Opinion.
The measures proposed in the electoral programs of the parties with parliamentary seats are analyzed here, taking into account the results that similar policies have achieved in other countries.
Housing is one of the major topics up for debate in the 2024 legislative elections. All parties recognize the need for renewed state action in the sector.
An analysis of programs of the parties with parliamentary seats shows a variety of proposed measures, whose effectiveness is analyzed here taking into account the results that similar policies have had in the past and in other countries.
With this exercise, we want to understand the assertiveness of the parties' proposals in this area.
Increasing supply
A a variety of instruments (tax, liberalization of urban planning, provision of public land, cutting red tape) aim to stimulate construction and put more housing units on the market, hoping that the increase in supply would lower prices.
However, it has been solidly demonstrated that, given the peculiarities of the housing market, the increasing supply does not in itself reduce pricesespecially in overheated markets such as Portugal. Just look at the rapid increase in prices in countries like Spain or Ireland before 2006, when supply was much higher than demand. The use of these instruments is only useful if it ensures that new construction enters the market at affordable prices.
Credit subsidies
The following are presented instruments (fiscal and financial) to support access to credit for home ownership, especially for young people. Although the democratization of property can, in certain contexts, contribute to the reduction of generational and other inequalities, the history shows that these subsidies don't always have the desired effect.
In the housing market, the increase in liquidity structurally implies an increase in prices: one policy brief of 2011 of the Lisbon Landlords Association admitted that subsidized interest rates (the form these facilities took until 2002) led to higher prices, and that the support was only captured by the private sector. There are doubts that this measure will have a redistributive impact on access to property.
Rent subsidies
These are various forms of fiscal or monetary transfers to tenants (from young people to vulnerable families) that allow them to reduction in rental costs.
Careful use of this measure can help some people or families to enter or stay in the free rental market. However, in lack of robust market regulationThe subsidies contribute to the increase in prices, not solving the problem at its source.
Subsidies for affordable housing
It is about generally fiscal measuresThis is a way of attracting landlords and the construction industry to the affordable rental market, according to certain criteria (currently, rents at least 20% below market value are exempt from IRS, subject to certain conditions).
These measures can have an impact in the short term, if there is strong support (which hasn't happened in Portugal), but they coexist with an overheated market and are not reflected in lower prices.
At the same time, the notion of accessibility determined on the basis of market value and not income earned can, in practice, turn out to be inaccessible to a large proportion of the population.
Investment in public housing
Almost all parties support the direct promotion of controlled or affordable housingby making vacant public property available and/or building new public housing. The differences lie in the type of housing to be created.
A large stock of public housing, in addition to solving the needs of the families who access it, can reduce prices on the free market through indirect regulation. To do this, the housing created needs to be kept off the market and, at the same time, the public housing stock needs to be robust. Portugal has only 2% of public housing, it is essential to invest in this sector, but we are aware that the impact will only be felt in the long term.
Market regulation
Finally, some parties are proposing to influence housing prices by limiting specific forms of investment, protecting tenants, setting ceilings for rents or rules to stop them rising. These measures can immediately cool prices and allow time for the implementation of other policies, avoiding gentrification and real estate speculation.
Measures that limit the use of the housing stock by specific activities or groups (e.g. Local Accommodation and Non-Habitual Residents) are desirablebut need to be adjusted at local level. A market regulation should therefore be consideredIt deserves a thorough and enlightened debate on the models to be adopted.
In summary
There is still a long way to go in the operationalization of public housing policies. This recognition on the part of all the political forces is positive. Many of the proposed measures, however, do not take into account the specificities of the housing market or are new versions of policies that have proven to have a limited or perverse impactIn addition to the invisibility in the debate of situations of housing indignity in which part of the Roma and migrant or homeless community lives, or even victims of domestic violence.
The characteristics and specificities of the Portuguese context show that different fields of intervention need to be activatedIt also takes into account the reality of urban centers, where the market is particularly overheated, but also other territorial realities. This need leads us to reinforce the importance of a strategic visionIt is also important that the government is able to establish priorities and take integrated action in terms of housing, which does not stop at access to a home. It is essential to discuss the impact of housing on other issues, such as social and territorial cohesion and climate change mitigation.
Without calling into question the need for a combined response (public housing promotion, tax, subsidy and legal regulation measures), we believe that the The general principles of state action should focus on two directions:
- public investments that aim to increase the range of housing outside the free market, whether in public housing, cooperative housing or other housing unrelated to the logic of the market;
- limiting speculative demand both in buying/selling and renting. Countries and cities that have had and have systems capable of guaranteeing universal access to housing show us that this is the way forward.
Parties that present measures in these directions are better prepared to solve the current housing crisisIt is recommended that measures from various programs be combined for a robust housing solution.
Text prepared by Simone Tulumello, Sílvia Jorge, Rita Castel' Branco, Francesco Biagi, André Carmo, Nuno André Patrício, Luís Mendes, Saila Saaristo. The following signed this text: Claudio Carbone, Tiago Mota Saraiva, Rita Silva, Sílvia Leiria Viegas, Jorge Malheiros, Joana Mourão, Ana Catarino, Marco Allegra, Maria Assunção Gato, Joana Lages, José Carlos Guinote, Ana Estevens, Jannis Kühne, Ana Catarina Ferreira, Ricardo Agarez, António Ricardo, Tiago Castela.
The text is the result of a debate held at the Rede H - National Network of Housing Studies and it was originally published in Público.
