Costa Warns of Risks from Tourism: the Gov’t Will Provide €2.4 Billion to Boost Rental Market

23 June 2018

“We cannot permit the growth of tourism to transform our cities into amusement parks for adults.”

Portugal’s prime minister stated that the National Assembly is preparing a package of “tax incentives” that will help private individuals offer their properties at “more affordable rents and for long-term contracts.” António Costa was speaking in Vila Nova de Gaia at the inauguration of a new public square.

The head of Portugal’s government stated that two urban rehabilitation programs essentially have the same purpose: to foster “affordable” rents. Together their funding amounts to 2.4 billion euros. The funding consists of “a €1-billion line of credit with the European Investment Bank” and a “new €1.4-billion financial instrument, aimed exclusively at abandoned properties owned by the central government and the municipalities.”

“The measures do not seek to restrict tourism; they are intended to increase the rental market for residents. Otherwise, tourists will not come. They come when the cities are alive. This only happens while they are seen as being authentic. [That authenticity] is provided by people who live there, not by visitors,” he told reporters.

Prime Minister Costa believes that it is necessary that “some of the existing supply for tourism must be added to the rental market for affordable housing for the middle class.”

“We have, within the scope of the new generation of housing policies, a bill in the National Assembly that has an important set of tax incentives that seek to incentivise more affordable rents and longer-term contracts,” he said, noting that the State has “worked hand-in-hand with local authorities.”

The prime minister explained that they are targeting rents that “do not involve an effort rate exceeding one-third of household income and have an average discount of 20% to the rental market rate in the corresponding area.”

Original Story: Jornal Expresso / Lusa

Photo: José Sena Goulão / Lusa

Translation: Richard Turner