LISBON, Jan 24 (Reuters) - Portugal's parliament approved a bill on Friday that facilitates the reclassification of rural land for urban use, with a focus on allocating areas for affordable housing. This move is a key initiative by the government to address a worsening housing situation.
The bill, which faced opposition from environmental groups, grants municipalities the authority to make decisions on such reclassifications independently, eliminating the current requirement for multiple public entities to be involved.
A minimum of 70% of the total reclassified land will be designated for public or affordable housing. Territorial Cohesion Minister Manuel Castro Henriques stated that there will be "maximum prices for new houses clearly below current market prices" to deter property speculation.
Describing the housing crisis as severe, Minister Henriques emphasized the need for an increased supply of affordable housing for middle-class Portuguese citizens during a parliamentary session.
In response to the bill, 21 environmental non-governmental organizations issued a joint statement expressing concerns about the potential adverse effects on areas valued for their natural attributes and the unchecked expansion of urban areas.
They highlighted that substantial urban land remains undeveloped, with over 50% still unoccupied by housing, and approximately "12% of all housing is vacant," equating to 720,000 unoccupied residences.
The housing crisis in Portugal is primarily due to a chronic shortage of affordable housing, exacerbated by the influx of affluent foreigners incentivized by residency rights tied to property investments and tax incentives offered by the government.
The housing affordability issue is most acute in major cities such as Lisbon, where rents have surged by 94% and property prices by 186% since 2015, according to data from housing specialists at Confidencial Imobiliario.
To address the pressing housing needs, the government has earmarked 4 billion euros ($4.2 billion) to construct approximately 59,000 residences by 2030 to support the most vulnerable families.
($1 = 0.9541 euros)