Portugal to assign more land for affordable housing as prices soar

LISBON (Reuters): Portugal's parliament on Friday approved a bill allowing rural land to be more easily reclassified for urban use and allocated to affordable housing, one of the government's key proposals to curb a worsening housing crisis.

The bill, opposed by environmental groups, gives municipalities the power to decide on such reclassifications, without the need for a number of public entities to weigh in, as is the case now.

At least 70% of the total area reclassified will be allocated to public housing or affordable housing.

There will be "maximum prices for new houses clearly below current market prices" to avoid property speculation, said Territorial Cohesion Minister Manuel Castro Henriques.

"The housing crisis in Portugal is serious, we need many more houses and cheaper houses for middle-class Portuguese people," he told parliament.

In a joint statement, 21 environmental non-governmental organisations said the change would have "serious impacts on areas classified for their natural values and promote arbitrary and uncontrolled urban expansion".

They said there was no shortage of urban land, as more than 50% is not yet occupied by houses and "12% of all housing is vacant", equivalent to 720,000 empty houses.

The housing crisis is rooted in a chronic shortage ofaffordable housing, aggravated by the arrival of wealthyforeigners attracted by residency rights linked to propertyinvestment and tax breaks offered by the state.