At a time when Lisbon's Municipal Housing Charter is being discussed, we sat down with Councillor Filipa Roseta to talk about the city's strategy for housing over the next 10 years. The conversation focused on the importance of having a vision, the new commitment to housing cooperatives, the answers for the middle class, the municipality's Affordable Rent Program (PRA) and the IMT exemption for young people up to the age of 30 to buy a house, and ended with a metropolitan vision.
In October 2021, the local elections interrupted the Socialist cycle in Lisbon City Hall, causing a disruption in several policies that had been followed until then. Housing was no different. Since 2007, when the PS took over the running of the capital's municipality, Lisbon's housing policies had been the responsibility of the Cidadãos Por Lisboa (CPL) movement, which stood in the various elections in coalition with the Socialists. Between 2007 and 2013, Helena Roseta - who began her political career in the PSD, then switched to the PS and finally joined the CPL - was in charge of housing. In 2013, she was succeeded by Paula Marques, also from the CPL, who had already worked as an advisor to Roseta. Marques remained Lisbon's housing councillor until the last elections.
Social Democrat Filipa Roseta, Helena Roseta's daughter, has now taken over the housing portfolio, in a mandate that began with a major challenge: to develop the Lisbon Municipal Housing Charter to respond to the housing crisis in the Portuguese capital. The Charter, required by the new Basic Law on HousingThis is the strategic document that brings together a diagnosis of Lisbon's housing situation and defines a set of measures to solve these problems. It's not the first strategic document to be produced on this subject - in 2009, we already had the Local Housing Program and, more recently, the Local Housing Strategies, which have allowed municipalities to resolve, together with the IHRUIt is the first document to link shortages, undignified housing situations. But it is the first document to link needs, measures, resources and sources of funding.
Lisbon's Municipal Housing Charter seeks to respond to three main objectives: eradicating poverty, settling families and promoting a more sustainable Lisbon. When it is fully approved, it will have a ten years, until 2033and will represent, in the different measures and proposals, an investment effort of 918 million euros. At the moment, and until February 2nd, the Charter is available for public consultationAny citizen can send in comments and contributions. The document will then be finalized, approved by the City Council and the Municipal Assembly, and will enter into force.
At a time when the Municipal Housing Charter is being discussed, we sat down with Councillor Filipa Roseta to talk about the city's strategy for housing over the next 10 years. The conversation focused on the importance of having a vision, the new commitment to housing cooperatives, the answers for the middle class, the municipality's Affordable Rent Program (PRA) and the IMT exemption for young people up to the age of 30 to buy a house, and ended with a metropolitan vision.
You can navigate the following interview using these shortcuts:
The importance of a strategy | Cooperatives | Middle class | IMT exemption | Priority in PRA tenders | PRA Concessions | Metropolitan vision
When Filipa Roseta took office as Councillor, the first thing she did was to start defining a new strategy for housing, taking the legacy she had and proposing new measures. And she took advantage of the fact that it was necessary to draw up a Municipal Charter, which is basically this strategy. How important is it for you to have this long-term vision for the city?
It's really decisive. There has never been one of this nature, because it wasn't obligatory by law either - it only has been since 2019. But why is a 10-year strategy so important? Because now we know what we have to do so that, in 10 years, we have all the municipal assets in use. This is extremely important, it hadn't been done before. What was done before was a diagnosis of the shortcomings. We've had the Local Housing Program with this diagnosis since 2009. So, since 2009 we've known what the needs are, what has been done now? We've defined the way to respond to these needs. That wasn't done.
Now we have to respond to these needs. We have to have a 10-year, very concrete, tailor-made plan of how we're going to pay for it, who's going to do it, how we're going to get each measure moving. And that's what the Municipal Housing Charter is. It's a 10-year timetable with associated financing. So it has everything we need to make it happen. That's why it's really important. It's one thing to identify what the problems are, it's another to have a solution program to solve them. And the Charter is the solution program to solve them.
And couldn't some problems have been solved earlier?
There are parts that could and parts that couldn't. Lisbon City Council is the largest landowner in the country. What wasn't done, but which was fundamental - and which this Charter does - is to identify the municipal property that can be put at the service of needs. This is crucial and could have been done earlier. Basically, it's a plan with all the public property identified and all the capacity of that property. There are nine thousand homes. So we have the property to build 9,000 homes.
This is what could have been done earlier, it wasn't done, and it's important to do it. And the Basic Law on Housing says that this is one of the fundamental things in the Charter, which is to identify areas with housing potential in order to respond to shortages.
It was in this diagnosis that they found the empty houses...
Exactly. Apart from the fact that there are several empty houses in the city, the 46,000, we were also very concerned about our own houses. In other words, what we've identified is that the City Council itself has potential in its property that hasn't been realized. And that's what has to be done, that's our first priority. We have identified a potential of 9,000 houses on municipal land, in other words, on our properties, in addition to the other empty ones that we already know about. Of these nine thousand, two thousand are houses that were simply empty because they needed money to be rehabilitated and put up for sale. And seven thousand are either plots ready to build new buildings, or land that needs to be developed to build new buildings.
And what did we do? We put all this in motion and had a plan to make sure that these things come off. The empty council houses that are just being rehabilitated and then just put out will come out faster. Next will come the plots with new buildings, which will take two or three years to be built. And then, at the end, the large plots of land that the council owns and where we have to do urbanization work to produce whole new parts of the city. So this part of identifying municipal property and the potential for municipal housing wasn't done either. It was important that it was done and it was our first priority, it's something that the Charter sets out. It's very important that the Charter is fixed, that it is approved as a document that says what the City Council's capacity is to do.
And the Charter has another advantage: looking at municipal budgets, the annual money invested in housing used to be 14 million, 20 million, 30 million a year in housing production - which was more rehabilitation than anything else. Now we're over 100 million almost every year. So it's also going to give us another kind of investment capacity.
The PRR is a great help...
The PRR is a great help in this field, especially in terms of being able to have a much higher budget than we had. But note that we always have more budget than the equivalent year in the previous decade. So not only is the City Council committing more of its budget, because the PRR doesn't pay for 100% of the interventions, but it's also leveraging a lot with the PRR. So that's the part that we're now taking advantage of from the PRR.
In short, what do I think could have been done that wasn't? It was this diagnosis of what the council could do with its assets and an associated schedule of interventions. Another thing that could have been done, but not only - and which we are doing in this area of increasing production - is to work a lot on partnerships, whether with cooperatives or concessions. This is also something that could have been done throughout the previous decade, because the only thing the council is going to invest in is land. It's the families who pay for the construction. These partnerships, especially at the cooperative level, have not even been tried. We're going to try and we have three plots of land for partnerships with cooperatives. This could have been done even without a budget because it doesn't have a big impact on the municipal budget.
Cooperatives are, in fact, part of Lisbon's new housing strategy, at a time when in other European cities a new generation of collectively-owned housing cooperatives has emerged, as opposed to individually-owned cooperatives. But Filipa Roseta didn't want to close the door on one model and embrace both. Why?
We are completely inclusive. And we think there are people for everything in society. We're going to put our land to use for everything, in other words, we're not going to close down collective ownership, because I don't even understand why. Why should I stop a cooperative from wanting to organize itself into individual properties? We're not going to close down either model, that's what we've always said. We're going to have properties for cooperatives, we're going to launch a public auction and whoever wants to come along. I'm not going to close down and forbid people from organizing themselves with individual surface rights. But they can also come in collective ownership if they want to organize themselves that way.
Why are there few cooperatives?
It's not because there are few of them. What I think is a model that was used a lot in the 1990s; it built practically the entire Telheiras neighborhood. It's something our city has a history of and it seems to us that it could work because of it. But it's disappeared in the last two decades, and with the council having land, it's hard to understand why. What I think is that, having this land, we have to launch it in the most inclusive way possible to see who comes. Because the model has disappeared, it's collapsed; the cooperatives exist, but there have been various problems. The cooperatives haven't been able to carry out some projects that were underway. So there have been problems and we're relaunching this movement. What we think is most prudent is to try to open it up to everyone, and not just close it off to one type of person, those who want to live in collective ownership. I believe they will come, but we won't close to them, but we won't close to the others either.
And also, within the theme of whether the property is collective or individual surface rights, it's important to say that the property always remains with the council, because it will never be sold. So we're always talking about surface rights only, i.e. whether the surface rights remain with the cooperative and it manages them collectively, or whether the surface rights remain with the cooperative but it's each family that gets a share. These are two different models, but at the end of the day, ownership of the land itself always belongs to the council. So this is the same for both situations. Now, how the cooperatives want to manage themselves, I'm not going to interfere in that. They have to come, they have to compete. And if a collective wins, that's fine.
The tenders that the City Council intends to launch for the cooperatives already come with closed architectural projects, but cooperatives in the city that are working on these collective housing models would also like to be able to decide, with the architects and together, on their houses - whether they have a garage or not, what types of dwellings, what the common areas are like. Why doesn't the City Council open up more of these processes?
We have three projects that are already done. They were architectural competitions and we're going to launch with closed projects, on the one hand, because the families will receive the project, which has a value in itself, has a cost that they won't have to pay, and, on the other hand, they won't have to go to the urban licensing office. Because they go with the project already closed and approved. So when they enter these tenders, they have to start building straight away. This is for families who don't want to waste a lot of time. They don't want to waste a lot of time defining the project and designing it. But I'm also going to launch them for others. The idea is to be inclusive. I'm also going to launch some with approved equipment and with projects yet to be defined. And then let the ones who want to define the projects, who want to go to the town planner, the ones who have more time, come along; basically, they're going to waste time and money because they don't have the project either. They have to pay for it. As the cooperatives have opened up a lot to this issue, I'm going to launch at least one of them, so that those who really want to do the project, pay for it and go down this path, also have this option.
Now, what I think is that it would be very important for this model to work, because as I said earlier, it's a model that can work even when there's no municipal budget, because what you need to give is land and the council has land. The rest, the financing part, is up to the families themselves. And they only pay for the construction, which is almost half the market value. So it's a much lower price for that house. It's something that's very difficult to understand because it hasn't been done; and we have to open up these first products as much as possible. Because if I only close to certain types of people, it's strange at first, but it's also not very pragmatic, because I don't know who is really coming. To make sure that people buy in, it's best to open as many models as possible. In the first five, there will be one where people can come and do their own project.
And do you already know where this pilot is going to take place?
It's an allotment in Marvila, but I'll give you more details later...
Another sensitive point in this issue of cooperatives is financing. What role can the Chamber play in this area?
We've been working with the banks, with all the banks, and with Banco de Fomento, which is a bank that's different from the others, to try to figure out the best format for families to get financing. And we're working with the banks to make them aware of this, which I think is the best thing we can do. Because if we can get the banks to support this model, the exponential is much greater than the line of financing that the government is doing, which is very limited. For the whole country, it's very small: the 250 million they're talking about is for cooperatives and affordable housing. We have two Affordable Rent projects in Lisbon that are worth 100 million. Those two big ones, the Benfica and Parque das Nações. In other words, it's a line that won't solve everything. It's something specific and very defined that will be available to a few people, but only a few. But if the banks are also part of this movement of cooperatives, there is no limit to what can be financed for families. There's no limit to the number of cooperatives, because as long as the banks make it possible, it will go ahead. So that's the work we're doing.
That doesn't mean that people can't go to this government line, but I think that this government line will always be limited in time, size and value. The most interesting thing, and this is what happened in the past, is that there is organic financing in the market. I'll say it again: we have the capacity to build 9,000 homes, so it's a lot of housing, but the City Council won't be able to build everything; even with the PRR it will be difficult because the PRR itself has a limit and it's being distributed throughout the country, not just to Lisbon. So we have to find other ways to build these 9,000 homes. The municipal budget isn't enough, the PRR runs out, we have to find a way. And if we get cooperatives that can work with banks, it's much more interesting because we have an organic system. We want to create a new model of cooperatives, which has to work in the market. Because if it's something that's only closed for a government program, it's not a new model. It's a pilot project; it might be something interesting and good, but it's a pilot project. A new model is something that works naturally. And that's what we really wanted to create. It was a new model of cooperatives that would work naturally, on its own, between the council and the families.
One of the arguments that Filipa and the rest of the Executive raise when talking about this Charter is that it covers various sectors, from municipal neighborhoods to renting and even buying a house. But hasn't the middle class been forgotten, bearing in mind that the Affordable Rent Program has its limits and also that it doesn't reach those who earn between the minimum wage and the average wage?
We've already set in motion - and it's also in the letter - a support for universal income. This is something that doesn't exist, it's a paradigm shift and it's totally for the middle class. In other words, rent support means that if you pay more than a third of your salary in rent, the council pays the difference. If a third of my salary is 300 euros and I'm paying 500, the council pays 200 euros a month, which is so that the person can pay for the house and not lose it. We are currently monitoring 800 families and another 500 have already applied. And, above all, the most important thing is that we reached all the families who applied and who met the criteria. To date, this has been universal. Those criteria are to have an income between the minimum wage and 2,500/month, one person, 3,200, two people; and to be paying a rent of more than a third of that income. With associated rent ceilings: up to 600 for a studio, 900 for a one-bedroom, 1,200 for a two-bedroom. So these are real rents. These families are paying a median of 200 euros a month.
Note that this idea of rent support is very important because in the middle class, in fact, the shortage will always be much greater than the houses we've managed to produce in the PRA [Affordable Rent Program]. In fact, the affordable house isn't the house itself; it's the rent that the person pays. So if I support the rent, any house on the market can be affordable. I suddenly don't have to build 10,000 houses because they're on the market. If I'm already supporting 800 families at the moment, and we have 500 applications for a new competition. So I'll quickly pass the thousand. This year, I'm going to pass the 1,000 families supported, where for these 1,000 families the rent is affordable. For these thousand families, with rent support, the house they're in is affordable. And then they'll file their IRS over the years and if they start earning more, they won't get that support anymore. But the moment it was needed, the council supported it and the rent became affordable.
This is very important: to have the notion that the middle class is being supported as universally as ever. There was never this idea that anyone who applied within the criteria was supported. There is no lottery, unlike the PRA.
How does the PS's proposal for a subsidy for young people's rents fit in with the council's rent support?
Their proposal comes after this income support. What the PS asked us to do in the budget, and we did it, was to provide more support for young people. We realized that what they had proposed was something that didn't pay off. It was better to come to ours than to come to what they had proposed, and they all applied for what we had already opened up. The young people are in this program. Because this program we're doing is for everyone. There's no limit to being young or no longer being young. But what did we do? We've negotiated with the PS and we've now launched support for young people that gives young people a slightly better benefit - and we're going to see how many people apply - which is a lower effort rate: instead of 35%, it's 28%; and it also lowers the income a little, from the minimum wage to a little less. Because we found that young people don't earn the minimum wage, they earn a little less. And so this line for young people goes precisely to young people who earn less than 760 euros a month.
But the middle class is being supported like never before. Because before, it was houses with lotteries - and we're still doing them, there's been no stop to that; except that, for every 100 houses, three thousand people compete, so there are a lot of people who are left out. That's why we thought that rent support was so important, and we made this measure universal. This was immediately a measure in the package that Carlos Moedas announced when inflation began to soar towards 2023; it was a measure that we felt was absolutely urgent so that families could get to the end of the month and not have to leave their homes. The middle class is not excluded at all, quite the opposite. Never has a measure been implemented so quickly in three months. In three months, we were supporting access for families.
And now, this competition for the 500 that we are now evaluating is specifically for displaced people. For example, for teachers who were posted to Lisbon in August and need to live here; know that there is this measure, don't stop coming to Lisbon and the City Council will help pay the rent. So our first competition was for everyone, in December 2022. Our second was now in September, to get a lot of teachers, but also thinking about nurses, policemen, everything that is displaced - the people who are placed in Lisbon and who don't come because they can't afford the house. It was very much with them in mind, because the city needs them. These are the 500 candidates we're now looking at. And we've also launched the PS program, lowering the salary a little, thinking that young people don't even earn the minimum wage and they're the ones who will come to this program.
The exemption from IMT for young people up to the age of 30 who buy a house came out in the Charter, but has now reappeared in this Municipal Budget with a new ceiling of 300,000 euros. Could this new ceiling make a difference to the approval of the measure?
I don't know, let's see. Predictions only at the end of the game, as you say. It's a measure that's often failed.
But is it an important measure?
I'd say yes, it's fundamental for us. And the idea here is to keep young people in Lisbon. Why support for young people to buy a house in Lisbon? They ask. Why do young people need support? It's important to keep them here. If we want to keep young people, the best measure is to help them buy a house. If they buy a house, they can move to another city, but they tend to stay here; they have a reason for wanting to stay here that probably outweighs the reason for wanting to leave. It's a brutal fixation measure. And it can take pressure off the PRA. The idea is to provide support at all levels so that people don't have to leave Lisbon. Settling families is one of the Charter's main objectives.
Are you still in favor of giving priority to those who already live in Lisbon in the PRA tenders - a proposal that was rejected by the opposition?
I still think it could be a good measure. It would be a priority, not an exclusion. As I say, I have rent support and I have a special one for displaced people. So I want people to come here. In other words, the people who want to come, I've already found a way for them to come. Now, I have people who are being driven out of the city and who live here, have children... they're being driven out of the city by the value of the rent itself. If the council has these houses to give away, which are more stable contracts than rent support - because they are five-year council contracts - what I was proposing was to give priority to the families who are being pushed out of the city.
I still think this is logical. But if they tell me no, this is democracy, the opposition doesn't want it, fine. But I still think it would be totally logical for the few houses that the council has for affordable rent to be given priority to those who want to stay in the city. Because our priority is to keep families together. In those affordable rent tenders, we put up 40 houses and 1000 people apply, or 100 houses, 3000 people. It's a huge disproportion between the houses we put up and those that compete. And the people competing are from all over the country, from the north to the south, islands, whatever. There is no priority. I might have someone next door who's going to have to leave Lisbon because they can't pay the rent. And someone from Castelo Branco comes. I have nothing against that. I'm even supporting the rent for the person from Castelo Branco to come, but I have to give priority to those who have been here all their lives and are leaving because they can't pay the rent. I think it's only natural, not least to keep the social fabric together, so that there's territorial cohesion.
I'm not excluding anyone. I'm giving priority to the dramatic situation of several families we have who are having to leave and uproot their entire lives to go elsewhere because they can't pay the rent here. And because every time there's a draw, thousands of people come from all over the country. This makes no sense to me. In fact, there has never been so much support for people to come from abroad to live in Lisbon, there has never been this thing of paying a third of the rent to anyone who comes. There has never been such a thing, we're opening it up for them to come, especially these displaced professionals. But these draws should, in my opinion, give priority to people who live here. And I can't understand why this is so natural for me. I'm an architect, as you know, and architects study the relationship between territory and people a lot. People have a relationship with the territory. The idea that a person doesn't have a relationship with the territory is a bizarre idea.
Still within affordable rent. The PRA in partnership with private individuals, that is, the so-called PRA Concessions, has had some difficulties because it is not attractive to these private individuals. Do you already have a solution to this problem?
We have a lot of land for cooperatives, but it's smaller, it's a smaller level of investment. And we have these big ones, which are large investments, of 60 million, in which a promoter has to come in to do it with a professionalization of the whole model. What are we going to do? We're going to try to launch Benfica and Parque das Nações again. The tender was open until December last year but no one came forward. So the idea is to launch a new tender. This year we've been talking to the banks and various developers to find out what they didn't like about the model so that we can launch it again, but this time successfully.
There were basically three things. The model was a little cumbersome to contract, because it was a concession and every change that was made had to go to a town hall meeting, any change over the 90 years of the concession. Imagine that a concessionaire took the property and then in 10 years' time wanted to sell it on to another developer, and it had to go to a town hall meeting to be approved. This is a huge risk. You can't depend on this. What we're trying to do is let him keep it under those circumstances and, if he maintains all the same circumstances of the agreement he's made now, he can sell it to the other developer, as long as the circumstances are exactly the same. We were told a lot about this, that it was a very big risk, a very big uncertainty, for the developer to depend on whether or not the City Council approved it at a meeting if, for whatever reason, he wanted to sell it. Our model now is to make a public auction of the surface right so that it doesn't have to go to a town hall meeting every time this transfer of ownership takes place. This is one thing, the first problem we're solving.
The second problem is the value issue. The cost of construction has also gone up with the war, and interest rates now, so we have to try to make the model more attractive. What we're doing is, instead of following the municipal rents, we're following the rents in the 2019 affordable rent ordinance, which are higher than the municipal rents. So we've raised the rent package but there's no longer any free rent. So the houses are all for affordable rent, but the rents are a little higher than the municipal rents, which are the municipal houses that we do. And what is this higher rent? It's 20% below the market. The municipal ones have been fixed and frozen for some time, the others are 20% below the market. So you can see in the parish what the market is, it's 20% below market. Therefore, for developers it's more appealing because they can have a higher level of rent, which can offset the issue of interest rates and the issue of the price of construction.
The previous program was based on the 70/30 percentage - 70% for affordable rent and 30% for the private to sell on the free market? So now it's 100% for affordable rent?
All for affordable rent. In the end, the developer gets the land. He builds everything and keeps it all for affordable rent. This seems simpler to us. But all this will also have to be negotiated with the other parties to see what happens. The idea is to try to do something that is simple to understand and very flexible to implement. There are a number of exemptions, practically everything we can exempt, we exempt. And we're also reducing uncertainty. Because in the previous tender there were also some uncertainties in the subdivision, we've reduced those uncertainties and we think that this could also make it more attractive for developers. We'll see.
The housing problem is not exclusive to Lisbon. Should we be thinking about a Metropolitan Housing Charter instead of tackling this problem only on a municipal scale?
I thought that was great. In fact, one of the measures in our Charter was precisely to have a Metropolitan Housing Council. Because we don't think it's a problem that can be solved within each municipality. We hold a lot of meetings with the Metropolitan Area to try to understand how things are going, but there isn't really a policy for the whole metropolitan area. There's no such serious figure. I think there should be a body that can coordinate all the municipalities because housing is a central issue. Lisbon is under pressure and maybe we can work with other municipalities to take pressure off the centers, to create new centralities. And link housing policies with transport policies, because it's a question of time - if I have good transport, I can live a little further away from where I'm working, for example.
But what is really missing is this metropolitan authority that can take a political view of the whole metropolitan area and not just a piecemeal approach. What is done today, by the nature of things, is piecemeal. You add up what each person wants for themselves. We felt that it was important to have a Council that would sit down with a vision for the whole and be able to articulate this overall vision.
And how could this be done? Would the government have to give more powers to the Metropolitan Area?
I'd say that if we could set up a political body with all the elected representatives from each municipality just for this purpose, that would be good enough. And in conjunction with transport. What we propose in the Charter is that we start holding - let's see if this is possible or not - meetings to coordinate the various problems with all the councillors in the area. We have something very good in the parishes, called the GABIPsThese are co-coordinating structures in the parishes. The problems are put around a table and everyone makes the decision there. But it has to be a political decision-making body, because everyone makes the decision there, on the spot. I go as a councillor, the Mayor is also there and we make decisions there, at that moment, with the residents' association, with the local partners. Basically, it was something like this that we'd like to replicate on a metropolitan scale, where 100 people with some political authority were sitting down, not just the mayors, but also other political leaders from each municipality. This is already done at various levels, in transport, for example, there is already more of this idea that this has to work on a metropolitan scale. In housing, the only thing that exists is a kind of compilation of county programs and not so much a political vision for the whole.
Do the councillors already talk to each other in any way?
In housing, this is not the case as it is in transport, that's all I can say. We talk, but it's not a vision at all. It's more about what's happening, sharing experiences, good practices, what others are doing, what we're doing. It's more like this and not sitting down to draw up a vision for housing in the Lisbon metropolitan area, which is exactly what was needed. And in conjunction with transportation. Because otherwise we'll just be adding up strategies and not really having an overall vision. And there you have it, housing and transport are a complement that have to work hand in hand.
I also say in the Charter that one of the most important issues for the metropolitan area is migrants. It's an issue that clearly impacts the entire metropolitan area and can't be resolved on the scale of a single municipality. You have to see what's going on in the whole metropolitan area. So, for this reason alone, it would be worth having a strong political council that could make strong political decisions on this problem and that was articulated, thinking and looking at the problem. I'm putting a problem on the table because sometimes people think too much about organizations and less about problems. That's what we see in the parishes. And when people look at a problem, they're finding the solution; they're not thinking about all this political machinery that sometimes gets in the way more than it helps. So sometimes looking at a problem, sitting around the table, is the best way to solve it. So, if we could put the problem of migrants on the table in the Lisbon metropolitan area, something interesting might come out of it.
