigrated here and bought a luxury apartment and lived in it for 7 years (paying taxes) and now want to rent it out as I moved outside the city.
Unless I rent or sell it for much lower than the market rate, even on the lower end it's still too expensive for the average person. If I sell it, it's probably just going to be poached by someone who will use it as an investment and put it on Airbnb.
My city is building a lot of new developments, but space is limited as young people want to live close to the city center, not somewhere 30 minutes drive away. That is driving up the average price, so you end up with studio apartments costing upwards of €4000/m2, which you need to earn at least €2500/mo to afford, which is well above the average salary. With rising inflation the problem isn't so much people can't afford the mortgage payments (which are slightly lower than renting), but they can't afford to save the 15% needed for a deposit.
In Rome, Italy, we have an estimated 150k empty apartments in a 2.9 millions people city...that we know of..yet they build and build and prices keep going up.
I would really, really like to see governments taking this issue seriously, starting with a proper effort to determine how many of the residences in their jurisdictions are not used as a primary residence. I suspect the results would be enlightening and point the way to effective regulation.
I firmly believe that most investors are chasing capital gains as yields at current prices (even with extortionate rents) are mostly a joke. It's bad enough that some speculators don't even bother renting out their property.
A widespread residential property market crash would be painful but looks like the most likely outcome and solution. I'm hopeful that as interest rates rise capital gains will diminish, disappear, or even go backwards. Indications are that this is already underway in many places.
Come on, it's nowhere near dire - it's expensive yes, like just about every other capital city - Lisbon is still way cheaper than Paris or London.
This poorly written rambling rant of an article has some valid points but no insight.
I moved to Cascais near Lisbon 5 years ago because of Brexit and yes property has boomed, like in many other countries but money printing QE is not just a Portuguese phenomena.
10 Years ago Portugal was a basket case economy (following the financial crisis) with many talented people moving abroad - now it's the opposite it's the fastest growing economy in Europe and Talent is moving here in droves. Of course the Tax and Golden Visa incentives to attract people have pushed up property prices but they have also provided many benefits.
Portugal is not densely populated Like England or Holland, even here in Cascais you see lots of unbuilt land or derelict properties. A major problem is supply side because of their slow and burdensome bureaucracy - it took us 3 years to get planning permission on a derelict property we bought for investment and we had to involve 2 architects and 5 engineers to get all the necessary paperwork in order, it's insane. Their job protection mentality needs to change towards a more dynamic job creation mentality - they need to reform their labour laws urgently to unleash amazing potential here. This would quickly solve the problem of low local wages. Many companies would invest here because of the incredible quality of life: great infrastructure, low crime, lovely climate, beautiful sandy beaches, quality food, the list goes on.
The average salary is quite low and those people are struggling a lot with their expenses and are completely unable to set money aside for a rainy day.
>even here in Cascais you see lots of unbuilt land
We have no intention of becoming a concrete jungle.
>Their job protection mentality needs to change towards a more dynamic job creation mentality
No thank you, please just keep your opinions to yourself, and honestly find somewhere else to go.
>low crime
Wrong, there's more and more crime, specially in Lisbon, Cascais, Sintra, and it's increasing in Porto and Braga too.
Specially on neighboorhoods with lots of "youngsters".
I don't think talent is moving in - at least in tech, there are lots of foreign companies opening offices and hiring local talent.
And for number two, it seems you're part of the problem the article mentions. You comain about how long it takes to work in a property you're INVESTINF in - but Portuguese people are struggling to afford property to LIVE in. That's the crisis, rich people investing in property makes it more expensive for poor people to own it.
I lived in Lisbon for a while. After expenses and a bedroom rent, my whole salary was spent, for a bedroom in a apartment shared with 3 other people. Many of my work colleagues lived in the peripheries and took more than 45 minutes to get to work, or more than 1.5 hours of daily commute. That's what the majority of Lisboets are being forced to, such that tourists and investors can have their happy lives.
This type of investment is causing lots of problems, and society should prioritize housing as a place to live in, not as a business to invest in. There are lots of other ventures for investors that don't ruin people's lives.
> It's crazy because all new homes and apartments are "luxury apartments" with insanely high pricing both for buying and renting. They're mostly empty or are (often illegally) rented out as holiday apartments.
You'd feel at home in LA.
I've seen this trend here for at least a decade now. I know some people who say that the construction of these luxury apartments is a sign that the economy is recovering, but I remain skeptical. These places are the least lived-in looking apartment complexes I've ever seen in my life. There's one down the street from where I live that was completed around 5 years ago, and I would bet good money that most of it is vacant. I rarely see people going to and from it, besides the occasional few who visit the burger bar right in front of it. Too many of the balconies look sterile.
I don't know why so many of these are being built outside of LA proper, but I have a theory for why there are these massive complexes being built; the rich have spoiled children they no longer want to deal with so mommy and daddy pay for these apartments to house them. I used to deliver food to these places and, without fail, I was delivering to men and women who appeared way too young to afford such places.
Its the same trend all over the world. No one wants to build/sell affordable housing since margins on that area very less. Everywhere its luxury housing.
There was a post on hacker news a while back about a study in Finland showing that it doesn't matter if the new builds are "luxury", they increase so supply which will always eventually stop/slow/reverse price increases.
This actually makes sense in terms of supply and demand but more interestingly it's because people tend to "upgrade" when they move this then frees up space at the lower end of the market.
The argument I've heard in South Africa for why luxury builds are the only things being built is that they're the only things that are profitable. After time and maintenance, ideally the luxury aspect falls away and it becomes affordable for the masses.
Same idea as buying a car - most people won't buy brand new because of the cost.
You do have the opportunity though. I bet you could find, say, 10 likeminded people and pool your resources and get those 2 apartments. Yes, you only get 1/10th of the cut, but if it really is easy money like that, then why not do it?
> or example, if you own three ordinary apartments in Lisbon, you can live in one of them and easily make a good living by renting out the other two as holiday apartments. Because cleaning services, guys who do repairs, etc., are cheap in Portugal, this involves almost no work. Moreover, the net worth of your property will continually increase while you do (almost) nothing.
I'm a bit conflicted on this. I definitely see what you're saying (and often repeat it myself).
But it should be noted: property is simply an asset like any other. If there's easy and outsized returns to be had, the demand for this asset would increase, pushing up the price to the point that the returns on the asset are in line with returns of other assets which have similar risk/effort profiles.
To say that one can make money 'doing nothing' owning any asset (that has a positive return) is true. But that's not per se some kind of economic or political problem, it's a normal feature.
Of course to absolutely do nothing and still earn enough to live off of, means you must have earned enough money to purchase a large amount of assets. Supposing rental income of 5%, and supposing rent is 25% of someone's wages, and supposing a 20% tax rate on your returns, you'd essentially need to purchase assets worth 100 times what someone spends on rent.
(ex: if you need 40k to live on, spend 25% or 10k on rent, you'd need 100x that or 1 million returning a 5% return that's taxed 20%, leaving 40k in net income.)
Amassing 100x your rent is no easy feat, and in fact it means that someway, somehow, you've provided 100x your rent in value, without spending a penny of it, and saved it all, then poured it into an asset (incurring risk and requiring some level of commercial effort), and then, yes, you could start to approach doing 'nothing'.
For many that's a life's worth of work. Buying such assets is really no different from putting in an equivalent amount of money into a retirement fund, and that fund in turn buying assets like companies. Whether it's companies that buy and rent out cars, or real estate, or produce and sell, the people owning these enterprises through their retirement fund are 'doing nothing' while others are working.
But the important part to note is that anyone has access to this system. Every person can, proportionate to their income (based on their economic value to society) buy assets.
In fact, I'm able with a click of the button not to just buy a part of a in Portugal, but rather the biggest and most successful company on the planet: Apple. I can buy a small part in it, and profit when many of the planet's smartest and most educated people build & sell some of the most cutting edge consumer technology day in day out. Whilst doing: nothing.
So I don't really see a structural problem with this system. What is problematic is the stuff around it. For example, in some countries real estate goes untaxed and is subsidised, and is bailed out when things go bad. Subsidised private profits, and socialised public losses. It's unfair and a failure of markets and governance. Another example is that swathes of people indeed inherit value to the point they've never done any contribution to the world to get into a position to 'do nothing', rather than work to retire off of the fruits of their labour, they could in effect retire from work before ever even starting. This is where the system breaks down and must be balanced, again by e.g. taxing inheritance and balancing things out.
Finally, markets work when price & profit signals can balance supply & demand. If there is a shortage of bread, demand outpaces supply, the price rises, and overnight new bakeries will pop up bringing down the price. In real estate high prices often do not trigger new supply in many countries, either due to geographical limitations (e.g. the mountains of Taiwan limiting buildable space, or simply the fact physically there is a limited area we consider to be 'downtown new york' for example), but more often due to political limitations (NIMBYism). Because in real estate markets in many areas do not naturally solve the problem, government intervention is needed to ensure more equitable and fair outcomes moreso than in other types of markets. Again here I see a role for stronger taxation on outsized profits and some income support for groups otherwised pushed out of neighbourhoods.
> But it should be noted: property is simply an asset like any other
> So I don't really see a structural problem with this system.
This is the disconnect. Residential real estate is fundamentally different than owning stock, in that people need a place to live and building residential construction is much more difficult than issuing stock. When wealthy people from abroad buy multiple apartment buildings in desirable cities, and then proceed to keep living elsewhere (probably in a different residence in another desirable city) they create a problem that in no way resembles the result of buying stock in a company.
Not all assets are equal. Shelter is a basic human need. Creating an environment that allows speculation in this asset is bad.
Progressively tax the shit out of each subsequent property owned. Prevent foreign/corporate ownership of property outside of short stay, hotel/motel type accommodation.
Make shelter an extremely unattractive asset to own.
Unfortunately, many politicians across the world are also landlords.
This sounds like what happened in the SFbay area(south bay/pennisula), I grew up there and it used to be a great place to live, center left politics, lots of families and a diverse set of industries with many middle class opportunities. right around 10-15 years ago things started to change dramatically for the worse, housing and costs everywhere skyrocketed, homeless population exploded, politics veered hard left. Most of my friends from high school(90%) were forced to leave due to rents going from $1k a month to $3k a month for a 1-2 bdrm apts. Those that owned houses also moved as they were fed up with crime and could get a way better house somewhere else. Middle class jobs all disappeared from the area, families also left, the neighborhoods I lived in San Jose (rose garden/willow glen) had barely any kids for my daughter to play with as there were no families anymore, the rose garden neighborhood had 0 kids on the street, the willow glen neighborhood had 1 family w/ kids who moved away during the pandemic.
I was lucky and making really good money in tech but was devastated by how the area I grew up in had turned into a nightmare and everyone I know (even family) leaving the area. I too ended leaving as the cost vs. quality of life didn't make any sense and I couldn't see my family living in a place I didn't even recognize anymore. Most people don't talk about it but there is a huge diaspora of bay area residents due to the stuff mentioned above and it breaks my heart to think we will most likely never return and familiy/friends I expected to spend the rest of my life with all leaving.
Hard left politics would build housing or pass legislation/policies that encouraged it rather than preserve the wealth of already wealthy property owners through discouraging new building.
There is more to left politics or even sane politics than being socially very liberal.
Yeah this isn't rocket science. Saving every old home in the city is not a winning long term solution. We need more homes in these places people want to live.
That is an anecdotinal data point.. I live in a building with 6 units in the Mission district of SF. Until a few years ago my neighbours were people: families, (gay) couples,.. We now have 3 startups in our building. One of the startup (YC-backed!) moved out yesterday. The guys just threw what they didn't want into the street from the windows of their second floor apartment. And disappeared, leaving a filthy mess on the pavement.
I totally understand your pain in seeing your hometown turning into a hellish zone but I can't pass on calling the irony in your story since these same Cali exiles are one of the principal factors in pricing ordinary locals in Portugal out of their neighborhoods.
SOURCE
Welcome to Portugal, the new expat haven. Californians, please go home
The petty crimes are committed by a small but very vocal minority of homeless people who are severely mentally ill and/or severely addicted to meth/opiates. They can afford to live here because everyone has apparently decided the most humane thing to do is to look the other way while they struggle, freeze, and eventually overdose and die on the street.
The larger-scale thefts are committed by organized crime operations that essentially operate a business of stealing and reselling stuff because of notoriously lax law enforcement. Think the opening scene of Requiem for a Dream, except an entire crew doing that, over and over and over. They make a lot of money doing this -- and drive up the cost of basic essentials for other working class people who have to buy what they resell because they clear drugstores out. They make enough to live comfortably, despite the high cost of living, apparently.
and the only reason they could get a way better house somewhere else is bc their own home greatly appreciated in value... so let's not paint homeowners as victims here
The freeways make it easy to commute in and out for criminals.
My housemate's car was stolen about 15 years ago(!) and used for a bank robbery somewhere else on the peninsula (also close to a freeway) and abandoned in Oakland.
There's a regular sweep of my neighborhood on the peninsula for unlocked cars at night, they will take anything, and break into cars for visible bags. It's practically every third topic on Nextdoor.
I'm also from the bay area, and it's quite simple: demand skyrocketed due to tech, and supply couldn't keep up, due to various kinds of regulations.
Zoning is the most obvious regulation that makes things hard: most land is zoned exclusively for single family homes on large lots. There's been a bit of movement on this from the state level to allow ADU's or duplexes, but not enough, there's usually various legal hurdles that make it harder. Missing middle housing is mostly still illegal.
The other thing is all the various processes involved. CEQA makes things take a long time (not that I'm opposed to protecting the environment, but surely there's a way to do it that doesn't take years for an apartment complex). Community meetings and planning commissions can often block new developments for random, arbitrary reasons, like "tall building would cast too many shadows" or "demand on street parking would increase"; these are things that are so obviously inherent to any significant development permitted in areas where you can build taller apartment buildings, and yet they're still used to block more housing.
A lot of people moved into the bay area for the good jobs, nice weather and nature. Once housing demand pushed above supply, prices started shooting up. Those locals whose incomes didn't grow were pushed out of their homes. The bay area is boxed in by the hills so hard to expand out. Also a lot of the land was already build up with single family homes and other low density housing a long time ago so upgrading the density is harder. The public transportation is also limited. BART didn't expand to south bay until a few years ago. And the stations are far apart. Undoing all this mess will be much more expensive now.
Very difficult to change because, in the "Pax Neoliberalia" world we live in, profits are Sacrosanct - and the higher the capital concentration, the holier so.
But some straightforward fixes:
1. Flood the market with affordable state housing, Austria-style - with the bonus of building new, boosting the national economy.
2. Create very progressive (rapidly rising) taxes based on property value - making untenable the current practice of parking money and profit by simply buying & holding empty flats and the like.
3. Raise salaries - currently portuguese salaries, and their weight on GDP, rank the lowest in the EU.
(and no, it won't create an inflation spiral:
the current inflation spike is, first and foremost, the result of a supply shock, price-gouging and speculative/cartel practices - corporate profits being at a record high is proof of that)
Unfortunately, incentives are heavily stacked on leaving things as they are, as the ruling class is mostly made up of the landlord class, and, is not sensitive to (sometimes even not aware of) the struggles of assetless commoners that only earn income from their (low) salaried labor. Or, even worse, stands to lose their current large gains on capital/assets if this is fixed - and most portuguese media outlets trumpet their - private - master's voice and interests.
Additionally, just leaving things as they are, also scores brownie points with the EU by making the Government (even if "center-left") appear "frugal". And PM Costa has personal ambitions for future EU high office.
(...who will be the next head of the European Commission or the European Council?)
Inflation is not the result of profits, gouging, etc. It's the result of funding the deficit by running the printing press. (Or the modern equivalent, creating debt backed by nothing.)
The proof is the observation that endemic inflation only happens in countries with fiat money systems.
I'm not sure you deserve engaging, but I'll give it a try.
So you're just going to ignore a war involving two of the biggest exporters of some of the main raw materials we have (foodstuffs and energy) on the planet and associated supply problems on crucial things? Not to mention a pandemic that wrecked havoc on supply lines. None of that matters, your theory goes, it's purely a monetary phenomenon, because only countries with fiat money systems are impacted. Could you share some countries with alternative money systems that aren't impacted?
> Inflation is not the result of profits, gouging, etc.
Inflation is the measure of the price of goods
> It's the result of funding the deficit by running the printing press
Increasing the money supply indirectly increases the price of goods. It matters in the long run, but the price of goods can change in the short-term based on supply. The oil crisis of the 1970s caused oil prices to increase because oil supply was limited. This would have caused inflation even without an increased money supply.
> creating debt backed by nothing. ... fiat money systems.
This is more of a tangent, but the money supply can also shrink in fiat systems. Fiat currency can be shrunk via taxes. Debts can be defaulted. Fiat systems aren't inherently inflationary; but they target a low level of inflation because they prefer it to deflation.
> The proof is the observation that endemic inflation only happens in countries with fiat money systems.
More generally anything that increases the money supply. Non-fiat monetary systems have suffered from inflation due to debasement of the currency or an influx of precious metals use to create coins (e.g. when gold from the new world flooded the Spanish economy).
How do you justify the current record corporate profits?
Also, Quantitative Easing was literally printing money and yet EU rates (inflation & sovereign debt interest) remained low, many times negative - with some EU countries observing actual deflation.
Only when the supply shock did happen (Covid & Ukraine), rates started to increase. And only after that, price gouging practices started by riding the supply shock public perception - resulting in said record corporate profits.
If there was inflation caused by excess money, how could corporate profits be at record highs?
This has pretty much already been done in Vancouver, which has layers of Foreign Buyer Taxes, Speculation Taxes, Empty Home Taxes and strict Airbnb regulation.
It absolutely did not make the problem go 'poof.'
All these things were well worth doing and helped in various ways, but it remains that the core underlying problem is that there's not enough homes for everyone and scarcity ensures high rents and high prices. The dull solution is that a hell of a lot of homes need to be built.
1. "banning foreign ownership" would result in Portugalexit at best, perhaps a Zairization of Portugal, or even worse - no thanks.
What's wrong with large industrial projects?
It's exactly what we need at this moment - in fact, both Portugal and EU-scale.
This would cost a small fraction of the Quantitative Easing program from the European Central Bank.
(and these Massive Real Estate buildouts must include the lessons in Urbanism learned from past such projects)
2. (y)
3. State sector raises salaries, private sector is forced to follow.
Just raising minimum wage is positive, but not enough. This tends to compress people to the bottom salary tier and promote even more brain drain.
I haven't seen number 1 actually "fix" Vienna's rental market? I mean it's not as crazy as other places, but I moved to Vienna in 2005 (since moved out) and it used to be a lot more affordable to rent in than today (even adjusting for inflation). So it's not that it's completely ineffective but it's not on it's own enough.
When people suggest that adding more new housing, either public or private, doesn't work, this is usually left out: how much housing actually was being added?
Yes I’m sure inflation has everything to do with price gouging and nothing to do with the trillions of dollars printed by the Fed. Because of course, money printer go brrr with no repercussions right?
Looking at Switzerland, which printed a lot of money in the past years but still has low inflation and had mostly deflation over the same period, there isn't a simple connection between money supply and inflation.
I hope Portugal won't tackle it like my country, with a cap on rent and other market distortions. I think that only makes it worse.
Fun fact: I - as a single - live in a way too big, luxurious and expensive apartment because of this. I rented it, when I was still working for the man and was making a killing. Now I live a much more modest 4-hour-workweek life. It would be better for me to move to an apartment half the size. Then a big family could live here nicely. But no way. No landlord in Germany rents to a freelancer who enjoys a "I'm mainly slacking off for a while" lifestyle.
Heavily taxing houses that stay empty and limiting short duration rental could be quite effective.
The issue is somewhat the same in Paris. It’s very hard to afford living there because non local use properties as an investment and prefer them staying empty than risking them degraded and people who want to rent make more money on Airbnb.
It’s fine if you want the city to become Disneyland but very depressing otherwise.
This issue of speculation on empty properties would be, if not solved, then at least immensely alleviated with a Georgist LVT (Land Value Tax), a tax on properties equal to the rent for the undeveloped piece of land.
It's easy to implement, the market exists to price that amount, and provides a direct incentive to either put the property to productive use or get rid of it.
Building physical houses to sit empty as a financial instrument has to be one of the peaks of capitalist insanity.
> I hope Portugal won't tackle it like my country, with a cap on rent and other market distortions. I think that only makes it worse.
That's one of the reasons why portuguese renting market is so bad. There were rent control policies for like 40 years. It has been phased out but the market still has the signs of its damages.
There also other contributing policies and the policies change almost every two years.
I'm one that could invest in the market, to bring more houses to be rent, but I can not risk 150 000 euros buying a house to rent (middle income market) and then having problems evicting with a non-paying renter, being forbidden to increase the rent due a new law or god help me if I need to use the court system to ask for renter damages.
So either we preference your 150000 euros (and of course interest and margin on top) or someone having a roof over their head, running water, and even the ability to stay in the same are and building community instead of moving each year due to capital seeking max gains.
The fact that you can’t evict people at will and that you have to go through courts to seek damages (rather than robbing your tenant’s bank account), is a feature not a bug.
I don't think Germany is a great example at all cause they would rather rent out to a good German girl who's dad has money than to a foreign professional who has a longterm work contract in Germany. I agree that the annoying lifestyle expats are a problem, but bringing up something completely unrelated with a whole host of its own issues is a really weird way to make a point.
Lack of building when the population is still growing.
Encouraging single lifestyle, both by kicking out kids early and shacking up later.
Cases where sitting on an empty property is risk free.
Infrastructure increases taking valuable space.
Giving early birds great deals compared to today, making them sit on huge housing for a pittance and making moving out a terrible deal.
And politically, there simply is no immediate incentive to solve things when the current population of homeowners does not contain enough people to vote in favor of those that don't own homes.
There are other ways to be stuck, I'm in subsidized housing which I would like to give to the less fortunate but buying is impossible and leaving would mean half the space and four times the rent making me have less remaining per month than the less fortunate in my current appartment.
Large amounts of public-built housing (and I mean large, in the order of at least ~20% of the market) have a track record of working amazingly well to lower the cost of housing to acceptable levels and to give everyone a chance at homeownership.
Similar in Vancouver. If you've been renting for 7+ years, you won't move even if the place doesn't fit you anymore. You would be paying close to double.
Isn't it more accurate to say the Portuguese can no longer afford to live in Lisbon(or Porto, or some other desirable city)?
If you have a city with X housing units, but 5X people from within the city + all over the country/world want to live there, and for whatever reason no one wants to/can build 4X more housing units, how do you fairly determine who gets to live there and who doesn't?
* Is it fair if you were born in Lisbon you get to keep living in Lisbon?
* Is it fair if people early in their career get to live in Lisbon because it will advance their career much more than if they lived in the countryside?
* Is it fair if a rich person gets to live there because they can pay a lot of money to do so?
Whatever policy is in place, it will be deciding the winners and the losers, or the people who get to live in Lisbon and those who don't.
Using a word as subjective as "fair" allows for people to propose solutions you don't agree with, but that they think are fair.
The author of the article says:
> Digital nomads, retired foreigners, and millionaires searching for Gold visas are pushing the Portuguese to another place.
> Is this really that fair?
We are obviously supposed to say "no", but I think the answer is yes. I really hate this form of argument by rhetorical question that only works if you _already_ agree with the author, if my answers are different the whole article just doesn't work.
It's hard to empathize with a belief system that thinks pricing a native population out of their own country is fair. I suppose if you hold that everything should be subordinate to economics, including community and nationhood?
> If you have a city with X housing units, but 5X people from within the city + all over the country/world want to live there, and for whatever reason no one wants to/can build 4X more housing units, how do you fairly determine who gets to live there and who doesn't?
The phenomena that honestly pisses me off, is that all of these countries touting their immigration policies are lying to immigrants. They're selling them on a quality of life that existed 20 years ago and is no longer possible even to the people who have lived there all their lives.
It's absolutely fraudulent and exploitative behaviour by this countries.
For an immigrant from eastern europe, yes, Lisbon is not the great place it was 20 years ago.
But for an immigrant from US/Canada, Germany, UK, or whatever rich country. Yes, it's a great place to go to. A high rent in Lisbon is nothing to them, and the rest (utilities, restaurants, commerce) is still pretty cheap.
Good weather, good food, cheap lifestyle is quite attainable... just not for everyone.
> how do you fairly determine who gets to live there and who doesn't?
Well, we live in a democracy here, and so we vote.
Our government announced their intention to ban residential investments in Porto, Lisboa, and the Algarve for the golden visa, and adjustments to the taxes for long-term v. short-term letting that went into effect this year.
It will take time to see if it is actually fair or not, but the cool thing about democracy is we can always vote again in the future!
Too bad for people "all over the world that want to live in it" when said country has sovereignty and can vote to prevent locals to be displaced by them. People of each country decide what is fair or not, not people outside of it.
Is it fair that someone, by sheer accident, was born in SF, is SWE and now wants to take advantage of that stupidly high income and dislodge people who have lived their whole lives in a certain place? Probably worked much harder and for longer? Where all their family and friends live and always lived for more than a century? Their culture and life? You seem to forget Portugal is not the US. They have more than 3 times your history and with it each place has a markedly different personality and much deeper roots not only culturally but also relationally.
Maybe you're used to a capitalistic emotionless everything-is-replaceable view and that in life all is fair and square, the ends justify the means, but perhaps you should rethink it.
Central city locations in Lisbon and Porto have exploded in price, but this is due to AirBnB rather than rich expats. Portugal's tourism industry has boomed, which has put money in a lot of people's pockets, but has distorted local economies somewhat. Better management is required, for example cracking down on AirBnB and NOT building that new cruise liner terminal.
Unfortunately the upper middle class idyll (alluded to in the article) of living a dilapidated (but in a cool way) apartment ten paces from your favourite coffee shop, while doing a socially respectable play job is now no more viable here than in SF, London or Berlin. Indeed, my own favourite 'coffee shop' got turned into a chain tequila bar.
Outside the hot centres, things aren't as bad. Public transport (at least in the AML - Lisbon Metropolitan Area) is excellent by any standard, and decent apartments are available for sensible prices well within one hour public transport commute of the downtown. Compare with London, where people are fighting over each rental.
> family factor weighs a lot here
Yes, and this is a problem, given that Portugal only became democratic 48 years ago and has a large amount of cultural baggage from quite frankly medieval times. Also, the implication of this statement is that family doesn't count elsewhere - and in case you missed it it was spelled out a few lines later, which should give you an idea of the residual naivety and insularity of (old) Portuguese culture. Agency - the idea that you can do or think something independently, and then take responsibility for it - is somewhat lacking too.
But! There is much that is very good about Portugal and the Portuguese people, I feel that here it is ok to be kind to each other. Furthermore, there are good changes, new opportunities are arising (perhaps in a very small part to some of the more productive visa holders), and I see a great future for Portugal - even if many Portuguese often don't.
(Calling yourself a "refugee" as a rich immigrant is a bit off-puting, imho)
Why do you say that the rise in housing prices has been due to AirBnB but not to rich immigrants? It seems a bit odd. Both can outbid the average native and just push prices high. Many rich immigrants also buy up loads of property for speculative/investment purposes, not just to live in.
>has a large amount of cultural baggage from quite frankly medieval times
We lived in Lisbon for a year. While lots of city centers have had housing converted to Short-term Rentals, Lisbon is at an entirely different level. There, entire apartment buildings (6-10 units) are converted to Airbnbs/hotels/hostels. There are streets in the more touristy areas where every other building is for STRs (buildings that were clearly built as long-term housing).
not the op.
agree that op is not refugee fleeing war on inflatable boat.
I distilled "lack of agency" as: not rewarding initiative, people afraid to take initiative. the portuguese boss does not like the employee to take initiative, and the employee will not do so.
copying existing British designs is "safer" socially speaking, than making new designs.
source: I'm portuguese, I'm a weirdo and people always try to conform me to a box.
>>has a large amount of cultural baggage from quite frankly medieval times
>I wonder what exactly you mean by this.
I was at a festival last night - the screens by the stage were playing ads in between the acts (that itself is a topic for another day!).
After a cringe-worthy advert for the UK (that I didn't even recognise it was so far fetched), there then appeared a public information message in Portuguese. It said (and I do my best to translate):
"What is the place for a women?"
(pause)
"Wherever she wants it to be"
Full credit to them for trying to drag themselves into the 21st century, having mostly avoided the 20th - you can see what I'm getting at.
There is such a thing as a rich refugee. People in the mining business, when a country goes supercritical (more than Brexit, like Cuba) their bright career prospects decouple from their prospects politically, so confiscation is on the table even if "they were cool" because eg the Cuban Revolution needed money and now everyone is meant to have the same amount of sustenance anyway. New definition of what's fair. They operate under more recent definition, I would say every single person has a different definition of fairness.
Incompatible definitions of fairness. They have in practice a much higher metabolism requiring more pure ingredients, from better sources, it's medically harmful to cut them off like instantly. Although at the same time they contribute to both the problem and solution, like it depends. Turns out very rough to adapt to on short notice, flat-out can't in many cases, and for sure you can't send your kid to any random Cuban school with kids on the other side of a former class divide, from one day to the next? Like how are you going to tell that kid? Just gotta be "really cool", in the "they was cool", sense, and some kids make it and others can't, wretched childhood. Although at the same time Fidel Castro, biographically, grew up among blacks because his father didn't recognize him fully, not even a second son, so he knew it could be done and there was the will that it happen.
And people will price discriminate against that kid forever, never accept he's no longer rich unless he's filthy in rags...that's a rough sketch of it. Misery all of a sudden, and metabolically difficult, like it's not just 2000 calories here's some water with fluoride for your teeth boom done. It wouldn't take your body 24 hours a day if it took a single sentence to summarize like I just did. Water alone, Americans aren't supposed to drink Chilean water or they get diarrhea like automatically, it could be anything, selenium plus manganese in the water table, natural salts (as opposed to NaF) that are systematically removed in America. It's along the same lines as toothpastes in Chile having over 6x the sodium flouride of American toothpastes. Like literally you couldn't buy those same toothpastes in America without a dentist's prescription, I innocently told them 5000 ppm pharmacist looked at me said "No that you need a prescription" like it was opioid that kind of reaction. I was actually prescribed toothpaste weaker than the only strength toothpaste Walmart sells in Chile, it's all 1650, like eating the color white, kids hate it because it's good to hate it because it's bad for you. Counterproductive, makes people become busted and scream at their kids, everyone in the family going to the Walmart to buy cookies. Makes you crave. Gives you ADD, I actually--it turns out--don't have any symptoms of ADD--and I generally have literally every single one and nothing else--when I cut fluoride out of my life. Drank from a well. I actually paid attention, as a verb, for once in my life. Like a colorblind guy seeing blue for the first time. So weird, now I know what people are talking about.
So if you don't want F poisoning, which is exactly what the fuck that's all about for political reasons, there it is again, didn't want this country to turn into another Cuba, Socialist Sandwich as Nixon put it, you flourinate really hard. Breakfast lunch and dinner, inescapable, it's a super expensive subsidy but it's not for your teeth, it's for your brain, it is incapacitating so you don't eg sue or protest. If you know the way around here in Santiago, you'll figure out you have to pay triple at a homeopathic store, the pharmacies don't carry any toothpaste that doesn't F you 1650 ppm. Either you go way out of your way or go without toothpaste, which is a thing for instance in Cuba. Everyone has a hard time adapting to that.
So that's an example of adapting, and it can take decades. And it's expensive to adapt, hard-learned lessons like flunking courses at Stanford in my case because I was consenting to absurd doses of fluorine, not knowing the harm. Not one ADD doctor brought it up, like they have them on a gag order, it's the most obvious shit nobody had ADD in the 50's and then you F'ed up the water and now everyone has to see a shrink, 2 + 2 equals what?
So the wealth and political status decouple, and they benefited when times were good, and then...well they get a new citizenship somewhere else and adapt to that, not Cuba but maybe 60's Brazil, learn the language which is work, learn the laws under which they must now live, and relearn the balance of power what the traps are what the actual opportunities are...and be a survivor, there are people left behind that couldn't get out, not savvy enough, bad airport game missed the last flight, and yeah they have money but they get charged much more for everything. Like the parent poster. Price discrimination evens things out in the end. That's what you replied to.
Dude a raft is not what determines refugee status, it doesn't have to be a giant pornographic Hollywoodesque stereotype of all the tropes of taking refuge--which is what the word means--to qualify in my book. Being hated is enough.
Others have said it before, but mass tourism is the new Dutch disease [1]. Pure tourist cities like Venice are already too affected by it to have a chance of getting back to a normal economic and social life, but there are other cities that are still trying to fight it, like Barcelona. Not sure if there are any political forces in Lisbon or Porto ready to take the same stance.
Yes exactly this. And like other resource extraction industries, tourism does not provide many high skilled jobs and is not supportive of a growing and successful middle class, favouring wealth holders over wealth creators.
Rich expats too, who are you trying to fool. Can rich expats outbid the average Portuguese? If the answer is yes, then there's not much discussion to have.
Portuguese living in Lisbon here -- I deeply agree with the parent comment. Prior to covid, it was very common to hear stories where families were to put all their savings into new mortgages to buy more AirBnBs.
I also see a bright future in Portugal. Many young people that moved out after university want to come back, after making a killing in their career. They might earn less with the move, but you don't need a six digit salary to live very comfortably here.
I do think that a state should exist primarily for the benefit of its citizens but this view had long been decried xenophobic at best.
However, you can't have it both ways. If
> countless stories of flats left uninhabited by some rich person who arrived at the building, bought two flats so that he could get a visa, and doesn’t even live there
then clearly not
> wealthy foreigners from all over the world, to whom we offer a paradise where they enjoy the same services but where they don’t pay or pay less tax than the general population
Yeah, the article wants to argue both sides of every issue.
However,
> countless stories of flats left uninhabited by some rich person who arrived at the building, bought two flats so that he could get a visa, and doesn’t even live there
So, the way it works is, as a golden visa applicant, you have to spend 7 days in the first year. The next 2 years, a combined 15 days (which can be spread whichever way you like). Subsequent renewals are different (21 days / 3 years). You can already live there when you apply, but you are not _required_ to.
You have to maintain your investment for at least 5 years (or until you become a permanent resident) and renew the golden visa twice. Then you can apply for permanent residency (or citizenship if you qualify), if you want to.
It's entirely conceivable that people would buy property and only vacation there. Which, if we are honest, is not a problem, given that large cities are excluded from the program. And cheaper housing does not qualify, either. So you would be taking property that's pretty expensive already (€500,000, €400,000 for low density areas) - OR requires the property to be older than 30 years old, and a minimum of €350,000 (or €280,000 in low density areas).
1) The investment doesn't need to be in a single property; you could buy up multiple smaller properties that sum to the amount you need, and rent them out or leave them empty.
2) There are also hotel investment options rather than buying up existing real estate, and those are still available in the big cities as they are considered 'commercial'
No mention of the vast holdings the church or bombeiros have in Lisbon and the insane amount of empty un-renovated buildings that are essentially just place-holders until the right CML-connected developers show-up with lots of money?
The main problem in Portugal is a lack of wealth generation more than Housing.
It doesn't matter if rents are curbed under 1k a month. The median under 25 earns less than 700 euros a month.
I talk to people in Portugal and I hear more or less the same salary discussions and ranges for more than 20 years. It is a stagnant labour market for literally +20 years! When adjusted to inflation it becomes even more ludicrous.
The iron curtain countries in the Baltic as well as Slovenia and Czechia, have all surpassed Portugal in wage growth. That should give anyone reason to pause.
Portugal has a few succesful SMEs, a wine industry, a cork industry, some textiles and not much more to show.
The Portuguese economy is mostly services which are circular not actualy exported and the obvious exported component which is Tourism.
The majority of Portugal's EU Cohesion Funds were sunk on motorways. The country has suffered from lack of strategy in both Government and Industry since the 80's.
There is only so much we can keep blaming on the dictatorship regime of Salazar 50 years ago. At some point politicians and business owners/investors need to take ownership of their fuck ups.
Absolutely, and low wage growth is endemic in Portugal due to cultural factors - business owners are famously greedy, small-minded, and given to mistreat workers, including by paying them miserably.
Tech businesses thankfully have been leading the way, aware that intrinsically remoteable work means they're competing with foreign capital for workers, but the situation is nowhere near where it needs to be (higher wages across ~more~ all trades and industries).
Readit News
Quite honestly, apart from the generally increasing gap between rich and the poor, one big problem in societies nowadays is that you can simply get richer and richer just from owning property. For example, if you own three ordinary apartments in Lisbon, you can live in one of them and easily make a good living by renting out the other two as holiday apartments. Because cleaning services, guys who do repairs, etc., are cheap in Portugal, this involves almost no work. Moreover, the net worth of your property will continually increase while you do (almost) nothing. I'm not saying I blame these people, I would do the same if I had the opportunity, but this is a huge structural problem in my opinion.
If you are becoming a tourist hub, then create an off-town tourist area and add a convenient transit line/people mover to the central parts of town. Tourists get reasonable housing, locals don't get displaced and the influx of population does not destroy the cultural vibe of your town.
Prohibition never works, and piracy is a reflection of an unmet need. Banning things merely airs out open wounds, and leads to grey-markets such as shady uber/airbnb equivalents within the city. If you want to reduce abortions, banning merely leads to riskier abortions. Examples of this are dime a dozen.
When demand arrives, the cities MUST adjust to incoming demand. Couple examples of working uncomfortable compromises are: 1. Paris - Choose a small district and allow it to go full skyscraper. The rest of the town maintains its architectural identity. 2. Barcelona - Go full superblock. Means that tourist activity gets neatly distributed across the city (removing bottlenecks) and tourists do not lead to increase in car traffic.
I could go on and on, but 1 fundamental truth stays. Bottlenecks only help those who control access to it. The key is to eliminate the bottleneck (more housing). Band-aids (rent-control) or equitable distribution of bottleneck gains (no-renters->only-homeowners/ more single-family-housing) never works. It only leads to the situation festering (see Bay Area / SF), and makes for an even harder problem in the future.
I'm not sure if my comment conveys any cohesive point, but I hope folks get something out of it.
p.s: fuck NIMBYs
This famous article discusses why housing is becoming a huge problem everywhere and why that's super bad for the economy: https://www.worksinprogress.co/issue/the-housing-theory-of-e.... It's been discussed here a few times, e.g.: https://news.ycombinator.com/item?id=28531025.
The compromise Barcelona made is not enough. Sadly, that beautiful city is IMHO the prototypical case of getting ruined by too much tourism.
In their defense, I think it's safe to state all mid-to-large cities in EU are quite crowded and unaffordable. For example, Copenhagen used to be a place where citizens enjoyed great purchasing power. Despite rent control and sale taxes, a single person in a well-paying job can hardly afford a mortgage for a decent flat right now. The same can be said of Munich, Madrid, London and many, many other places.
Or would you propose strict accompanying zoning laws with strict enforcement? I think that would meet stiff resistance from property owners but would be feasible. I do think all of this would make the destination much less attractive to visit though so it really comes down to how much you want/need the tourists.
What do you mean by "works"? Yes, grey markets will pop up, but if Portugal banned AirBnB style renting that the market for that housing wouldn't shrink?
It seems to me that prohibition might be a useful tool in a more comprehensive set of policies to address the problem.
Hotels are usually limited because they are unpleasant neighbors for actual residents. It’s not really a surprise that’s the main issue people have with AirBnB rentals.
If you just add housing, isn't it possible that the effect is like adding roads to prevent traffic congestion? The number of people coming in just increases even more until the marginal attractiveness is the same. From the point of view of locals this means that there are even more outsiders, and the affordability is just as bad.
The exact same concepts: cheap grandfathered lease, hoping the landlord doesn’t cancel, can’t afford rent despite making >100k, “luxury apartments”, empty apartments, illegal renting (e.g. AirBnB) and shadiness.
We are currently in the "denial" phase. We can't get to "acceptance" fast enough.
Or to put it in reverse - I am not aware of any metropolis/capital where this isn't true, regardless of regime.
Portugal should build more housing, which is a simple, effective solution if the rent is too damn high: https://www.theatlantic.com/business/archive/2012/03/the-ren....
The nice thing about indoor space is that we can make pretty much as much of it as we'd like.
"I'd do anything for lower housing prices!"
Build more housing.
"...but I won't do that."
What? Have you ever been in Lisbon? The city is pretty dense as it is. You could mostly just build higher, and that has its limits too, depending on the structure and foundation.
Adding more housing outside the core of the city might not be attractive enough. And increasing the density of people also means you need to increase the density of services (public and private) and utilities, which also comes with its own problem.
This is just the dark side of globalism cheered by Portuguese politics for decades. Competition is global now. Local middle class is having their lunch eaten by foreign rich people or even middle classes from wealthier countries while the unrestricted influx of emmigrants from poorer countries keep sallaries down.
Suck it up and enjoy.
It might be the _right_ solution, but if it failed to be adopted for so long it can't be that simple, isn't it ?
Or if they're crazy enough to want to keep these old buildings they could just build all the skycrapers in the park surrounding peak Monsanto, easy.
/s
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If you want to decrease unemployment, you add tariffs for imports enabling more businesses to open domestically (i.e. tariffs effectively increase import costs).
Similarly, you can loosen building codes to increase production of homes, limit visa duration, require citizenship for home ownership, etc. Those are some obvious fixes, why is the government not doing it?
Beyond the obvious potential fixes, all EU countries are facing the same issue:
- supporting immigrants (high level of immigration)
- no controls over ones border(s) (anyone can move between EU countries)
- over regulation and too many social programs (reducing peoples willingness to work & increasing burden on the current tax base)
- over regulation of industry and farming has left the only option to survive being to work in a city (as an example, see nitrogen reduction regulations in the Netherlands)
It's all "give-and-take" you have to decide how you want to live... To me it sounds like the EU is hitting a critical state, but is there a will to make the tough calls yet?
* depends on how you define "high" levels of migration, but few EU countries fit that. Portugal does, because they explicitly encourage it. Why? Nothing to do with the EU, they're trying to fight negative population growth.
* social programs aren't an EU thing, they're purely local. And the "too much social spending makes people not want to work" ia such bullshit.
* there are more local regulations than EU regulations. Which ones specifically are you referring to as too much?
* farming is explicitly subsidised to make it profitable. What are you talking about?
* not everyone can move between EU countries, you need to be a citizen. Like the Portuguese that have moved all around (e.g. there are probably millions of people of Portuguese descent in France)
It's annoying how popular empty nationalistic populists have gotten. Can't nobody bother to fact check their bullshit?
alot of these things used to be regulated, discouraged or prohibited, but with deregulation of much of finance more and more wealth is generated from speculation, rents and leverage... if people can make money passively from doing nothing but owning something (real or virtual) there is less motivation for "real productive work" and squeezes out the rest of the economy.
this compounds over time and get the results you see today: high land costs, rents, inflation etc.
blocking immigration or adding tariffs etc will do nothing to stop any that....
> If you want to decrease unemployment, you add tariffs for imports enabling more businesses to open domestically (i.e. tariffs effectively increase import costs).
Unless your domestic business requires imported goods to run its business. Then you've just increased costs for your domestic industry.
Portugal eases visa rules to tackle labour shortage
https://www.swissinfo.ch/eng/portugal-eases-visa-rules-to-ta...
> "Portugal's unemployment rate is at 5.7%, near a record low.
Employers' confederations have been asking for the immigration rules to be streamlined, pointing to an economic situation close to full employment"
The narrative of unemployment in Portugal driving dissatisfaction across the population is very tenuous in light of these latest developments and policies
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This is very simplistic. You first start building local expertise/domestic businesses and then increase tariffs to wean off imports. Don't put the cart before the horse.
Portugal used to even have a negative net migration rate and suffers a labor shortage. Right now, the net migration rate is positive and low at around 0.5. That's a good trend, but there is still too much emigration of skilled Portuguese people due to weak economy and structural problems.
The problem is not immigration, the problem is that wealth is distributed very unevenly. Average salaries are low in Portugal, many people have to do with very low salaries and few people in Lisbon and Porto make a lot of money. Although it luckily went down from nearly 0.4, the Gini index in Portugal is still relatively high for a Western European country at 0.33. This wealth disparity in combination with laws and politics that favor landlords, property speculation, and building hotels instead of apartment buildings lead to the housing crisis.
We should vastly reduce cattle numbers globally actually.
I have to call Grade-A bullshit on your comment.
At best, nationalist political movements take advantage of sticking points with their highly opportunistic, ideologically incoherent and empty promises hoping to buy arguments while pinning the blame of everything on whoever is the incumbent at the time.
That this doesn't happen, could be because there is a lack of capital, but to me the actual problem seems to be over-regulation and especially an over protection of tenants. If, as the article states, foreigners buy multiple apartments, and then let them sit empty, it's because they are afraid of renting them out. Especially with elderly tenants, you can't increase the rent, and you can't terminate the contract. Once you start looking around for a house to buy, you'll almost certainly bump into some homes costing only a tenth of similar houses in the neighborhood, and any Portuguese knows what that means: there is an elderly tenant, paying only 20 euros of rent per month, and your only hope of ever getting them to leave, is wait till they pass away (and even then, their children might try to continue the lease at the same conditions).
> I live in Lisbon as a foreigner for more than 12 years now. We pay a rent for a small flat that used to be very expensive … Rents in the city have skyrocketed, we'd have a hard time finding anything
I know this comment won’t be received well, but aren’t you describing gentrification & how you participated (maybe unknowingly) in what has caused prices to skyrocket. And you’re now complaining because someone even more rich than you has caused prices to exceed your means, just like you did to a local person when you moved in as a foreigner.
People move around. Some cities grow, others shrink. New jobs get created, old jobs disappear. Some housing gets more expensive, some housing gets cheaper. Some cities get wealthier, others get poorer.
We'd still be living in caves if our goal was to forever keep all cities and towns the exact same way they've always been. Which is basically the goal when people criticize "gentrification".
What’s propping all of these property prices up? Supply and demand rules don’t seem to apply at all. You might have thousands of empty apartments in a city yet the price only keeps going up.
Everything is broken, but housing is particularly broken.
Money printing, first and foremost
Smaller cities and towns are cheap. I've seen government auctions selling apartments for under €5000 which nobody wants. Why? Because people are moving to larger cities. People want opportunities, and the idea of working in some chicken factory (which may have been a perfectly respected career for our parents) is not appealing for the current generation. And the problem in these small towns, is the chicken factory is really the only career prospect you have, so people move elsewhere.
Of course there are rich foreigners buying apartments as investments and renting them on Airbnb, but that's a very small percentage of the housing market. And even if they rented them normally, they'd still be asking for prices that are unaffordable for the average person. I know that because that was me, I emigrated here and bought a luxury apartment and lived in it for 7 years (paying taxes) and now want to rent it out as I moved outside the city.
Unless I rent or sell it for much lower than the market rate, even on the lower end it's still too expensive for the average person. If I sell it, it's probably just going to be poached by someone who will use it as an investment and put it on Airbnb.
My city is building a lot of new developments, but space is limited as young people want to live close to the city center, not somewhere 30 minutes drive away. That is driving up the average price, so you end up with studio apartments costing upwards of €4000/m2, which you need to earn at least €2500/mo to afford, which is well above the average salary. With rising inflation the problem isn't so much people can't afford the mortgage payments (which are slightly lower than renting), but they can't afford to save the 15% needed for a deposit.
https://www.architectmagazine.com/practice/how-to-fight-weal...
I firmly believe that most investors are chasing capital gains as yields at current prices (even with extortionate rents) are mostly a joke. It's bad enough that some speculators don't even bother renting out their property.
A widespread residential property market crash would be painful but looks like the most likely outcome and solution. I'm hopeful that as interest rates rise capital gains will diminish, disappear, or even go backwards. Indications are that this is already underway in many places.
>even here in Cascais you see lots of unbuilt land
We have no intention of becoming a concrete jungle.
>Their job protection mentality needs to change towards a more dynamic job creation mentality
No thank you, please just keep your opinions to yourself, and honestly find somewhere else to go.
>low crime
Wrong, there's more and more crime, specially in Lisbon, Cascais, Sintra, and it's increasing in Porto and Braga too.
Specially on neighboorhoods with lots of "youngsters".
I don't think talent is moving in - at least in tech, there are lots of foreign companies opening offices and hiring local talent.
And for number two, it seems you're part of the problem the article mentions. You comain about how long it takes to work in a property you're INVESTINF in - but Portuguese people are struggling to afford property to LIVE in. That's the crisis, rich people investing in property makes it more expensive for poor people to own it.
I lived in Lisbon for a while. After expenses and a bedroom rent, my whole salary was spent, for a bedroom in a apartment shared with 3 other people. Many of my work colleagues lived in the peripheries and took more than 45 minutes to get to work, or more than 1.5 hours of daily commute. That's what the majority of Lisboets are being forced to, such that tourists and investors can have their happy lives.
This type of investment is causing lots of problems, and society should prioritize housing as a place to live in, not as a business to invest in. There are lots of other ventures for investors that don't ruin people's lives.
You'd feel at home in LA.
I've seen this trend here for at least a decade now. I know some people who say that the construction of these luxury apartments is a sign that the economy is recovering, but I remain skeptical. These places are the least lived-in looking apartment complexes I've ever seen in my life. There's one down the street from where I live that was completed around 5 years ago, and I would bet good money that most of it is vacant. I rarely see people going to and from it, besides the occasional few who visit the burger bar right in front of it. Too many of the balconies look sterile.
I don't know why so many of these are being built outside of LA proper, but I have a theory for why there are these massive complexes being built; the rich have spoiled children they no longer want to deal with so mommy and daddy pay for these apartments to house them. I used to deliver food to these places and, without fail, I was delivering to men and women who appeared way too young to afford such places.
This actually makes sense in terms of supply and demand but more interestingly it's because people tend to "upgrade" when they move this then frees up space at the lower end of the market.
Same idea as buying a car - most people won't buy brand new because of the cost.
If this was true, everyone would buy REITs until it wasn't
A planet full of empty "luxury apartments" and most of us homeless?
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I'm a bit conflicted on this. I definitely see what you're saying (and often repeat it myself).
But it should be noted: property is simply an asset like any other. If there's easy and outsized returns to be had, the demand for this asset would increase, pushing up the price to the point that the returns on the asset are in line with returns of other assets which have similar risk/effort profiles.
To say that one can make money 'doing nothing' owning any asset (that has a positive return) is true. But that's not per se some kind of economic or political problem, it's a normal feature.
Of course to absolutely do nothing and still earn enough to live off of, means you must have earned enough money to purchase a large amount of assets. Supposing rental income of 5%, and supposing rent is 25% of someone's wages, and supposing a 20% tax rate on your returns, you'd essentially need to purchase assets worth 100 times what someone spends on rent.
(ex: if you need 40k to live on, spend 25% or 10k on rent, you'd need 100x that or 1 million returning a 5% return that's taxed 20%, leaving 40k in net income.)
Amassing 100x your rent is no easy feat, and in fact it means that someway, somehow, you've provided 100x your rent in value, without spending a penny of it, and saved it all, then poured it into an asset (incurring risk and requiring some level of commercial effort), and then, yes, you could start to approach doing 'nothing'.
For many that's a life's worth of work. Buying such assets is really no different from putting in an equivalent amount of money into a retirement fund, and that fund in turn buying assets like companies. Whether it's companies that buy and rent out cars, or real estate, or produce and sell, the people owning these enterprises through their retirement fund are 'doing nothing' while others are working.
But the important part to note is that anyone has access to this system. Every person can, proportionate to their income (based on their economic value to society) buy assets.
In fact, I'm able with a click of the button not to just buy a part of a in Portugal, but rather the biggest and most successful company on the planet: Apple. I can buy a small part in it, and profit when many of the planet's smartest and most educated people build & sell some of the most cutting edge consumer technology day in day out. Whilst doing: nothing.
So I don't really see a structural problem with this system. What is problematic is the stuff around it. For example, in some countries real estate goes untaxed and is subsidised, and is bailed out when things go bad. Subsidised private profits, and socialised public losses. It's unfair and a failure of markets and governance. Another example is that swathes of people indeed inherit value to the point they've never done any contribution to the world to get into a position to 'do nothing', rather than work to retire off of the fruits of their labour, they could in effect retire from work before ever even starting. This is where the system breaks down and must be balanced, again by e.g. taxing inheritance and balancing things out.
Finally, markets work when price & profit signals can balance supply & demand. If there is a shortage of bread, demand outpaces supply, the price rises, and overnight new bakeries will pop up bringing down the price. In real estate high prices often do not trigger new supply in many countries, either due to geographical limitations (e.g. the mountains of Taiwan limiting buildable space, or simply the fact physically there is a limited area we consider to be 'downtown new york' for example), but more often due to political limitations (NIMBYism). Because in real estate markets in many areas do not naturally solve the problem, government intervention is needed to ensure more equitable and fair outcomes moreso than in other types of markets. Again here I see a role for stronger taxation on outsized profits and some income support for groups otherwised pushed out of neighbourhoods.
> So I don't really see a structural problem with this system.
This is the disconnect. Residential real estate is fundamentally different than owning stock, in that people need a place to live and building residential construction is much more difficult than issuing stock. When wealthy people from abroad buy multiple apartment buildings in desirable cities, and then proceed to keep living elsewhere (probably in a different residence in another desirable city) they create a problem that in no way resembles the result of buying stock in a company.
Progressively tax the shit out of each subsequent property owned. Prevent foreign/corporate ownership of property outside of short stay, hotel/motel type accommodation.
Make shelter an extremely unattractive asset to own.
Unfortunately, many politicians across the world are also landlords.
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Why not
I was lucky and making really good money in tech but was devastated by how the area I grew up in had turned into a nightmare and everyone I know (even family) leaving the area. I too ended leaving as the cost vs. quality of life didn't make any sense and I couldn't see my family living in a place I didn't even recognize anymore. Most people don't talk about it but there is a huge diaspora of bay area residents due to the stuff mentioned above and it breaks my heart to think we will most likely never return and familiy/friends I expected to spend the rest of my life with all leaving.
There is more to left politics or even sane politics than being socially very liberal.
SOURCE
Welcome to Portugal, the new expat haven. Californians, please go home
https://www.latimes.com/world-nation/story/2022-05-12/califo...
Austin? Ok, sure. How many Californians are expatriating to Lisbon? Is it that many? Ok, let's do Londoners next.
A lot more right?
Principal factors, you say. Let's see it.
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How do the criminals afford to live in the area?
The petty crimes are committed by a small but very vocal minority of homeless people who are severely mentally ill and/or severely addicted to meth/opiates. They can afford to live here because everyone has apparently decided the most humane thing to do is to look the other way while they struggle, freeze, and eventually overdose and die on the street.
The larger-scale thefts are committed by organized crime operations that essentially operate a business of stealing and reselling stuff because of notoriously lax law enforcement. Think the opening scene of Requiem for a Dream, except an entire crew doing that, over and over and over. They make a lot of money doing this -- and drive up the cost of basic essentials for other working class people who have to buy what they resell because they clear drugstores out. They make enough to live comfortably, despite the high cost of living, apparently.
My housemate's car was stolen about 15 years ago(!) and used for a bank robbery somewhere else on the peninsula (also close to a freeway) and abandoned in Oakland.
There's a regular sweep of my neighborhood on the peninsula for unlocked cars at night, they will take anything, and break into cars for visible bags. It's practically every third topic on Nextdoor.
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Zoning is the most obvious regulation that makes things hard: most land is zoned exclusively for single family homes on large lots. There's been a bit of movement on this from the state level to allow ADU's or duplexes, but not enough, there's usually various legal hurdles that make it harder. Missing middle housing is mostly still illegal.
The other thing is all the various processes involved. CEQA makes things take a long time (not that I'm opposed to protecting the environment, but surely there's a way to do it that doesn't take years for an apartment complex). Community meetings and planning commissions can often block new developments for random, arbitrary reasons, like "tall building would cast too many shadows" or "demand on street parking would increase"; these are things that are so obviously inherent to any significant development permitted in areas where you can build taller apartment buildings, and yet they're still used to block more housing.
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By hard left do you mean "wokeism" or "communism", because the former is absolutely not hard left
1. Flood the market with affordable state housing, Austria-style - with the bonus of building new, boosting the national economy.
2. Create very progressive (rapidly rising) taxes based on property value - making untenable the current practice of parking money and profit by simply buying & holding empty flats and the like.
3. Raise salaries - currently portuguese salaries, and their weight on GDP, rank the lowest in the EU.
(and no, it won't create an inflation spiral: the current inflation spike is, first and foremost, the result of a supply shock, price-gouging and speculative/cartel practices - corporate profits being at a record high is proof of that)
Unfortunately, incentives are heavily stacked on leaving things as they are, as the ruling class is mostly made up of the landlord class, and, is not sensitive to (sometimes even not aware of) the struggles of assetless commoners that only earn income from their (low) salaried labor. Or, even worse, stands to lose their current large gains on capital/assets if this is fixed - and most portuguese media outlets trumpet their - private - master's voice and interests. Additionally, just leaving things as they are, also scores brownie points with the EU by making the Government (even if "center-left") appear "frugal". And PM Costa has personal ambitions for future EU high office.
(...who will be the next head of the European Commission or the European Council?)
The proof is the observation that endemic inflation only happens in countries with fiat money systems.
So you're just going to ignore a war involving two of the biggest exporters of some of the main raw materials we have (foodstuffs and energy) on the planet and associated supply problems on crucial things? Not to mention a pandemic that wrecked havoc on supply lines. None of that matters, your theory goes, it's purely a monetary phenomenon, because only countries with fiat money systems are impacted. Could you share some countries with alternative money systems that aren't impacted?
Inflation is the measure of the price of goods
> It's the result of funding the deficit by running the printing press
Increasing the money supply indirectly increases the price of goods. It matters in the long run, but the price of goods can change in the short-term based on supply. The oil crisis of the 1970s caused oil prices to increase because oil supply was limited. This would have caused inflation even without an increased money supply.
> creating debt backed by nothing. ... fiat money systems.
This is more of a tangent, but the money supply can also shrink in fiat systems. Fiat currency can be shrunk via taxes. Debts can be defaulted. Fiat systems aren't inherently inflationary; but they target a low level of inflation because they prefer it to deflation.
More generally anything that increases the money supply. Non-fiat monetary systems have suffered from inflation due to debasement of the currency or an influx of precious metals use to create coins (e.g. when gold from the new world flooded the Spanish economy).
Also, Quantitative Easing was literally printing money and yet EU rates (inflation & sovereign debt interest) remained low, many times negative - with some EU countries observing actual deflation.
Only when the supply shock did happen (Covid & Ukraine), rates started to increase. And only after that, price gouging practices started by riding the supply shock public perception - resulting in said record corporate profits.
If there was inflation caused by excess money, how could corporate profits be at record highs?
gas prices? electronics supply issues? general supply chain issues? (expected soon) energy/food supply issues?
how does commodity money fix that?
A 'straight forward fix' is to ban foreign ownership of homes and AirBnB. Poof. Now, I wouldn't support that, but it would be 'straight forward'.
#2 is reasonable.
#3 is a big glib tough. "Hey, everyone should just get a raise!", if it were only that easy!
This has pretty much already been done in Vancouver, which has layers of Foreign Buyer Taxes, Speculation Taxes, Empty Home Taxes and strict Airbnb regulation.
It absolutely did not make the problem go 'poof.'
All these things were well worth doing and helped in various ways, but it remains that the core underlying problem is that there's not enough homes for everyone and scarcity ensures high rents and high prices. The dull solution is that a hell of a lot of homes need to be built.
What's wrong with large industrial projects?
It's exactly what we need at this moment - in fact, both Portugal and EU-scale.
This would cost a small fraction of the Quantitative Easing program from the European Central Bank.
(and these Massive Real Estate buildouts must include the lessons in Urbanism learned from past such projects)
2. (y)
3. State sector raises salaries, private sector is forced to follow. Just raising minimum wage is positive, but not enough. This tends to compress people to the bottom salary tier and promote even more brain drain.
When people suggest that adding more new housing, either public or private, doesn't work, this is usually left out: how much housing actually was being added?
Looking at Switzerland, which printed a lot of money in the past years but still has low inflation and had mostly deflation over the same period, there isn't a simple connection between money supply and inflation.
Inflation isn't merely a monetary issue.
It won't be affordable at first, of course, but as you flood the market with new high-rise apartments, the price will inevitably plummet.
Fun fact: I - as a single - live in a way too big, luxurious and expensive apartment because of this. I rented it, when I was still working for the man and was making a killing. Now I live a much more modest 4-hour-workweek life. It would be better for me to move to an apartment half the size. Then a big family could live here nicely. But no way. No landlord in Germany rents to a freelancer who enjoys a "I'm mainly slacking off for a while" lifestyle.
The issue is somewhat the same in Paris. It’s very hard to afford living there because non local use properties as an investment and prefer them staying empty than risking them degraded and people who want to rent make more money on Airbnb.
It’s fine if you want the city to become Disneyland but very depressing otherwise.
I would think only a small one-digit percentage?
taxing empty - yes
limiting short duration - no, just tax it more. Limits are too easy to hack.
It's easy to implement, the market exists to price that amount, and provides a direct incentive to either put the property to productive use or get rid of it.
Building physical houses to sit empty as a financial instrument has to be one of the peaks of capitalist insanity.
Two wrongs don't make a right.
That's one of the reasons why portuguese renting market is so bad. There were rent control policies for like 40 years. It has been phased out but the market still has the signs of its damages.
There also other contributing policies and the policies change almost every two years.
I'm one that could invest in the market, to bring more houses to be rent, but I can not risk 150 000 euros buying a house to rent (middle income market) and then having problems evicting with a non-paying renter, being forbidden to increase the rent due a new law or god help me if I need to use the court system to ask for renter damages.
Lack of building when the population is still growing.
Encouraging single lifestyle, both by kicking out kids early and shacking up later.
Cases where sitting on an empty property is risk free.
Infrastructure increases taking valuable space.
Giving early birds great deals compared to today, making them sit on huge housing for a pittance and making moving out a terrible deal.
And politically, there simply is no immediate incentive to solve things when the current population of homeowners does not contain enough people to vote in favor of those that don't own homes.
Some have been unable to raise rents since the 1910s!
If you have a city with X housing units, but 5X people from within the city + all over the country/world want to live there, and for whatever reason no one wants to/can build 4X more housing units, how do you fairly determine who gets to live there and who doesn't?
* Is it fair if you were born in Lisbon you get to keep living in Lisbon?
* Is it fair if people early in their career get to live in Lisbon because it will advance their career much more than if they lived in the countryside?
* Is it fair if a rich person gets to live there because they can pay a lot of money to do so?
Whatever policy is in place, it will be deciding the winners and the losers, or the people who get to live in Lisbon and those who don't.
The author of the article says:
> Digital nomads, retired foreigners, and millionaires searching for Gold visas are pushing the Portuguese to another place.
> Is this really that fair?
We are obviously supposed to say "no", but I think the answer is yes. I really hate this form of argument by rhetorical question that only works if you _already_ agree with the author, if my answers are different the whole article just doesn't work.
The phenomena that honestly pisses me off, is that all of these countries touting their immigration policies are lying to immigrants. They're selling them on a quality of life that existed 20 years ago and is no longer possible even to the people who have lived there all their lives.
It's absolutely fraudulent and exploitative behaviour by this countries.
For an immigrant from eastern europe, yes, Lisbon is not the great place it was 20 years ago.
But for an immigrant from US/Canada, Germany, UK, or whatever rich country. Yes, it's a great place to go to. A high rent in Lisbon is nothing to them, and the rest (utilities, restaurants, commerce) is still pretty cheap.
Good weather, good food, cheap lifestyle is quite attainable... just not for everyone.
Well, we live in a democracy here, and so we vote.
Our government announced their intention to ban residential investments in Porto, Lisboa, and the Algarve for the golden visa, and adjustments to the taxes for long-term v. short-term letting that went into effect this year.
It will take time to see if it is actually fair or not, but the cool thing about democracy is we can always vote again in the future!
Is it fair that someone, by sheer accident, was born in SF, is SWE and now wants to take advantage of that stupidly high income and dislodge people who have lived their whole lives in a certain place? Probably worked much harder and for longer? Where all their family and friends live and always lived for more than a century? Their culture and life? You seem to forget Portugal is not the US. They have more than 3 times your history and with it each place has a markedly different personality and much deeper roots not only culturally but also relationally.
Maybe you're used to a capitalistic emotionless everything-is-replaceable view and that in life all is fair and square, the ends justify the means, but perhaps you should rethink it.
Central city locations in Lisbon and Porto have exploded in price, but this is due to AirBnB rather than rich expats. Portugal's tourism industry has boomed, which has put money in a lot of people's pockets, but has distorted local economies somewhat. Better management is required, for example cracking down on AirBnB and NOT building that new cruise liner terminal.
Unfortunately the upper middle class idyll (alluded to in the article) of living a dilapidated (but in a cool way) apartment ten paces from your favourite coffee shop, while doing a socially respectable play job is now no more viable here than in SF, London or Berlin. Indeed, my own favourite 'coffee shop' got turned into a chain tequila bar.
Outside the hot centres, things aren't as bad. Public transport (at least in the AML - Lisbon Metropolitan Area) is excellent by any standard, and decent apartments are available for sensible prices well within one hour public transport commute of the downtown. Compare with London, where people are fighting over each rental.
> family factor weighs a lot here
Yes, and this is a problem, given that Portugal only became democratic 48 years ago and has a large amount of cultural baggage from quite frankly medieval times. Also, the implication of this statement is that family doesn't count elsewhere - and in case you missed it it was spelled out a few lines later, which should give you an idea of the residual naivety and insularity of (old) Portuguese culture. Agency - the idea that you can do or think something independently, and then take responsibility for it - is somewhat lacking too.
But! There is much that is very good about Portugal and the Portuguese people, I feel that here it is ok to be kind to each other. Furthermore, there are good changes, new opportunities are arising (perhaps in a very small part to some of the more productive visa holders), and I see a great future for Portugal - even if many Portuguese often don't.
Why do you say that the rise in housing prices has been due to AirBnB but not to rich immigrants? It seems a bit odd. Both can outbid the average native and just push prices high. Many rich immigrants also buy up loads of property for speculative/investment purposes, not just to live in.
>has a large amount of cultural baggage from quite frankly medieval times
I wonder what exactly you mean by this.
I distilled "lack of agency" as: not rewarding initiative, people afraid to take initiative. the portuguese boss does not like the employee to take initiative, and the employee will not do so. copying existing British designs is "safer" socially speaking, than making new designs.
source: I'm portuguese, I'm a weirdo and people always try to conform me to a box.
>I wonder what exactly you mean by this.
I was at a festival last night - the screens by the stage were playing ads in between the acts (that itself is a topic for another day!).
After a cringe-worthy advert for the UK (that I didn't even recognise it was so far fetched), there then appeared a public information message in Portuguese. It said (and I do my best to translate):
"What is the place for a women?" (pause) "Wherever she wants it to be"
Full credit to them for trying to drag themselves into the 21st century, having mostly avoided the 20th - you can see what I'm getting at.
Incompatible definitions of fairness. They have in practice a much higher metabolism requiring more pure ingredients, from better sources, it's medically harmful to cut them off like instantly. Although at the same time they contribute to both the problem and solution, like it depends. Turns out very rough to adapt to on short notice, flat-out can't in many cases, and for sure you can't send your kid to any random Cuban school with kids on the other side of a former class divide, from one day to the next? Like how are you going to tell that kid? Just gotta be "really cool", in the "they was cool", sense, and some kids make it and others can't, wretched childhood. Although at the same time Fidel Castro, biographically, grew up among blacks because his father didn't recognize him fully, not even a second son, so he knew it could be done and there was the will that it happen.
And people will price discriminate against that kid forever, never accept he's no longer rich unless he's filthy in rags...that's a rough sketch of it. Misery all of a sudden, and metabolically difficult, like it's not just 2000 calories here's some water with fluoride for your teeth boom done. It wouldn't take your body 24 hours a day if it took a single sentence to summarize like I just did. Water alone, Americans aren't supposed to drink Chilean water or they get diarrhea like automatically, it could be anything, selenium plus manganese in the water table, natural salts (as opposed to NaF) that are systematically removed in America. It's along the same lines as toothpastes in Chile having over 6x the sodium flouride of American toothpastes. Like literally you couldn't buy those same toothpastes in America without a dentist's prescription, I innocently told them 5000 ppm pharmacist looked at me said "No that you need a prescription" like it was opioid that kind of reaction. I was actually prescribed toothpaste weaker than the only strength toothpaste Walmart sells in Chile, it's all 1650, like eating the color white, kids hate it because it's good to hate it because it's bad for you. Counterproductive, makes people become busted and scream at their kids, everyone in the family going to the Walmart to buy cookies. Makes you crave. Gives you ADD, I actually--it turns out--don't have any symptoms of ADD--and I generally have literally every single one and nothing else--when I cut fluoride out of my life. Drank from a well. I actually paid attention, as a verb, for once in my life. Like a colorblind guy seeing blue for the first time. So weird, now I know what people are talking about.
So if you don't want F poisoning, which is exactly what the fuck that's all about for political reasons, there it is again, didn't want this country to turn into another Cuba, Socialist Sandwich as Nixon put it, you flourinate really hard. Breakfast lunch and dinner, inescapable, it's a super expensive subsidy but it's not for your teeth, it's for your brain, it is incapacitating so you don't eg sue or protest. If you know the way around here in Santiago, you'll figure out you have to pay triple at a homeopathic store, the pharmacies don't carry any toothpaste that doesn't F you 1650 ppm. Either you go way out of your way or go without toothpaste, which is a thing for instance in Cuba. Everyone has a hard time adapting to that.
So that's an example of adapting, and it can take decades. And it's expensive to adapt, hard-learned lessons like flunking courses at Stanford in my case because I was consenting to absurd doses of fluorine, not knowing the harm. Not one ADD doctor brought it up, like they have them on a gag order, it's the most obvious shit nobody had ADD in the 50's and then you F'ed up the water and now everyone has to see a shrink, 2 + 2 equals what?
So the wealth and political status decouple, and they benefited when times were good, and then...well they get a new citizenship somewhere else and adapt to that, not Cuba but maybe 60's Brazil, learn the language which is work, learn the laws under which they must now live, and relearn the balance of power what the traps are what the actual opportunities are...and be a survivor, there are people left behind that couldn't get out, not savvy enough, bad airport game missed the last flight, and yeah they have money but they get charged much more for everything. Like the parent poster. Price discrimination evens things out in the end. That's what you replied to.
Dude a raft is not what determines refugee status, it doesn't have to be a giant pornographic Hollywoodesque stereotype of all the tropes of taking refuge--which is what the word means--to qualify in my book. Being hated is enough.
Others have said it before, but mass tourism is the new Dutch disease [1]. Pure tourist cities like Venice are already too affected by it to have a chance of getting back to a normal economic and social life, but there are other cities that are still trying to fight it, like Barcelona. Not sure if there are any political forces in Lisbon or Porto ready to take the same stance.
[1] https://en.wikipedia.org/wiki/Dutch_disease
I also see a bright future in Portugal. Many young people that moved out after university want to come back, after making a killing in their career. They might earn less with the move, but you don't need a six digit salary to live very comfortably here.
Who doesn't want to spend 15% of his woke day commuting.
Hard cringe.
The horror! ;-)
However, you can't have it both ways. If
> countless stories of flats left uninhabited by some rich person who arrived at the building, bought two flats so that he could get a visa, and doesn’t even live there
then clearly not
> wealthy foreigners from all over the world, to whom we offer a paradise where they enjoy the same services but where they don’t pay or pay less tax than the general population
Either they live there and use services or not.
However,
> countless stories of flats left uninhabited by some rich person who arrived at the building, bought two flats so that he could get a visa, and doesn’t even live there
So, the way it works is, as a golden visa applicant, you have to spend 7 days in the first year. The next 2 years, a combined 15 days (which can be spread whichever way you like). Subsequent renewals are different (21 days / 3 years). You can already live there when you apply, but you are not _required_ to.
You have to maintain your investment for at least 5 years (or until you become a permanent resident) and renew the golden visa twice. Then you can apply for permanent residency (or citizenship if you qualify), if you want to.
It's entirely conceivable that people would buy property and only vacation there. Which, if we are honest, is not a problem, given that large cities are excluded from the program. And cheaper housing does not qualify, either. So you would be taking property that's pretty expensive already (€500,000, €400,000 for low density areas) - OR requires the property to be older than 30 years old, and a minimum of €350,000 (or €280,000 in low density areas).
1) The investment doesn't need to be in a single property; you could buy up multiple smaller properties that sum to the amount you need, and rent them out or leave them empty.
2) There are also hotel investment options rather than buying up existing real estate, and those are still available in the big cities as they are considered 'commercial'
Dead Comment
It doesn't matter if rents are curbed under 1k a month. The median under 25 earns less than 700 euros a month.
I talk to people in Portugal and I hear more or less the same salary discussions and ranges for more than 20 years. It is a stagnant labour market for literally +20 years! When adjusted to inflation it becomes even more ludicrous.
The iron curtain countries in the Baltic as well as Slovenia and Czechia, have all surpassed Portugal in wage growth. That should give anyone reason to pause.
Portugal has a few succesful SMEs, a wine industry, a cork industry, some textiles and not much more to show.
The Portuguese economy is mostly services which are circular not actualy exported and the obvious exported component which is Tourism.
The majority of Portugal's EU Cohesion Funds were sunk on motorways. The country has suffered from lack of strategy in both Government and Industry since the 80's.
There is only so much we can keep blaming on the dictatorship regime of Salazar 50 years ago. At some point politicians and business owners/investors need to take ownership of their fuck ups.
Tech businesses thankfully have been leading the way, aware that intrinsically remoteable work means they're competing with foreign capital for workers, but the situation is nowhere near where it needs to be (higher wages across ~more~ all trades and industries).