Portugal tackles housing crisis with $1b, scrapping Golden Visas and banning Airbnb rentals.

Portugal unveiled a sizable package of measures on Thursday to address the country’s housing issue, including the termination of its divisive “Golden Visa” program and a prohibition on the issuance of new permits for Airbnbs and other short-term vacation rentals.

Portugal, one of the most impoverished nations in Western Europe, has seen a sharp increase in rents and home prices. More than 50% of workers made less than 1,000 euros per month in 2018, and rents in Lisbon alone will increase 37% by 2022.

According to housing organizations, it has been difficult for locals to rent or buy for years because of low wages, a hot real estate market, rules that encourage wealthy foreigners to invest, and an economy that depends heavily on tourists. Portugal’s inflation rate of 8.3% has made the issue worse.

The crisis, according to Prime Minister Antonio Costa, now affects all families, not just the most disadvantaged.

The measures, which are estimated to cost at least 900 million euros ($962.19 million), are not yet known when they will go into effect. Some, according to Costa, will be authorized the next month, while MPs will vote on others.

He stated that a mechanism to control rent hikes would be established, and the government would provide tax breaks to landlords who turn tourist properties into rental homes for locals.

Mariana Mortagua, a member of the Left Bloc party, criticized the policies, claiming that the government was providing tax advantages to landlords who had previously “profited from (housing) speculation.”

New licenses for tourist accommodations like Airbnbs will not be allowed, with the exception of rural areas with fewer people.

The policies, according to the Social Democrats, “target” the rights of company owners and property owners.

Costa stated that in order to address the housing deficit, the state would directly rent empty homes from landlords for a five-year period and place them on the rental market.

Portugal will stop its “golden visa” program, which grants non-EU citizens EU passports in exchange for investments, including real estate, and has come under fire for driving up housing costs and rents.

Since the program’s 2012 debut, 6.8 billion euros have been invested, with the majority of that sum going toward real estate.

Housing organizations claimed that the measures would be ineffective if the government continued to advocate for other measures to entice wealthy foreigners to Portugal, such as the “Digital Nomads Visa,” which allowed foreigners with high monthly incomes from remote work to live and work from Portugal without paying local taxes. This policy was introduced in October.

At a modest housing demonstration in Lisbon, activist Andreia Galvao, 23, charged that the government had broken previous commitments to address the housing situation.

The objective was for all Portuguese to have access to high-quality housing by 2024, but it doesn’t appear that will happen, she added. “The circumstances are dramatic.”

Large real estate investment funds, which dominate a sizeable portion of the market, are still a part of the “system in place,” according to the “Housing is a Right” group, and the measures do not alter that.

Rents will continue to be expensive for the vast majority of people, and home ownership will remain a pipe dream, it stated.