The difficult access to housing is far from being an issue exclusive to Portugal, affecting other European countries as well. This is why the European Commission is rolling up its sleeves and will unveil a new emergency housing plan on December 16th. This plan “will have an unusual scale, it will bring together a very large set of resources,” reveals Francisco Rocha Antunes, Co-Chair of the European Council for Affordable Housing at the Urban Land Institute (ULI), in an interview with idealista/news. “We are talking about a number always above 1 million homes, which will have EU funding,” he announces.
So far, few details have been disclosed about what the new housing plan from Brussels will contain when presented in December. “Only when it is published (…) will we know the final format. But we are convinced that it will be very impactful. Because Europe sees solving the housing problem as a strategic priority—otherwise, there is no economic growth, no attraction or retention of talent,” explains the ULI spokesperson, an association consulted by European institutions when drafting plans like these.
“We will have the possibility of having European instruments to improve housing affordability. That is certain.”
But EU funding alone is not enough. Portugal still has much to learn from other countries’ examples when it comes to attracting investment in affordable housing. On one hand, “it is important to attract long-term institutional investors,” such as pension funds, says Francisco Rocha Antunes. On the other hand, Portugal should look to Madrid’s example regarding housing cooperatives, he adds. Antunes is also the founder and CEO of MOME, a professional manager of this type of cooperative in Portugal.
“To solve the issue of affordable housing, there is no silver bullet. There is a set of things that must be done,” he stresses. One of the most important aspects is creating a stable legal environment. This is crucial because all the uncertainty surrounding VAT on construction “has already driven away very important investors from the Portuguese market,” such as a large French company specialised in affordable housing, he warns in this interview conducted during Porto’s Urban Rehabilitation Week.
Affordable Housing in Europe
Francisco Rocha Antunes, Co-Chair of the European Council for Affordable Housing at the Urban Land Institute
Credits: Gonçalo Lopes | idealista/news
What is the role of the Urban Land Institute (ULI) in promoting affordable housing in Europe?
ULI is an interdisciplinary association that shares knowledge among professionals. Real estate is a very complex system with many variables, and it is necessary to combine them in the right way. What we do at ULI is try to understand what worked in some places, what did not work in others, and why. It was many years ago that ULI defined what we now call affordable housing. In fact, the first formal definition of “Affordable Housing” is closely linked to the association’s work. ULI, although now very strong in Europe, originated in the US, where the idea emerged that it was important to design housing for critical working-class groups such as nurses, police officers, and teachers—people who, while not wealthy, needed to live in cities. The entire process stems from there. What ULI does is share experiences that help us understand what works in some countries and might work in others, which is highly valuable.
Does ULI work directly with the European Commission?
We are in contact with the main European institutions. At the moment, we have a very important initiative called “C Change for Housing.” The European Commission will present a major housing programme on December 16th, in which Europe will adopt housing as a strategic mission. So yes, we have regular contact with the EU and have been involved in many consultations, as the Commission has a rule of consulting multiple stakeholders, and we are one of them, actively participating.
“Europe sees solving the housing problem as strategic, because without it there is no economic growth.”
What can you reveal about the housing plan that Brussels will present on December 16th?
The plan will have an unusual scale and will bring a very large amount of resources. We do not know exactly how many homes it will cover, but it will always be above 1 million homes receiving EU funding. However, there will be very clear rules. For example, funding will not go to the construction of homes that are then sold—this will certainly not happen. Several formats are being studied. Only on December 16th, when the plan is unveiled, will we know the final structure. But we are convinced it will be very impactful. Europe sees solving the housing problem as strategic, because without it, there is no economic growth and no attraction or retention of talent. All the factors that make Europe a good place to live are somewhat threatened by the difficulty of finding housing. We may think the difficulty in accessing housing is a uniquely Portuguese issue, but it is far from that. Unfortunately, Portugal has some of the worst indicators. Therefore, we will have European instruments to improve housing affordability. That is certain.
European Affordable Housing Plan
European Commission – Getty Images
You have been Co-Chair of the ULI European Council for Affordable Housing for more than a year and a half. What strategies have been developed with international leaders to address affordable housing challenges in Europe? Which apply to Portugal?
This year and a half has been full of learning and knowledge sharing. We have learned that there are many formats not used in Portugal that are very interesting and could be implemented here. So we have high expectations for the knowledge exchange that our “Affordable Living” activity promotes. We have around 30 professionals committed to delivering affordable housing in their respective countries. This sharing has taught us a lot. It is vital to standardise criteria and attract long-term investment. For example, pension funds—which invest over 30 years—are ideal partners for these types of projects, as they do not seek extraordinary returns but rather secure, steady value so that pension savings remain available decades into the future. Real estate has this advantage because it is less volatile than stocks or other assets.
“To achieve affordable housing, it is very important to attract long-term investors.”
Which housing models used abroad could work in Portugal?
We strongly believe that solutions linked to improving rental affordability and creating conditions for people to have long-term homes (regardless of whether they are for sale or not) have performed very well in many countries. Austria is a classic example, along with the Netherlands, Denmark, and Germany. These four countries are clearly far ahead of us. Portugal is not advanced at all in this area, unfortunately, so we have a lot to learn from them.
However, Portugal has an advantage: today, it is a European investment destination in real estate, which can make it easier for new affordable housing formats to be financed by institutional investors. Long-term institutional investors are precisely the ones we want to attract, because they are willing to wait 20 or 30 years—they do not operate on a 4- or 5-year investment horizon. This is something we have learned: to achieve affordable housing, it is essential to attract long-term investors.
What types of construction, beyond traditional methods, should be explored? Does hybrid construction (concrete and wood) and industrialised construction form part of the solution?
One of the biggest challenges is doing two things at the same time: building affordable housing and building sustainable housing. Doing both simultaneously is more complex than building only affordable housing, because it is obvious we cannot build millions of homes the way we do today. First, because this would create an absolutely unbearable carbon footprint. Second, because we do not have enough labour to build even one tenth of that number. Everything points toward the need for new, more repetitive, more off-site construction methods that allow for greater efficiency and lower carbon impact. It is a huge challenge for the industry, which will need to reinvent itself. But there are already good signs that this transformation is beginning.
Real Estate Investment Attraction
Freepik
How can housing cooperatives help bring more affordable homes to the market?
Cooperatives are a model that was abandoned in Portugal for many different reasons. We have the great example of Madrid, which served as inspiration for implementing cooperatives in Portugal through my company, MOME. In Spain, cooperative activity never disappeared—formally, they never disappeared in Portugal either, but in practice they stopped producing housing. Now we have interesting examples in the Madrid and Barcelona regions that are perfectly replicable here. This is a good example of how know-how and procedures can be transferred between countries.
“To solve the issue of affordable housing, there is no silver bullet. There is a set of things that must be done. Cooperatives offer an essential contribution.”
What needs to be done to boost this collaborative model in Portugal (more public-private partnerships, financing, land…)?
We believe nothing particularly special is needed other than changing our perception of cooperatives. This new wave of cooperatives is viable and already being developed, although not yet at scale. We must understand that to solve the affordable housing issue, there is no silver bullet. Several things must be done. Cooperatives bring an essential contribution: giving up profit. This is not common in the Portuguese housing market, but it is not strange at all elsewhere. In Spain, cooperatives build thousands of homes per year based on a cost-only model. Naturally, this means promoters and developers must adopt a different mindset.
This also brings a greater challenge for municipalities, which must realise that they hold responsibility for creating land— even if not sold, but granted through long-term surface rights—so that land costs (one of the largest components of housing prices) are removed. And then come regulations. It makes little sense to promote affordable housing while requiring every home to include an underground parking space, which is extremely expensive. There are many aspects that can be improved, and this means that several parties must contribute for the outcome to be better. We cannot place responsibility solely on developers, municipalities, governments, or the tax authorities. A combination of solutions is what can truly change the landscape.
Housing Cooperatives
Hera.coop, a MOME housing cooperative in Porto – MOME
What is your view on the VAT reduction to 6% planned until March 2026 for homes for sale up to €648,000 and homes for rent up to €2,300?
Affordable housing is already subject to 6% VAT. But there is something very dangerous around the VAT issue, which is unfortunately very Portuguese: uncertainty. Real estate investment, above all, needs stable rules. All this instability regarding possible changes to construction VAT rules creates uncertainty that has already driven away major investors from the Portuguese market. We had a large French company specialised in affordable housing in Portugal, but due to the VAT confusion, they left and abandoned the market. It is important to understand that when we mobilise billions of euros, we need clear rules and trust—otherwise this investment will not appear. Unfortunately, we need a lot of money to build a lot of homes.
Developers have already warned that there are projects on hold waiting for the 6% VAT. Is this issue solved with the retroactivity proposed by the Government?
Apparently, the Minister for Housing resolved the matter by announcing a proposal to Parliament that the 6% VAT would be applied retroactively from the date it was announced, preventing delays. We will see. Parliament, not the Government, is responsible for approving the law, so until it is passed, we are all waiting. Hopefully it has been resolved, because this was an unnecessary artificial complication.
“Many people who have the tools to make more land available for housing strongly resist doing so.”
What is your outlook for housing prices in Portugal for 2026?
It is negative—prices are rising significantly. We continue to see a puzzling debate: there are people working in urban planning in Portugal who insist that more housing is not needed. This is alarming, when it is obvious that more housing is needed. Many people with the instruments to release more land for housing strongly resist doing so, because their analyses are based on conditions from 20 years ago, when the market seemed more balanced. That might have made sense then, but certainly not two decades later. This resistance is significant, and it is important to understand that much more construction capacity must be enabled so that land prices stop rising as they have. Land values rise because land is scarce, and this scarcity is artificially created through construction restrictions. There are many tools available, and they are diverse, and each party must do its part. The tendency to point fingers at others is easy, but it solves nothing.