By LiveAlgarve on 10th January 2025 - 3-4 m. reading time 

The Portuguese government is prioritising housing affordability and sustainability through its "Construir Portugal" plan. This initiative emphasises building public and affordable housing while maintaining environmental and agricultural protections. The program addresses a housing supply crisis, with new policies enabling the reclassification of land for residential purposes under strict guidelines.

Understanding the Scope of the Housing Crisis

The Portuguese housing market has experienced significant challenges, with a notable decline in construction rates over the past two decades. In 2002, the country built as many homes in a single month as it did in half a year by 2022. This shortfall has led to rising costs and limited availability, leaving many families struggling to find adequate housing within their financial means.

The "Construir Portugal" plan responds to this with a comprehensive strategy to address affordability and availability by increasing land designated for housing development and ensuring controlled costs.

The Role of Land Reclassification in Urban Development

Central to the plan is a legal framework that facilitates land reclassification for urban purposes. Under specific conditions, municipalities can reclassify land to meet residential needs. This measure is crucial for addressing housing shortages but is tightly regulated to maintain balance and sustainability.

Key requirements for reclassification include:

1. Ensuring alignment with existing urban areas to avoid sprawl.
2. Guaranteeing that at least 70% of the total above-ground construction area is allocated for public or moderate-value housing.
3. Protecting ecologically sensitive and agriculturally valuable land by prohibiting construction in these areas.

The framework also supports the development of infrastructure, green spaces and public amenities to ensure new housing areas are liveable and well-integrated.

What is Moderate-Value Housing?

A notable feature of the plan is the emphasis on "moderate-value housing." This category is designed to serve middle-income families who often fall between eligibility for social housing and the financial capacity to afford market-rate properties.
Moderate-value housing is priced based on median sales values, with a ceiling of 125% of the municipal median housing price or up to 225% of the national median value. This ensures that housing remains accessible while being priced appropriately for local contexts.

Importance of Municipalities

The implementation of the plan heavily relies on municipal involvement. Local councils are tasked with proposing land reclassifications, which must be approved by municipal assemblies. This process ensures a transparent, democratic approach that considers local needs and priorities.

Moreover, municipalities are empowered to implement housing strategies that align with regional and national goals, ensuring a collaborative effort between different levels of government.

Environmental and Safety Safeguards

The plan underscores the importance of sustainability by maintaining strict protections for areas of ecological and agricultural significance. Lands classified under the National Ecological Reserve or National Agricultural Reserve are excluded from urban development. Additionally, areas prone to flooding or other natural risks are safeguarded to prevent endangering people and property.

This balance ensures that while housing needs are met, Portugal’s natural heritage and environmental resilience remain intact.

Implications and Goals

The legislative amendments supporting the "Construir Portugal" plan include provisions for expedited processes to enable housing projects to proceed without unnecessary delays. However, these are carefully calibrated to ensure compliance with environmental, social and economic criteria.

By December 31, 2024, municipalities were required to update their land-use plans to align with the new regulations. Failure to do so resulted in automatic suspension of areas with potential for urbanisation, highlighting the urgency and importance of adhering to the plan’s goals.

Summary

Portugal’s "Construir Portugal" plan is a bold response to a growing housing crisis, blending urgency with long-term planning. Through prioritising affordable housing, empowering local governments and safeguarding environmental values, the plan aims to reshape the housing landscape for the better.

As this initiative unfolds, it sets a precedent for how countries can address housing challenges in a manner that is equitable, sustainable and inclusive.

Source: https://diariodarepublica.pt/dr/detalhe/decreto-lei/117-2024-901535572