The design of the city is changing. Today at families seek to live with a quality of life in urban centers, which means living close to work, schools and all public services and facilities, but also parks and gardens – a trend that has emerged strengthened from the pandemic. But cities live with a structural problem: there is a lack of affordable homes and therefore compatible with the Income of people. This reality primarily affects the youngest layer, but also all middle class. And it is for them that housing policies are currently being considered in Lisbon, Porto and Funchal (Madeira), with a strengthening of the supply of affordable housing, guarantee the respective mayors. The subject was discussed during the conference which, this Thursday, March 12, marked the start of the Lisbon Real Estate Fair (SIL) and idealista/news now has the main conclusions.
“There is a group of middle-class people, young couples and people who want to leave their homes, but cannot find affordable housing.” Rui Moreira, Mayor of Porto
There is one point that unites the three mayors: “We want build the city look at people,” said Carlos Moedas. And that means creating housing policies think of everyone. Although he considers that “there is no solution or magic wand to the housing problem”, the mayor of Lisbon has stressed on occasion that there are designed solutions, which have come first, for “those who have nothing”. From now on, the municipality is focusing on creating a supply of housing for “those who are not eligible for social housing or for affordable income programs“, like the police and firefighters, arguing that there is an ongoing project in this direction.
Indeed, as Rui Moreira explains, “the cost of housing has skyrocketed, while the Portuguese disposable income has not increased in the same way and is even lower than the European average. This dichotomy forces cities to make huge, targeted investments,” the mayor of Invicta said. And this scenario creates a new challenge, as admitted by the mayor of Porto who participated in the conference via Zoom: “There is a group of people from middle class, young couples and people who want to leave home but cannot find affordable homes. It has to do with giving up support projects to have a place to call home – the model burned out at some point,” he also argued.
Also in Funchal are being designed “public policies for youth housing», a measure that aims to make more affordable homes people, but also seeks to encourage the creation of young couples in this municipality of Madeira. Indeed, while the population aged 65 and over has increased, the percentage of the population aged 14 to 25 has decreased in the municipality. “The main concern is to adapt the cities to the people,” said Pedro Calado, president of the town hall of Funchal, present at the event. And for that “we must have a city ready to attract talentto attract residents who are also looking for digital nomads”. “We need to think about how to increase birth and create conditions for people to settle in Funchal”, added the mayor of the capital of Madeira.
What are the current solutions to create housing for young people and the middle class?
In the opinion of the mayors, for create housing for young people and the middle class it is necessary to combine a set of measures. Go through:
- create public-private partnerships,
- create housing cooperatives,
- benefit from the support of Community funds.
- speed up licensing
- create the conditions to make this investment more attractive.
More agile licensing
On this occasion, Carlos Moedas stressed the importance of speed up licensing“We are increasingly accelerating license approvals”, but this “requires clear rules and rapid responses from developers”, he explains.
What is happening in the city council of the Portuguese capital is that “70% of the processes do not have the necessary information and are poorly instructed”, admits the mayor of Lisbon. And so, “an academy has been created to instruct the processes: you have to work with the people upstream so that the processes go well”. And with this measure, we are “already working on process acceleration», recalling that through a platform promoters can see the state of Licence.
Rui Moreira also pointed out this morning of the first day of SIL2022 that “having Licence faster, helps streamline processes and not increase housing price.
Attract private investment from municipalities
THE private investment is part of the equation to solve the problem of middle class housing. And the role of municipalities is also to create mechanisms that attract more developers to develop housing solutions for families.
One way that the Municipality of Porto has found to stimulate this relationship has been to create an “interface between the municipality and the private sector, an agency for simplification and investment promotion within Porto City Hall. And “Porto has managed to attract a lot of investment this way”, reveals Rui Moreira.
In addition, another solution is under consideration. private public partnership: “The municipality cedes municipal land, hands it over to private individuals who exploit it for long periods of time and provide affordable housing,” explained the mayor of Porto. But, he warned, it is “a difficult equation”, because “private investors have yet to be interested build to rent“, largely because of the “imminent risk linked to the rights acquired by the tenants”.
“We have to change this paradigm” and with this objective, according to the mayor of the city of Invicta, it is necessary, on the one hand, “to reconcile the existing typologies and what the demand wants” and, on the other hand, ” to create a relationship of trust with investors”. To this end, “we must also fiscal stability and public policies”.
The Mayor of Madeira also agrees that “it is important to convey security to investors” and that is why the Funchal City Council is trying to align itself with the Madeira Regional Government “for the benefit of investors and of housing policiessaid Pedro Calado, adding that the municipality is also investing in tax breaks (5% VAT on construction, IMI and IMT exemption), as well as in the figure of process manager to support entrepreneurs and speed up responses.
Leveraging Community Funds
“We want to leverage community funds from the recovery and resilience plan to create homes for young people“, underlined the mayor of Funchal. But there is a problem here that extends to the rest of the country: “The cost of raw materials has tripled, we are short of manpower and we risk reaching the deadline  and miss the opportunity to apply the funds”. “Either they adjust the deadlines, or the whole country is wasting community funds,” warned Pedro Calado.
The metamorphosis of urban centers to the city of 15 minutes goes, but at low speed. And, therefore, we must work to “accelerate the change of processes that are slow, mainly because the source of funding run out easily,” said the mayor of Porto.
What are the challenges for creating the cities of the future?
In addition to creating the conditions to create solutions for middle class housing, the mayor of Lisbon admits that “when you think of cities, you have to think beyond urban planning and real estate”. And believe that to create future city three current challenges must be met:
- Digital: “Realizing that the world of cities has completely changed” and that we are facing a “fusion between the physical and the digital world”, in which the “physical through the digital can speak to people through sensors. This can help not only to manage the city, but to build the city”, admits the mayor of Lisbon. For example, a sewer system may be able to detect if there are public health issues in the city.
- Sustainability: “A much bigger challenge for the construction and real estate industry, it has a huge responsibility. And know how to build a more sustainable real estate, goes through the materials, but also through the processes we use. And when town planning doesn’t work [os processos de licenciamento]we are not contributing to sustainability,” said the mayor of the capital.
- Attracting talent: “A city must be a hub to attract talent. People should feel good in the city. When we talk about unicorns, we are talking about the need to attract talent. We must have the ability to focus on innovation and technology,” concluded Carlos Moedas.