'Support with converting properties to affordable rent.'

The Dower Law Firm

Although Portugal now occupies a middle position in the European rental table, curiously the richest countries are leading the way in residential rentals.

The "Mais Habitação" program announced in February finally began its validity on October 7, after a political presidential veto and expected confirmation by a majority of parliament.

In this text, however, we''would like to focus on the positive aspects of some measures to stimulate the expansion of affordable housing stock, starting, appropriately enough, from the beginning: supporting the development of affordable rental housing.

We will not dwell now on the discussion of the viability of developing a healthy rental market in the unstable legislative environment that has characterized Portugal for the last 50 years. It seems that it cannot be denied that the changes and deviations that have accompanied the transition to the New Urban Rental Regime, as well as the measures to limit rental yields, will always cause a rejection of investment in real estate for rental purposes, especially in the residential sector.

Although Portugal now occupies a middle ground in the European''rental table, where 21% -25% of families live in rented accommodation, curiously, the richest countries are the leaders in housing rentals (Switzerland 58%, Germany 50%, Austria 45%, Denmark 40% and France 35% - Eurostat 2021 data), this ratio should make us think.

With regard to the Mais Habitação program, one of the main criticisms is the presence of many properties owned by the state or municipalities, the amount of which is still unknown (varies depending on the source).

It also seems clear that the state and municipalities are unable to engage in the construction or transformation of real estate in a timely manner, which fully justifies the creation of the support program''development of affordable rental housing, making private non-speculative investment attractive and profitable.

Besides government and community organizations (especially prominent owners of large urban properties such as almshouses), the primary recipients of the support created are housing and building cooperatives and commercial building organizations in cooperation or other forms with rental housing and property management societies.

It is unlikely that the legislative package will cause the cooperative sector to develop in a way that is inconsistent with what we have seen in the past, so in our view the new support may or may not have an impact in the private''sector.

This support program, in addition to various tax incentives, provides, on the one hand, for the provision of financing to enterprises engaged in the construction of affordable rental housing, up to 250,000 euros, with mutual guarantee and interest rate reduction, for affordable housing projects, including construction or renovation, including the acquisition of real estate for this purpose, and subsequent rental.

On the other hand, if applied effectively, this could become an attractive tool for private investment and entrepreneurship, provision is made for the identification by the State of real estate properties to be transferred to such private organizations for the purpose of promoting, providing and managing affordable'