New diploma sets out to strip condominiums of powers of veto
Bit by bit, announcement by announcement, Portugal’s centre-right government is setting out to unpick the former administration’s draconian stance on short-term/holiday lettings – better known as ‘AL’ (Alojamento Local).
The reason is very simple: Social Democrats do not believe Socialist measures included in the ‘Mais Habitação’ (More Housing) programme contribute in any way to resolving the country’s housing crisis. Instead, says the country’s new government, they contribute to “a loss of confidence in investors and private agents” (many of the latter being hard-working Portuguese citizens who were horrified to see the goalposts move so brutally against them after creating what they thought were viable little businesses).
Thus, the ‘new rules’ imposed less than a year ago by Socialists already lie in tatters. What hasn’t already been unpicked is on its way out the door – the latest being the power of condominiums to veto an AL business within their complex.
A diploma approved at last week’s Council of Ministers rules that, in future, condominium owners will have to demonstrate, “with concrete evidence”, that the AL activity disturbs the normal use of the building/complex or causes significant inconvenience to residents.
“In addition, the final decision on the closure of an AL activity will fall to the local mayor, who may also try to mediate an agreement between the parties involved,” explain reports.
With this new amendment, condominium owners will have to call a meeting if they are unhappy with an AL operation in their building/on their complex, and then send a ‘reasoned justification’ to their local municipality, which will make the final decision on whether or not to cancel the AL licence within the space of 60 days.
In the event of cancellation, ‘the immediate cessation of the establishment’s operation is determined, without prejudice to the right to a prior hearing’, for a maximum of five years.
According to Público, which broke this news, the diploma also provides for the creation of an ‘ombudsman’ for ‘Alojamento Local’, who should support the municipality ‘in the management of disputes between residents, the owners of AL establishments and condominium owners’.
There are other changes in the pipeline designed to give municipalities more power in making decisions about where AL should go, and where it shouldn’t.
“Municipalities will be able to define ‘containment areas’ and ‘sustainable growth areas’ for AL,” wrote Expresso, “adjusting the expansion or limitation of these activities according to local specificities.
“This change is intended to avoid overloading already saturated areas, while promoting controlled growth in areas that still have the capacity to receive more AL establishments.
“Also in the pipeline is the elimination of the rule that prevented the age of properties used for AL from being taken into account when calculating the tax value (…) Previously, the age of buildings did not influence the reduction in taxable value for properties used for AL. Now, the age coefficient, which is part of the formula for calculating the taxable value of houses and which serves as the basis for calculating IMI, will once again be applied”.
As has already been stressed, the government wants AL licences to be able to be transferred to a new owner if/when the property is sold (another about-turn of previous Socialist policies). Currently, licences are personal and non-transferable, meaning that they are linked to the original holder, with the exception of cases of death.
“The government has yet to detail how this change will be implemented, nor has it clarified what will happen if the property is converted to residential rental and the owner later wants to take it back as an AL.
“The measure is part of legislation that has already been approved but is still awaiting enactment,” explains Expresso.
PS Socialists line up for battle
With all the government’s changes heavily focused on reviving the interests of investors (which the previous government saw as part-responsible for driving up the price of property in Portugal), PS Socialists are seeing red. The more extreme left is seeing ‘redder still’.
Thus, with very little ‘in law’ yet, the plan is to “request parliamentary appreciation of the (various) diplomas on Alojamento Local”.
It is no secret that this new government has been seeking to ‘rule by decree’ due to its minority position in parliament. What the PS is saying is the equivalent of “not so fast”: there are mechanisms in place to stymy ‘ruling by decree’ – and Socialist leader Pedro Nuno Santos is clearly meaning to use them … to the hilt.
“This government shows every day that it governs for a minority,” he wrote over social media last week. It is a government refusing “any measure to combat speculation”. It “even refuses to recognise the impact that AL has on the housing crisis”, he said.
This line of attack may well sound reasonable to people at the bottom end of the housing ladder (or even far from the first rungs) but speak to anyone who knows about AL and they will tell you a very different story. Indeed, when the ‘Mais Habitação’ programme was first trailed, hundreds of Portuguese families who had invested in AL staged dramatic protests, imploring the PS government “not to kill AL”, as their livelihoods depended on it.
But, for now, this is where the country is: a government focused on returning to the days of pre-‘Mais Habitação’ regarding AL, and left-wing parties spitting into their cups.
Bloco de Esquerda’s Marisa Matias rails that as the global housing crisis increases, Portugal’s government “has done nothing more than liberalise the Alojamento Local market even further”.
“There are no homes for Portuguese salaries,” she told Público, adding with a touch of drama that “once city centres have all been turned into theme parks, even tourists won’t want to come here”.
Also read: PM commits to finding funding for 29,000 houses left out of PRR
By NATASHA DONN
