Portugal is unsuccessfully attracting foreign investments, the rental market is becoming "crazy"

By 7:30 PM on a summer evening, the cool and beautiful streets of Lisbon start to fill with tourists taking selfies against the soft light. They move from bar to bar, facing the daily dilemma of choosing a place for dinner.

Margarida Custódio, who stays at home with her three-year-old daughter Pilar, has more serious problems. Like many people in Portugal, where rental prices mock low salaries, Custódio experiences the agony of covering her apartment expenses every month. Despite having a good job in human resources, she earns 930 euros (795 pounds) a month after taxes, of which 700 euros goes to rent. "Here, you spend almost 90% of your salary on rent every month," she said. "Everything else goes to gas, water, electricity, and food. It's like living on the edge."

At the same time, in the Bairro da Jamaica quarter, an abandoned housing complex in the city of Seixal, located on the other side of the April 25th Bridge connected to Lisbon to the north, Lisandro Batista de Souza Pontes and his children face an even greater danger. The demolition of the dilapidated housing complex, which has been home to the 47-year-old stonemason since he arrived in Portugal from the African island nation of São Tomé and Príncipe in the late 1990s, is planned. The local council states that the blocks must be demolished as they were never properly completed before being occupied and therefore do not meet "habitable conditions." Although the Seixal council has already relocated 545 people from 185 families, de Souza Pontes is not giving up and has gone to court to request the cancellation of the demolition of his block, pointing out that he and his children are living better than if they had to squeeze into his sister's two-room apartment, where five people already live. "Last week they demolished the neighboring block," he said, sitting in a room that used to be his mother's café. Outside, children played among the rubble, trying to avoid the drug addicts who had already moved into these skeletal blocks. "We were in the house when it was being demolished. The house shook. My six-year-old son cried when he saw the demolition because he was afraid we would end up on the street."

Economic recovery of Portugal

Kushtodiou and de Souza Pontes know very well what it's like to live in a country that narrowly escaped the clutches of the 2008 financial crisis, only to end up facing a housing crisis. Portugal's economic recovery, driven by deregulation and a series of programs aimed at attracting foreign investment, has distorted the real estate market beyond recognition in a country where the monthly minimum wage is 760 euros, and where 50% of the population earns less than 1,000 euros a month. The liberalization of the rental market, the issuance of "golden visas" granting residency upon purchasing property worth 500,000 euros or more, the introduction of a "non-permanent residency" scheme for foreigners to save on taxes, and the recent creation of a visa for digital nomads allowing wealthy foreigners to work remotely and pay only 20% in taxes—all of this has played a role. It is also evident that apartments are being purchased for subsequent short-term rentals. The housing crisis currently unfolding in Lisbon, Porto, and other Portuguese cities was not entirely unexpected.

Six years ago, the UN special rapporteur on housing warned that "unbridled tourist activity" would undermine the right to housing for the most vulnerable citizens of Portugal and lead to a deterioration in housing and living conditions, resulting in a "new poverty." Agustin Cocola-Gant, a researcher at the Institute of Geography and Spatial Planning at the University of Lisbon, provided a brief description of the crisis: "The situation is insane." Like many scholars and activists, Cocola-Gant uses the term "transversal" to describe the impact of the gap between wages and rental costs.

Rita Silva, an experienced housing activist and researcher, says that the crisis only exacerbates existing inequalities. "Doctors are not moving to big cities where they are desperately needed because they can't afford a place to live," she said. "The same goes for teachers. This affects society in various ways, and it will have economic repercussions in the future." She adds, "The market has gone beyond what is reasonable; it is no longer focused on the people living and working in Portugal. This is a market that, through government policy, is geared towards foreign investment." Both Silva and Kokola-Gant argue that the rush to pull Portugal out of the financial crisis and put the country on the global investment map has led to the current situation.

The influence of digital nomads

Currently, there are growing concerns about what Silva calls the "huge influx of digital nomads," foreign workers who work remotely and have been able to obtain visas since October of last year if they meet a number of requirements, including a monthly income of over 3,040 euros - about three times the average salary in Portugal. French machine learning engineer Baptiste Cumin is among the digital nomads working remotely in Portugal. He says, "They are a privileged population that benefits from this global inequality, and they mainly come here to further gentrify and exacerbate the problems in the housing market."

Such accusations do not go unnoticed by some of those who have moved to Lisbon. Baptiste Cumin, a 26-year-old machine learning engineer from France, says he has long struggled with his decision to move to the Portuguese capital with his girlfriend. "The deal I made with myself is this: 'We will move here, but we will try to do it right. I attended intensive Portuguese language courses and studied Portuguese history,'" he said in his workspace at Second Home, a bright and green office above the Time Out Market in Lisbon. Despite doing everything he can to integrate and insisting that he wants to be seen as an immigrant rather than an expat, Cumin has no doubt about what is happening. "In the past, people gentrified neighborhoods," he says. "Now, with remote work, you can gentrify countries."

Iva Divic-Batens, a freelance marketer from Croatia, says she is aware of the impact that she and other foreigners working remotely have on housing in Lisbon. "There is just a huge gap between what Portuguese people can afford and what we can afford," she said. "I think my Portuguese friends are primarily angry at the government, but I also happen to meet a lot of Portuguese people who say, 'Oh, you expats are taking everything.' Maybe we are the problem right now, but I think we can find a solution, and I believe the government is doing a poor job by not setting limits on the market."

Government priorities

The socialist government of Portugal, which unexpectedly won an absolute majority in last year's early parliamentary elections, claims it has already made the housing crisis a priority. "Over the past seven years, we have moved away from the policy of providing public housing only for the socially disadvantaged, replacing it with a universalist approach to public housing policy," said a representative of the Ministry of Housing and Infrastructure. The government also announced measures to end the "golden visa" program and to impose a moratorium on short-term rental licenses - with the exception of