Lisbon's Municipal Housing Charter approved: what's changed? And what's next?

At its executive meeting on October 11, the Lisbon City Council decided to.., approve and submit for public consultation the Municipal Housing Charter. After the document was leaked before the summerIn response to the opposition's disagreement over some of the content, the Councillor for Housing, Filipa Roseta, met with the various political forces that make up the Municipal Executive and a consensus was reached, mainly with the PS.

The Lisbon Municipal Housing Charter is the a major strategic instrument for municipal intervention in the field of housing; it is valid for ten years and represents an investment effort of 918 million euros in the various measures and proposals. For Carlos Moedas, Mayor, "it was finally possible to approve such an important document for the future of the city". "We have done everything we can to try to respond in the best way to what is the biggest challenge we face at the moment: housing. We need very concrete, diversified and realistic measures, and that's what we've been doing since the beginning of our mandate. Without ideologies or promises, but with concrete actions and policies that enable us to respond to this complex challenge", says the mayor.

The Letter defines a strategy to be implemented in the 2023-2033 period, taking into account housing needs and shortages on the one hand, and available resources on the other. In general, this instrument has the same three fundamental objectives - "to eradicate poverty"; "to settle families"; "a more sustainable Lisbon" - and lists more than 30 measures to achieve them. In detail, the version of the Charter that has now been approved has several differences from the version that was rejected before the summer, more precisely on June 28, at a town hall meeting. The new document is the result of negotiations between Councillor Filipa Roseta and the parties, especially the PS, with whom Moedas' team would have to reach an agreement in order to have a favorable majority in the vote.

For example, the measure to subsidize young people's rentals, which the PS had approved with the support of the left, was introduced, and the IMT exemption, which Moedas had proposed twice, was withdrawn. Several changes were also made to the Affordable Rent Program, a particularly sensitive issue for the Socialists.

However, the meeting on October 11 - where the new version of the Charter, with the changes from the negotiation round, was approved - brought a number of new changes of the various parties; therefore, the document will have to go through a a new editing phase before the discussion is opened up to all interested parties.

What's new?

The version of the Municipal Housing Charter that came before the City Council last week has approximately 20 pages more than the original June versionThis is the result of several changes that the PS negotiated in several meetings with the Housing Councillor and the other political forces. The the socialists' main amendments there were three:

• changes were made to the planning of the Affordable Income Program (PRA). Thus, the he municipality will build Affordable Rent housing for middle-income families too, not just for low-income families. The previous proposal split the PRA in two: on the one hand, municipal construction would only be for Affordable Rent aimed at families on lower incomes; on the other, private housing construction (in partnership with the municipality) would be exclusively for middle-class families. The PS also wanted to set out in the Charter a list and respective timetable of the Affordable Rent projects already planned, namely: Restelo ("allotment procedure under analysis and deliberation to be proposed to the City Council by the end of this year"); the operations on Rua de São Lázaro and Rua Gomes Freire ("works expected to be completed by 2026"); the Benfica, Parque das Nações, Olaias and Alto da Ajuda projects ("revision of the financial and contractual model, with relaunch expected in 2023"); and the Casal do Pinto allotment, in the parish of Beato, "whose urbanization works resulting from the subdivision to be approved are foreseen in the municipal budget";

• was introduced into the Charter youth rental support program that the PS had approved in November 2022as an alternative to Moedas' proposal to exempt young people up to the age of 35 from paying IMT when buying a house up to 250 thousand euros. The Socialist proposal, discussed at the time, suggested giving a subsidy of up to 400 euros (300 if you're a single person) to young tenants up to the age of 35, if the amount they pay in rent is more than 30% of their net income - the measure would cost the municipality 4.5 million euros a year, about the same as Moedas' IMT proposal. This idea is now worded in the Charter like this: "launch of extraordinary tenders for affordable rental subsidies for young people"It is now up to the city council to implement the measure as part of the existing Municipal Rent Subsidy. At the same time IMT exemption proposal has been removed from the Charter;
• the Charter now has a diagnosis of housing shortages - There is a whole new chapter on the evolution of housing needs in the city of Lisbon. In this chapter, there is an important conclusion: "the most appropriate assessment (...) for quantifying the housing shortage and the corresponding need for expansion is related to the manifest demand for affordable housing, by the population that wants and has the right to live in the city, but is prevented by the inability to access housing on the market". In other words housing shortage corresponds to the number of families who have applied to municipal affordable housing programs, such as the PRA, without finding a response - that is, 10,000 families.

The PS also managed to incorporate these into the Municipal Housing Charter: 1) the exercise of the legal right of first refusal by the municipality to acquire properties that could strengthen the municipal housing stockand thus introduce speed in the ability to provide housing according to the needs and requirements identified; 2) pilot projects for modular construction and co-housing for university students and professionals displaced from public institutions; and 3) if the municipality declares that it has a housing shortage, it can condition private urban development operations to meet the Affordable Rent targets defined in the Charter and do the same for Local Accommodation, conditioning the issuing of new licenses.

And what changed "at the last minute"?

Despite private meetings between Councillor Filipa Roseta and the parties over the summer, the various political forces still presented proposals for changes to the version of the Municipal Housing Charter at a town hall meeting on October 11. The PS, for example, took the opportunity to improving the regulation of Local Accommodation (LA).

The Charter, in its original version, already provided for the regulation of this economic activity "through the delimitation of absolute and relative containment areas and the definition of regulation, monitoring and inspection measures, within the scope of the revision of the Municipal Regulation on Local Accommodation (RMAL)"which is currently underway. During the negotiation process, these zones of absolute and relative containment were quantified:

• the absolute containment areasIn the case of Local Accommodation, where no new Local Accommodation registrations can be assigned, they correspond to parishes where at least 15% of the available housing is allocated to LA;
• the areas of relative containment, in which new licenses can be admitted under certain conditions, correspond to parishes where at least 5% of the available housing is allocated to LA and also the neighborhoods outside these parishes in which at least 15% of the available housing is allocated to LAs.

These percentages are not new and had already been defined for the proposal to revise the Municipal Regulation on Local Accommodation (RMAL)They were only included in the Charter. Looking at the panorama of the city, these ratios mean that Misericórdia, Santa Maria Maior, São Vicente, Santo António and Arroios would be parishes of absolute containment, while Alcântara, Estrela and Avenidas Novas would be in relative containment - along with 19 specific neighborhoods, such as Santa Isabel, in Campo de Ourique, the Sapadores, in Penha de França, several neighborhoods in Belém and many others in the eastern part of the city.

Now, at the town hall meeting in October, the PS has put forward two proposals that deepen this regulation of Local Accommodation in the city:

• o establishing an ideal ratio for the whole city of 5%that is, that Local Accommodation in Lisbon cannot exceed 5% of the available housing - this point was approved by a majority, with the coalition voting against New Times (PSD/CDS);
• o a commitment to make use of the instruments available to the municipality, such as opposing the renewal of registers, "in order to allow, for example, parishes such as Santa Maria Maior and Misericórdia, which currently have ratios of 71% and 47% respectively, to move back towards the containment ratio threshold that will be established in the RMAL" - this item was approved by a majority, with the coalition voting against New Times (PSD/CDS) and the abstention of the two PCP councillors.

These two PS points will be included in the Charter during a new revision of the document, which will have to be carried out after the October 11 meeting.

In addition to the Socialist proposals, these amendments, which were approved by a majority at the town hall meeting on the 11th, will also be included:

• o Livre has managed to ensure that the Municipal Cooperative Program, which is described in the Charter, includes the creation of specific financing lines and credit guarantees exclusively for cooperatives, in conjunction with the government, and also that a pilot project of "intergenerational cooperatives" be tested - approved by a majority, with the coalition voting against New Times (PSD/CDS);
• o Livre also managed to create a earthquake risk indicator for residential buildings, fulfilling a proposal that the party had already presented and approved at a town hall meeting (and also in Parliament). Livre wants new construction and urban rehabilitation to be carried out taking seismic risk into account and to have a "seismic resilience form" - approved by a majority, with the coalition voting against New Times (PSD/CDS);
• the PCP was concerned about the public consultation period of the Municipal Housing Charter and wanted to ensure that the for 60 days. The Communists also wanted to ensure that this public consultation period includes "a set of thematic sessions, in an open forum model, where the various measures are disseminated and discussedcalling on its actors, promoters and recipients" - unanimously approved;
• the PCP finally introduced a new measure in the Charter: the preparation of a "Study of Lisbon's Tourist Cargo Capacity"The Communist Party will also carry out a study, in which a diagnosis and evaluation of the impacts of tourism at a local level will be made, mainly in the central parishes of Lisbon. This study, which the Communists had already approved in a proposal presented at a town hall meeting in 2019, will aim to "draw up a Lisbon Tourism Charter and introduce a suitable concept of tourist carrying capacityto be developed with the contribution of various Lisbon City Council departments, universities, associations and other civil society organizations". "The Lisbon Tourism Charter will be the support instrument for the diagnosis, planning and organization of tourism activity in the city, at the different scales of urban planning and will be integrated into the future revision of the PDM, establishing general objectives and identifying environmental, social, cultural and economic conditions of balance for the communities"This measure was approved by a majority vote, with the coalition voting against. New Times (PSD/CDS);

All the amendments proposed by the BE were rejected. One of the main demands of the Bloquistas was to end partnerships between the municipality and private companies for the construction of affordable housingand tried to make all the houses public. Citizens for Lisbon (CPL) - which proposed preventively suspend the approval and licensing of new hotels and local accommodation units in the Housing Priority Zones identified in the Charter - did not receive a favorable vote. Livre, for its part, tried to create a "Tourist Pressure Index" to identify areas of the city where, due to high tourist pressure, it would be necessary to restrict local accommodation - but their suggestion was also rejected. For their part, the Socialists tried to ensure that, in areas identified as having a housing shortage (i.e. where it is declared that there is a lack of affordable housing), private urban development operations would have to have a proportion of the dwellings earmarked for affordable housing; specifically, a quota of 25% of the total number of dwellings produced would be sold at the construction price to the municipality for it to make available in its municipal programs. But the PS saw this proposal rejected with the votes against of the New Times and the PCP and BE abstained.

After discussing the new changes, the Municipal Housing Charter (CMH) was voted on. The document received votes in favor of the coalition New Times (PSD/CDS), the BE and Livre voted against, and the PS, PCP and Cidadãos Por Lisboa abstained..

Approved, now what?

To Councillor Filipa Roseta, speaking to Público newspaper, this HCM "marks a groundbreaking moment in Lisbon's history" e reveals "a public construction ambition only matched by the PER", the Special Relocation Plan, launched 30 years ago. This Charter "framed within a municipal housing system that translates into incentives for the private supply of affordable housing and the redesign of partnerships with the municipality, such as cooperatives and larger-scale operations"; and it is "equally innovative in the definition of rigorous indicators and measurable targets, each year and measure by measure, which allow this political commitment to be continuously scrutinized throughout this mandate and the next". "We are pleased with this approval, which is the result of a consensus-building effort reached with all the political forces and which allows the charter to be passed on to the people of Lisbon so that they can formally have their say on the city's housing policy."concluded the mayor responsible for housing.

In a statement sent to newsrooms, the BE explained the four reasons why it voted against the document: "1) The Municipal Housing Charter is totally liberal. It says that if developers build a lot, prices will go down. It turns out that studies say that this is not true. New construction is in the segments for the rich, since expensive houses are more profitable for developers. This strategy will not reduce the price of housing for Lisbon families; 2) There is a bet on the municipal Affordable Rent Program in a PPP version, with benefits for private individuals. This program has already failed under Fernando Medina, having not produced a single house since 2017, and it will fail under Carlos Moedas; 3) The CMH does not foresee any way of recovering the houses lost to the Local Accommodation business, despite the fact that there are parishes that have already exceeded twice or even three times the ratio provided for in the regulation; 4) The 100% Public Affordable Rent Program, created by the Bloc and the only one that has actually brought 1,400 houses to people, should be the big bet. However, Moedas has an ideological bias towards its success."

For its part, also in a press release, the PCP considers that the new version of the Municipal Housing Charter "there are no fundamental changes compared to the document presented previously, particularly with regard to resolving housing problems". "The CMH does not foresee that the social function of housing will be realized in the case of the tens of thousands of vacant/derelict houses in Lisbon, remaining silent on this issue in this new version. On the other hand, it gives the Municipal Rent Subsidy a dimension that opens the door to the risk of it becoming the central measure of municipal housing policy - far from the circumscribed and focused character it should have - through a mechanism that drives up rents, thus favoring speculation"write the communists. "The PCP councillors, despite the obvious shortcomings and deficiencies of the proposal that has now been approved, did not object to it going out for public consultation, hoping that these gaps and errors, which make it largely ineffective in solving the city's serious housing problem, can be remedied as a result of a broad public discussion and collection of contributions."

What are the next steps? The availability of the Municipal Housing Charter for public consultation, for a period of 60 days and with discussion sessions open to the population, after the publication of the document in Diário da República and on the Lisbon City Council website.