Lisbon Land Ownership Mapping: Unpacking Regulatory Mechanisms Behind Lisbon’s Spatial (In)justice
This blog post is the 4th article in the series. The collaboration between Dark Matter Labs and the Institute of Human Rights and Business (IHRB) has previously resulted in mapping of Copenhagen and Prague, and aims to continue its investigation further in Athens.
Through findings in this blog, we aim to flag the role of the state and city councils as active agents — alongside many others — shaping neoliberal development as opposed to the prevailing belief that solely the market forces may jeopardize spatial justice. The example of Lisbon shows that whereas transparent and accessible land ownership information is an important enabler for public oversight and policy, it is not the only key factor shaping a city’s ability to safeguard local livelihoods and affordability. This blog post expands on the thesis that land ownership patterns are foundational to spatial (in)justice, broadening the definition by encompassing the state- and city council-led regulatory mechanisms that govern property markets.
Introduction
Lisbon is currently the 3rd most expensive city in Europe for rental accommodation. Given Portugal’s lower salary levels compared to other European member states, the recent penetration of vast amounts of foreign capital into the housing market has made everyday life increasingly unmanageable for its citizens.
Lisbon can be considered as a flagship example of the dynamics where the public debt of the European “semi-periphery” to the financial European and global market “core” (see: Lima, 2023) creditors turns the city into space for capital accumulation and its repayment. The public assets, municipal land, cultural heritage, housing, service sector and public space all become tools for economic growth often measured solely by abstract metrics such as real estate value appreciation.
Financialization means that even greater amounts of capital decoupled from the real economy and local realities (livelihoods, salaries etc.) flow into the city’s square meters turning them into financial assets that demand continuous returns on investments. In a context where finance is linked to space, new waves of capital need to continue finding physical room to act, with major impacts on people’s lives. The true debtors of this logic are not only the state or the municipality balance sheets, but the displaced citizens whose apartments needed to be freed for urban rehabilitation, struggling middle-class families facing soaring housing costs, the 22,812 families on the waiting list for social housing, and the young; future generations who might never afford a home, forced to live with their parents.
In Lisbon, state-aided deregulation of the rental market, commodification of the existing housing stock, land and new housing developments speculation are the forces that have shaped this condition. Based on existing research, this blog aims to explain these forces.
Due to a lack of data transparency, it is difficult to precisely assess and depict who owns land and properties in the city, as well as what are the historical transactions which could bring actors in power into the public eye. What is known, however, through qualitative interviews with leading housing justice researchers, is that the main factors that have been shaping the catastrophic housing affordability crisis in Lisbon are those known to many other cities in Europe.
Structure of the blog
The structure of the blog aims to guide the reader through the dynamics which led Lisbon to its current condition.
1. Role of the state — making ground for new capital
- Neoliberalism — once again
- Forces at play & Timeline
2. Large institutional investors & land ownership patterns
3. Data transparency review
4. Conclusion and recent developments
The role of the state — making ground for new capital
Neoliberalism — once again
Neoliberalism involves preference for the extension of spontaneous (freed from state interference) competitiveness, market powers, and the belief in their ability to regulate economies efficiently. As it aims for a world where the state’s role is diminished, it paints a false picture of its passive role in the neoliberalisation of the economies. However, it’s precisely the state which, through a deliberate set of policies and regulations, provides the means through which the free market forces can spread their wings.
The case of Lisbon is exemplary, demonstrating that, in the context of property markets, instead of merely conforming to the free market doctrine, the state, and the municipal government chose to regulate in favour of the private sector to stimulate economic growth.
Against the backdrop of the 2008 financial crisis, the EU, Portuguese state, and Lisbon city government implemented, on the one hand, austerity measures resulting in the lowest public investment in housing in Europe, and on the other, multiple incentive mechanisms to attract foreign investment capital, aiming to repay the “Troika” loan, and re-stabilise the economy.
Neoliberalist logic moved Portugal away from its previous, more welfare-oriented system, creating a new state-craft infrastructure for market-oriented economic growth. Rather than being passive agents, the governing institutions actively retreated, creating room for the private market to rule.
Forces at play
To understand the reasons why Lisbon became so unaffordable, one needs to understand the set of historical events that turned the city, from being from a “high-risk” location, to a top investment destination in 2018 (the Emerging Trends in Real Estate European ranking, PwC & Urban Land Institute, 2018).
The developments which took place over two decades can be summarised as major trends of:
- Commodification, and touristification of the historical core
2. 1. Further financialisation of the housing stock through engagement of large- scale institutional investors
Force 1: Commodification, and touristification of the historical core
The first trend can be broken down further into three state-led and deliberate shaping mechanisms including:
§ F1.1. Attracting private investment for rehabilitation of urban areas through
Financing — Urban rehabilitation funding programmes that provided efficient financing infrastructure for renovations of the historical core
- § 2004 — Creation of Societies of Urban Rehabilitation (Decree Law 104/2004)
- § 2011–2024 — Lisbon Rehabilitation Strategy
- § 2007 — Public Funding Programmes for Rehabilitation
- § 2015 — Financial Instrument for Urban Rehabilitation
Deregulation — Simplification of urban rehabilitation rules
- § 2007 — Legal Regime for Urbanisation and Building (Decree-Law 60/2007)
- § 2017 — Exceptional Regime for Urban Rehabilitation (Decree-Law 53/2014)
Liberalisation — Special tax incentives based on a desired economic turn towards commercial and tourist functions
- § 2009 — New Legal Regime for Urban Rehabilitation n (Decree-Law 307/2009)
- § 2012 — Lisbon Municipal Master Plan
F1.2. Attracting foreign capital through
- § 2009 — Non-habitual Resident Programme (Decree-Law 249/2009)
Incentives for wealthy transnationals willing to invest in the property market
- § 2012 — Golden Visa Programme (Decree-Law 29/2012)
F1.3. Finally, for these two trends to work, there need to be simultaneous strategies that “make room” for the new wave of investment capital. In this context,,
o Liberalisation of the rental market through, among others,
- § 2012 — New Urban Lease Law leading to displacement of former tenants in the central districts of Lisbon (and beyond).
The set of events shows that multiple incentives and deregulation rather than demand and supply issues led to the current unaffordability (see: Untaxed, Investigate Europe 2022).
Force 2: Further financialisation of the housing stock — role of large-scale institutional investors
The measures that led to the commodification of the historical core proved to be successful in terms of real estate investment returns. Following this first wave of investments, the perceived oversupply of luxury housing and scarcity of land for new large-scale investments in the central areas led institutional investors to bet on the peripheral plots of Lisbon’s metropolitan area.
A significant surge of almost 90% in building permits between 2017 and 2018 indicates this surge in large-scale investments, where substantial capital could be deployed. The adoption of a build-to-sell strategy ensured a secure exit option for institutional investors, who then facilitated the acquisition of ostensibly “affordable” housing from non-premium segments by smaller investors keen on subletting.
As highlighted by Lima, 2013, the narratives of the large investors shifted towards “long-term” investments targeting “the middle class”. Further narrative tools which the author points towards are:
- § Complaining about bureaucracy and “context-risk” — as means to justify lack of possibility of affordable housing provision, and needing to sell housing at more premium prices.
- Positioning as the only ones able to build in the city due to lack of capital and institutional capacity from the state to deliver.
- Lamenting the historical lack of public investment to make the case for private investment.
- Differentiating themselves from the previous “short-term”, speculative investors through the “long-term” rhetoric — emphasising the role of institutional investors as actors responding to city’s needs.
Against the backdrop of liberalised rental laws, institutional investors drove the creation of a “new supply” of speculative rental apartment units extending beyond the historical core. This perpetuates the financialisation of housing, allowing the trend to proliferate and persist beyond the city centre.
The following illustration aims to capture the dynamics that led to Lisbon’s persisting unaffordability:
Large institutional investors & land ownership patterns
By complementing the great research of Lima, 2023 with our own investigations regarding land sizes, the following table shows the largest projects led by institutional investors in the Lisbon metropolitan area:
Link to the TABLE
- VIC Properties,
- Vanguard Properties,
- EMGI Group,
- Novo Banco,
- Solyd,
- Filidade,
- CleverRed,
- Reward Properties,
Additionally the Map by Lima, 2023 shows locations of the projects.
Further research, including Lisbon’s Municipal Housing Charter’s, clearly indicates that the Municipality of Lisbon and State & Public Companies remain large landowners in the city (see maps).
Data transparency review
Interestingly, the Lisbon Land Registry function resides under the Ministry of Justice. The permanent certificate of land registry provides, online, all the data regarding a property, even the pending requests. It is always updated and available for consultation. The WEBSITE (INSTRUCTION (in Portuguese) of the Registo Predial Online offers the possibility of creating a ticket based on Town, parish (however, outdated taxonomy) and building number. The building number however can only be known if the interested party knows it (e.g. from a legal document such as a property sales contract) or applies for it in a physical office in Lisbon.
Application based on the property number (not land plot) is possible but costs 1 euro per entry (each apartment is one entry). For for purposes of this project, obtaining the scale of data would be simply beyond budget, and it may not even give much information on land. No data has therefore been purchased from this source.
As a test, a random search for buildings in the area of Santa Catarina (which is now part of the Misericórdia parish) revealed 650 possible buildings, several of which may contain multiple housing units. One could reduce the cost of the purchase by filtering out some buildings (for example, those known to be owned by the municipality), but this is not an option, as the cadaster building number is decoupled from its address.
Interviews with researchers conducting similar investigations (Cocola-Gant, A; Gago A.; Lima, R, and Silva R.) confirmed that large-scale land ownership investigations are an impossible or very costly task. Applications for buildings by their address costs 14 euro, need to be submitted via a physical office in Lisbon and are limited to 10 inquiries per day. According to some researchers, even the municipality’s own planning department may not have a clear overview on the municipal assets.
Conclusion & Recent developments
Lisbon serves as a prime illustration of how gentrification processes, initially disconnected from land ownership, originate in the city core and radiate outwards. Initially, urban rehabilitation efforts and incentives for transnational individuals and corporate investors attract foreign capital, which primarily targets properties such as apartments and housing units, and are not necessarily land focused. In the second instance, however, as the market matures, land plays an important role as the large-scale investors attracted by promising returns seek space for large-scale developments. Thus, as the property market in the central areas gets saturated, the new wave of large-scale investments provides a new supply of housing units, inflating the market further.
Amid rising cost of living, Lisbon city council has recently introduced measures to mitigate the effects of increased financialisation of the housing sector.
This February (2024) the municipality approved the new “Cooperativas 1ª Habitação Lisboa” programme which involves making municipal assets available to housing cooperatives for 90 years. This includes small plots of land for construction of affordable housing by the cooperatives. Furthermore, Lisbon’s Municipal Housing Charter just went through a 3-month long public consultation process (see also Civic Assembly’s website, the Report, and Maps). The Charter defines a strategy for the implementation of municipal housing policies between 2023 and 2033, representing an investment of 918 million euros. Its future is yet to be seen.
Acknowledgements
Special thanks to Agustín Cocola-Gant, Ana Gago, Rita Silva, Rafaella Lima for your valuable research and time sharing insights that enabled the writing of this blog post. In depth research, action and activism on the ground are the true powers able to change the trajectories of spatial injustice.
Contact:
This research and blog post is conducted and written by Aleksander Nowak aleks@darkmatterlabs.org
Giulio Ferrini (IHRB) giulio.ferrini@ihrb.org
Annabel Short (IHRB) annabel.short@ihrb.org
