In the three years that have elapsed since I last wrote on this subject (TPN 09-08-2022) the malfunction of the market for residential property has brought a crescendo of complaint from a younger generation which cannot afford the prices and rents caused by the malignancy of unbridled monetary capitalism.

It is a crisis which extends across the EU; caused by a demand from an expanding population, swelled by immigration, for decent accommodation built to modern standards of hygiene and safety. This cannot be met from the refurbishment of a largely antique stock of bricks and mortar while new construction is largely driven by the requirements of technocrats and their many acolytes in an increasingly digital world.

A survey issued in May by the National Institute for Statistics (INE) shows that, by the end of year 2024, 12% of Portuguese people are subjected to living in intolerably overcrowded conditions. Congestion is more acute in the rental sector which forms nearly one third of housing but dwellings that are owned by the middle and working classes also suffer. Accurate assessment of this problem is made difficult by the clandestine sub-division of family units either by floors or by the use of annexes and outbuildings for separated habitation.

The Institute for Housing and Urban Rehabilitation (IHRU) has calculated that the overall housing stock consists of somewhat less than six million units of which around 12% are unoccupied at any one time. Only one third of these are actively present in the housing market to be sold or let. The remainder are “off market” due to a variety of reasons such as the need for refurbishment, disputes concerning title and derelict or unoccupied properties owned by emigrants.

Until the end of the 20th century a substantial proportion of properties was owned by institutional landlords - predominantly the Catholic church, local government, the armed forces and insurance/banking groups. The trading for sale or rental of these and private properties was often conducted by patriarchs of families or by cacifes who habitually worked on the basis of an “over-price” whereby small premiums were paid to allow a short-term bartering of contracts. The identification of property was made difficult by the absence in many municipalities of topographical and detailed construction plans and much confusion existed in the conservatorias due to the division having been shared within families without effective registration following inheritance.

This cosy but often decrepit national market has changed drastically in the 21st century. The digital revolution has been boosted enormously by the extension of AI supremacy with all of its associated requirements for luxurious housing to serve a new class of wealthy technicians and their supporting staff. This has been accompanied by (1) the financial crisis of 2008 (2) the epidemics of Covid- 19 (3) the all-encompassing effects of climatic changes and (4) a psychological revolution concerning the future intellectual needs of all citizens. Together, they have profoundly altered the way in which we think about our needs for accommodation to provide shelter from gathering storms.

There seems to be little doubt that societal destinies are to be directed by the policies of trillionaire entities such as Meta, Amazon, Google, Microsoft and X which may politically supercede sovereignty in weak economies. To ensure success, urban lives will be marshalled through super-AI to allocate the basic necessities of housing and sustenance to a subservient, waning workforce with some comfort to be provided to the populace by the diversionary provision of mass entertainment and sporting fixtures.

The scenario for this proclivity has been partly set by the enthusiastic activities of venture capitalists whereby entire estates (often of affordable housing) have been acquired with the sole intent of producing a maximum return on investment by redevelopment in the profitable sectors of tourism and luxurious residences for rich migrants. In Ireland, nearly 40% of new housing is now owned by predatory private equity of north American origin. In Germany and Britain more than one hundred thousand units of former social housing have been wheedled away from public ownership by the Israeli investor Grand City Properties. This pattern has been repeated throughout the EU and has resulted in drastic alterations to the character of historic residential sectors after the eviction of “undesirable tenants” and the gentrification of their former homes by conversion to duplex and mansion-style apartments.

In the UK of the 1980s, the Thatcher regime promoted more subtle changes to the housing of the tenants of municipal housing by playing upon their aspirations to become part of a “Property Owning Democracy”. This resulted in tenement buildings in similar prime locations being emptied of erstwhile tenants, quickly refurbished and sold for vast profit. Only now, after 35 years, are the full effects being felt. The former homes of cabbies, porters, cleaners and sanitation workers are being sold as boutique studio-flats at up to ten times their original valuation.

Capitalism can be benevolent as witnessed by the liberal policies of companies such as the British John Lewis Partnership and Quaker companies which provided estates of well-planned housing for employees who enjoyed both security of tenure and arbitrated rents. However, the vast majority of modern landlords are “in it to win it” whereby maximum return partners minimal social consideration and their best interests are served by an upward trending spiral of price being governed by rent.

The suggested “grass roots” alternative of placing the planning and construction of affordable housing in the hands of home seekers is unattractive to politicians but it can work surprisingly well and echoes the tradition of village co-operatives and local “Friendly Societies”. The existing Housing Associations of the EU have been be formed by amalgamating the interests of younger people who take part in the design, building and management of housing units resulting from both the renovation of older properties and new-build.

In Portugal, a new approach was taken in October 2023 by passing the Lei da Mais Habitaçâo 56/2023 which formally established a new generation of housing co-operatives by granting access to public funding and enabling pilot projects for public buildings. However, progress has been perfunctory with only small tenders being approved in Lisbon and Coimbra.

To widen the scope of this legislation, a national fund should be created to receive proceeds from the taxation of tourism and the import of foreign capital destined for top-end residential construction. Distribution of such finance, with long-term loans at low fluctuating interest rates should be made through municipalities, which are aware of local needs and traditions, to each enterprise. Paradoxically, this would represent a combination of private enterprise and Marxism!

Ownership as a form of Common Wealth is included in the constitution of each Association. This stipulates how profits or losses from future sales may be absorbed for communal benefit. Regulations concerning under-letting and the civilised conduct of all occupants are already envisaged in national legislation which is also considering the introduction of a universal basic income (UBI). This would replace a guaranteed minimum wage and retirement pensions with a remuneration sufficient to meet the rents and mortgage repayments of affordable housing

Looming above all this are the forthcoming perils of superior AI and climatic change which will enforce revolutions in the way we live and where. Be prepared!

by Roberto Cavaleiro - Tomar. 17 August 2025