Ricardo Correia was just months old when he came to live with his parents in one of the municipal houses in the Condado neighbourhood, in Chelas. Today, in the same building where he still resides, only three municipal houses remain. The rest, including his, were bought by those who lived there.
This is happening throughout the neighbourhood: over the past three decades, the Lisbon City Council has sold, under the terms of municipal contracts, 35.9% of the properties it owned in the parish of Marvila (to which Chelas belongs) to its tenants. And this is one of the factors pointed to in the current housing crisis in Lisbon.
It is a controversial issue that divides those who advocate for the right to property of those who inhabit these houses and those who believe that the State, in its various forms, should have properties that allow it to intervene in the housing market. To put it into perspective: if each of these sold properties in Marvila (sold to municipal tenants) were to return to the city’s ownership, the municipal housing stock would immediately increase by 12%.
In some municipal neighbourhoods in Chelas, the percentage of residential properties sold exceeds 80%, such as in Condado Antigo– 82.4%, or in Amendoeiras Neighbourhood/Zone I, with 70%. In the Prodac South and Prodac North neighbourhoods, the percentage is also 70%, but the situation here is different as the houses were self-built by the residents.
What is stipulated in the municipal contracts?
In Chelas, a significant portion of the construction is municipal property – and some also belong to cooperatives. The parish now holds 21.3% (which represents 1/5) of all municipal housing, totalling 23,557 in the entire city. However, over the last 30 years, municipal contracts have systematically provided for the sale of houses to their tenants.
And this number has been decreasing.
As stipulated in the contract, the alienation of municipal properties took place between the Lisbon City Council (CML) and interested tenants, with common values well below the market – ranging from 20 to 30 thousand euros. What this document, the Municipality’s Real Estate Heritage Regulation, determines is that houses cannot be sold on the open market (this is called “the burden of inalienability”) for ten years (with variations).
However, after this period, the sale becomes unrestricted.
And that’s what’s happening.
How much have the houses’ prices increased in Marvila and Chelas?
Chelas is beginning to witness this phenomenon: the rise in prices. Although slowly, the thousands of properties already sold in municipal neighbourhoods are entering the real estate market at increasing prices, with added value that can approach 1000%, contributing to the deepening housing crisis in Lisbon. This means that houses that the City Council sold for 30 thousand or 40 thousand euros are now being offered for sale at 200 thousand euros.
The trend in Marvila – the parish to which Chelas belongs – is real estate valorization, according to the Confidencial Imobiliário portal, which even speaks of an approaching alignment of real estate values between this parish and the other parishes in the city.
Despite still being one of the city’s parishes with the lowest square meter sale prices, about 20% below the city’s average, housing prices in Marvila are growing at a faster rate than the municipal average. While property transaction values across Lisbon increased by 19% between 2019 and 2023, in the Marvila parish, the growth was 44%. This includes some new constructions, according to the portal’s analysis.
It is “one of the Lisbon parishes where transaction values show a more robust evolution in recent years”, says the publication.
Ricardo Correia began and completed the process of buying his house in 2022. He says he intends to stay in the Condado neighbourhood, also known as Zone J, but not everyone who, like him, transitioned from tenants to owners, thinks the same way. With real estate speculation affecting the Chelas area, the temptation to sell the house for current market values becomes irresistible.
In the Flamenga neighbourhood, Ana Lopes, who also bought her house from the City Council, admits when asked if she feels tempted to sell her house: “Who knows, maybe one day…”
For many, the amount they could get from selling would allow them, for example, to return to their hometown and buy a better house – a story that is echoed by residents and experts.
The controversy of the alienations
In addition to the increase in prices according to the market, alienation policies lead to the city losing significant capacity to respond to the housing crisis. “Alienation is not positive in the context we are living in”, says Luís Mendes, a researcher at the Center for Geographic Studies (CEG). “It weakens the influence that public authorities should have in terms of property when the opposite should be happening.”
He further emphasizes that “municipalities must mobilize not only land but also their built property to address this crisis and combat housing precariousness.” “To do that, they have to possess as much publicly owned property as possible”, he concludes.
These policies have always been closely tied to the deeply rooted culture in Portugal: that of property ownership.
“It’s a culture with profound reasons”, says Paula Marques, Councilwoman for Citizens of Lisbon at the Lisbon City Council and former Housing Councilwoman in the previous term. “It has to do with the idea of me having a possession and being able to pass it on to others” – which is one of the main, if not the only, ways of accumulating wealth in Portugal. This culture is particularly present in rural populations, including those who settled in the social neighbourhoods of Chelas.
For years, while the housing crisis did not overshadow life in Portugal, these policies were in place. The alienations were planned and agreed upon in contracts.
The planning established which lots could be alienated, and from that moment, residents in those buildings could decide to proceed with the purchase, provided they met a set of requirements, such as having regularized their housing situation in the property for more than a year, as explained in the Municipality’s Real Estate Heritage Regulation.
The values practised in alienations, always well below market values, are listed in tables and have reduction factors proportional to the age of the beneficiaries and the number of years each resident has been in the lease agreement with the municipality. The guidelines have changed over time, and there were times when it was only possible to alienate fractions if a percentage of the building was already privately owned.
In 2014, sensing early signs of the housing crisis, the executive led by António Costa chose to suspend new alienations, without prejudice to the previously approved plans in 2010, 2011, and 2012.
“We were in a political process of the need to increase the stock of public housing, and there was public heritage entering the speculative market”, says Paula Marques.
The suspension of new alienations sparked the obvious controversy, with complaints from residents who felt unjustly treated. A Facebook post in a Chelas group illustrates how residents who couldn’t buy their homes, as they were not included in the annual alienation plans, expressed their discontent.
In 2022, another change was introduced in the alienation policy.
The executive led by Carlos Moedas approved the alienation of 40 properties, according to a proposal endorsed by Vice President Filipe Anacoreta Correia and Housing Councilwoman Filipa Roseta, which, as reported by the newspaper Público, aimed to “promote the quality of life, social integration, and autonomy of the resident populations, making the managed neighbourhoods, in the social, heritage, and financial aspects, sustainable units with a strong sense of belonging”.
This proposal sparked discussions among political forces. Consequently, shortly afterwards, the City Council approved a proposal from the PCP (Portuguese Communist Party) with votes against from PSD-CDS-PP (Social Democratic Party-CDS-People’s Party), which revoked the alienations of fractions in municipal neighbourhoods and suspended the initiation of any new process, without prejudice to ongoing procedures.
Ana Jara, councilwoman at the Lisbon City Council, states that “in the equation of the housing crisis in Lisbon, alienations don’t make sense”.
The councilwoman from the PCP, who presented the proposal approved in 2022 to revoke the programming of alienations, also adds that the municipality’s interest should be “not only to refrain from alienating but to increase the housing stock and add new properties to municipal neighbourhoods.”
At that time, Paula Marques referred to the alienation policy as “perverse“, promoting the reduction of public housing and “aggravating the already extreme difficulty” in intervening in the housing market.
For many, the expectation of buying their homes faded away again.
Recently, during a public meeting of the City Council, a citizen, Henrique Farinha, questioned why alienations were suspended when, in the building where he lives, 50% of the lots were already alienated. The citizen also reported a series of problems regarding the thermal insulation of the house he lives in, a problem he claims he could solve if he were allowed to purchase the property.
His intervention once again sparked a discussion among council members, with the opposition stating that the alienation policy was “a mistake” and that the lack of municipal investment in the rehabilitation of the housing stock, specifically in thermal comfort in municipal properties, was at issue.
“It was hard for me to pay more than 100 thousand euros for a house in Chelas”
Even with the price speculation today, in the neighbourhoods that were once purely municipal in Chelas, houses can still be found at more affordable prices… prices from the past. For many, this is one of the few areas where it is still possible to buy a house in Lisbon.
That was the case for Fernando Gomes, a tattoo artist, who bought a house in the Amendoeiras neighbourhood, in Chelas. The area is dear to him as he grew up here. However, at the time, he was surprised by the amount asked for a house that was once municipal housing: “It was very hard for me to pay 170 thousand euros for this house. I know these buildings, I used to play around here as a kid. This house was sold to the initial tenants for 30-something thousand.”
In the neighbourhood where Fernando now lives, 407 out of 556 municipal houses were alienated, accounting for 73.2% of the total.
The City Council can still exercise the right of first refusal when these houses are put up for sale on the market, but it states that it is not aware that this has ever happened. It also reveals that there are no plans to do so in the future.
Despite this, the Municipality’s Real Estate Heritage Regulation, in its Article 15, provides that revenues from alienations can be used for the acquisition of new properties:
Even in neighbourhoods in Chelas where the alienation policy has less impact, such as the Armador neighbourhood – with only 27.4% of alienated housing – it is possible to find several former municipal homes for sale.
Teresa Morte, a 49-year-old content analyst, bought a two-bedroom apartment (T2) in the neighbourhood for a value between 150 and 200 thousand euros.
“The prices were unaffordable elsewhere, yes”, she admits, echoing the prejudices towards the neighbourhood where she now lives, despite saying she did not have them, as she is not from Lisbon: “If you ask me which place in Lisbon I would choose to live, obviously it wouldn’t be Chelas.”
When looking for a house, Teresa visited four other apartments, all in Marvila. She chose the one in the Bairro do Armador because it met almost all her requirements: proximity to the metro, state of conservation, layout, and an unobstructed view. The truth is that, two years later, she does not regret the decision.
The experience in the neighbourhood has been positive, she assures, only denouncing some lack of maintenance in the building.
This was, in fact, one of the main problems of joint maintenance of the buildings, done jointly between the new owners and the City Council: it didn’t always go well, especially when owners did not have the financial resources for it.
“People started to be responsible for the per mille of common spaces, roofs, elevators, and often people would buy the house and then turn to the City Council for the necessary renovations”, explains Councilwoman Paula Marques. When the property is 100% owned by the municipality, it is the municipality – through Gebalis, the public company that manages council neighbourhoods – that is solely responsible for maintenance works on the common spaces of the buildings.
After alienation, gentrification?
Is what the researcher from the Center for Geographic Studies (CEG), Luís Mendes, predicted now happening? Alienation is acting as “the first phase of gentrification” in these territories.
And it was not for lack of warning: in an interview with the newspaper O Corvo in 2016, the researcher considered that some areas of the city, such as Mouraria, Intendente, and Anjos, were starting to become a “new frontier of interest for real estate capital.”
At the time, many people laughed, he says. The housing crisis had not yet taken hold, and the territories most affected by the process of touristification were still limited to the historic area of the city – Alfama, Bairro Alto, or Santa Catarina.
Eight years later, everything has changed.
“What theory tells us – and the theory is proven with practical cases – is that when there is a devaluation of property, there is an attraction of real estate investment – this in the territorial continuity of areas that have already been exhausted”. Touristification – and, shortly after, the housing crisis – did not take long to reach the Arroios parish and almost all other parishes in the city.
Ana Jara “fears” that property that was built “for social purposes and ends will fall into the hands of the market and serve to intensify real estate speculation.” Especially in real estate fronts of territories like Chelas, long marked by public housing and that “were once protected”.
Luís Mendes concludes that the thousands of properties already alienated by the city – hundreds only in the municipal neighbourhoods of Chelas – “will be sorely missed in the future”, acknowledging, however, that there has already been “considerable resistance to the trend of alienation of public property”.
What is being done abroad?
Last year, the article “Have Low-Income Households Been Failed by the Sale of Social Housing?”, published in the scientific journal Metropolitics, assessed how the sale of municipal housing in three countries (Germany, the Netherlands, and the United Kingdom) hindered access to housing for the most disadvantaged families.
In the United Kingdom, for example, the “right to property” led to the possibility for municipal housing tenants to buy at prices below the market. Here, the impact of the alienation policy was tremendous. If, in the 1970s, local governments owned 5 million municipal houses, thirty-five years later, the number had reduced to 2.6 million.
Meanwhile, 30 to 40% of the houses acquired by tenants were reportedly put on the private market, with rents much higher than social rents. Although there were benefits for the tenants who bought them and for local governments, the public housing stock suffered, argues the authors.
“In both Germany and the United Kingdom, the reduction of the housing stock, combined with rising prices, made it more difficult for the populations to access municipal housing”, concludes the article.
What is happening in Lisbon is not an isolated phenomenon – it is a situation that is repeated in other European countries. Luís Mendes even considers it to be “one of the most important gentrification fronts in Europe” at the moment.
This report is part of the Narratives Project. Learn more here.
Ana da Cunha
Nasceu no Porto, há 28 anos, mas desde 2019 que faz do Alfa Pendular a sua casa. Em Lisboa, descobriu o amor às histórias, ouvindo-as e contando-as na Avenida de Berna, na Universidade Nova de Lisboa.
✉ ana.cunha@amensagem.pt
Frederico Raposo
Nasceu em Lisboa, há 32 anos, mas sempre fez a sua vida à porta da cidade. Raramente lá entrava. Foi quando iniciou a faculdade que começou a viver Lisboa. É uma cidade ainda por concretizar. Mais ou menos como as outras. Sustentável, progressista, com espaço e oportunidade para todas as pessoas – são ideias que moldam o seu passo pelas ruas. A forma como se desloca – quase sempre de bicicleta –, o uso que dá aos espaços, o jornalismo que produz.
✉ frederico.raposo@amensagem.pt
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