CHAPTER 2: PLAN
2.1 Vacant properties in Portugal
It would be fair to say that Portugal is currently facing a challenge in terms of the number of vacant properties. According to the latest figures from the National Institute of Statistics (INE), there are around 720,000 vacant properties, representing 12.2% of the 5.9 million existing dwellings. These properties, which are either abandoned or underused, not only reflect a failure to make the most of housing resources, but they also contribute to urban decay, crime and social exclusion. It is therefore essential to reverse this situation to guarantee the well-being of communities and the vitality of our cities.
2.2 Advantages of reuse
It is thought that rehabilitating vacant buildings could offer a few potential benefits, including:
• Economy: Renovating an existing building can be cheaper than building a new one with the advantage of making use of established infrastructure.
• Sustainability: The reuse of buildings has the potential to reduce the ecological footprint - avoiding the extraction of new materials and preserving green spaces.
• Urban Revitalisation: Rehabilitation has the potential to bring life back to abandoned neighbourhoods, stimulate local commerce and improve community services, combating urban and rural desertification.
2.3 Timetable and Target
It would be beneficial to create a realistic plan based on a clear timetable and simple goals that can be understood by all citizens. For instance, the crisis response measures could be applied from the beginning of 2025 for properties that have been unoccupied or vacant for more than five years and could remain in force until the specific target of occupying 40% of vacant properties is reached.
2.4 Joint implementation measures
It is hoped that the effectiveness of the proposed measures will be enhanced by their joint implementation, with a view to creating a balanced environment that will promote revitalisation without adverse effects. It is worth noting that each of these measures exerts pressure on different agents in the real estate market in a complementary way.
• Real estate tax increase: This could encourage owners to sell or renovate their properties, which might help to reduce speculation and lower property prices.
• Rent tax exemption: This could make renting more attractive by encouraging landlords to offer affordable housing.
• Lines of credit: This could reduce the cost of renovation, which might attract investors and construction companies to focus on affordable housing.
It would be remiss of us not to consider the possibility that these measures could have an adverse effect if they are not implemented in a coordinated manner. As you can see from the examples below,
• If there’s no IMI increase: Facilitating credit lines could potentially lead to greater real estate speculation, which may result in an increase in property prices.
• If there’s no IRS exemption: Even with an increase in IMI and credit lines, rehabilitated properties may be absorbed by the high value buying and selling market, which could limit the positive impact on the rental market.
• No lines of credit: Increased IMI and IRS exemptions may not be sufficient to encourage renovation, which could keep the supply of affordable housing insufficient.
2.5 Penalty for abandonment
It would be beneficial to ensure the effectiveness of the measures by using the tools provided by law and applying penalties fairly and responsibly.
• Fines for Advanced Degradation: It may be beneficial to consider the possibility of imposing fines on owners of buildings in a state of advanced degradation. This could serve as an incentive for them to maintain their properties in a safe and habitable condition, thereby contributing to the overall safety and quality of life of the community.
• Expropriation in Priority Areas: In priority urban areas with a high concentration of vacant properties, it might be worthwhile to explore the option of expropriation if the owners are unable or unwilling to comply with the renovation obligations. This could help ensure that the properties are treated in a manner that is conducive to the well-being of the community.
2.6 Alignment with the EU
It would be beneficial for urban revitalisation in Portugal to be aligned with the policies and funds made available by the European Union.
• The Cohesion Fund: Rehabilitation projects may wish to consider applying for funding to improve the urban environment and preserve cultural heritage.
• The EU Renovation Strategy: Aligning with this strategy may allow Portugal to receive financial support to renovate old buildings, making them more energy efficient.
• The NextGenerationEU: These post-Covid funds emphasise green investments and urban renewal, offering an opportunity to accelerate the rehabilitation of vacant properties in Portugal.
2.7 Sustainability and the New Bauhaus
It would be beneficial to consider the principles of the New European Bauhaus when rehabilitating vacant buildings. This could help to transform living spaces into more sustainable, inclusive and aesthetically pleasing projects.
• Energy Efficiency: We would like to suggest that rehabilitation works incorporate solutions such as solar panels, efficient thermal insulation and sustainable materials.
• Circular Economy: We believe that reusing demolition materials and encouraging technological innovation could help to promote more sustainable construction.
• Community Inclusion: We feel that involving local communities in the definition and execution of projects would ensure that revitalisation meets the real needs of residents and promotes social cohesion.