ZAP
“Urban rehabilitation is a strategic priority … but it continues to face several constraints.” Interview with AICCOPN.
The response to the crisis in housing in Portugal has been essentially for construction.
The accounts of the Association of Construction Industrials and Public Works (AICCOPN) for the need for 45 thousand new homes per year, in 2024.
But thousands of houses built in this century are empty. There are experts that there is no more new houses – but more rehabilitation of houses.
And a very recent shows that there are 126,000 vacant properties available for sale or lease – that need repairs.
We talked precisely about AICCOPN about this doubt: recover or build houses? Despite being a priority, urban rehabilitation continues to have several obstacles. And it is not necessarily cheaper than construction.
ZAP – Why no longer bet on the rehabilitation of so many houses already built? Is it a practical/technical issue, cost, bureaucracies…?
Aiccopn – Urban rehabilitation is a strategic priority for sustainable development of cities, promoting the valorization of built heritage, the revitalization of urban centers and the efficiency in the use of resources. However, this process continues to face various constraints, of a technical, economic and administrative nature. Among them are the unpredictability associated with the state of conservation of buildings, the significant investments that rehabilitation often requires, the difficulty in access to financing and the slowness of licensing processes.
Although there are specific support regimes, their practical application is sometimes insufficient. In this context, we highlight as positive the reduced rate of VAT (6%) in rehabilitation contracts of buildings located in ARU (urban rehabilitation areas). It is essential to apply the reduced rate of VAT to all urban rehabilitation works, regardless of its location, and the extending this rate to the construction of new accessible housing and lease supported.
It must also be eliminated distortions such as taxation, in AIMI, from real estate detained by companies in the sector, as well as the incidence of IMI on the housing stock intended for sale. AICCOPN underlines the need to reinforce incentives, simplify procedures and create more favorable investment conditions to enhance rehab as a true urban and economic development engine.
Zap – Don’t European funds arrive?
Aiccopn – The PRR, the main financing instrument for increasing public housing supply, has an execution rate of only 38% in the housing component – a clearly insufficient level.
Administrative slowness, delays in public tenders, uncoordination between entities and maladjusted base prices are factors that continue to compromise the execution of PRR funds and to lock the implementation of the necessary investments to the housing response.
Correcting these embarrassment requires urgent and articulated performance, which includes the review of base prices, simplification and acceleration of procedures, the reinforcement of institutional cooperation and the creation of exceptional mechanisms to support companies, so that they can intervene effectively and within the required deadlines.
Urban Simplex needs corrections that ensure speed and legal certainty, and the new soil law, published at the end of last year, has to be applied, promoting greater availability of urbanizable land, in order to counteract the evolution of construction costs.
Zap – more rehabilitation and less construction would save costs for builders? And, therefore, for buyers?
Aiccopn – The bet on urban rehabilitation allows you to preserve and streamline the built heritage, while promoting more responsible and sustainable urban development. However, it should be noted that the largest bet on this type of intervention does not necessarily translate into a reduction in direct costs, either for builders and to buyers.
Rehabilitation operations often have high levels of unpredictability, requiring specialized labor and being subject to complex licensing processes, which can lead to added costs and longer deadlines. On the other hand, the benefits for buyers mainly result from the appreciation of the location and characteristics of real estate and the existence of specific tax incentives, but does not mean that the final price is lower than other projects.
ZAP – For Aiccopn, what is the best way to combat the housing crisis? What is missing?
Aiccopn – The housing crisis in Portugal is a central challenge for sustainable urban development and social cohesion. AICCOPN understands that the response to this problem should be based on an integrated strategy that combines measures to increase housing supply, urban rehabilitation, investment incentive and promotion of families’ access to housing.
Regarding supply, it is important to simplify and accelerate urban licensing and construction processes, as well as providing more urbanized soil efficiently, ensuring a rapid search response. Urban rehabilitation should be encouraged through appropriate tax and financial support, specific lines of credit and the simplification of procedures in non -classified real estate, allowing to preserve and value the built heritage.
To ensure favorable investment conditions, it is necessary to promote tax and regulatory stability, facilitate access to financing and foster partnerships between the public and private sector. At the same time, AICCOPN underlines the importance of policies that improve household access to housing, including lease support and the acquisition of the first home. It is essential to build a stable strategy for housing lease, based on clear rules and legal certainty, which promotes private investment and protects lessees and landlords. To this end, mechanisms should be created that ensure compliance with contracts, encourage the placement of real estate in the market and avoid legislative changes with retroactive effects. In addition, energy efficiency measures should be met that reduce housing costs.
In short, AICCOPN considers that the mitigation of the housing crisis depends on the creation of a simpler, predictable and attractive legal framework, in order to counteract the growing evolution of prices, which allows the construction sector to respond quickly, sustainable and accessible to the housing needs of the population.
For this, it is also fundamental to resort to industrialized construction, in view of the availability of houses in the market, with the urgency that the situation imposes.
Nuno Teixeira da Silva, Zap //
