The proposal now defines that 70% of the area must include public housing or housing of moderate value, which opens the door to real estate speculation. The change is being criticized for contradicting the initial objective of the law.
At the end of December, the Government published an amended version of the decree-law that facilitates the conversion of rustic land into urban land, eliminating the obligation to include affordable rental as one of the modalities for housing.
The new diploma determines that 70% of the total construction area on the converted land is destined for public housing or housing of “moderate value”, a recently introduced concept and the target of criticism by open space for real estate speculation.
The changes to the Legal Regime of Territorial Management Instruments (RJIGT) were presented as part of the “Construir Portugal” program, announced in May, with the aim of “encouraging the supply of housing”. The initial version provided for solutions such as affordable housing, affordable rent and public housing. However, the final version omits affordable rental, focusing only on public housing and the concept of moderate value housing.
The latter establishes price limits that can exceed median market values by up to 125% at the municipal level, reaching 225% of the national median. The exclusion of affordable rent, which consists of rents 20% below market value, was justified by the Government as “implicit” in the concept of public housing, says the .
The President of the Republic, Marcelo Rebelo de Sousa, promulgated the diploma despite considering that this constitutes a “sprain” in terms of spatial planning.
The opposition and experts point out that the new formulation could allow the construction of housing above market pricecontradicting the objective of promoting affordable housing. This change also comes in a context in which Portugal had the second biggest quarterly rise in house prices across the European Union.
Furthermore, there are no guarantees in the decree-law that impose minimum quotas between public and moderate value housing. This flexibility allows municipalities to prioritize more profitable projects for private developers, reducing the supply of homes at controlled prices.
The decree-law will be subject to parliamentary consideration, and it is not guaranteed that this will be the final version.
