Madeira Consorcio

134 Madeira Consorcio Meeting 22.4.2023

Apr 23, 2023 at 11:21 am | Posted in Posts | Leave a comment
Tags: al, alojamento local, foreigners, lisbon, madeira consorcio, Portugal, rent control

We met in the Gallery again. The Topic was the Gentrification of Lisbon. The ARTE video is here:

https://www.arte.tv/en/videos/107194-056-A/re-sold-out-lisbon/

The report about Alojamento local (AL) and influx of foreign residents with money is quite nice but it left our the “rental history” of Lisbon.

The city centre has a lot of old, rent-controlled buildings in which the tenants are paying a very low rent of perhaps 20 € month. (The CZ Foundation had a rent-controlled house once where the tenants paid a rent of 200 escudos, around 1,50€, per month.)

A building owner will not invest in the upkeep for such low rents and when the roof leaks (accidentally, not deliberately) the money isn’t there to pay for renovations. If the owner damages the roof  deliberately, the juridical costs to fight such a treatment is too high for simple people.

Owners also use the ploy that they need the apartment for themselves to get tenants out. It should be checked by the state if they really move in themselves.

The advantage Lisbon has from the AL boom is that decrepit buildings are now being renovated well, and once AL is stopped by the Government, the apartments are going to be offered for long-term rental to local residents.

The Government can and it seems, will turn the screw (as is custom in Portugal, slowly) by changing the taxation on AL (now net 8.75%) and long-term rental (now 28% minus certain expenses). The tax on AL could be increased and on long term rental is already being lowered. Investors will react to that and switch more and more from AL to long term.

The Golden Visa scheme is also a fact that impacts on real estate prices but the lobby to keep it is place is strong

Tourism in Madeira:

The Levadas are nowadays packed with so many tourists that the crowds resemble the Mount Everest ascent. Low-cost tourists are camping in the Laurissilva, Forbidden, but they have no clue. They should be informed and show respect for the island.

Madeira had 15 Mio tourists passing through in 2022, and many will want to relocate here.

Money talks:

We can expect that the Madeiran Government listens to the “money” and reacts too late to the squeeze on the real estate market which already disfavours the population. Salaries cannot keep up with rising real estate prices, so young couples have to keep living with their parents.

Tenants in Germany can be asked to help with renovation costs for, say, a new roof by paying an add-on for 20-30 years; that is affordable for tenants.

The Government gets high taxes from real estate purchases by foreigners because they pay more than Madeirans.  Luxury projects such as Savoy and Socicorreia should be coupled with housing at affordable prices, but.. nothing is happening yet.

This may cause the Madeirans to develop ressentiments against foreigners.

The Association helping the old tenants in Alfama is:

APPA Associação do Património e da População de Alfama

Organização Não Lucrativa

Localizado em: Miradouro de Santa Luzia, : 1100-058 Lisboa

Telefone: 21 886 9290

They will have an IBAN number for donations.