Speaker
Description
In December 2024, the Portuguese government approved Decree-Law 117/2024, allowing private housing developments on rural land with minimal restrictions and bureaucratic requirements, terminating the need for detailed plans or updates to existing municipal land use plans. The government asserts that this measure seeks to grant developers access to inexpensive land to reduce housing costs.
This legislative act is part of the 'Building Portugal' strategy, introduced to address the ongoing housing crisis. This is not new: in the 80’s, Portugal built up a “dual housing system” (Arbaci, 2007) fostering private housing promotion bolstered through state budget subsidized credit and thus leveraging economic development on the construction and banking sector. Portugal has now the 3rd highest ratio of houses per family in OECD (OECD, 2024). Following the subprime crisis, planning policies changed from sprawl and lack of planning to introducing new requirements towards compact city paradigms.
The policy that the government is now introducing seems a return to past dynamics, marking a significant distance from the housing and spatial planning policies that were being developed for a decade, sparking heated public debate.
This paper examines the ongoing policy shift, its public discourse, and the influence of narratives promoted by the real estate sector. We argue that, while the new legislation ostensibly addresses the housing crisis, its primary objective is to bolster the real estate sector as in the past. Faced with evolving market dynamics, the sector is now seeking to redirect investment toward new territories through a “spatial fix” (Harvey, 1982) on rural lands. The new policy framework seems designed to facilitate this goal.
The paper is structured in two main sections:
1. Two Contrasting Urbanization Cycles
The first section outlines preceding urbanization cycles and their underlying public policies.
The first cycle (1976–2008) featured rapid urban expansion driven by permissive planning, private development, homeownership incentives, and subsidized credit. This period profoundly shaped the territory but faced criticism for its unsustainability.
The Global Financial Crisis ended this dynamic, inducing legal reforms that shifted from expansion to urban renewal, from homeownership to rental markets, and from expansion to urban perimeters restriction.
This second cycle, prioritized urban renewal, particularly in central urban areas, targeting high-end markets and tourism. This approach attracted foreign investment and increased property values, contributing to accelerating gentrification and deepening the housing crisis. Post-2017 housing policies attempted to mitigate these challenges, promoting affordability while retained support for urban renewal, rental and compact city paradigms.
2. The Shift: Returning to Expansion
This section examines the recent policy shift, drawing on legislative analysis, GIS-based mapping of property market dynamics, public discourse and contestation analysis.
It argues that the new government policy aims at promoting a new urbanization cycle, returning to expansion and densification of low-density areas. Such policy reflects pressure from the real estate sector, which frames the housing crisis as a supply issue solvable through tax incentives, expedited licensing, and access to inexpensive land.
This narrative – and its massive presence in the media – is recent, and results from changes in property market dynamics: as property values in urban centers approach saturation and rising construction costs limit gains, developers are incentivized to target new territories with higher profit margins.
This paper concludes by positioning the Portuguese case within broader international debates on housing crises and planning paradigms. It reflects on the implications of prioritizing real estate sector interests, questions the sustainability of reverting to expansion as a solution to housing challenges, discusses the potential increase of impermeable area and threats to agricultural uses and ecological structures and highlights the risks of undermining spatial planning legitimacy through land use liberalization via exception mechanisms.
References
Arbaci, Sonia (December 2007). Ethnic segregation, housing systems and welfare regimes in Europe. European Journal of Housing Policy, Vol. 7, No. 4, pp. 401- 433.
Harvey, David (1982). The limits to capital. Oxford.
OECD (2024) OECD Affordable Housing Database - indicator HM1.1. Housing stock and construction, https://oe.cd/ahd. Directorate of Employment, Labour and Social Affairs - Social Policy Division .
| Keywords | Urban Expansion; Planning Cycles; Housing Crisis; Public Policy; Real Estate |
|---|---|
| Best Congress Paper Award | Yes |
