The Algarve is a region where the tourism sector is key. However, despite the pandemic, the region faces a serious problem that threatens the production of wealth in the region – the lack of manpower. A problem whose cause may come from the lack of affordable housing that prevents people from choosing the Algarve to work in.

To address these two problems (manpower shortages and a lack of affordable housing) which the mayor of Lagoa, Luís Encarnação, believes are linked, the municipality will put in place several measures to support the community.

“Manpower shortages mainly affect our main economic activity (tourism industry) and we have to do something about it because without employees, companies cannot work and if companies do not work they don’t produce wealth. So it's a problem that we have to solve.”

In fact, “when the pandemic began, we expected the unemployment rate to rise, which did not happen thanks to the support that the government gave to companies that allowed them to survive,” said the mayor, adding that at this point everyone is complaining about the lack of manpower.

Law of supply and demand

However, this seems to have a specific cause. In fact, the Algarve does not have enough population to meet the demand, especially in summer. “When it comes to attracting people – who need to come from other regions of the country or even abroad – the main obstacle is the lack of affordable housing”.

While prices for buying homes are expensive, the rental market is no better. The prices that landlords are asking are even higher than a monthly payment to the bank. In addition, the high demand from holidaymakers in the Algarve during the summer leads most landlords to rent out their properties only during the summer as they get higher rents, leaving tenants with few and expensive options.

Social housing

In this regard, Lagoa Council is working on three different projects. The first one will be called “primeiro direito” and will be a kind of social housing for those households who are in extreme poverty and can’t pay a rent over €60 per month.

“We are finalising the projects and signing the contract with the IHRU, which is the national institute that supports these housing and urban projects. In addition, it is expected that the project can be 100 percent funded by the PRR (Recovery and Resilience Plan), which would be great for us, as we could allocate this money to other important projects”, said the mayor. However, as there is no 100 percent certainty, even without funding, the mayor assured that he will continue with the set plan.

Asked about the stigma that social housing can have on people who go to live there, Luís Encarnação shared the same concern. “This major investment will be made in the Porches neighbourhood, where we already own the land. We are doing this project because we want to take advantage of the door that the PRR opens for us and we already have this land available”. However, he added that this will be the last social housing project, “because our next strategy will be focused on the recovery of degraded buildings spread throughout the county”, he added.

Affordable rents or purchases

An example of that is the second housing project that the chamber is working on called “affordable housing”. With this plan, which aims to promote affordable rents and purchases, the municipality will put into the market renovated houses at controlled prices.

In fact, those houses will have controlled prices by the decree-law and can be rented or purchased by young couples and people with some economic needs who cannot buy a house or rent at market prices. “With this project they will be able to start their life with dignity”, the mayor said.

In addition, to prevent people who do not have economic needs from taking advantage of this programme, the mayor said that certain criteria will have to be met. “It is perfectly possible to receive the applications, analyse them and draw up a list of families that can apply for these properties”, he said.

Private Investment

The third level has to do only with private investment. In this case, “it will be a very large project for the municipality of Lagoa and in spite of being a private housing development owned by a private developer; they promised that the houses will be sold within a certain amount that Lagoa’s families can afford, obviously rising the population of the council and also increasing the workforce. In this specific case, we are talking about 300 houses”.

“As long as one family in Lagoa does not have a proper house, our work in this matter is not done and that’s why we have to guarantee that everyone has the right to adequate housing”, highlighted the mayor.


Paula Martins is a fully qualified journalist, who finds writing a means of self-expression. She studied Journalism and Communication at University of Coimbra and recently Law in the Algarve. Press card: 8252

Paula Martins