Lisbon’s built environment is largely shaped by rapid, unregulated post-World War urbanisation, which has resulted in today’s poor-quality building stock. In the wake of the 2008 financial crisis, the Portuguese government received loans from the International Monetary Fund and the EU, for which the country agreed to follow a strict austerity programme. However, the deficit increased and GDP decreased, so the government attempted to attract foreign investment by focusing on tourism (including liberalising short-term rentals) and foreign investment (through golden visas). While this growth strategy helped the country economically, it has contributed to make Lisbon, where only 2% of residential housing is publicly owned, the third most expensive rental city in Europe.
Lisbon, sitting at the mouth of the River Tagus, is particularly vulnerable to sea level rise. The landscape of climate plans and strategies is extensive, from national energy poverty plans and long-term strategies for the renovation of buildings to the Lisbon Climate Action Plan 2030, and the country has made impressive progress in reducing its climate emissions, particularly through renewable energy generation.
Built environment decarbonisation initiatives, on the other hand, have been slower. Attempts to improve the outdated housing stock have focused on new builds, but these mostly cater to high-income families, and the golden visa for renovations has exacerbated affordability issues for middle- and low-income households. The green transition requires at least 80,000 more skilled construction workers, but these are difficult to attract due to poor working conditions and widespread obstructionism to unions.. The recent creation of a new housing ministry and the adoption of the Mais Habitação (More Housing) initiative, which ends golden visas and aims to provide affordable housing, is a promising sign of a shift towards a more just transition.
For more information, read the Lisbon City Summary Report
Opportunities for the green transition
The Portuguese government recognised that touristification, unregulated short-term rentals, and golden visas exacerbated socio-spatial inequalities. In January 2023, it created a new Housing Ministry and, only five months later, launched its new housing plan, Mais Habitação, supported by 2.7 billion euros in investment from the EU Recovery and Resilience Plan. The plan aims to solve the housing crisis by increasing housing supply, simplifying licencing procedures, combating speculation, and protecting families. If successfully implemented, such measures would help address housing unaffordability, and cushion gentrification, displacements, and spatial inequalities.
Risks from the green transition
In an attempt to increase foreign investment and improve its ageing building stock, in 2011 Portugal introduced a “golden visa” programme for those spending over 500,000€ to buy property or 350,000€ on renovating it. However, in 2024, an assessment of the scheme’s impact concluded that it “may have exacerbated affordability issues for middle- and low-income households”.
When consulting on its Mais Habitação (More Housing) initiative, the government received 2,700 submissions. However, the plan was voted on and approved in Parliament just one week after the consultation period ended, with no significant changes to the initial text, raising questions about the meaningfulness and effectiveness of the entire public consultation.
See IHRB and The Shift recommendations on the Mais Habitaçao Programme, submitted to the Government of Portugal in 2023.
City Future Vision: Lisbon
People-centred, participatory, and affordable
Local communities sit at the heart of decision-making: governments involve residents in addressing climate change and housing issues, and businesses proactively engage with workers through social dialogue and collective bargaining with their trade unions, improving their wages, rights, and safety. The public sector starts providing sustainable, affordable homes. The private sector also plays an active role in solving the housing crisis, as well as developing new materials and increasing transparency in its supply chains. Civil society and academia work closely together to build the evidence base for climate action, counteracting fake climate news and sensationalism.
See the full insights report from the Lisbon visioning workshop held on 29 April 2023
New economic model
Just a Change
Just a Change is a non-profit that brings together volunteers and businesses to retrofit leaky homes. Local agents highlight cases of housing poverty to the organisation’s employees; international businesses like Saint-Gobain, Ikea, and Leroy Merlin provide the materials; and Just a Change deploys young volunteers with construction skills to retrofit the homes. “We rehabilitate houses because we know it brings improvements to public health and energy efficiency in our country. We know that this can be the starting point for a new life.” In addition to warmer homes, this model forges intergenerational connections, equips young people with retrofit skills, and effectively connects international businesses with local needs.