Opportunity

The current crisis began with the Great Recession, when the troika of creditors bailed out Portugal’s debt on condition that it implement austerity measures and deregulate its economy to encourage foreign investment. The Portuguese government — labeled “the good student” compared to Greece — ran with this. Simone Tulumello of the University of Lisbon explains that this meant a focus on quick-fix “development activities with low added value, of which tourism is the golden egg.” It also developed the “Golden Visa,” which granted EU-resident status to investors who paid in, such as by buying property worth €500,000, and a nonpermanent resident program incentivizing European property investors.

City hall also promoted Brand Lisbon until it topped several rankings — and became the European hotspot to visit if you were a right-thinking tourist, digital nomad, or start-upper. A boatload of celebrities, most famously Madonna, also moved in.

Local property owners and foreign investors took notice. “With the boom of Lisbon and the change in its self-perception,” says Tulumello, “people clicked that: ‘Alright, now rent is about making lots of money.’”

Several landlords used a new national rental law that facilitated evictions and converted their properties into lucrative holiday rentals. From 2014, they could automatically get a tourist-let registration number by filling out an online form. By 2020, twenty thousand of the city’s residences were registered as tourist lets: 60 percent of all properties in some neighborhoods.

Despite a massive building and renovation program, Lisbon lost a net six thousand homes in a decade, with tourist accommodation centrally responsible. “[The council] is both renovating and losing people,” argues Tulumello. “It is totally failing.”

Over time, while Portugal’s labor and wage market stagnated, the housing market began to reflect global consumption power. Long-standing local businesses across the city transformed to cater to tourists and expats.

Maria — who has lived in the Chiado neighborhood for seventy-eight years — feels that her options using local businesses have dwindled. “I’m ashamed to go into those places because I don’t even know what to order,” she says of the brunch cafés that have replaced old neighborhood shops.

“Life is disappearing,” Agustín Cocola-Gant, a geographer at the University of Lisbon, explains. “When I was interviewing short-term real estate investors, their message to locals was: ‘Move from the city center. This is a future opportunity for us, not a residential place anymore. Leave us alone and assume that you can’t live here.’”

Inertia

Instead of doing something about all this, national and city governments vacillated between denying there was a problem and further promoting property investment. Whereas Berlin, Paris, and London limited the number of days owners could let out short-term, and Barcelona and New York curbed new tourist lets, until last year Lisbon authorities took no such action.

But there was another kind of political response. After the pandemic receded and tourist numbers rapidly shot to record levels, frustration led to the growth of a social movement. This included new campaign organizations founded in 2022–23 such as Vida Justa, Porta a Porta, and Casas Para Viver, an umbrella platform for over a hundred organizations. Massive protests led to some promising words but little action from government. In fact, in the 2021 Lisbon and 2024 national elections, power shifted toward the Social Democrats: despite the name, a center-right party. Unlike the previous Socialist administration, one academic told me, the Social Democrats “don’t even acknowledge there is a problem.”

“I think we’re still very far from over-tourism,” says current mayor Carlos Moedas, a Social Democrat. “We should continue to bet on tourism, betting on quality tourism.” But how can this be a rational electoral choice for the main parties, when everyone can see the crisis, and Portugal is an apparent democracy?

One reason is simply that the number of voters who do have their money in housing is now significant enough that the council is quite desperate to keep prices rising, as unsustainable as that may be. And even when policymakers’ constituencies might want policy change, recent scandals have shown how the incestuous link between capital and the parties often trumps voter interest.

Additionally, the political culture of treating Lisbon as a breeding ground for national office prevents the more autonomous city hall politics visible in recent years in Barcelona, New York, Paris, London, and Berlin.

Movement and Friction

A group of activists and academics frustrated with the political consensus of inertia came together to form another of these new organizations, the Housing Referendum Movement (MRH). Inspired by Berlin’s 2021 referendum to force city hall to nationalize the big landlords’ property portfolios through a compulsory purchase order, it became a broad and everchanging movement to get the city to hold a popular referendum on housing.

“We have professionals, unemployed people, tenants, homeowners, people who vote for right-wing, centrist and left-wing parties,” explains Cocola-Gant. “The housing crisis and touristification in the city cut across several themes. They affect the most vulnerable but also the middle class and even the more well-off who moved to the center twenty years ago [and struggle to sustain a pleasant life among the mass of tourists and tat shops].”

MRH’s aim has been to make the first ever use of a Portuguese law meant to help voters to have their say. It says that if enough registered residents sign a petition for a public decision on the question, the municipality must vote on holding a binding referendum.  Last month, the movement announced that, over a couple years of petitioning, it had achieved the required five thousand signatures and would present them to the council in October.

The council will debate it after that, though isn’t bound by law to green-light a ballot. But MRH hopes that public and media pressure is such that it would be difficult to deny people’s voice on this tense issue.

“We will have more than the double signatures necessary in the end,” explains Gago, who also works with MRH. “So, there’s clearly will among the population to have this referendum. If [the council] denies that, we would question our democracy.” This, in a moment when Portugal celebrates fifty years since the overthrow of the dictatorship.

All going MRH’s way, there will be a referendum in spring 2025, which — unlike Berlin’s — would be legally binding. So, if over 50 percent of eligible voters vote yes, the council would have six months to ban all existing and new Airbnbs and similar tourist lets in residential buildings.

Even beyond that, it’s not impossible, as Cocola-Gant explains, that the council could pass a new law to counter the effects of the referendum so that “nothing changes.” But that wouldn’t kill the symbolic value of Lisbon residents voting to rid the city of such lets. “If a lot of people vote saying ‘We don’t want this,’ the political pressure remains.”

Another possible challenge might come through the courts. When cities like Edinburgh and Berlin tried to curb Airbnb & co., the platforms began legal battles that watered down or tied up their plans.

Definition

If, despite all of this, the ban does come into force, the impact would be seismic.

During the pandemic, four thousand short-term lets reentered the long-term market. This had a noticeable impact on Lisbon rents and house prices. “Now,” says Gago, “imagine if we could take back all twenty thousand units, I’m guessing . . . hoping that would significantly impact not only Lisbon, but the entire metropolitan area.

“That would lead to the de-touristification of neighborhoods, which means that homes could be reinhabited by residents — new and old,” she explains. “Then the store that only caters to tourists today might rethink their business model to cater for [the people living nearby]. And neighborhood associations would stop closing [as populations stabilize].”

In this sense, this fight is about who gets to define the city and its core. “The city is far more than a place for investors to make money and it must remain a [diverse] mix of people,’” Cocola-Gant says, recalling the investors he interviewed. “The center is built out of a collective endeavor and heritage. Investors want to use that collective heritage to make deals [for their benefit] and in doing so we need to move out. We are saying no to that.”

Half a century ago, Lisbon revolted against one of Europe’s longest right-wing autocracies and chose people power in its Carnation Revolution. But while Portugal is marking fifty years of democracy, the rise of the far right in this year’s elections added a bitter taste to the anniversary for many. However, developments like the Housing Referendum Movement give a sense of hope that people can use the democratic mechanisms they built to effect change that helps the masses.

Lisbon isn’t the only part of Portugal facing strain on housing, intensified by tourist lets. The Algarve, Porto, Coimbra, Madeira, and Lisbon’s satellite towns suffer similarly and the whole country has access to this petition-to-referendum mechanism thanks to its post-revolution constitution. Housing activists nationwide will be watching closely how things progress in the capital.

If everything goes to plan, says Gago, it will be a “breath of hope that we can change our lives if we mobilize, plan, and organize. It would give hope for the system in force, this democracy.”

As Portuguese democracy marks its fiftieth anniversary, there is a sense that this movement is about more than soaring rents.