Modernizing housing: Making it easier to live in Portugal

The Arcadis Portugal recently participated in a conference together with PLMJ, a prestigious Portuguese law firm. Its first part took place in Lisbon on May 11, 2023 and the second part on June 29, 2023 in Porto. The conference focused on specific licensing challenges in the Portuguese real estate market, with a special emphasis on Lisbon and Porto.

The government's "Mais Habitação" program aims to simplify the licensing process and streamline the various steps and procedures. Portuguese real estate has historically been an excellent distress investment opportunity in the country and is expected to remain so in the coming years compared to equities, bonds and cash. Portugal currently offers''s unique conditions, making it one of the world's most attractive places to travel, live, work abroad and invest. The country restricts foreign ownership of real estate to a minimal degree and transaction costs are generally low. From the perspective of foreign buyers, Portuguese real estate offers excellent value.

In recent years, Portugal has faced a housing crisis with various factors contributing to it. The press and industry experts have highlighted several reasons for this situation, including local politics and the economic environment. One of the main problems is the planning and licensing process, which poses risks to investors due to delays in obtaining approvals and the complexity''bureaucratic system. The Golden Visa program is experiencing significant growth, leading to the preservation and revitalization of the urban environment in Lisbon and Porto. The market perceives this requirement as one of the factors influencing the increase in prices of 2- and 3-bedroom apartments in urban areas. While it is true that foreign buyers are attracted to Portugal due to its advantages, including its warm climate and low standard of living, to attribute the rise in property prices solely to this factor is to miss important variables. These include long delays in obtaining licenses, shortages of skilled labor and availability of materials, all of which affect the broader political, economic and social environment in''Europe.

The government recently passed a bill aimed at reforming and streamlining the urban planning licensing process. This new bill seeks to simplify bureaucratic hurdles, streamline procedures and ultimately speed up the construction of residential projects. The main objective is to facilitate the rapid development of more real estate. The bill specifically seeks to eliminate unnecessary administrative requirements that do not promote the public interest.

Initiatives and proposals

In the framework of the SIMPLEX program, a priority for the government, the aim''is to simplify administration by continuously eliminating unnecessary licenses, permits and administrative acts, ultimately working towards achieving a "zero license". One of the key points of discussion was the time required to obtain a license or project approval, focusing on the need for efficiency and timely decision making.

The conference, organized by PLMJ and Arcadis, focused on the importance of conducting a thorough pre-approval process, which includes a thorough assessment of the potential of an urban development project and identification of associated risks, all within the urban development regulations governing a particular piece of land. The presenters emphasized the importance of''assessments of measurable parameters such as building façade height, potential for future expansion and the type of use allowed. In addition, the conference highlighted initiatives being undertaken by the City Council to increase awareness and clarity of licensing guidelines. These initiatives are designed to inform and educate stakeholders about the complexities of licensing procedures.

Participants and summaries

The roundtable brought together a diverse group of participants from the private, public, and academic sectors, as well as representatives from engineering and architectural organizations. The roundtable provided an opportunity for in-depth exploration of the opportunities and threats associated with the program''regarding the abolition of prior control (PL bill n. º 77 / XV). It is now widely recognized that certain key issues hamper the efficiency of urban planning operations, such as the gap between the legal timeframe associated with project evaluations and the actual implementation timeframe. Another issue is the possible discrepancy in the understanding of the urban planning framework between the licensing authority and project decisions.

The current permitting system will undergo significant changes, as the construction license will be replaced by the payment of municipal fees, and the use license will be replaced by prior notice within a set time frame or simple prior notice in''depending on the existence of prior control. In cases where prior control is required, a sham approval will be implemented, which is a concern for both developers and municipalities. While this measure is intended to expedite the process, it lacks the necessary legal certainty for the property owner, as potential urban planning violations may go undiscovered despite the investment made and the completion of the real estate project. The proposed changes also seek transparency in the calculation of the due dates. It is stated that the approval period starts when the application is submitted and the timeline is only suspended if the applicant fails to respond to inquiries for more than 10 days. In addition,''Requests for additional information or documents can only be submitted once. The introduction of one-time notices for pre-clearance and throughout the procedure will increase vigilance among City Hall technicians and improve the overall instruction of processes.

In conclusion, while the proposed reforms aim to simplify and speed up the licensing process, there are concerns about the lack of legal certainty for property owners and the ability to monitor compliance with city planning requirements. It is important for authorities to strike a balance between simplifying procedures and maintaining effective oversight to ensure the integrity of urban planning projects.