A
survey released on 02 August by the National Statistics Institute (INE) shows
that 10% of the population is now living in overcrowded conditions . The Algarve region, which has the highest
average house price in the country, reports the worst rate for congestion at 13.7% followed closely by the metropolitan
areas of Lisbon (13%) and Porto (11.3%).
Traditionally, overcrowding relates to rented accommodation where rents are adjusted annually
by a value determined by statistics which are calculated at the end of
August- If the year on year rate of
inflation in June 2022 is maintained at 9% for the following two months then the factor to be used in calculating
increases effective from 01-01-23 will be one of 5.5% which will be the highest
value since 1994.
The
statistical model used by INE is one of family groups consisting of three
adults and two or more children living in accommodation of three/four divisions but in practical terms small bedrooms
often have tier beds while sofas are
used for sleeping in dual purpose kitchen-living
areas. The occupiers share a single interior
w.c /shower. In rural localities some
cottages still have only an external w.c. and drainage to a septic tank.
Overcrowding
is also increasing in owned properties especially where young couples have been
persuaded by lenders to enter long term mortgage agreements for repayments at
nearly 100% above market valuations. After a “honeymoon period” of low payments
the attendant problems of unemployment and ill health plus the expense of
raising children can reduce the disposable income to a level where there is a
dilemma between sub-letting part of the
accommodation or of moving to rented accommodation and selling at a loss.
Where
families are reduced to having one income earner ,the risk of living in poverty
now extends to nearly 20% of households. Of course, some rental accommodation is shared by young,
childless people each with an income to jointly meet costs so the
proportion expenses to individual space
requirements is more favourable. The
demographic details of tenanted accommodation fluctuate from year to year and
from region to region but it can be said that many of the Portuguese who live
in such deplorable conditions are the manual and social workers who provide essential municipal
services and perform the dirty, onerous duties which make living in Portugal so convenient and enjoyable for an upper society which is
progressively consisting of non-EU
foreigners.
In
addition to the looming threat of annual rent increases, both tenants and
owner-occupiers must also prepare themselves for the inevitable soaring costs
of energy bills , condominium and insurance charges which will exceed by far 5.5%.
Such toutgoings will absorb the
major part of what may be termed “disposable net income”. For many families it will indeed become a
choice between heating and eating !
Without
doubt, this worsening housing crisis has been exacerbated by the activities of foreign
investors (especially private equity corporations of U.S. / Israeli origin) who
must accept responsibility for the harsh living conditions which workers and their families are now forced to accept. Cash deals to buy social housing stock have resulted in lower end properties being
tarted up for immediate onward sale or
for short term letting through the likes of Airbnb to tourists and other visitors. This has resulted
in the Portuguese character of entire neighbourhoods being swiftly destroyed and the eviction of “locals”
who have been forced to move to the cheaper suburbs
Some
immediate relief could be achieved by
introducing legislation to restore Landlord and Tenant relationships to
dignity whereby rental contracts would be for a period of one year for fully
furnished accommodation and three years
for unfurnished with full security of tenure ( except for malevolent transgressions)
and rents fixed for such terms. Where
rent increases cannot be mutually agreed, appeals could be made to independent
rent tribunals which would consider all factors before making an assessment
based on factors such as location and quality rather than cold statistics. It would also be helpful if state interest
free loans were to be made to condominiums and housing societies for
improvements such as external insulation, waterproofing and reduction of fire
risk.
Furthermore,
the activities of foreign investors in the Portuguese housing market must be curbed by
reintroducing taxes on the import of capital
and restricting purchases to residences with valuations for IMI above a median level.
But
just what can be done to stop the slide of many Portuguese into a state of
poverty due to the insidious rise in inflation is difficult to foresee in the
present political situation where leadership is corrupted by influencers who
are paid to promote to meet the interests of rapacious capitalism and establishment.
If
buses, trains and lorries are to be
driven, land tilled and lives saved a vast programme of fair wage adjustment and
the payment of social benefits must be quickly introduced . From each according to his ability; to
each according to his need.
A well written piece, some basic starting points to close the advantage gap. This is for those who can “fix” the problems.
“Pay it forward” has always been an ideal we need, but is corrupted by greed. For those who can make these changes, do the right thing.
By A V from Algarve on 09 Aug 2022, 14:27