The recent change to the Soil Law, which allows the reclassification of rustic land in urban housing construction, entered into force on 29 January with the promise of increasing the offer of houses at affordable prices. However, experts heard by Lusa and other regional experts, including an Algarve urbanist, are skeptical about the actual impact of the measure, especially in the Algarve, where tourist pressure and foreign investment already inflate the real estate market. Between failed expectations and fears of speculation, the new legislation is far from consensual.
The Algarve in the sight of speculation
Ana Rodrigues, executive director of the Nova SBE Environment Center, told Lusa that “the new soil law has the potential to increase housing supply and reduce housing prices”, but stressed that “success will depend on effective regulation and complementary policies”. However, the expert warned that “in markets strongly pressured by tourism and foreign investment,” as is the case with the Algarve, “the simple availability of more land may not be enough to lock the pricing.” Rodrigues added that “the reclassification of land can encourage real estate speculation”, with investors to acquire soils expecting future appreciation, without guarantee that they become accessible housing.
In the Algarve, where tourism represents about 70% of regional GDP, according to data from the 2023 National Statistics Institute (INE), the demand for second homes and luxury accommodation has pushed prices to prohibitive levels.
A law maladjusted to the regional reality
Leonardo Costa, professor and researcher at Catholic Porto Business School, highlighted Lusa the lack of adaptation of the law to regional specificities: “As is customary in the Portuguese central state, it addresses the country as a homogeneous whole that it is not.” For the expert, the impact on zones such as the Algarve will be distinct from other areas due to “great tourist pressure” and “low population density in certain areas”. Costa goes further, admitting that the law “has no impact” on the offer of accessible housing, and can only increase “the value of land that may be urbanized.”
In the Algarve context, where vast areas are still classified as National Agricultural Reserve (RAN) or National Ecological Reserve (REN), soil reclassification raises additional concerns. Bento Aires, president of the Order of Engineers – Northern Region and Teacher of Porto Business School, stressed Lusa that “there are no major impacts on the housing market”, pointing out that the law “will favor low processes”. For private land, like many in the Algarve, Aires considers the applicability “difficult and unattractive”, limiting the practical effects of the measure.
The Algarve Voice: a local alert
António Nóbrega, a habitual chronicler Algarve urban planner in the Algarve post newspaper, wrote on Sunday a chronicle entitled “the wrongly designated – ‘soil law’ – its impact and the collateral damage provoked,” goes further into criticism. For Nóbrega, the, which alters the legal regime of territorial management instruments, represents “a risk of unpredictable consequences” when trying to transform static territorial planning into a strategic model through a single diploma. “Territory management systematically causes media scandals of enormous impact,” he wrote, noting that urban regulation was the origin of the fall of the last two Portuguese governments.
In the Algarve, where municipal master plans (PDM) still reflect a “rudimentary” planning based on military letters, Nobrega warns of the complexity of implementing an innovative system in a region marked by disparate economic interests. “Society requires a new strategy paradigm, but it does not compade with legislative experiences of experimental process,” he said.
National controversy with regional echoes
The approval of the law, with the votes of the PSD, CDS-PP and PS, was marked by controversy. The resignation of Hernani Dias, former secretary of state of local administration and territory planning, after revelations that he created real estate companies as ruler, launched suspicions about the interests behind the legislation. In the Algarve, where the real estate market is dominated by large national and foreign investors, the perception of favoring to private intensifies. The government, shaken by the controversy, is now facing a motion of trust that can be spoiled, aggravating political instability.
Accessible Housing: An postponed dream?
The law provides that at least 70% of the construction area is intended for “public housing, affordable lease” or “at controlled costs”, but experts question viability. In the Algarve, the lack of infrastructure in many rural areas and the high construction costs – aggravated by dependence on imported materials – make it difficult to realize this goal. For local residents, who face average 800 euros incomes by a T2 in Faro (according to INE), the accessible housing promise seems increasingly distant.
As the debate continues, the Algarve remains at the epicenter of a tension between economic development and social justice. The “Soil Law” could be a milestone in territorial management or just another chapter in the long history of frustrated expectations in the region. As António Nóbrega wrote, “the way is walking”-but, for now, fate remains uncertain.
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