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Fidelidade Wants to Participate in the Affordable Housing Program

9 April 2018

The insurer, which was previously owned by CGD, is selling a third of its real estate assets. However, if incentives were to be created, the company announced that it would be interested in investing in the affordable rental market.

Fidelidade is selling one-third of its real estate assets in Portugal in a sale amounting to 900 million euros. However, if applicable incentives were to be created, the insurer would strengthen its presence in the rental market, namely in the Accessible Housing Program (PAA), which grants exemptions to income from property arising from participating contracts. Prime Minister António Costa stated, at the latest bi-weekly debate in the National Assembly, that new measures regarding the affordable housing market will be announced this month.

“The company is and intends to continue to be a major investor in real estate,” a spokesperson from Fidelity said. The Chinese insurer Fosun “is expecting the new housing support instruments the government announced by the end of April to be made public to be able to strengthen its presence in the rental market, in particular through the Affordable Housing Program,” the insurer added.

The company that formerly belonged to CGD is embroiled in controversy over complaints about lawsuits that could lead to evictions in three residential buildings in Loures. Fidelidade sent, up to the end of February, eight letters announcing the non-renewal of rental agreements and will send another seven by the end of June. There are 126 tenants in the buildings.

The government is looking to broker a solution. The Secretary of State for Housing met with the tenants and Fidelidade. “In both meetings, the government presented the instruments and measures that are under preparation in this area. The participants are analysing the opportunities that will be created by the new instruments, to open the way for an adequate solution to the case in hand,” an official source at the Ministry of the Environment stated.

The subject will be discussed in Parliament tomorrow, as the Secretary of State for Housing, Ana Pinho, speaks to a parliamentary committee. The Portuguese government stated that not all of Fidelidade’s 1,500 tenants are at risk, admitted that difficulties exist for some: “It is widely known that there are some situations where contracts are being terminated or renegotiated. It is a problem that concerns the government,” the same official source said. “Problems with access to housing do not only afflict very low-income families…, but they also affect a large part of the middle class, which, to obtain adequate housing, must take on expenses that exceed their budgets.” The tourist boom, coupled with local housing development policies, has led to an increase in demand for real estate and caused prices to rise, leading to evictions, the non-renewal of rental contracts and rising rents.

Support for evicted families

The government wants “greater stability and security in the rental market” and, as part of its strategy in the New Generation of Housing Policies. In addition to the PAA, it is developing the National Building Rehabilitation Fund, reformulating the Rehabilitate to Rent program and preparing the First Law, a program that is intended to facilitate access to housing for needy families. According to an official source of the Ministry of the Environment, there will be a “significant increase in the scope of beneficiaries and the size of the housing stock with public support.” There will also be legal support for tenants, through the Order of Solicitors at the Institute of Housing and Urban Rehabilitation.

Original Story: Diário de Notícias – Elisabete Tavares

Photo: Global Imagens

Translation: Richard Turner