survey released on 02 August by the National Statistics Institute (INE) shows
that 10% of the population is now living in overcrowded conditions . The Algarve region, which has the highest
average house price in the country, reports the worst rate for congestion at 13.7% followed closely by the metropolitan
areas of Lisbon (13%) and Porto (11.3%).
Traditionally, overcrowding relates to rented accommodation where rents are adjusted annually by a value determined by statistics which are calculated at the end of August- If the year on year rate of inflation in June 2022 is maintained at 9% for the following two months then the factor to be used in calculating increases effective from 01-01-23 will be one of 5.5% which will be the highest value since 1994.
The statistical model used by INE is one of family groups consisting of three adults and two or more children living in accommodation of three/four divisions but in practical terms small bedrooms often have tier beds while sofas are used for sleeping in dual purpose kitchen-living areas. The occupiers share a single interior w.c /shower. In rural localities some cottages still have only an external w.c. and drainage to a septic tank.
Overcrowding is also increasing in owned properties especially where young couples have been persuaded by lenders to enter long term mortgage agreements for repayments at nearly 100% above market valuations. After a “honeymoon period” of low payments the attendant problems of unemployment and ill health plus the expense of raising children can reduce the disposable income to a level where there is a dilemma between sub-letting part of the accommodation or of moving to rented accommodation and selling at a loss.
Where families are reduced to having one income earner ,the risk of living in poverty now extends to nearly 20% of households. Of course, some rental accommodation is shared by young, childless people each with an income to jointly meet costs so the proportion expenses to individual space requirements is more favourable. The demographic details of tenanted accommodation fluctuate from year to year and from region to region but it can be said that many of the Portuguese who live in such deplorable conditions are the manual and social workers who provide essential municipal services and perform the dirty, onerous duties which make living in Portugal so convenient and enjoyable for an upper society which is progressively consisting of non-EU foreigners.
In addition to the looming threat of annual rent increases, both tenants and owner-occupiers must also prepare themselves for the inevitable soaring costs of energy bills , condominium and insurance charges which will exceed by far 5.5%. Such toutgoings will absorb the major part of what may be termed “disposable net income”. For many families it will indeed become a choice between heating and eating !
Without doubt, this worsening housing crisis has been exacerbated by the activities of foreign investors (especially private equity corporations of U.S. / Israeli origin) who must accept responsibility for the harsh living conditions which workers and their families are now forced to accept. Cash deals to buy social housing stock have resulted in lower end properties being tarted up for immediate onward sale or for short term letting through the likes of Airbnb to tourists and other visitors. This has resulted in the Portuguese character of entire neighbourhoods being swiftly destroyed and the eviction of “locals” who have been forced to move to the cheaper suburbs
Some immediate relief could be achieved by introducing legislation to restore Landlord and Tenant relationships to dignity whereby rental contracts would be for a period of one year for fully furnished accommodation and three years for unfurnished with full security of tenure ( except for malevolent transgressions) and rents fixed for such terms. Where rent increases cannot be mutually agreed, appeals could be made to independent rent tribunals which would consider all factors before making an assessment based on factors such as location and quality rather than cold statistics. It would also be helpful if state interest free loans were to be made to condominiums and housing societies for improvements such as external insulation, waterproofing and reduction of fire risk.
Furthermore, the activities of foreign investors in the Portuguese housing market must be curbed by reintroducing taxes on the import of capital and restricting purchases to residences with valuations for IMI above a median level.
But just what can be done to stop the slide of many Portuguese into a state of poverty due to the insidious rise in inflation is difficult to foresee in the present political situation where leadership is corrupted by influencers who are paid to promote to meet the interests of rapacious capitalism and establishment.
If buses, trains and lorries are to be driven, land tilled and lives saved a vast programme of fair wage adjustment and the payment of social benefits must be quickly introduced . From each according to his ability; to each according to his need.