The Portuguese can no longer afford to live in Portugal
medium.com
medium.com
Quite honestly, apart from the generally increasing gap between rich and the poor, one big problem in societies nowadays is that you can simply get richer and richer just from owning property. For example, if you own three ordinary apartments in Lisbon, you can live in one of them and easily make a good living by renting out the other two as holiday apartments. Because cleaning services, guys who do repairs, etc., are cheap in Portugal, this involves almost no work. Moreover, the net worth of your property will continually increase while you do (almost) nothing. I'm not saying I blame these people, I would do the same if I had the opportunity, but this is a huge structural problem in my opinion.
Portugal should build more housing, which is a simple, effective solution if the rent is too damn high: https://www.theatlantic.com/business/archive/2012/03/the-ren....
The nice thing about indoor space is that we can make pretty much as much of it as we'd like.
"I'd do anything for lower housing prices!"
Build more housing.
"...but I won't do that."
Maybe SF doesn't want to build more housing, but this isn't universal.
The other part is that the same things that make it slower to build more housing also make it more expensive, all the various bureaucratic processes.
Furthermore builders will need to be incentivized appropriately otherwise we'd get an abundance of luxury apartments (higher margins).
https://old.reddit.com/r/yimby/comments/wz3tq0/anything_but_...
This is not some metropolis or even medium city. Quite the opposite.
I guarantee if California said tomorrow, "build what you like on your land, there will be no permits required!" People would flock to build on the land. Whether the dangers of that outweighs the dangers of homelessness and high price families spend on rent that makes healthcare, healthy food, and education less affordable, is an exercise for the reader.
But what that amounts to is, "we could do it, but collectively don't feel like it."
There are all sorts of obvious political fixes to this (repeal prop 13, end single-family zoning, incentivize building mixed-use, mixed-income residences, whatever), but I can't imagine any passing any time soon. Homeowners have all the power, fight all these changes tooth and nail (often through lawsuits against developers on environmental protection grounds) at the local level.
People need to probably drastically limit what they think of when they think of affordable housing. Think multi-family homes where each dwelling supports 4 people and is < 800 sq-feet. 1 bathroom, 1 communal area (w/ small range + table) and 2 bedrooms.
Look to the disposable homes of Japan I guess.
I think the tiny home concept makes sense as it’s trailers without the stigma. But yes, we probably need to think of a new type of town built around small properties that are pre-fab and disposable outside the connecting infrastructure.
I don’t think dense towers are the answer though.
Suppose you see a man strangling himself, and he wants to know how to get out of his predicament. Does he need a VC-backed startup to sell him an anti-strangulation machine? No, he just needs to stop strangling himself! To hell with "innovation".
Land prices in the US (or the UK, or any other place with a housing crisis) are not a limiting factor, if anything they're what would fuel the construction if it were allowed to happen. Property values within cities are so inflated precisely because of the zoning which makes it impossible to build the kind of housing needed to serve the immense demand.
So even if you build multi-family dwellings, the crisis isn’t resolved because the cost of construction, maintenance, and property taxes are out of reach. Unless it is subsidized. The UK is evidence of this. Almost all their housing is multi-family and dense and unit size is small even by European standards. But it’s expensive still. And they keep building.
Japan is a good example of a place where there isn’t a housing crisis and it’s because homes are mainly disposable and very small.
>So even if you build multi-family dwellings, the crisis isn’t resolved because the cost of construction, maintenance, and property taxes are out of reach. Unless it is subsidized. The UK is evidence of this. Almost all their housing is multi-family and dense and unit size is small even by European standards. But it’s expensive still. And they keep building.
No, this is totally, completely wrong, the housing crisis here is not because of materials or labour costs. It is a policy failure: a sluggish, capricious planning system, entrenched NIMBYism and politicians that cave to it, massive legal restrictions on supply, and subsidies to demand. We aren't building enough, there is a massive shortfall in housing supply.
See this thread: https://nitter.net/AntBreach/status/1121362679367598080
six weeks. People were moving in three months after breaking ground.
The challenge is nearly always political in nature: a lot of vested interests want to go out of their way to make it harder to build more housing.
https://www.macrotrends.net/cities/23014/houston/population
They have also managed this with affordable housing.
That's something to learn from.
Texas has allowed lots of houses to be built. It's perfectly doable. CA did it until the 1980s.
Check out Arbitrary Lines by Nolan Gray for how Zoning stops people building houses.
https://www.goodreads.com/book/show/59613917-arbitrary-lines
What? Have you ever been in Lisbon? The city is pretty dense as it is. You could mostly just build higher, and that has its limits too, depending on the structure and foundation.
Adding more housing outside the core of the city might not be attractive enough. And increasing the density of people also means you need to increase the density of services (public and private) and utilities, which also comes with its own problem.
There are other decent metropolises in Portugal and other fun spots around the country not to get crammed in the capital.
People can work from nearby towns where housing costs are relatively moderate and just hit the head office in Lisbon one or two times a week.
Corporations and people need to adapt to the changing circumstances and to be open to make the necessary adjustments to advance in this world.
This is the exact way that janitors and baristas and everyone servicing those 100k+ a year software engineers is priced out.
Took a train to Sintra, there were endless and endless 6 story-miles long buildings forever. Portugal seems insanely dense.
Lisbon: 6,452/km2
Barcelona: 16,000/km2
NYC: 25,000+/km2 (depends on the source)
Lower East Side NYC: 33,600/km2 - due to zoning regs, there are very few buildings over 9 stories... but every building is 9 stories!
Lower East Side NYC 1910: 144,000+/km2 - visit https://www.tenement.org/ to learn more.
Kowloon Walled City, 1970s: ~2M/km2 !!! - inspiring 1000s of dystopian Sci Fi stories from Akira to Blade Runner. https://www.google.com/search?q=Kowloon+Walled+City
25,000/km2
It’s pretty quiet too! :)
Lisbon: 100.05 km^2 , 544k people
San Francisco: 121.48 km^2, 873k people
20% more room than Lisbon, 60% more people.
Or if they're crazy enough to want to keep these old buildings they could just build all the skycrapers in the park surrounding peak Monsanto, easy.
/s
Historical buildings are nice, but for apartment blocks at least, yes, the priority has to be actually housing people. You can always require historical-looking facades if looks are a concern.
I assume you have actually seen the inside of old buildings with your own eyes.
In no way is the look & feel of the inside of an old building comparable to a modern one.
Yes, old buildings sure have downsides. But pretending nobody looses anything when you only keep historical (or even just historical looking) facades is eyewash.
I bet there are ways for the Portuguese Gvt to encourage renovation of all the dilapidated old style buildings instead of encouraging speculators to wait for them to collapse so they can build new and cheap and with loosing every bit of charm a building can have.
It might be the _right_ solution, but if it failed to be adopted for so long it can't be that simple, isn't it ?
They are an active party, so you can’t just say “it works, but only if these people don’t exist”. This means the “simple” solution only applies to an imaginary world, and an actual solution requires a lot more thought and adjustment to accommodate for the reality of the problem.
This is just the dark side of globalism cheered by Portuguese politics for decades. Competition is global now. Local middle class is having their lunch eaten by foreign rich people or even middle classes from wealthier countries while the unrestricted influx of emmigrants from poorer countries keep sallaries down.
Suck it up and enjoy.
How do you arrive to that conclusion?
- If you built 100 million new houses in Lisbon, would prices fall?
- If you built 10 million new houses in Lisbon, would prices fall?
- If you built 1 million new houses in Lisbon, would prices fall?
- If you built 100k new houses in Lisbon, would prices fall?
- If you built 10k new houses in Lisbon, would prices fall?
- If you built 1k new houses in Lisbon, would prices fall?
Even if you have a model that says that building more houses raises prices for some number of houses, surely increasing the number will eventually make prices fall, wouldn't you agree?
Where is that number? Shouldn't the discussion about how big is that number, and how to achieve building that many houses?
"Supply increses lead to price increases" is a pretty extraordinary claim, and the only charitable interpretation of it is with the addition of "up to a point". Where is that point? Why not make the charitable interpretation yourself that people recommending more housing are recommending more housing past the price increase point?
To be clear, I don't believe that the supply/price curve is anything but sloping downwards, but even if your one does have a hump, being against housing still sounds like a bad conclusion.
Globalization is inevitable. What I don't buy is the rate of change, it _must_ be smooth or the system may implode. Blind and raw globalization is just a way to feed the nationalisms that most people are afraid of.
Anyway, the problems is not so much that there is not enough housing, but that it is on the wrong place.
https://www.architectmagazine.com/practice/how-to-fight-weal...
The exact same concepts: cheap grandfathered lease, hoping the landlord doesn’t cancel, can’t afford rent despite making >100k, “luxury apartments”, empty apartments, illegal renting (e.g. AirBnB) and shadiness.
Tenant protection is good, but it breaks down in high-demand situations. And of course the better solution is to solve this on the supply side
Lack of housing suits most people in power perfectly well. They get to control the populace through sops like the aborted rent control law Mietendeckel.
Or to put it in reverse - I am not aware of any metropolis/capital where this isn't true, regardless of regime.
I mean, tendency is that most people want to live in the big city, sometimes as necessity (can only find a job there) sometimes as a preference (better services, etc.) the result is traffic jams and expensive real state.
Quality of life issues eventually drive people to live in the outer suburbs, further exacerbating issues within city cores (e.g. San Francisco right now).
Also, white flight in the 60s was a move to the suburbs- many would consider that given the density of 2020, the suburbs are feeling the same crunch. Bellevue and other suburbs are more expensive than Seattle. I’m guessing there are suburbs of SF that are more expensive than SF.
And you yourself said "Bellevue and other suburbs are more expensive than Seattle." Which would infer that yes, people are leaving the city and moving to suburbs.
My statement the cycle of movement to urban centers might be reversing, and I used condo prices in SF since pre-Covid as a data point.
You come back with “its still one of the most expensive places in the world”. Then you said “Be a big boy”.
You’ve failed to make your case and resorted to condescending remarks.
Let’s just chalk this up to you failed to disprove my argument and leave it at that? Unless you had more condescending statements to make?
Tokyo. It is hoovering up all the Japanese youth, but manages to stay affordable for other factors.
- Permissive zoning - Immigration restrictions - Closed culture - Declining population
Public transit is constantly being expanded and there is so much stock of modern buildings, I can’t see it changing any time soon.
Last week I went to the fish market by Sky Train, first time I’d been out that way, and I was surprised to see a ton of modern condo towers clustered around Erawan. And why not? It’s 30-45 minutes on the train to the center of town.
Compared to months of planning and looking if you plan to move in an European city.
We are currently in the "denial" phase. We can't get to "acceptance" fast enough.
And adjusting to what exactly? Living in squalor way outside of what you call home because some parasite gets to live in a furnished and unaffordable temp home, payed for by a relocation package?
If 10 people with $1 to spend on an apple, and one person suddenly had $11 you could say demand for apples had "doubled", implying that this the result of an implacable, impersonal, unchangeable force but it absolutely isnt.
That guy with $11 just needs to lose most of it or not be able to spend it and then there is no more apples shortage "due to high demand".
Portugal cant tax an overly rich canadian living in canada but they can absolutely cut the bottom out of the portuguese-property-market-as-a-bitcoin-like-store-of-wealth. This would not only free up land for portuguese habitation it would help fill the portuguese budget hole.
However, for some reason that is probably more about a variety of property owning portuguese politicians getting very rich and not attracting useful investment, the Portuguese government encouraged this with the golden visa. They only cut porto and lisbon out of the program after a steep backlash.
If you want to decrease unemployment, you add tariffs for imports enabling more businesses to open domestically (i.e. tariffs effectively increase import costs).
Similarly, you can loosen building codes to increase production of homes, limit visa duration, require citizenship for home ownership, etc. Those are some obvious fixes, why is the government not doing it?
Beyond the obvious potential fixes, all EU countries are facing the same issue:
- supporting immigrants (high level of immigration)
- no controls over ones border(s) (anyone can move between EU countries)
- over regulation and too many social programs (reducing peoples willingness to work & increasing burden on the current tax base)
- over regulation of industry and farming has left the only option to survive being to work in a city (as an example, see nitrogen reduction regulations in the Netherlands)
It's all "give-and-take" you have to decide how you want to live... To me it sounds like the EU is hitting a critical state, but is there a will to make the tough calls yet?
* depends on how you define "high" levels of migration, but few EU countries fit that. Portugal does, because they explicitly encourage it. Why? Nothing to do with the EU, they're trying to fight negative population growth.
* social programs aren't an EU thing, they're purely local. And the "too much social spending makes people not want to work" ia such bullshit.
* there are more local regulations than EU regulations. Which ones specifically are you referring to as too much?
* farming is explicitly subsidised to make it profitable. What are you talking about?
* not everyone can move between EU countries, you need to be a citizen. Like the Portuguese that have moved all around (e.g. there are probably millions of people of Portuguese descent in France)
It's annoying how popular empty nationalistic populists have gotten. Can't nobody bother to fact check their bullshit?
(We could now add the Satre quote, or Hannah Arendt, or any number of people who've written about this. The popularity of the feel-good lie is well-inspected.)
Portugal's working age population is declining[1] while its 60-plus population is increasing.[2]
Old people own most of the real estate and don't care much about workers. They also tend not to like change, which immigrants bring. So they dislike immigrants despite depending on them.
(//TODO: find papers supporting these assertions: they're factoids of the "everyone knows" type.)
1. https://population.un.org/wpp/Graphs/Probabilistic/POP/15-64...
2. https://population.un.org/wpp/Graphs/Probabilistic/POP/60plu...
"Boomers don't like immigrants/workers, therefore life is getting really expensive" doesn't really sound like good reasoning.
If the population is shrinking, demographics doesn't explain it by itself. Housing should be getting cheaper if there are less people competing for it. There must be another factor here.
As with all wealthy countries, household size has fallen in Portugal over the past few decades, so the same amount of people needs more house. This is especially true in the context of empty nest retirees.
I'd still like the GP to connect the dots for me on his "it's all demographics" argument. It sounds like are argument you hear on Reddit.
For example, when my siblings were kids we all lived in 1 house. I have 3 siblings so there were 6 of us including my parents. In 1 house.
As we graduated from college we moved out. Now there were 6 of us in 5 houses.
Beyond the raw house count, you're going to need more space. Multi-bedroom homes have shared common space. The house we grew up in had 1 dining room, 1 kitchen, 1 living room, 4 bedrooms, and 2 bathrooms.
If we each moved out on our own, we now needed a minimum of 5 dining rooms, 5 kitchens, 5 living rooms, 5 bedrooms, and 5 bathrooms.
The number of people is the same. Still just 6. But we needed more housing and more space since we didn't share common space anymore. We didn't expect more than we had before (well, beyond the practicalities - it's difficult to share a bathroom with someone you don't live with), we expected the same as we had before we moved out.
Growing up (middle-class; both parents were teachers), we used our dining room to eat maybe 3 times a year. We ate around 1000 meals/year at the kitchen table and maybe 3 at the dining room table.
I am also going to echo what was said earlier: dining rooms are not a necessity. They are mainly intended for people who entertain guests. Many apartments and smaller family homes don't even include a dining room, since the expectation is that people will eat in the kitchen.
In any case, censuses define a household as people living together in a unit, which would account for roommates. Portugal has gone from 3.7 in 1960 to 2.6 in 2011. Housing 10.3M people at 3.7 requires 2.8m units; 2.6 requires 4m units. And that may be just what Portuguese people have to put up with, but not their desired end state; if they were at the EU average of 2.2, then it would require 4.6m units.
I think that your thrust was that smaller average household sizes means more dwellings are required. This is a good point.
Shrinking average household sizes could be explained by the shrinking size of the average family, or it could be explained by shifting expectations, by people wanting more.
If you take a population where all single people are willing to live in share houses, your average size of your household goes up. If all the single people expect to live in their own apartment because they want their own space, own bathroom/kitchen, then this would drive down the average household size.
I would expect both of these dynamics to be at play here. Average family sizes are decreasing in most developed countries. People's expectations have also risen with regards to housing.
I wonder what effect each has on the demand for housing in Portugal?
BTW: Your personal example is possibly a good example of shifting expectations in society, whether you recognise it or not. Every sibling moved into a place by themselves? Did no one move into a sharehouse? I probably do not live in the same country as you, but it used to be in my country that when you first move out of home it is not the norm to live by yourself. What's the norm these days?
(Disclaimer, I'm American, so can't speak directly about the Portuguese experience.) But as an example, at this point I don't remember the last time I saw a bunk bed in a non-dorm room setting. This used to be extremely common in low-income housing in particular [1] but as an example I have never, ever seen anyone share a bunk bed with a stranger.
One other effect is location, location, location. In Lisbon in particular, like most European cities there is generally a height limit imposed on most of the city (higher than most places in the US, but not so high that tall buildings are allowed). There is only ten buildings above 80 meters in all of Portugal. If your building is so short, there is only going to be so many ways to subdivide it before you can't split it more to accommodate people.
---
[1] - a historical photo of an NYC tenement: https://media.gettyimages.com/id/640482741/photo/bunkrooms-i...
Or, in the case of "world cities" like London, wealthy (nearly all old) people from shaky and shady regimes around the world buy them as places to escape to if need be.
As well as falling household size in occupied dwellings, the proportion of unoccupied dwellings in these cities increases far above the percentage normal for the delays inherent in ordinary buying and selling.
IIRC Paris is attempting to combat this with a surtax on dwellings unoccupied for long periods.
The fully elaborated argument is long and somewhat nuanced. If you want a soundbite, how's this: "Boomers own all the stuff (to a first approximation). Two other things: first, due to their wealth they can outbid Zoomers for real estate as it comes onto the market. (Having someone live in the proprty is entirely optional.) Second, boomers are adept at protecting their wealth by keeping real estate scarce and taxes on real estate negligible, as they have always been."
Or: people are not competing for houses, piles of money are. The bigger piles are winning.
Edit to add: Demographics comes into it because the Boomers are the first generation in history to be so economically significant in their old age.
Before the boomers, life expectancy was about the same as retirement age, or younger. Houses passed on to the next generation much sooner in their life cycle, often as they were just starting to have children of their own. Now, children can themselves be retired before parents die and leave them the house. Often, perhaps usually, are, these days.
The market weakness of new-household-forming adults (the 18-49 age group) is one consequence.
We are in uncharted territory, demographically, this century.
Just think about it for a second, we in the west allow people to buy a piece of the Planet Earth, and hold on to it forever, virtually tax free(in Western Europe at least).
How is this nothing else but blatant feudalism? And how is it still allowed? Royal families and landlords were beheaded in the past by angry mobs over abusing this system for their personal gain.
Why don't we have taxes or a system in place to prevent this accumulation of land by those who got in the game early? Why can't we just lease land instead of allowing land ownership in perpetuity? Like, "this land is leased to you/your family for the next 100 years, after that it goes on to the market again where your offspring will have the chance to lease it again if they wish at the future market rate". Something like that, as our current system is basically a zero sum game which just encourages land hoarding through inheritance.
Those who's families go cheap land for peanuts ~100 years ago, are now leveraged to acquire even more of it while those born now without family wealth have no leverage to buy anything. Insane!
Imagine you have to start paying Monopoly from square one, while others get to continue where their parents left off. How is this fair? Why don't we have a system that resets this real-estate monopoly board every generation or so?
With our current ways, instead of creating a system that rewards individuals through hard work and innovation that contribute to society and human-kind, we're creating a system that encourages asset hoarding and rent-seeking that contribute nothing to humanity, rapidly going back to feudalism, where a few landlords, both corporate and private, will own all of the available land, and most of the people will be serfs for life, without the chance of ever owning anything, no matter how hard they work.
So, again, why do we allow people to own pieces of Planet Earth in perpetuity, virtually tax free?
Because the moment anyone mentions this, they get bombarded with "think of the poor old people who sit on a big house! They worked hard for it!"
We as a society have a tendency to prefer leaving lucky people as is while the remainder fights for the scraps. Why this is, no clue. Beyond voting being in favor of those already owning homes (too fractured to oppose grandfathering politically), I come across this attitude among the young way too often. It doesn't take a genius to realize sharing less with more will cause people to go hungry eventually.
Those same young people are all pro-grandfathering until they realize the bottleneck bites their life goals at age 30 and beyond. By then its too late, many of them stop caring as they become part of homeowners, and the cycle continues.
What do you mean tax free? There are inheritance taxes for that, which often go up to 50-60% of the value for higher values. That's why the majority of castles in the UK are in trusts and open to the public, paying 50% of the value of the castle and land every generation was too much.
And the property taxes are mostly grandfathered to the price the property was last purchased at, rather than at the current market prices.
> like donating your property to your kids before you die to avoid the inheritance process and taxes.
Donation to family members (above a certain sum, but any property would qualify) is taxed just like any other income.
> And the property taxes are mostly grandfathered to the price the property was last purchased at, rather than at the current market prices.
Property taxes are set at the current market prices (and if the gov thinks the value is set too low, they will come back and ask for more, retroactively).
Lisbon's local government is renowned for being the largest property owner in the country, with over 60% of Lisbon's real estate owned by the city.
I'm from Lisboa and this can't be true unless you're using some very strange definition of real estate. What's your source for this?
It's fascinating how subjective dimensions of reality have the appearance of being objective, and how this seems to be increasing over time.
Portugal eases visa rules to tackle labour shortage
https://www.swissinfo.ch/eng/portugal-eases-visa-rules-to-ta...
> "Portugal's unemployment rate is at 5.7%, near a record low.
Employers' confederations have been asking for the immigration rules to be streamlined, pointing to an economic situation close to full employment"
The narrative of unemployment in Portugal driving dissatisfaction across the population is very tenuous in light of these latest developments and policies
They just to lower the wages. Hence why they are so in favor of opening the borders and human traffic situations like we had in Odemira with people from Nepal and neighboring countries living like literal slaves.
Even with visa deals for Portuguese speaking countries like Brasil, Angola and Mozambique just have that goal in mind, because it's not like we are getting scientists, doctors and engineers from those places...
> If you want to decrease unemployment, you add tariffs for imports enabling more businesses to open domestically (i.e. tariffs effectively increase import costs).
Unless your domestic business requires imported goods to run its business. Then you've just increased costs for your domestic industry.
alot of these things used to be regulated, discouraged or prohibited, but with deregulation of much of finance more and more wealth is generated from speculation, rents and leverage... if people can make money passively from doing nothing but owning something (real or virtual) there is less motivation for "real productive work" and squeezes out the rest of the economy.
this compounds over time and get the results you see today: high land costs, rents, inflation etc.
blocking immigration or adding tariffs etc will do nothing to stop any that....
So if you increase supply and then people get bigger homes, etc..., until prices reach an equilibrium, then as long as rents exceed maintenance costs and land doesn't depreciate, you have a leverage (read: financialization) opportunity.
Then prices rise again until you do something else, and eventually you approach infrastructure scaling limits.
We should vastly reduce cattle numbers globally actually.
Maybe a lower population -> lower housing prices -> easier to start a family will cause some sort of equilibrium.
That's not how real estate pricing works in the real world capitalism. Germany's population has been on decline for ~30 years due to demographics, yet housing has been getting more and more expensive, far outpacing wage growth in the last few decades, especially after the QE bull run from ~2013, so much so that owning your home is impossible for the average German.
Why is that you wonder? That's not how free market economy should work right? If now there is less demand for a good due to population shrinkage, then prices should come down right?
Well, that's because housing is not a good, it's a speculative investment asset, so as soon as people die and are not replaced, their free houses don't magically end up in the hands of those who would need them the most to buy at a discount, but end up on the "free market" being bough by existing rich home owners, investors, speculators and publicly listed real-estate conglomerates, using their existing assets and capital as leverage to buy even more houses for their investment portfolio. And governments and banks have ensure the policies to make sure this asset keeps going up, up, up.
When housing is an investment vehicle, then it can never be affordable, regardless of the population decline.
Like a commenter above said, which explains why home prices are not coming down despite population shrinkage: "people are not competing for houses, piles of money are. The bigger piles are winning."
The thing is – within that time frame it hasn't, actually. There have been some years with slight decreases, but those have been balanced by other years with increases, and compared to 1990 population is actually definitively slightly up (83.2 millions last year vs. 79.8 millions). Combined with a decreasing average household size (2.27 in 1991 vs 1.99 in 2019) and internal migration those things by themselves will probably generate enough pressure on the housing markets in and around the prospering parts of the country, even without any added financial shenanigans on top.
Fix those first so we can have a stable income and affordable housing from a young age, and then we'll take off the condoms.
But blaming the poor young people priced out of their own country for not breeding, and just bringing third world immigrants with no living standards, is much easier than improving the living standards of your own population.
As long as you treat housing like a speculative investment that is squeezing the young to get a much larger return for the older owners, instead of treating it like shelter and a basic necessity for any family, why are you surprised young people don't breed anymore? The precarious job market isn't doing them any favors either.
Mass migration that puts more pressure on affordable housing and on the low-end jobs market is not the solution here. That breeds long term instability, segregation, distrust, and leads to political extremism. The solution is fixing housing, which nobody actually wants to do, because "housing prices must go UP", and the ruling asset owning class is making a killing from it.
Guarantee all parents affordable child care close to their work or home and many people settling for one kid will have two.
Sweden has that (and generous parental leave policies) and still has both low and declining birth rates.
Yeah and why is that? Is it because the young are now competing in a zero-sum capitalism squid-game economy, where good jobs are scarce and super stressful to get, requiring you to grind away the most fertile years of your life, and that lawmakers, banks, speculators, foreign buyers and NIMBY boomers have made owning a family home completely unaffordable for the young in most cities with jobs, giving young people too much anxiety about starting a family?
No, it must be porn, hookup dating apps, and all that damn avocado toast to blame. /s
>It has to allow immigration for its survival.
Here's a wild idea: Instead of imposing mass migration from the third world on everyone, you first try, <inhales_deeply>, MAKING HOUSING SUPER AFFORDABLE, and watch young people breed like rabbits?
I'm from a ex-communist country and during those days population was monstrously booming, because, even though young people could not afford modern luxuries like iPhones, cars, TVs, consoles, oranges, bananas, washing machines, Adidas shoes and tracksuits, fancy cafes, they didn't have to worry about the main things that give young people anxiety about starting a family today: jobs, housing and childcare. The state would provide families with all of those necessities. I'm not saying communism is the solution, it's not, but it turns out that most humans have very simple needs in life (we're still animals at the end of the day), and as long as the need for food(jobs), safe shelter(housing) and childcare are covered, they'll solve the need for sex on their own and breed like crazy without having any modern luxuries.
So why are we surprised Europeans aren't breeding anymore when those basic needs have been intentionally made very difficult for them to get in the name of profit, and instead we push third world immigration as a the solution to replace them?
Both are unlikely explanations given inverse GDP per capita and birth rate correlation: https://en.wikipedia.org/wiki/Income_and_fertility
More plausible explanation - many people don't like children and want to live for themselves but in poor/developing countries they have to 'invest' into children so they will take care of parents later. In countries with more or less stable economy people can rely on own investments or state pensions to not face extreme poverty after retirement.
I have to call Grade-A bullshit on your comment.
At best, nationalist political movements take advantage of sticking points with their highly opportunistic, ideologically incoherent and empty promises hoping to buy arguments while pinning the blame of everything on whoever is the incumbent at the time.
Portugal used to even have a negative net migration rate and suffers a labor shortage. Right now, the net migration rate is positive and low at around 0.5. That's a good trend, but there is still too much emigration of skilled Portuguese people due to weak economy and structural problems.
The problem is not immigration, the problem is that wealth is distributed very unevenly. Average salaries are low in Portugal, many people have to do with very low salaries and few people in Lisbon and Porto make a lot of money. Although it luckily went down from nearly 0.4, the Gini index in Portugal is still relatively high for a Western European country at 0.33. This wealth disparity in combination with laws and politics that favor landlords, property speculation, and building hotels instead of apartment buildings lead to the housing crisis.
This is very simplistic. You first start building local expertise/domestic businesses and then increase tariffs to wean off imports. Don't put the cart before the horse.
What’s propping all of these property prices up? Supply and demand rules don’t seem to apply at all. You might have thousands of empty apartments in a city yet the price only keeps going up.
Everything is broken, but housing is particularly broken.
Money printing, first and foremost
The alternative of a mineral backed currency that can’t adjust with population levels and is inherently deflationary we know to be far worse.
I’m not even sure if this Globalization was worth all that much. It’s made some people very wealthy, some people well-off, but its also made lots of people very poor and very angry.
I’m okay with living in a world with fewer millionaires but also fewer people sleeping on the streets.
It was an interesting argument that globalization was an American security development not an international economic development.
Did you mean billionaires? Because a million isn't what it used to be...
Smaller cities and towns are cheap. I've seen government auctions selling apartments for under €5000 which nobody wants. Why? Because people are moving to larger cities. People want opportunities, and the idea of working in some chicken factory (which may have been a perfectly respected career for our parents) is not appealing for the current generation. And the problem in these small towns, is the chicken factory is really the only career prospect you have, so people move elsewhere.
Of course there are rich foreigners buying apartments as investments and renting them on Airbnb, but that's a very small percentage of the housing market. And even if they rented them normally, they'd still be asking for prices that are unaffordable for the average person. I know that because that was me, I emigrated here and bought a luxury apartment and lived in it for 7 years (paying taxes) and now want to rent it out as I moved outside the city.
Unless I rent or sell it for much lower than the market rate, even on the lower end it's still too expensive for the average person. If I sell it, it's probably just going to be poached by someone who will use it as an investment and put it on Airbnb.
My city is building a lot of new developments, but space is limited as young people want to live close to the city center, not somewhere 30 minutes drive away. That is driving up the average price, so you end up with studio apartments costing upwards of €4000/m2, which you need to earn at least €2500/mo to afford, which is well above the average salary. With rising inflation the problem isn't so much people can't afford the mortgage payments (which are slightly lower than renting), but they can't afford to save the 15% needed for a deposit.
A planet full of empty "luxury apartments" and most of us homeless?
There will soon come a time where revolt is no longer possible.
If you are becoming a tourist hub, then create an off-town tourist area and add a convenient transit line/people mover to the central parts of town. Tourists get reasonable housing, locals don't get displaced and the influx of population does not destroy the cultural vibe of your town.
Prohibition never works, and piracy is a reflection of an unmet need. Banning things merely airs out open wounds, and leads to grey-markets such as shady uber/airbnb equivalents within the city. If you want to reduce abortions, banning merely leads to riskier abortions. Examples of this are dime a dozen.
When demand arrives, the cities MUST adjust to incoming demand. Couple examples of working uncomfortable compromises are: 1. Paris - Choose a small district and allow it to go full skyscraper. The rest of the town maintains its architectural identity. 2. Barcelona - Go full superblock. Means that tourist activity gets neatly distributed across the city (removing bottlenecks) and tourists do not lead to increase in car traffic.
I could go on and on, but 1 fundamental truth stays. Bottlenecks only help those who control access to it. The key is to eliminate the bottleneck (more housing). Band-aids (rent-control) or equitable distribution of bottleneck gains (no-renters->only-homeowners/ more single-family-housing) never works. It only leads to the situation festering (see Bay Area / SF), and makes for an even harder problem in the future.
I'm not sure if my comment conveys any cohesive point, but I hope folks get something out of it.
p.s: fuck NIMBYs
This famous article discusses why housing is becoming a huge problem everywhere and why that's super bad for the economy: https://www.worksinprogress.co/issue/the-housing-theory-of-e.... It's been discussed here a few times, e.g.: https://news.ycombinator.com/item?id=28531025.
The compromise Barcelona made is not enough. Sadly, that beautiful city is IMHO the prototypical case of getting ruined by too much tourism.
In their defense, I think it's safe to state all mid-to-large cities in EU are quite crowded and unaffordable. For example, Copenhagen used to be a place where citizens enjoyed great purchasing power. Despite rent control and sale taxes, a single person in a well-paying job can hardly afford a mortgage for a decent flat right now. The same can be said of Munich, Madrid, London and many, many other places.
In practice, it's a free market and landlords have by no means been discouraged to offer flats.
Hotels are usually limited because they are unpleasant neighbors for actual residents. It’s not really a surprise that’s the main issue people have with AirBnB rentals.
What do you mean by "works"? Yes, grey markets will pop up, but if Portugal banned AirBnB style renting that the market for that housing wouldn't shrink?
It seems to me that prohibition might be a useful tool in a more comprehensive set of policies to address the problem.
How much control is happening, no idea, probably none as usual.
You could also make laws to limit the number of properties per person, and if you're even smarter, you could use that in conjunction with a map of relationships between people, so you could limit the number of people putting listings in their family members names to get around any limitations.
AirBnB has the data to assist governments.
Airbnb will probably follow your law, but other platforms that do not will flourish. They will be difficult to regulate, given that they won't be in your jurisdiction.
> You could also make laws to limit the number of properties per person.
Many laws already exist that give unfavourable tax treatment to second and subsequent properties. They are widely avoided through family members and legal entity structures and a hand-wavy "map of relationships between people" isn't going to magically fix that. This would also have a fairly obvious negative effect: it would artificially limit supply in the rental market, driving up prices. A person who could have invested in multiple properties and supplied them to the rental market will instead supply at most one, and invest the rest of their money elsewhere.
There isn't some nefarious conspiracy preventing effective regulation in this area. It's just a legitimately hard problem.
At least that is how remember how bad it used to be.
Take Amsterdam for example.
A good decade ago, it was crowded in the tourism months (summer), but not too bad. Now it's crowded in the off season too, and during the summer months even more so, to the point where walking around is really hard.
The mayor seems to constantly want to get rid of cannabis, which won't solve the problem, the issue isn't the weed tourism... it's the unfettered tourism.
These things can be controlled, you can control how much tourists you have by limiting the amount of hotels you have in your city. But with AirBnB you lose all control on how many tourists.
The old wooden buildings where one could hear everything, people arriving and talking loudly in the stairwells then banging their suitcases up the stairs etc.
We left, couldn't deal wit it.
If you just add housing, isn't it possible that the effect is like adding roads to prevent traffic congestion? The number of people coming in just increases even more until the marginal attractiveness is the same. From the point of view of locals this means that there are even more outsiders, and the affordability is just as bad.
Or would you propose strict accompanying zoning laws with strict enforcement? I think that would meet stiff resistance from property owners but would be feasible. I do think all of this would make the destination much less attractive to visit though so it really comes down to how much you want/need the tourists.
I'm a bit conflicted on this. I definitely see what you're saying (and often repeat it myself).
But it should be noted: property is simply an asset like any other. If there's easy and outsized returns to be had, the demand for this asset would increase, pushing up the price to the point that the returns on the asset are in line with returns of other assets which have similar risk/effort profiles.
To say that one can make money 'doing nothing' owning any asset (that has a positive return) is true. But that's not per se some kind of economic or political problem, it's a normal feature.
Of course to absolutely do nothing and still earn enough to live off of, means you must have earned enough money to purchase a large amount of assets. Supposing rental income of 5%, and supposing rent is 25% of someone's wages, and supposing a 20% tax rate on your returns, you'd essentially need to purchase assets worth 100 times what someone spends on rent.
(ex: if you need 40k to live on, spend 25% or 10k on rent, you'd need 100x that or 1 million returning a 5% return that's taxed 20%, leaving 40k in net income.)
Amassing 100x your rent is no easy feat, and in fact it means that someway, somehow, you've provided 100x your rent in value, without spending a penny of it, and saved it all, then poured it into an asset (incurring risk and requiring some level of commercial effort), and then, yes, you could start to approach doing 'nothing'.
For many that's a life's worth of work. Buying such assets is really no different from putting in an equivalent amount of money into a retirement fund, and that fund in turn buying assets like companies. Whether it's companies that buy and rent out cars, or real estate, or produce and sell, the people owning these enterprises through their retirement fund are 'doing nothing' while others are working.
But the important part to note is that anyone has access to this system. Every person can, proportionate to their income (based on their economic value to society) buy assets.
In fact, I'm able with a click of the button not to just buy a part of a in Portugal, but rather the biggest and most successful company on the planet: Apple. I can buy a small part in it, and profit when many of the planet's smartest and most educated people build & sell some of the most cutting edge consumer technology day in day out. Whilst doing: nothing.
So I don't really see a structural problem with this system. What is problematic is the stuff around it. For example, in some countries real estate goes untaxed and is subsidised, and is bailed out when things go bad. Subsidised private profits, and socialised public losses. It's unfair and a failure of markets and governance. Another example is that swathes of people indeed inherit value to the point they've never done any contribution to the world to get into a position to 'do nothing', rather than work to retire off of the fruits of their labour, they could in effect retire from work before ever even starting. This is where the system breaks down and must be balanced, again by e.g. taxing inheritance and balancing things out.
Finally, markets work when price & profit signals can balance supply & demand. If there is a shortage of bread, demand outpaces supply, the price rises, and overnight new bakeries will pop up bringing down the price. In real estate high prices often do not trigger new supply in many countries, either due to geographical limitations (e.g. the mountains of Taiwan limiting buildable space, or simply the fact physically there is a limited area we consider to be 'downtown new york' for example), but more often due to political limitations (NIMBYism). Because in real estate markets in many areas do not naturally solve the problem, government intervention is needed to ensure more equitable and fair outcomes moreso than in other types of markets. Again here I see a role for stronger taxation on outsized profits and some income support for groups otherwised pushed out of neighbourhoods.
> So I don't really see a structural problem with this system.
This is the disconnect. Residential real estate is fundamentally different than owning stock, in that people need a place to live and building residential construction is much more difficult than issuing stock. When wealthy people from abroad buy multiple apartment buildings in desirable cities, and then proceed to keep living elsewhere (probably in a different residence in another desirable city) they create a problem that in no way resembles the result of buying stock in a company.
I agree that buying housing stock and leaving it empty is an issue. But they're not the cause of all the housing issues, in most cases they're a tiny fraction of the problem. Most cities have vacancy rates of just a couple percent. Given the average person in a big city moves every 4 years and a home is empty for 1 month inbetween tenants/owners, you'd already have 2% permanent vacancy rates. Most cities have vacancy rates of 3-4%, Lisbon has 5%. It's definitely stupid to allow high vacancy rates and most cities have laws against them (here in Amsterdam you get fined for leaving your house empty), but even shaving off 1 or 2% off the vacancy rates isn't solving the housing problem. It very often features in newspaper articles because it's a clickbait story: rich person buys home and leaves it empty. Again, it's stupid and we should expand laws against it, but solving it still keeps 99% of the issues with housing which have nothing to do with this phenomenon.
And this phenomenon is limited precisely because housing is a market, and from a financial perspective it's a stupid idea to buy an asset and forgo its use or its returns.
Beyond that, nothing that I noted about assets has a disconnect because everyone else owning housing simply rents it out at the market rate, which is both the most expensive but also the cheapest marginal price to provide an extra unit of housing, which is the same for any asset and there's no real disconnect here.
Progressively tax the shit out of each subsequent property owned. Prevent foreign/corporate ownership of property outside of short stay, hotel/motel type accommodation.
Make shelter an extremely unattractive asset to own.
Unfortunately, many politicians across the world are also landlords.
I don't think "basic need" is a good argument, as many other things are basic needs but function perfectly fine in a market-based system. This perspective sounds moral, but proposes nothing to actually resolve the problem (other than to advantage a particular section of the population at the expense of another - namely, people who would like to be homeowners). I note that most such proposals make no allowances for people who would like to rent - because they don't actually care about anyone other than themselves; they want to own a home, ideally at a low price, in a good location, with good services, on a large block.
Food is also a basic need, but does not get any of the attention because it is a functioning market.
In many places, property is not a very functional market, as suppliers (developers) are unable to respond to demand thanks to regulations/zoning.
If bread and milk were being hoarded by speculators (not some random luxury like truffles) you'd be hearing exactly the same discussion.
The point is that rich people with vested interests are stacking the deck against newcomers.
>market-based system
The free market does not exist. Property markets around the world are being heavily distorted through favourable tax treatment and speculators.
>other than to advantage a particular section of the population at the expense of another
This is business as usual, except that the advantage almost always flows the other way.
We'll see how that plays out in the coming year.
Lots of revolutions in history have been triggered by unaffordability of food, and step 1 of the classic formula for keeping people happy is food ("Bread and circuses")
I firmly believe that most investors are chasing capital gains as yields at current prices (even with extortionate rents) are mostly a joke. It's bad enough that some speculators don't even bother renting out their property.
A widespread residential property market crash would be painful but looks like the most likely outcome and solution. I'm hopeful that as interest rates rise capital gains will diminish, disappear, or even go backwards. Indications are that this is already underway in many places.
You'd feel at home in LA.
I've seen this trend here for at least a decade now. I know some people who say that the construction of these luxury apartments is a sign that the economy is recovering, but I remain skeptical. These places are the least lived-in looking apartment complexes I've ever seen in my life. There's one down the street from where I live that was completed around 5 years ago, and I would bet good money that most of it is vacant. I rarely see people going to and from it, besides the occasional few who visit the burger bar right in front of it. Too many of the balconies look sterile.
I don't know why so many of these are being built outside of LA proper, but I have a theory for why there are these massive complexes being built; the rich have spoiled children they no longer want to deal with so mommy and daddy pay for these apartments to house them. I used to deliver food to these places and, without fail, I was delivering to men and women who appeared way too young to afford such places.
> I live in Lisbon as a foreigner for more than 12 years now. We pay a rent for a small flat that used to be very expensive … Rents in the city have skyrocketed, we'd have a hard time finding anything
I know this comment won’t be received well, but aren’t you describing gentrification & how you participated (maybe unknowingly) in what has caused prices to skyrocket. And you’re now complaining because someone even more rich than you has caused prices to exceed your means, just like you did to a local person when you moved in as a foreigner.
I also do not understand how the second sentence and the last aren't a direct contradiction of each other.
A country should focus on its citizens first, foreigners second.
Then again EU is an unique experiment as it is.
People move around. Some cities grow, others shrink. New jobs get created, old jobs disappear. Some housing gets more expensive, some housing gets cheaper. Some cities get wealthier, others get poorer.
We'd still be living in caves if our goal was to forever keep all cities and towns the exact same way they've always been. Which is basically the goal when people criticize "gentrification".
If this was true, everyone would buy REITs until it wasn't
Why not
This actually makes sense in terms of supply and demand but more interestingly it's because people tend to "upgrade" when they move this then frees up space at the lower end of the market.
Same idea as buying a car - most people won't buy brand new because of the cost.
That this doesn't happen, could be because there is a lack of capital, but to me the actual problem seems to be over-regulation and especially an over protection of tenants. If, as the article states, foreigners buy multiple apartments, and then let them sit empty, it's because they are afraid of renting them out. Especially with elderly tenants, you can't increase the rent, and you can't terminate the contract. Once you start looking around for a house to buy, you'll almost certainly bump into some homes costing only a tenth of similar houses in the neighborhood, and any Portuguese knows what that means: there is an elderly tenant, paying only 20 euros of rent per month, and your only hope of ever getting them to leave, is wait till they pass away (and even then, their children might try to continue the lease at the same conditions).
>even here in Cascais you see lots of unbuilt land
We have no intention of becoming a concrete jungle.
>Their job protection mentality needs to change towards a more dynamic job creation mentality
No thank you, please just keep your opinions to yourself, and honestly find somewhere else to go.
>low crime
Wrong, there's more and more crime, specially in Lisbon, Cascais, Sintra, and it's increasing in Porto and Braga too.
Specially on neighboorhoods with lots of "youngsters".
I don't think talent is moving in - at least in tech, there are lots of foreign companies opening offices and hiring local talent.
And for number two, it seems you're part of the problem the article mentions. You comain about how long it takes to work in a property you're INVESTINF in - but Portuguese people are struggling to afford property to LIVE in. That's the crisis, rich people investing in property makes it more expensive for poor people to own it.
I lived in Lisbon for a while. After expenses and a bedroom rent, my whole salary was spent, for a bedroom in a apartment shared with 3 other people. Many of my work colleagues lived in the peripheries and took more than 45 minutes to get to work, or more than 1.5 hours of daily commute. That's what the majority of Lisboets are being forced to, such that tourists and investors can have their happy lives.
This type of investment is causing lots of problems, and society should prioritize housing as a place to live in, not as a business to invest in. There are lots of other ventures for investors that don't ruin people's lives.
I was lucky and making really good money in tech but was devastated by how the area I grew up in had turned into a nightmare and everyone I know (even family) leaving the area. I too ended leaving as the cost vs. quality of life didn't make any sense and I couldn't see my family living in a place I didn't even recognize anymore. Most people don't talk about it but there is a huge diaspora of bay area residents due to the stuff mentioned above and it breaks my heart to think we will most likely never return and familiy/friends I expected to spend the rest of my life with all leaving.
* Remove its application to commercial property
* Remove its application to second/vacation homes
* Remove its application to inherited property
* Only apply the restriction if the increase would be burdensome on the household's income
* Only apply the restriction once someone has lived in the house for a significant amount of time, e.g. 5+ years.
The way I look at it, if the purpose is to protect people from needing to move because they can't afford property taxes, restrictions should be narrowly tailored to only apply in that case.
The other groups are all doing business and making money off others and I find that to be more justified for being taxed at market.
The same entity creating the regulations, I imagine. Who else would?
Set it at some threshold, if the property tax goes beyond some % of annual income then it gets capped.
> I do not believe in penalizing this group.
Letting people pay property taxes proportional to their property value is not "punishment", any more than people paying income taxes proportional to their income is "punishment".
Besides, you can simply transfer-tax it anyway. For a primary residence, this being the system:
1. You pay Prop 13 tax
2. You accrue true prop tax
3. You may sell the home and buy a new home and net-cap-gains you get the accrued tax taken out of profit
So then you don't get "pushed out", you pay when you sell, and it only applies to your home not to your rental properties. But that's not what people want - they ultimately would prefer the "housing crisis" but that's politically unpopular so they'll say other things, though occasionally the truth will leak out.
"Forced out" meaning sell their multimillion dollar property for a massive mostly tax-free profit. Alternatively, they can spend their windfall by using their property as collateral.
These people are in the top 5-10% of Americans by wealth, not some underprivileged underclass.
Zoning is the most obvious regulation that makes things hard: most land is zoned exclusively for single family homes on large lots. There's been a bit of movement on this from the state level to allow ADU's or duplexes, but not enough, there's usually various legal hurdles that make it harder. Missing middle housing is mostly still illegal.
The other thing is all the various processes involved. CEQA makes things take a long time (not that I'm opposed to protecting the environment, but surely there's a way to do it that doesn't take years for an apartment complex). Community meetings and planning commissions can often block new developments for random, arbitrary reasons, like "tall building would cast too many shadows" or "demand on street parking would increase"; these are things that are so obviously inherent to any significant development permitted in areas where you can build taller apartment buildings, and yet they're still used to block more housing.
How do the criminals afford to live in the area?
The petty crimes are committed by a small but very vocal minority of homeless people who are severely mentally ill and/or severely addicted to meth/opiates. They can afford to live here because everyone has apparently decided the most humane thing to do is to look the other way while they struggle, freeze, and eventually overdose and die on the street.
The larger-scale thefts are committed by organized crime operations that essentially operate a business of stealing and reselling stuff because of notoriously lax law enforcement. Think the opening scene of Requiem for a Dream, except an entire crew doing that, over and over and over. They make a lot of money doing this -- and drive up the cost of basic essentials for other working class people who have to buy what they resell because they clear drugstores out. They make enough to live comfortably, despite the high cost of living, apparently.
My housemate's car was stolen about 15 years ago(!) and used for a bank robbery somewhere else on the peninsula (also close to a freeway) and abandoned in Oakland.
There's a regular sweep of my neighborhood on the peninsula for unlocked cars at night, they will take anything, and break into cars for visible bags. It's practically every third topic on Nextdoor.
I live in SF and would watch my old neighbor in the subsidized housing across the street park a new ebike in the garage every day. They would throw away random exhaust bits in the public trash can around midnight once or twice a week. Every few months they would have a “garage sale” and every item on the sidewalk was still new in box. All completely random stuff.
Everyone knew about it. People complained. The cops knew. The postman knew they stole packages. Nothing anyone could do. They still live there. Still stealing.
SOURCE
Welcome to Portugal, the new expat haven. Californians, please go home
https://www.latimes.com/world-nation/story/2022-05-12/califo...
Austin? Ok, sure. How many Californians are expatriating to Lisbon? Is it that many? Ok, let's do Londoners next.
A lot more right?
Principal factors, you say. Let's see it.
Welcome to Portugal, the new expat haven. Californians, please go home
https://www.latimes.com/world-nation/story/2022-05-12/califo...
Instead let me propose an alternate origin of this story: "Hey have you heard that Jamie just moved to Portugal? Maybe we can write a story about that"
> “I’d say 95% of my clients are now Americans,” said André Fernandes, a 38-year-old Porto-based real estate broker who, upon seeing the surge in interest in his homeland, moved back from New Jersey three years ago and switched from installing fire sprinklers to selling housing
Only shows how most journalists will go far for a story. Oh and by far I mean the East coast.
"a west coast newspaper" should have been enough for you and anyone else looking for "a shred of evidence" that maybe there's something to this, because I would have to assume you being on HN, that you have some idea how to use a search engine. But sure, let me ddg that for you:
https://www.foxnews.com/world/portuguese-influx-californians...
https://www.sandoff.com/portugal-new-home-for-american-expat...
https://www.theportugalnews.com/news/2022-05-08/americans-co...
> Instead let me propose an alternate origin of this story...
Actually, please don't: If you can't operate a search engine, and you're unwilling to leave the armchair you speculate from to go find out from people living in Portugal (like me), how about you keep your uneducated and uninformed opinions to yourself?
Thanks.
Apresente fontes portuguesas sobre o assunto e a discussão será mais interessante
So what? Most people don't cause any problems. It is easy to understand Brazilians, and they are working. Most of the EU and Ukrainian immigrants are working and learn the language fast. Do you know who isn't working? Do you know who refuse to learn the language? Who can't even learn to drive in roundabouts? Do you know who is paying for the big expensive houses apartments and remodelling and fancy restaurants? Do you have any idea who is pissing off the locals? Let's just narrow our search to the immigrants who bought their way here:
https://sefstat.sef.pt/Docs/Rifa2021.pdf
Scroll down to page 40 and see for yourself last year's data: there is the USA (EUA: Estados Unidos da América) right there in second place.
They're also 25% of new arrivals: https://www.dn.pt/sociedade/tempo-maximo-de-espera-no-aeropo...
Top of golden visas on the monthly data: https://www.globalcitizensolutions.com/pt-pt/estatisticas-go...
And so on.
> Apresente fontes portuguesas sobre o assunto e a discussão será mais interessante
I should let you know Google Translate is worthless here because it is trained on Brazillian, and people do not talk that way here. I understand you have no idea what you're saying just fine in English, so you do not need to translate for me.
I have my suspicions yes. And if you're trying to point how Americans (and sometimes the English) are the rudest tourists, most of Europe knows that already. (I mean, even your tone on the comment is proof of that)
> there is the USA (EUA: Estados Unidos da América) right there in second place.
With 100 applicants.
> They're also 25% of new arrivals
Yes, but most of those are visitors (and some Schengen connections)
> understand you have no idea what you're saying just fine in English
Eu sou responsável pelo que eu falo, não pelo outras pessoas entendem. Não preciso de google translate pois sou falante nativo, ao contrário de certos "expats". Eu não estou defendendo americanos, nem falando que não estão se mudando para Portugal, mas uma andorinha só não faz verão. Passar bem.
But even if I reported them, I suspect YC leaders would be rather proud of these guys.
There is more to left politics or even sane politics than being socially very liberal.
By hard left do you mean "wokeism" or "communism", because the former is absolutely not hard left
1. Flood the market with affordable state housing, Austria-style - with the bonus of building new, boosting the national economy.
2. Create very progressive (rapidly rising) taxes based on property value - making untenable the current practice of parking money and profit by simply buying & holding empty flats and the like.
3. Raise salaries - currently portuguese salaries, and their weight on GDP, rank the lowest in the EU.
(and no, it won't create an inflation spiral: the current inflation spike is, first and foremost, the result of a supply shock, price-gouging and speculative/cartel practices - corporate profits being at a record high is proof of that)
Unfortunately, incentives are heavily stacked on leaving things as they are, as the ruling class is mostly made up of the landlord class, and, is not sensitive to (sometimes even not aware of) the struggles of assetless commoners that only earn income from their (low) salaried labor. Or, even worse, stands to lose their current large gains on capital/assets if this is fixed - and most portuguese media outlets trumpet their - private - master's voice and interests. Additionally, just leaving things as they are, also scores brownie points with the EU by making the Government (even if "center-left") appear "frugal". And PM Costa has personal ambitions for future EU high office.
(...who will be the next head of the European Commission or the European Council?)
A 'straight forward fix' is to ban foreign ownership of homes and AirBnB. Poof. Now, I wouldn't support that, but it would be 'straight forward'.
#2 is reasonable.
#3 is a big glib tough. "Hey, everyone should just get a raise!", if it were only that easy!
What's wrong with large industrial projects?
It's exactly what we need at this moment - in fact, both Portugal and EU-scale.
This would cost a small fraction of the Quantitative Easing program from the European Central Bank.
(and these Massive Real Estate buildouts must include the lessons in Urbanism learned from past such projects)
2. (y)
3. State sector raises salaries, private sector is forced to follow. Just raising minimum wage is positive, but not enough. This tends to compress people to the bottom salary tier and promote even more brain drain.
"State sector raises salaries, private sector is forced to follow." ... my god man, no, that's not how it works.
More like: "Already inefficient state bureaucracies raise salaries, attracting workers from private sector who cannot afford to pay higher wages, requiring massive budgetary increase from government i.e. 'more taxes' just as economy goes into tailspin due to private sector layoffs.
Probably the EU needs to re-think the fact that it's designed to send all young workers to Germany or at least out of Portugual/Spain/S. Italy and Greece and leave them as octegenarian tourist centres with illegal Turkish workers doing the actual work.
Either 1) the EU starts massive transfer payments or 2) get rid of the Euro and have some limits on mobility, or it will just limp along. #1 might require political and fiscal integration which would probably just exasperate the problem.
In the short term, they should probably raise taxes on foreign home ownership.
But yes, Europe needs a genuine Hamiltonian Moment (share the debt burden) and also a genuine New Deal, instead of the current beggar-thy-neighbor EU order where Germany & friends benefit all.
In a country with a TFR of ~1.4 and a median age of ~47. What could possibly go wrong? It's not like Portugal is seeing a declining population or anything. Oh, wait.
What? This makes no sense. You basically leave out a large chunk of the induced demand. There you have your prices lowering.
This has pretty much already been done in Vancouver, which has layers of Foreign Buyer Taxes, Speculation Taxes, Empty Home Taxes and strict Airbnb regulation.
It absolutely did not make the problem go 'poof.'
All these things were well worth doing and helped in various ways, but it remains that the core underlying problem is that there's not enough homes for everyone and scarcity ensures high rents and high prices. The dull solution is that a hell of a lot of homes need to be built.
AirBnB is still running strong as well, which should be much more heavily taxed.
The biggest impacts have already happened. We had developers building hyper luxury condos explicitly marketed to an asian audience and overnight with the foreign buyer tax everyone stopped making those and the same developers have pivoted to building purpose built rental for locals.
The taxes worked. There's still a housing crisis.
> In 2020, the share of foreigners in the fair market value of homes was almost zero.
> It was 0.56 percent to be exact, based on figures compiled by Brendon Ogmundson, chief economist with the B.C. Real Estate Association.
> Ogmundson used official B.C. government data on property transfer taxes.
https://www.straight.com/news/no-scapegoats-this-time-bc-eco...
Previously the government didn't track details around who was buying homes, and this is something that changed along with the foreign buyer tax.
a) What is the precise meaning of "foreigners" in this context? How is it measured? When the identity is hidden behind a numbered company, does our expert source disclose that?
b) If someone who has gained citizenship then accepts a wire transfer of $10M+ (from someone who is not a citizen) and then proceeds to buy 10 houses (overbidding for each), is that "foreign" involvement?
c) By what methodology were these numbers compiled, from which data sources, and can people examine these processes with no restrictions?
> It was 0.56 percent to be exact, based on figures compiled by Brendon Ogmundson, chief economist with the B.C. Real Estate Association.
"Was" (to be within reality) "exact" and "based on..." is an interesting claim from an epistemological perspective. Is Mr. Ogmundson, chief economist with the B.C. Real Estate Association, guaranteed to be a trustworthy source of information?
> Ogmundson used official B.C. government data on property transfer taxes.
Is there some reason one should believe that this data, or the government that administers it, is trustworthy? (There is a fairly substantial amount of historic stories to believe that they are not.)
> Previously the government didn't track details around who was buying homes, and this is something that changed along with the foreign buyer tax.
There is what is claimed has changed, and what has actually changed. Often, the difference is impossible to resolve - it is also often difficult to realize that a difference between the two is even possible.
As the amount of foreign buyers is now explicitly recorded in all real estate purchases, presumably Mr. Ogmundson looked up that data. He wouldn't have had to do anything creative or difficult to come up with this data.
> Is there some reason one should believe that this data, or the government that administers it, is trustworthy?
If you're at the point where you're not trusting data the government collects I dunno man. Keep your tin foil hat on tight bud.
Canada is oddly one of the places in the world wherein it's difficult to discover who owns what.
"B.C.’s beneficial ownership registry being used in tax cases, visa applications"
https://www.theglobeandmail.com/canada/british-columbia/arti...
BC is certainly the first place in Canada to do this and they haven't even finished the registry yet. Seems like it's quite tricky to sort out.
"B.C.’s land registry aimed at finding hidden owners bogged down by concerns over clarity, confidentiality" https://www.theglobeandmail.com/canada/british-columbia/arti...
Even though the thing isn't fully up and running yet, the government has been so clear years ago that they will do this that it probably would have had a chilling effect on future purchases.
The proof is the observation that endemic inflation only happens in countries with fiat money systems.
So you're just going to ignore a war involving two of the biggest exporters of some of the main raw materials we have (foodstuffs and energy) on the planet and associated supply problems on crucial things? Not to mention a pandemic that wrecked havoc on supply lines. None of that matters, your theory goes, it's purely a monetary phenomenon, because only countries with fiat money systems are impacted. Could you share some countries with alternative money systems that aren't impacted?
Another way to understand it is to consider, what happens if the price of gas rises? Does that automatically put more money in your pocket to pay for it? Nope. You just have less money to spend on other things. But inflation (with a lag period) does put more money in your pocket.
> Could you share some countries with alternative money systems that aren't impacted?
Modern countries have all gone fiat. But we can look at the US from 1800-1914, which was not fiat money. There was zero net inflation in that period, while we've had endemic inflation ever since (aside from a brief period of deflation during the Depression).
> I'm not sure you deserve engaging
What I wrote is not the general opinion, though it is the opinion of economists. At least you were willing to talk about it, which is nice.
Like in India, inflation is almost back in control, and we didn’t print much money.
Same in China.
I haven’t run the numbers but if you were to chart inflation vs the money printing done by an economy, you’d likely find a positive correlation.
> I haven’t run the numbers but if you were to chart inflation vs the money printing done by an economy, you’d likely find a positive correlation.
As a member of the Eurozone, Estonia can't print money. That didn't stop it from inflation hitting 23%.
It's almost as if inflation is influenced by local factors...
Actually, according to Wikipedia, Estonia joined the Euro in 2010. There have been a lot of Euros created in the last few years (looking at the M2, we're roughly at the point where most Euro appeared after Estonia joined in to the project).
Obviously it's a more complicated than that, especially in the context of the US Dollar, but for smaller countries it's pretty basic stuff.
The printing never stops
gas prices? electronics supply issues? general supply chain issues? (expected soon) energy/food supply issues?
how does commodity money fix that?
It's Supply&Demand at work. Create lots of money (add Supply) and the value of it goes down (Inflation).
The same thing happens to the price of refrigerators if 10 million gets dumped on the market. The price for a refrigerator goes down.
For example, if you take out a mortgage, your house is collateral.
The government just issues more debt to pay off the old debt.
Inflation is the measure of the price of goods
> It's the result of funding the deficit by running the printing press
Increasing the money supply indirectly increases the price of goods. It matters in the long run, but the price of goods can change in the short-term based on supply. The oil crisis of the 1970s caused oil prices to increase because oil supply was limited. This would have caused inflation even without an increased money supply.
> creating debt backed by nothing. ... fiat money systems.
This is more of a tangent, but the money supply can also shrink in fiat systems. Fiat currency can be shrunk via taxes. Debts can be defaulted. Fiat systems aren't inherently inflationary; but they target a low level of inflation because they prefer it to deflation.
> Fiat systems aren't inherently inflationary; but they target a low level of inflation because they prefer it to deflation.
That's just the excuse. The real reason is so the government can spend money without raising taxes. So they sell you on the idea that inflation is good.
Where do you think Biden's trillions in extra spending is coming from? Not from raising taxes.
Besides, America did try fiat money with the colonial government, and again in the Civil War. Particularly in the Confederacy.
Each of those instances suffered from galloping inflation.
Interestingly, in each of the two gold rushes, the US had inflation due to the influx of gold.
More generally anything that increases the money supply. Non-fiat monetary systems have suffered from inflation due to debasement of the currency or an influx of precious metals use to create coins (e.g. when gold from the new world flooded the Spanish economy).
Also, Quantitative Easing was literally printing money and yet EU rates (inflation & sovereign debt interest) remained low, many times negative - with some EU countries observing actual deflation.
Only when the supply shock did happen (Covid & Ukraine), rates started to increase. And only after that, price gouging practices started by riding the supply shock public perception - resulting in said record corporate profits.
If there was inflation caused by excess money, how could corporate profits be at record highs?
Besides, if inflation is 10%, profits would have to rise 10% just to stay even.
When people suggest that adding more new housing, either public or private, doesn't work, this is usually left out: how much housing actually was being added?
Looking at Switzerland, which printed a lot of money in the past years but still has low inflation and had mostly deflation over the same period, there isn't a simple connection between money supply and inflation.
Inflation isn't merely a monetary issue.
It won't be affordable at first, of course, but as you flood the market with new high-rise apartments, the price will inevitably plummet.
Fun fact: I - as a single - live in a way too big, luxurious and expensive apartment because of this. I rented it, when I was still working for the man and was making a killing. Now I live a much more modest 4-hour-workweek life. It would be better for me to move to an apartment half the size. Then a big family could live here nicely. But no way. No landlord in Germany rents to a freelancer who enjoys a "I'm mainly slacking off for a while" lifestyle.
The issue is somewhat the same in Paris. It’s very hard to afford living there because non local use properties as an investment and prefer them staying empty than risking them degraded and people who want to rent make more money on Airbnb.
It’s fine if you want the city to become Disneyland but very depressing otherwise.
It's easy to implement, the market exists to price that amount, and provides a direct incentive to either put the property to productive use or get rid of it.
Building physical houses to sit empty as a financial instrument has to be one of the peaks of capitalist insanity.
I quite agree, and I am therefore very suspicious that this is actually happening in significant volume! I have never seen convincing evidence that this happens, and it, at least superficially, makes no sense as a money-making scheme (Worried about degradation? That just means you should get insurance.) In general, it doesn't make financial sense to keep capital idle, and claims of such should be taken with a grain of salt, especially if the messaging is politically charged as "rich foreigners are screwing the common man over to make money".
I agree that an LVT would be the solution if this were actually a problem. And that an LVT solves many other problems unrelated to evil foreign billionaires.
https://www.usich.gov/tools-for-action/2020-point-in-time-co...
I would think only a small one-digit percentage?
There is also a substantial number of new luxury apartment buildings in my area with apartments that appear to be empty. Whether they are owned yet or to be sold is hard to determine but you can see when nobody lives there.
[1]: https://dre.pt/dre/detalhe/decreto-lei/67-2019-122349221
The truth is that real estate is merely a reflection of wealth. Some of that wealth is earned by hard work that others are not willing to put in while other wealth is just inherited and some people work hard and smart and still stay relatively poor.
Therefore we shouldn‘t judge so easily based on what someone has and go back to asking how it came about.
So I now have an apartment that's been empty and useless for 5 years, it did triple in value in the meantime but it's such a huge waste
Two wrongs don't make a right.
taxing empty - yes
limiting short duration - no, just tax it more. Limits are too easy to hack.
Lack of building when the population is still growing.
Encouraging single lifestyle, both by kicking out kids early and shacking up later.
Cases where sitting on an empty property is risk free.
Infrastructure increases taking valuable space.
Giving early birds great deals compared to today, making them sit on huge housing for a pittance and making moving out a terrible deal.
And politically, there simply is no immediate incentive to solve things when the current population of homeowners does not contain enough people to vote in favor of those that don't own homes.
That's one of the reasons why portuguese renting market is so bad. There were rent control policies for like 40 years. It has been phased out but the market still has the signs of its damages.
There also other contributing policies and the policies change almost every two years.
I'm one that could invest in the market, to bring more houses to be rent, but I can not risk 150 000 euros buying a house to rent (middle income market) and then having problems evicting with a non-paying renter, being forbidden to increase the rent due a new law or god help me if I need to use the court system to ask for renter damages.
Someone in a position of economic vulnerability isn't going to invest in housing to rent out if there is a non-insignificant chance of damage to the property.
Moreover, this uncertainty has the perverse outcome of pushing the potential small landlord to use his funds to invest in something like a real estate investment fund - which will result in less local control over housing.
I think it’s time the English speaking world realised that landlords are not providing a service, they are extracting a tax on people that don’t have 150K to pay a deposit.
When I was younger I would really like to have more houses to rent... I don't really care if they provide a service or not, it's the cheapest and more liberating option available.
If the neighbors are a hell... I could just move out. Or if the house was not close to a gym I liked... move out.
I can have 150000 euros which I can use in an emergency, like being unemployed, long sick leave, needing move out of country due to family reasons OR I can risk not having it available when I needed and earn some money. Without the profit I have no reason for the risk.
Furthermore, me not investing removes a house from the renting market which makes it harder for people with less income, specially young people. To have a place to live because the same house will be available for purchase through a mortgage... and mortgages are not good.
You have to make a 10% down payment and you're almost always tied to a flexible interest rate... so people with less economic freedom are the ones to suffer the most.
You might disagree that things should not be like this which is fine, I'm only arguing over what happens now.
Unless you are proposing to take his extra 10k euros by force, or let him invest it elsewhere?
If you want him to invest his 150k euros in housing you need to (according to him) lower his risk.
Some have been unable to raise rents since the 1910s!
If you have a city with X housing units, but 5X people from within the city + all over the country/world want to live there, and for whatever reason no one wants to/can build 4X more housing units, how do you fairly determine who gets to live there and who doesn't?
* Is it fair if you were born in Lisbon you get to keep living in Lisbon?
* Is it fair if people early in their career get to live in Lisbon because it will advance their career much more than if they lived in the countryside?
* Is it fair if a rich person gets to live there because they can pay a lot of money to do so?
Whatever policy is in place, it will be deciding the winners and the losers, or the people who get to live in Lisbon and those who don't.
The author of the article says:
> Digital nomads, retired foreigners, and millionaires searching for Gold visas are pushing the Portuguese to another place.
> Is this really that fair?
We are obviously supposed to say "no", but I think the answer is yes. I really hate this form of argument by rhetorical question that only works if you _already_ agree with the author, if my answers are different the whole article just doesn't work.
The US as a nation is incredibly new and imported millions of people to build its population from almost nothing.
Communities being born and dying due to economics is something that has been happening in the US constantly, at a large scale, for its entire existence.
Maybe that's why some people are okay with this.
I see the same dynamic at play here in Boulder. People are claiming there is a housing affordability crisis because outsiders(commonly pejoratively referred to as Californians, Texans, and New Yorkers, even if they're not) are moving in and jacking up the prices, but commonly you'll see those people complaining have been here for, say, 10 years. But, 10 years ago when they moved here, the previous locals were saying...there's a housing affordability crisis and these newcomers are jacking up the prices!
When you say "the English" can you be more clear? Are you suggesting it's a problem if Scottish, Welsh, or Northern Irish people move to the capital of their own country, the UK? I don't think that's what you meant.
44.9% of people in London were white British according to the 2011 census, but 63% were born in Britain. The British are still a majority in London (according to the latest data). I don't think the 2021 census numbers for London by ethnicity are out yet (maybe I'm wrong).
The only way your comment makes sense is if you're suggesting it's a problem that white British being a minority is a problem.
I hope that's not what you meant to imply.
Why don't you tell me - do ethnic minorities without a country of their own face any challenges or dangers due to that? Is there reason to believe that native Britons won't face those same dangers? Perhaps because they are so beloved by other nations they now share their country with, there are yearly riots of gratitude held in their honor?
They're not even a minority yet, and we already have a preview of what's to come:
RAF ‘Pauses Job Offers for White Men’ to Meet ‘Impossible’ Diversity Targets - https://news.sky.com/story/raf-pauses-job-offers-for-white-m...
BBC bans white people from job - but workforce already reflects country's ethnic make-up - https://www.express.co.uk/news/uk/670266/BBC-advert-white-pe...
Most of my family have lived within the same 10km for at least 4 generations... It's not the same thing to live where I grew up and close to my friends and family or 50km away. Especially on normal Portuguese salaries which seriously restrict travel.
Sure, if you're in tech (like I am) you can just work remotely from anywhere and you can afford the gas and tolls, but you can also just rent in the city.
The phenomena that honestly pisses me off, is that all of these countries touting their immigration policies are lying to immigrants. They're selling them on a quality of life that existed 20 years ago and is no longer possible even to the people who have lived there all their lives.
It's absolutely fraudulent and exploitative behaviour by this countries.
For an immigrant from eastern europe, yes, Lisbon is not the great place it was 20 years ago.
But for an immigrant from US/Canada, Germany, UK, or whatever rich country. Yes, it's a great place to go to. A high rent in Lisbon is nothing to them, and the rest (utilities, restaurants, commerce) is still pretty cheap.
Good weather, good food, cheap lifestyle is quite attainable... just not for everyone.
Well, we live in a democracy here, and so we vote.
Our government announced their intention to ban residential investments in Porto, Lisboa, and the Algarve for the golden visa, and adjustments to the taxes for long-term v. short-term letting that went into effect this year.
It will take time to see if it is actually fair or not, but the cool thing about democracy is we can always vote again in the future!
Is it fair that someone, by sheer accident, was born in SF, is SWE and now wants to take advantage of that stupidly high income and dislodge people who have lived their whole lives in a certain place? Probably worked much harder and for longer? Where all their family and friends live and always lived for more than a century? Their culture and life? You seem to forget Portugal is not the US. They have more than 3 times your history and with it each place has a markedly different personality and much deeper roots not only culturally but also relationally.
Maybe you're used to a capitalistic emotionless everything-is-replaceable view and that in life all is fair and square, the ends justify the means, but perhaps you should rethink it.
Central city locations in Lisbon and Porto have exploded in price, but this is due to AirBnB rather than rich expats. Portugal's tourism industry has boomed, which has put money in a lot of people's pockets, but has distorted local economies somewhat. Better management is required, for example cracking down on AirBnB and NOT building that new cruise liner terminal.
Unfortunately the upper middle class idyll (alluded to in the article) of living a dilapidated (but in a cool way) apartment ten paces from your favourite coffee shop, while doing a socially respectable play job is now no more viable here than in SF, London or Berlin. Indeed, my own favourite 'coffee shop' got turned into a chain tequila bar.
Outside the hot centres, things aren't as bad. Public transport (at least in the AML - Lisbon Metropolitan Area) is excellent by any standard, and decent apartments are available for sensible prices well within one hour public transport commute of the downtown. Compare with London, where people are fighting over each rental.
> family factor weighs a lot here
Yes, and this is a problem, given that Portugal only became democratic 48 years ago and has a large amount of cultural baggage from quite frankly medieval times. Also, the implication of this statement is that family doesn't count elsewhere - and in case you missed it it was spelled out a few lines later, which should give you an idea of the residual naivety and insularity of (old) Portuguese culture. Agency - the idea that you can do or think something independently, and then take responsibility for it - is somewhat lacking too.
But! There is much that is very good about Portugal and the Portuguese people, I feel that here it is ok to be kind to each other. Furthermore, there are good changes, new opportunities are arising (perhaps in a very small part to some of the more productive visa holders), and I see a great future for Portugal - even if many Portuguese often don't.
Why do you say that the rise in housing prices has been due to AirBnB but not to rich immigrants? It seems a bit odd. Both can outbid the average native and just push prices high. Many rich immigrants also buy up loads of property for speculative/investment purposes, not just to live in.
>has a large amount of cultural baggage from quite frankly medieval times
I wonder what exactly you mean by this.
I distilled "lack of agency" as: not rewarding initiative, people afraid to take initiative. the portuguese boss does not like the employee to take initiative, and the employee will not do so. copying existing British designs is "safer" socially speaking, than making new designs.
source: I'm portuguese, I'm a weirdo and people always try to conform me to a box.
Incompatible definitions of fairness. They have in practice a much higher metabolism requiring more pure ingredients, from better sources, it's medically harmful to cut them off like instantly. Although at the same time they contribute to both the problem and solution, like it depends. Turns out very rough to adapt to on short notice, flat-out can't in many cases, and for sure you can't send your kid to any random Cuban school with kids on the other side of a former class divide, from one day to the next? Like how are you going to tell that kid? Just gotta be "really cool", in the "they was cool", sense, and some kids make it and others can't, wretched childhood. Although at the same time Fidel Castro, biographically, grew up among blacks because his father didn't recognize him fully, not even a second son, so he knew it could be done and there was the will that it happen.
And people will price discriminate against that kid forever, never accept he's no longer rich unless he's filthy in rags...that's a rough sketch of it. Misery all of a sudden, and metabolically difficult, like it's not just 2000 calories here's some water with fluoride for your teeth boom done. It wouldn't take your body 24 hours a day if it took a single sentence to summarize like I just did. Water alone, Americans aren't supposed to drink Chilean water or they get diarrhea like automatically, it could be anything, selenium plus manganese in the water table, natural salts (as opposed to NaF) that are systematically removed in America. It's along the same lines as toothpastes in Chile having over 6x the sodium flouride of American toothpastes. Like literally you couldn't buy those same toothpastes in America without a dentist's prescription, I innocently told them 5000 ppm pharmacist looked at me said "No that you need a prescription" like it was opioid that kind of reaction. I was actually prescribed toothpaste weaker than the only strength toothpaste Walmart sells in Chile, it's all 1650, like eating the color white, kids hate it because it's good to hate it because it's bad for you. Counterproductive, makes people become busted and scream at their kids, everyone in the family going to the Walmart to buy cookies. Makes you crave. Gives you ADD, I actually--it turns out--don't have any symptoms of ADD--and I generally have literally every single one and nothing else--when I cut fluoride out of my life. Drank from a well. I actually paid attention, as a verb, for once in my life. Like a colorblind guy seeing blue for the first time. So weird, now I know what people are talking about.
So if you don't want F poisoning, which is exactly what the fuck that's all about for political reasons, there it is again, didn't want this country to turn into another Cuba, Socialist Sandwich as Nixon put it, you flourinate really hard. Breakfast lunch and dinner, inescapable, it's a super expensive subsidy but it's not for your teeth, it's for your brain, it is incapacitating so you don't eg sue or protest. If you know the way around here in Santiago, you'll figure out you have to pay triple at a homeopathic store, the pharmacies don't carry any toothpaste that doesn't F you 1650 ppm. Either you go way out of your way or go without toothpaste, which is a thing for instance in Cuba. Everyone has a hard time adapting to that.
So that's an example of adapting, and it can take decades. And it's expensive to adapt, hard-learned lessons like flunking courses at Stanford in my case because I was consenting to absurd doses of fluorine, not knowing the harm. Not one ADD doctor brought it up, like they have them on a gag order, it's the most obvious shit nobody had ADD in the 50's and then you F'ed up the water and now everyone has to see a shrink, 2 + 2 equals what?
So the wealth and political status decouple, and they benefited when times were good, and then...well they get a new citizenship somewhere else and adapt to that, not Cuba but maybe 60's Brazil, learn the language which is work, learn the laws under which they must now live, and relearn the balance of power what the traps are what the actual opportunities are...and be a survivor, there are people left behind that couldn't get out, not savvy enough, bad airport game missed the last flight, and yeah they have money but they get charged much more for everything. Like the parent poster. Price discrimination evens things out in the end. That's what you replied to.
Dude a raft is not what determines refugee status, it doesn't have to be a giant pornographic Hollywoodesque stereotype of all the tropes of taking refuge--which is what the word means--to qualify in my book. Being hated is enough.
>I wonder what exactly you mean by this.
I was at a festival last night - the screens by the stage were playing ads in between the acts (that itself is a topic for another day!).
After a cringe-worthy advert for the UK (that I didn't even recognise it was so far fetched), there then appeared a public information message in Portuguese. It said (and I do my best to translate):
"What is the place for a women?" (pause) "Wherever she wants it to be"
Full credit to them for trying to drag themselves into the 21st century, having mostly avoided the 20th - you can see what I'm getting at.
The horror! ;-)
Others have said it before, but mass tourism is the new Dutch disease [1]. Pure tourist cities like Venice are already too affected by it to have a chance of getting back to a normal economic and social life, but there are other cities that are still trying to fight it, like Barcelona. Not sure if there are any political forces in Lisbon or Porto ready to take the same stance.
Who doesn't want to spend 15% of his woke day commuting.
Hard cringe.
Because words have meanings:
refugee
/rɛfjʊˈdʒiː/
noun
a person who has been forced to leave their country in order to escape war, persecution, or natural disaster.
Claiming to be a Brexit refugee when there are millions of actual refugees in Europe is cringey to say the least.
> Supposedly the economy is going to be downgraded from a developed economy to an "emerging market economy".
Anyone claiming that has no right to be taken seriously.
It is a man made disaster, and I left to escape it.
Unlike in Europe. Oh wait.
I've been told that in Germany the gas-saving measures will make people turn down their temperature during winter to 20-21°C from the, supposedly, standard 24-25°C.
But that can't be right, can it?
When I lived in Italy we had below 20°C during winter because the wooden windows from the 70s not replaced since then due to various, not strictly financial reasons, didn't provide much insulation.
Over here in eastern Europe it was always "18°C and put a sweater on".
But yes, generally speaking, people have got used to setting the thermostat higher.
I also see a bright future in Portugal. Many young people that moved out after university want to come back, after making a killing in their career. They might earn less with the move, but you don't need a six digit salary to live very comfortably here.
However, you can't have it both ways. If
> countless stories of flats left uninhabited by some rich person who arrived at the building, bought two flats so that he could get a visa, and doesn’t even live there
then clearly not
> wealthy foreigners from all over the world, to whom we offer a paradise where they enjoy the same services but where they don’t pay or pay less tax than the general population
Either they live there and use services or not.
However,
> countless stories of flats left uninhabited by some rich person who arrived at the building, bought two flats so that he could get a visa, and doesn’t even live there
So, the way it works is, as a golden visa applicant, you have to spend 7 days in the first year. The next 2 years, a combined 15 days (which can be spread whichever way you like). Subsequent renewals are different (21 days / 3 years). You can already live there when you apply, but you are not _required_ to.
You have to maintain your investment for at least 5 years (or until you become a permanent resident) and renew the golden visa twice. Then you can apply for permanent residency (or citizenship if you qualify), if you want to.
It's entirely conceivable that people would buy property and only vacation there. Which, if we are honest, is not a problem, given that large cities are excluded from the program. And cheaper housing does not qualify, either. So you would be taking property that's pretty expensive already (€500,000, €400,000 for low density areas) - OR requires the property to be older than 30 years old, and a minimum of €350,000 (or €280,000 in low density areas).
1) The investment doesn't need to be in a single property; you could buy up multiple smaller properties that sum to the amount you need, and rent them out or leave them empty.
2) There are also hotel investment options rather than buying up existing real estate, and those are still available in the big cities as they are considered 'commercial'
It doesn't matter if rents are curbed under 1k a month. The median under 25 earns less than 700 euros a month.
I talk to people in Portugal and I hear more or less the same salary discussions and ranges for more than 20 years. It is a stagnant labour market for literally +20 years! When adjusted to inflation it becomes even more ludicrous.
The iron curtain countries in the Baltic as well as Slovenia and Czechia, have all surpassed Portugal in wage growth. That should give anyone reason to pause.
Portugal has a few succesful SMEs, a wine industry, a cork industry, some textiles and not much more to show.
The Portuguese economy is mostly services which are circular not actualy exported and the obvious exported component which is Tourism.
The majority of Portugal's EU Cohesion Funds were sunk on motorways. The country has suffered from lack of strategy in both Government and Industry since the 80's.
There is only so much we can keep blaming on the dictatorship regime of Salazar 50 years ago. At some point politicians and business owners/investors need to take ownership of their fuck ups.
Tech businesses thankfully have been leading the way, aware that intrinsically remoteable work means they're competing with foreign capital for workers, but the situation is nowhere near where it needs to be (higher wages across ~more~ all trades and industries).
Now, even in suburbs, housing is far more expensive than most wage earners could expect to afford.
Maybe we are thinking of two different sides of the same coin, but I would genuinely be interested in reading articles from the ~mid-century describing what you suggest.
Over the next several decades as the boomers die off or move to retirement homes the housing supply will increase substantially, and the value of properties in most of the US will plummet.
As they die, and pass on their property, their kids will just retire young and rents will still rise, along with the prices of luxury goods.
I'll believe that house prices are high because of constrained supply when I see the prices of luxury goods drop.
I always find this a bit of a disappointing discussion, cherry picked to the extremes.
If we're being honest in talking about the cost of housing, we'd try to make apples to apples comparisons.
For example, if we used to eat apples that were 2 inches in diameter, lacked sweetness, had lots of seeds in them and started to rot after two days, and then 50 years later the average apple was tasty, 10 inches in diameter, seedless and juicy and lasted two weeks, you wouldn't necessarily conclude that because its price had doubled that apples have become more expensive.
But we kind of do that with housing.
Since 1969, homes have more than doubled in average size. Such homes were shared by 3.3 people, now by 2.5 (or 25% fewer people per house). And we used to pay 10% interest, now 5%.
So we have 2.6x as much square footage per person, and pay half the financing cost as we did before. And median nominal personal income tenfolded since the 60s. Of course you expect home prices to increase by a lot, it doesn't mean housing was laughably affordable and now isn't.
In fact there's quite a few studies which show that a unit of housing (e.g. the percentage of income spent on a square foot used by 1 person) has gotten cheaper. We just happen to consume more of it, and share it with fewer people, and pay less to finance price levels, which pushes the price levels to new heights without housing itself having become more expensive. [0]
If you then take into account the quality of housing and neighbourhoods, you see even the above is still an apples to oranges discussion. The amenities inside the home and in the neighbourhood are simply no comparison. I literally have a supercomputer allowing 3D simulations of any kind known to creativity on a screen with better quality than a 1970s movie theatre (I'm talking about a PS5 on a 4k screen) in my home. And I live in a town with 190 nationalities and as many kitchens within a 15 minute commute, just like parties with every denomination of music and dance, multiple universities and schools teaching just about any skill, shops selling just about any worldwide product I'd like. Of course all this access comes with a price because there was scarcely a place on earth like it 50 years ago, and now my city (Amsterdam) has many equivalents around the world, Lisbon being an example named in the thread's article. If you put our lifestyles and general wealth of pretty ordinary people like myself in these cities to the test of any city 50 years ago, you'd maybe find some of the very elite in NYC and London living like that, and that's it.
[0] https://www.forbes.com/sites/steveforbes/2021/06/25/us-housi... -- this isn't a proper study, but does substantiate some of the claims I made above. It's even missing some things (it overestimates principal paydown as a cost rather than a cashflow, and it doesn't account for quality differences).
I sometimes put a footnote in when I mention that house prices haven't changed in "400 years" because the records are from the Netherlands, but in your case that makes them more relevant.
I appreciate your approach, and I hadn't considered this perspective, but it still rings hollow to me:
Can I purchase 1/2.6 of a house? Just because the unit cost of housing has gotten cheaper doesn't mean _owning a home_ is more affordable.
Sure, I'll accept larger homes are being built at cheaper unit-cost. But those homes are still being snatched up, continuously "above market". Why aren't more smaller homes being built at similar unit-costs?
The problem is land has gotten expensive, not so much construction. Also, regulations and the like generally raise the bar for what is considered an acceptable house, which also contributes to rising prices (eg. things like mandatory minimum parking, housing amenities, etc.
Some places want to ban apartments smaller than a particular size because they are "expensive dog-boxes", which rather misses the point. I imagine the logic is that larger apartments will be available for the same price if such comes to pass... People are capable of impressive mental gymnastics.
Not if no one is building (or selling) the smaller houses, possibly because of the reasons you give in your second paragraph.
Your third paragraph starts to align with what I said. But "buy a smaller house" is not a helpful response to "there are no small houses for sale".
- Lisbon: 18.06
- Porto: 13.55
- Sydney: 9.09
- Melbourne: 7.05
- Vancouver: 12.62
- Toronto: 11.82
- San Francisco: 7.02
- Los Angeles: 7.47
- New York: 9.99Sometime in the last 100 years, leaders around the western world realized the massive real estate opportunity of strangling natural urban growth and price gouging on the limited supply they artificially created through euclidean zoning and countless layers of regulatory process meant to disincentivize investment in development. Just build more housing, and a lot of the economic ills of the 2020s around the world will evaporate.
More than anything, NIMBY neighbors keep killing less expensive forms of housing... 100's of homes, I would say, in the time since I started observing the situation.
STR's make for a convenient bogeyman that people can point their finger at. It's a bit more disturbing when you realize it's actually your neighbors; kind, ordinary people in most regards.
STRs just slipped past the NIMBYs because they weren't on the lookout for it; it won't happen again!
The government has said they're going to start tackling the issue of short term lets this month. I'll believe it when I see it.
But pre-covid Airbnb was about 10% of the total stays versus Hotels. And tourists in total were about 6% of the overnight population throughout the year on average, again the majority in hotels. And after corona this is a lot less due to new legislation (which caps it to max 30 days per year without a hotel license).
But yes, tourism obviously pushes up prices, but there's a big benefit to the local economy of course as well.
He could rent them out, but the long term rent contracts would not net him the same amount in a year than what he gets in just the summer months. Plus, long term contracts have a lot of other expectations from him as a land lord, whilst Airbnb is pretty chill.
From his point of view, airbnb is amazing, from my point of view when I was searching for a flat, I wanted to stab him in the face. It is what it is.
I almost think that the US is doing pretty well with this in the sense that you can still move somewhere that's cheap relative to your salary, but that only holds true if you're able to do it with remote work. So, maybe it's not true at all.
Portugal's demographics, like much of western Europe, didn't look like they were going to change dramatically: https://en.wikipedia.org/wiki/Demographics_of_Portugal - so getting set up to build a bunch probably wasn't a priority.
It looks like immigration picked up a lot, and also there has been an influx of wealthier immigrants.
It will be interesting to see how they handle it. Having people with money move to your country ought to be a positive thing, but you need to build housing for them so they're not competing with locals - and winning.
But the US is large and there are places where housing really isn't the issue (but there can be other issues, too).
https://www.theatlantic.com/ideas/archive/2022/08/housing-cr...
The US has places that you can live cheaply if you're able to arbitrage a remote job. It doesn't look as good if you're not able to work remote.
It's really impossible to make generalizations about the legalities go building in the US, as there is no federal control over such things. There are some state-level laws in some states, but for the most part zoning is left up to cities and counties, leading to literally thousands of disparate sets of laws and regulations.
My city has historically heavily restricted high density housing (until the state stepped in), while the city literally next door has added enough high density housing for ~20k people in the past decade.
This is an interesting book about the history of it all: https://www.cornellpress.cornell.edu/book/9780801479878/zone...
Generally, having all these big money foreigners trying to come to your country is a good thing. It sure beats having no industry and you can crank up the tax heat on them as high as you want since nonresident-noncitizens don't vote. The real problem is that the Portuguese government is not being made to share the bounty of a few winners with the rest of the population, who are instead left to just deal with the externalities.
There is another path that does not involve locking the doors and hanging up a "closed for business" sign.
The EU could change all of this and go for true European cohesion with Eurobonds under the blue/red proposal... but that's another story ;)
> Generally, having all these big money foreigners trying to come to your country is a good thing. It sure beats having no industry and you can crank up the tax heat on them as high as you want since nonresident-noncitizens don't vote.
Well but do they? Where is the evidence that golden-visa/NHR recipients have actually helped create jobs, invest, create industry...? In fact, there appears to be evidence to the contrary: https://www.publico.pt/2021/12/25/economia/noticia/vistos-go... (translated: "Golden visa: in nine years, the program created 241 new jobs. Investments which led to the residency permits since 2012 amount to 6000 million euro, the vast majority of which went to real estate")
The country might be poor and in debt overall, but somebody is getting rich off this real estate bubble and it is within the government’s power to make them share.
I wish we had public data showing how much each person in parliament/city government gets each month as rental income... would probably be pretty enlightening.
As it's common, the housing market reflects many errors and not just one.
(Probably similar for other EU countries with high relative purchasing power)
Absolutely no idea how it can be fixed as there is only so much space to build on in the large urban centers everyone wants to be in.
How is that different from other places? Houses in the center of big cities are always a lot more expensive than others far away from it. Want a small one in the center of Rome? Here you are: 27mq, 2nd floor and no elevator, no heating, no air conditioning, abysmal energy efficiency, no kitchen, renovation needed, only €600,000. What a bargain!
https://www-tecnocasa-it.translate.goog/vendita/appartamenti...
No thanks, I'll rather spend less than one third for the 7 times bigger house I'll be soon relocating to. I lived most of my life near the center of Rome; if you come as a tourist I concur it can be a wonderful experience, but after decades of traffic, noise and pollution, leaving for a much quieter and cleaner place with plenty of space for my hobbies is the best thing I could do. And it's also much cheaper. YMMV of course.
Yes, very central touristic areas are expensive but half a million can get you 3 room apartments you can go to center by feet, even less would be enough.
That's the price you would pay, e.g. in Ostiense.
I’m a globe trotting engineer who understands globalism and what access tech is opening up to it. I don’t mean being a digital nomad. Rather, tech is collapsing or expanding concepts of borders, nationalism and so on in very meaningful ways. That’s a hugely compelling area to work in vs chasing an OKR for Google ads. I don’t think it’s reversible, and I find a lot of value personally and professionally from being in that space because this is the rare moment where the world is changing and I’m in a field directly involved with it.
The other aspect is it’s locals selling to the foreigners, and a personally compelling reason to go there is urban areas of the USA have screwed themselves up with the cost of living. I want to participate in problems, not pay $5k/mo for a 2bdr in NYC or soon Austin or Nashville so I can go to bars with other techies. So if locals weren’t selling at hugely inflated prices, I’d be firmly in favor of that. So, look to the Portuguese neighbors selling apartments first.
But, no excuses - I see $500k 2 bdr in Lisbon and think that’s a chance to live in a world that is way too expensive and commercialized in NYC. A local in Lisbon is getting hosed by that and my mobility, no way around it.
In short - am I part of the problem, what responsibilities do I have vs the locals and govt policies about foreign purchases, do my motivations matter at all vs the outcomes.
I don’t know yet, Hard to say, although it’s good to face hard facts via articles like this. Networked-globalism won’t reverse, and I think it’s more likely the quiet parts of the world (rural America, cheap Europe) are just going to go through some transformations that can’t be stopped and the symptoms look like this article.
We are living more and more in a world where people work but are not able to live with dignity
And from what I remember, a lot of the politicians in the Parliament also have multiple properties, and lets not even remember the 'Rubles' case.
Fair always has two sides, and it's "impossible" to come up with a perfectly fair system.
If you live in any society where land values are private profit, expect nothing less.
We're seeing this in America too, but hopefully with any luck, we still have enough entrepreneurial inertia that salaries (mine especially) remain high enough for a little while longer to make this palatable.
Pandemic came, he stayed in Brazil doing remote work. Found him a few days ago. He told me he gave up going to Portugal and decided to stay in Brazil for now mostly because cost of living there. His initial salary would be 1.6K euros.
Uh, this is almost certainly data for the US city of Brazil, Indiana https://en.wikipedia.org/wiki/Brazil,_Indiana -- not the country of Brazil
As sibling has stated, Brazil (properly pronounced "BRAY-zil") is a small town in the U. S. state of Indiana. What amazes me though, as one that grew up probably 20 miles from the town, is that anyone in Brazil, IN is paying $62K/year. But it's been 30 years since I lived anywhere near there, looks like it's grown a little.
> The government has taken desirable measures for foreigners, making it easier for them to get golden visas if someone invests a certain amount of money. My husband, who works in real estate, tells me countless stories of flats left uninhabited by some rich person who arrived at the building, bought two flats so that he could get a visa, and doesn’t even live there.
There are a bunch of restrictions on where and what types of properties qualify. You can no longer buy property in large cities and get the 'golden visa'.
I do not think that is the main driver in large cities. IF these price hikes are indeed driven by foreigners, it's probably other European Union residents.
> Nowadays, flats are being rented in Lisbon for four thousand euros
Yeap. Rented. So why did they bring up the visa thing? You can't qualify if you rent.
Also, housing prices have been increasing all around the globe at the same time economies are screwed up and inflation is rampant everywhere. Blaming foreigners seem... xenophobic? I didn't know Portugal was like that.
For starters, is there enough new construction to satisfy demand? If not, there's the answer.
> (...) And if Brazilians, who must be the largest source of Portuguese immigration, move here
Wait. I thought the problem was rich foreigners? There are rich people in Brazil sure, but I seriously doubt their numbers would even move the needle. The overwhelming majority of expats are _not_ millionaires. If you are that rich, you can have a pretty great quality of life and would only look to live in Portugal if you were really into Europe or something like that. Rich brazilians are more likely to want to have property in Miami.
> The Portuguese are becoming, nothing more and nothing less, the servants of big foreign millionaires
Back to the foreign millionaire thing.
Way back in 2012 I had the opportunity to live and work in Europe. I considered Portugal, but while the country is amazing and the food is good, the salaries were utterly terrible compared to the neighboring countries. It seems that things have not changed.
For example, it claims Brazillians are going to Portugal in large numbers because Bolsonaro...
Except, Brazillians are going to Portugal in large numbers, because the Portuguese government invited them, out of necessity since the country is depopulated and has low birth rates.
I am one of the Brazilians that intend to move to Portugal, and part of the reason is that I am not exactly Brazilian, yes I was born in Brazil, but my family is from Portugal, and I was raised with a Portuguese culture, I just don' t feel like Brazil is my home and want to try going back to my family hometown (Leiria) to see if it is a place that clicks with me.
Lisbon and other metropolises indeed are bad, but because a incredible amount of people want to live there despite lack of enough land there.
And infrastructure. Lisbon is incredibly dense, partly due to its historical neighborhoods that's impenetrable by modern surface traffic, and a subway network with insufficient reach for a growing metropolis, resulting in everyone packing themselves denser in the few desirable areas.
https://www.reddit.com/r/PortugalExpats/comments/vy0i5r/crit...
It's proved... controversial! I'd be interested to get HNs take.
I suspect I need to go with something very carefully phrased around "helping give back", rather than "you're a terrible person, make recompense for your crimes!", haha.
To make up for buying your way into a region and contributing to the displacement of locals, you are offering to create an internet platform to solicit donations of other people's money to support a welfare economy.
It's an idea as absurd as Russia funding orphanages for Ukrainian children displaced by war, or patting yourself on the back for resuscitating someone you just tried to drown.
If you feel that guilty about it, leave. Charity from conquerors is not generosity, it is an imposed dependency-- literally the opposite.
Don't feel too bad though. This is the nation that pioneered the global slave trade; they've done far worse to the rest of the world in pursuit of a dollar.
Buying a house and paying above market rate for it is not a crime against humanity you should feel compelled to make amends for. You are already making a landlord and nearby service providers wealthier than they would be without you there. Count your blessings and live your life.
And even if you build housing, you somehow need to reduce the induced demand.
Obviously this would 100% be a problem better solved by government. But I don't see any evidence that they're planning to do that, so ...
* housing production in Tokyo is great, but to put this in context today's Japanese housing market essentially happened after the bubble pop in the '90s. Prices from 1991 to 2004 had declined by 64% due to the pop. In that context, deregulation was palatable because people were already underwater and didn't bother as much to fight things that would lower property values. (In fact, it could've raised them.)
https://www.airbnb.com/s/Tokyo--Japan/homes?adults=2&refinem...
Why wouldn't the government crack down on this?
Japanese culture would be my guess.
Portugal has an influx of foreign funds through Golden Visa and similar programs. It should take that money and build social housing that is, at least at first, only open to Portuguese citizens. Think Vienna.
In areas where building is a problem, just use funds to buy properties and turn them into social housing.
I don’t know what restrictions there are on foreign real estate purchases. Personally I have no issue with owner occupiers. But any “investors” (including AirBnBs) should be made illegal or simply taxed into oblivion.
Vancouver, Toronto.
Surpluses are being gathered by the global elite and they are coming back to buy property the locals cannot afford and leave the spaces underutilized and empty.
How on god's green earth we allow our 'land' in urban areas - a very valuable resource to be 'exported' while owners pay nary any taxes ... is completely insane.
We should basically ban foreign ownership, or, tax it heavily and especially require domiciles to be either occupied or to have a tax so that it 'gets occupied' at some rate.
High rents mean that a lot of people like a place enough that they'll fight (economically) to live there. The fact that you've lived in a place since before other people might feel like that should entitle you to low rent, but it doesn't, that's not how markets set prices.
High rents are just once aspect of "unpleasantness", and people will move around till the misery is equally distributed. Economies ebb and flow and shift from place to place, so it the process never ends, but don't be fooled, there is nothing broken about systems of market real estate prices, in a sense they're the final leveling of a system, the equalizer of all other desires.
It's like currency exchange rates, whichever way they go, there's good an bad, can afford more foreign goods but nobody wants to buy your goods, or can't afford foreign goods but can sell exports. But there's nothing to "do" about exchange rates, accept them as given and plan accordingly.
Bad transportation problem in your city? Think the new public works project is going to fix it? Think again, better transportation makes for more efficient redistribution of misery.
Now, I don't mean to sound negative: the redistribution of misery is a leveling, like stock prices going up and down with every trade, there is still a buyer who wants in and a seller who wants out. The redistribution of misery always entails some people getting less miserable.
The evolution of new housing construction over the last years https://www.pordata.pt/en/Portugal/Completed+dwellings+in+ne...
The number of conventional family houses in Portugal https://www.pordata.pt/en/Portugal/Conventional+family+housi...
My opinions: The housing market has been stagnant since 2010 while at the same time interest rates have been low. The population might not have risen a lot since 2010 but the usual trends of moving to city centers, people leaving their parents house (which keep the same house), people wanting new/bigger houses than their parents are still pressures present.
This means there's a big pressure in demand for housing which is not being met by supply which increases the prices. My speculation is that foreign investment has a very low impact in the housing prices, but it's just my speculation. Even if it's a considerable impact, the fix is always to increase supply of houses so that prices drop and we also get foreign investment.
People are hardworking and friendly, there is a lot of entrepreneurial spirit among the young, even though they are not in lisboa.
The house we got is so cheap I didn’t even know you could get actual liveable places for that in the the west of the eu still.
It’s close enough to lisboa and Porto to just have a weekend there regularly.
I'm sure the author has their reasons or whatever, but when they make statements like this:
> It’s not easy for anyone to emigrate, to have to deal with and to submited themselves to another culturee. It’s all hard, but to live away from those we love the most its the hardest.
It's just incredible to me that someone would act against their own economic interests so blatantly. The greatest innovation of the EU is free movement, and this person is unwilling to take advantage of it to escape economic hardship.
Obviously my mindset and the author's mindset have irreconcilable differences.
I think how the author keeps using "foreign" as an insult reveals something about their thought process:
> policies that benefit foreigners more than their residents.
> the majority are foreigners who are not there for a visit, but who live there.
> large public companies were sold off to Chinese managers who now do whatever they want
> The Portuguese are becoming, nothing more and nothing less, the servants of big foreign millionaires
Many young Portugueses fail to benefit from being part of the EU.
Portugal has the 4th highest rate of emmigrated working age population in the EU27, only surpassed by Romania, Lithuania, Croatia.
Portugal had one of the single biggest brain drains in history post 2008 crisis. People have absolutely voted with their feet.
Those who stayed behind, either stayed because they benefit from the cronyism or are held back by family or lack of marketable skills.
Or maybe none of those, there are plenty of people with good jobs here and no reason to leave, not all of us make minimum wage or live in Lisbon.
You called this bullshit and write that many Portuguese have already left.
Both can be true, and you admit as much:
> Those who stayed behind, either stayed because they benefit from the cronyism or are held back by family or lack of marketable skills.
This is what we're talking about, it appears the author is being held back by family.
Many people have voted with their feet and left, and many haven't, both are true.
Or because they don't want to leave their home country and have hope things will get better.
I have yet to meet the child of a Jewish family who does not intimately understand this, given how frequently those families often had to move, while staying extremely close.
> My parents are very family oriented and were somewhat upset when I left my home country
Also you:
> It's just incredible to me that someone would act against their own economic interests so blatantly
It appears you didn't adopt your parents' family values. Nothing wrong with that, but I don't think the strong will to remain near one's roots SHOULD be all that "incredible" to you.
I'm also the child of immigrants, and left their adopted country for another for "greener pastures". But my parents left their home country to escape tyranny, not just economic incentive. They did the hard thing because the other option was dangerous.
Are we really at THAT point? Are we doomed to always run from the tyrant, or can we build a different society where families don't have to be split up.
I think your post is a bit self righteous. Perhaps the demand for your skills in other countries made it easy for you to immigrate. Most cannot do that. They're stuck there, and I think are reasonable to want their country to do a better job supporting the quality of life of it's residents rather than treating them like peasants.
Regardless of what I "should" think, if people are complaining about not being able to afford to live somewhere, then they stay there while their disposable income drops and drops until they're struggling, all while alternatives are available, that is incredible to me.
I can empathise with feeling sad about leaving and delaying, but I don't think I'll ever be able to really understand the author's final decision.
> Perhaps the demand for your skills in other countries made it easy for you to immigrate. Most cannot do that. They're stuck there
But this isn't exactly what I'm talking about, is it? The author is bilingual, has a Bachelor's degree, and lives in the EU (and even further, the Schengen area), a single labour market.
We can talk in general about how some people are stuck. Indeed, helping people who can't help themselves is one of the main purposes of government, but the author doesn't seem stuck. Their comments and background indicate they're in Portugal by choice.
https://www.euribor-rates.eu/en/current-euribor-rates/4/euri...
Flint's population has rapidly declined over the past 40 years and continues to decline (its population is less than half of what it was at its peak), so there's not a population boom driving up demand. Flint is not exactly known as a tourist destination either. And to top off, Flint is most well known for its contaminated drinking water that contains lead. So why on Earth would such a place be experiencing a housing shortage?
The obvious answer is that governments around the world have brought interests rate down to zero, which forces investors to seek out riskier and riskier assets to invest in. Instead of investing in traditionally safe assets like treasuries and bonds, investors now have no choice but to invest in stuff like tech startups, cryptocurrencies, personal loans, mortgage-backed securities, and dilapidated houses in the Midwest.
Maybe in the USA. In other countries real equity returns have been negative for decades.
We see it time and time again. Policy makers try to address the symptom but not the cause, then people cry when nothing gets fixed.
The investor class inflates the value of the assets, meanwhile the working class are just struggling for a place to live.
- Increasing income inequality short-circuiting the backpressure role of market pricing (and, more specifically, the use of home ownership and immigrant-investor programs as a way to sidestep restrictive immigration systems)
- Countries attempting to replicate the American suburban lifestyle, which is economically unsustainable as voters are incentivized to constrain supply in favor of "line go up"
- The economic gravity of living in a large city.
The econ 101 explanation of markets is that increasing price lowers demand, but this is determined by the "elasticity" of the supply and demand curves. The shapes of the curves determines what the market will do when supply or demand shifts. But if these curves are straight lines, or "inelastic"; then suppliers or buyers do not compromise on quantity and the market gouges people.
Supply is inelastic: most cities are hostile to redevelopment and all the economically-viable land in the city has been used up. No matter how expensive housing gets, people will not be able to build more of it, so price goes up more. In fact, when housing gets more valuable, there is more political resistance to increasing supply, which makes prices go up more.
Demand is inelastic: most housing buyers need to own a house. Homelessness is at best inconvenient and at worst illegal. Moving out of a city is expensive, and will require finding new employment, possibly at a lower hourly rate or salary.
The end result is that the housing market works less like a market and more like NFTs pre-a-few-months-ago. It is politically engineered to ensure quick and profitable exits for the vast majority of homeowners. However, this process cannot go on forever; because eventually home costs will outstrip wages, which puts backpressure on the whole "line go up" thing.
This is where the rich and powerful come in. They do not respond to pricing backpressure the same way you or me do. If a flat in Portugal is a million euros instead of half a million, who the hell cares? They can afford it anyway. They represent "greatest fools" - people who can resolve a speculative bubble by just buying the asset and not caring about it.
It's also kind of a mistake to say that "the Portuguese can no longer afford to live in Portugal". The population is not a monolith; it's more correct to say that today's middle class Portuguese cannot afford to live in their own country, but prior decades' middle classes absolutely could have, and the price inflation in the housing market is specifically to the benefit of those people.
Really, where? I thought only fractions of the anglosphere replicated this (like parts of Canada). Extremely few Europeans would want that lifestyle, for instance. The trend seems to be moving aggressively in the opposite direction, with large and dense cities attracting the majority of new people.
This goes back a long time. The stockbroker belt/home counties as where commuters into London live has been a thing for more than a century, since railways then automobiles made this practical.
The attitude klabb3 mentioned of "Europeans don't want American suburbs" is, as I think he is realizing, nonsense. No matter where, no matter who, the majority of people prefer detached homes with lawns if they can afford them. (I speak as among the minority who prefers dense living.)
Eh. Yes, people want ponies. Suburbia does indeed optimize for this parameter, but they sacrifice almost every other. Single family houses with lawns is nothing new in Europe, but most of them are rural.
I'd still defend that for the vast majority of Europeans the attraction of American suburbia is very low. Most choose to live in apartments in dense cities that are most attractive near the center. "Walkable" is a term i first heard in the US, that is quite meaningless in Europe, for a reason.
Additionally, Portugal is suffering from high taxes (because everyone tries to avoid paying them, it's a vicious circle), and low productivity (they are working a lot, but ineffectively and in the wrong industries).
Almost 10% of the population have emigrated to the rest of Europe and they have every right to do so, just like all Europeans have the right to live in Lisbon.
And for the Brazilians being picked on in the article - Portugal could never finance its completely unsustainable social security system were it not for the influx of foreigners working there.
What's really needed is to address government corruption, fighting tax avoidance, lowering the taxes and increasing social housing projects. But this is very difficult to do.
Does anyone know other good reads to get a better understanding?
[1] https://www2.deloitte.com/content/dam/Deloitte/at/Documents/...
Things will probably shift when the proportion of renters significantly outnumber the home owners.
Why does anybody limit supply of housing to the point that prices rise?
The French did a bad job at building satellite cities, but done right, you could connect new housing to the city center like the original Los Angeles street cars.
If jobs don't pay much then you also don't pay much to the builders of new houses which makes them affordable.
The desirable locations are a renewable resource. Portugal could build new desirable areas. They could even turn this into a recurring business and sell them to international investors, too. Instead of building suburban sprawl they can build more urban clusters.
If your power goes out or there is a water leak in your home, you need an electrician or a plumber. Preferably one who doesn't have to live five hours away. If you need an ambulance and medical attention, you need doctors, nurses, and medical personnel. Hopefully they didn't get priced out of a 50 mile radius of your home.
And if the world consisted of only millionaires and an army of robots, if everyone is a millionaire, no one is. A carton of milk would just cost $700 and a lower end house $30M.
Be a YIMBY. Embrace looser zoning regulations and more and denser housing where you live. And don't jack up the rent to market rates if you're already turning a profit.
due to not paying enough
Local businesses and towns are throwing money at the few young people still here in an attempt to recruit workers but there just isn't enough to handle the scale up for summer volume. The band-aid for years was J1 workers but it's no longer enough.
The wealthy don't think about Cape Cod for 1 second once they cross the canal, or leave the runway in Hyannis/MV/Nantucket. They seemingly don't realize that their "tax dollars" which they claim are a gift to the local region, aren't helping or solving any of these problems.
What we're seeing now is consolidation of businesses, and the construction of worker "dormitory" housing. That's the future for our region. Multi-million dollar trophy homes, and worker dormitories.
Because they are not paying them enough- hence the need for J1 workers
Eh. Waiting for people to forgo short-term profit from the goodness of their hearts under capitalism is a losing battle. The system must be built to prevent such behaviours and outcomes, rather than relying on individual good-will.
Ultimately, the only way to change to change things under a democratic process is to win hearts and minds, and in either approach, people will have to make hard decisions. Either it's forgoing short-term profit by loosening zoning regulations or forgoing even long term profit by enacting whatever large scale systemic change one envisions will solve the problem (strict price controls, rationing, expropriation, etc).
FWIW the electricians and plumbers are the ones living right next door to the techies. They charge ridiculously high hourly rates and there aren't nearly enough of them, so they can keep raising their rates almost without limit. Try to find a decent electrician for less than $150/hr (this is SF Bay Area). A refrigerator repairman will charge you $300 just to walk in your house and diagnose an issue.
You can either have a housing market or you can make sure everybody has affordable housing. But that means making housing a public good rather than leaving it up to investors, but this requires the opposite of the austerity that was imposed on Portugal during its debt crisis.
If you think that's utopian thinking, consider Red Vienna and its housing projects which continue to exist today and still provide affordable decent quality public housing in the city: https://en.wikipedia.org/wiki/Red_Vienna
What are the good arguments ?
Do you think the “global elite” is invading Portugal ?
In the context of receiving visas, that's exactly what already happens in Portugal.
The most extreme example is probably Comoros, which up until a few years ago you could become a citizen for $45k over-the-counter.
You guys are going to have it all.
Inflation is occurring at higher rates in some countries than others (cough Estonia, Turkey for example) and Portugal is not exceptional in this respect. The starting salaries for doctors in the Portuguese SNS are terrible, at around 1800 euro for doctors and 1200 euro for nurses. This is insufficient for living in Lisbon or Porto, as the author would agree.
Source: I am Portuguese. I live in central Portugal.
I do not like the authors apparent intentions in trying to incite anti-foreigner sentiments. Portugal has chosen it's own course here, from the Golden Visas to the over-reliance on tourism. Lisbon has it's own management problems that I won't dig into, but suffice it to say that certain places like Lisbon or Porto have become rather expensive, while the majority of the interior of the country continues to be less-inhabited. Our train services were gutted when the public system was privatized and the concession given to a single company.
Monopolies run rampant in Portugal.
Uniquely complaining about PORTUGAL being unaffordable for the PORTUGUESE is such a Portuguese mentality, I can't even. The author needs to live abroad in some other countries for awhile and see how much this is a general issue relating to so-called NICE CITIES becoming horribly expensive. No doubt, we will stop being fashionable at some point, when the "next" cool place becomes king, so the real question is whether we will begin manufacturing and developing other sectors of our economy beyond raw-materials export (low in the capitalist pyramid) and tourism. Make furniture to sell, rather than exporting the timber, so to speak.
I love this complaint. It's so perfectly a demonstrations of itself. It's somehow as if, suffering a problem that someone else suffers from, means you're not allowed to even discuss it. It's also hardly unique to Portugal. Most countries discuss domestic politics in terms of the country, because they have say over the policy of non-domestic territories. (Usually - colonial empires excepted.)
Obviously there's local factors like Lisbon's desirability to foreigners, but from a global perspective, in the developed world...?
What am I missing?
Lisboa and Oporto are hideously overpriced, and it is indeed hard to see how a normal Portuguese earner can afford to live in either. Even Vila Nova de Gaia, which was the “cheap” side of Oporto, is now parlously expensive.
This effect has bled along the coast, and many coastal villages now ask €200k for an unmodernised one bedroom house.
But… the interior of the country is still facing depopulation, and property prices and rents here (between Bragança and Miranda) are still low. A five bedroom house in a town in decent condition can be had for €100k. There’s a beautiful 16th c. T8 palazzo needing modernisation in our nearest town for €80k.
People don’t earn much here, but they don’t spend much, either - a lot of food is home grown or hunted and bartered, heating is from firewood, and most folks drive perhaps 50km in a week, as they live within walking distance of where they work. Almost every house that’s had modernisation done uses solar for hot water and to supplement power. They deployed a gas network four years ago, and shuttered it last, as nobody is using it. Property taxes on the above properties are about €100 a year.
They’re desperate for people to move out here - lots of vacancies, not enough people to fill them. They’ve rolled out gigabit fibre to the villages, which they are literally giving away. We’re the only estrangeiros in the county, bar returning Brasileiros.
So. The reality is that which is being played out all over the world. Cities are becoming unaffordable for mere mortals - and, in my view, that’s ok, as cities are past their useful life as industrial hubs and have principally become destinations and speculative investments.
I’m not advocating some sort of “return to the land”, but rather that people are going to have to consider that perhaps they don’t all have to live in the top 5 cities in their country.
Sure, I can’t get takeout here, but I can breathe fresh air, sit at a quiet cafe and chat with my friends in the village without enduring traffic whilst drinking my €0.60 coffee, and support local businesses run by local people, rather than vast corporate chains.
Since we’ve moved here, particularly during the pandemic, we have seen quite a few young Portuguese couples move here from Oporto - some with family ties, some without - they’re starting businesses, families, renovating old abandoned homes. It’s genuinely exciting to see the beginning of something.
The pendulum swings, the market speaks, the world turns. Sure, we may be facing down collapse - of the current way of doing things. Not of all things.
Edit: just to demonstrate the veracity of my statements re property prices here: https://www.idealista.pt/comprar-casas/braganca/vimioso/vimi...
Some people just don't think very highly of "flyover country". The culture is not what they're used to. Return to the land makes a whole lot of sense though, now that the basic infrastructure for hybrid remote working is pretty much ubiquitous (courtesy of COVID).
"BC? British Columbia? NS? New Jersey, no that's not with an 's' ... Arg, no idea!"
It is not mandatory for me to understand all the abbreviations. Just that sometimes I would like to understand more, without having to guess states.
When I transition from tech, I hope to spend my time building affordable housing in Portugal and Spain.
(1) Bar agriculture and remote work, there are very few jobs in the interior of the country. I think in this forum we may have a skewed perspective since our sector is by far the one where remote work is most common. But most people simply don't have the option to earn 10x minimum wage from their computer while sitting in an idyllic mountainside village.
(2) Many people like living in rural areas. That's great! But many people also do not. I like nature walks and mountain biking and clean air as much as the other guy, but I also like restaurants and classical music concerts and nights out. I sort of have that right now by living in a rural area 10m away from a mid-sized (150k pop) town, but I don't think I would like very much to live in the middle of Trás-os-Montes for more than a few months.
There’s also the whole virtuous cycle thing - more people move here, bring more commerce, more demand, secondary and tertiary industries develop.
I hear you on lifestyle, however - this wouldn’t have been for me when I was in my 20’s, but at nearly 40, and finally wanting to start a family, it’s ideal - and many of the younger folks moving here are in the same boat.
That said, there are restaurants, some really good, and transport around here has improved such that Bragança is only 30 minutes from Vimioso now, rather than 1hr+ it was 10 years ago, and it has all the amenities of a secondary city. Oh, and we had an excellent concert a few weeks ago - after the bullfighting. But I agree, it isn’t for everyone - but it’s perhaps for more people than might realise it.
That's exactly what I saw when I was looking at properties there. And honestly the towns where some of the cheap properties were, were not half bad. They looked like they had all necessary amenities. I can't speak for their job markets though, which could be the main reason for the issue.
Well, compared to capitals in some countries in Europe, that is still cheap! Try half a million for a completely empty run-down flat.
I think it's an interesting question: why are there only a handful of "top" cities? What can we do to make cities that aren't desirable, more desirable?
I think Portugal was just late to the game, but the playbook is the same.
All major cities in Canada, NYC, London, Hanoi, Bangkok, Naypyidaw, and so on and on.
Every nice city is extremely overvalued.
I wonder how this will impact "golden visas." Personally, if moving to Europe, I would be a little concerned about short-term energy insecurity pretty much anywhere except perhaps the Iberian peninsula. I think they'll find a solution, but it'd be hard to make such a big bet on without certainty.
Eh, not anymore...
https://www.bloomberg.com/news/articles/2022-07-11/russia-be...
I think this title is a bit sensationalist. It's true that a middle class Portuguese, with the extremely heavy income/property taxes we have to pay, will find it very difficult to live in Lisbon's or Porto's city center in a medium-upper apartment.
Lisbon (and even more Porto) do have an extensive metro line though, and you can rent/buy an apartment on the outskirts (although still served by metro line), even with the low liquid wages. But more than that, vast areas of the country are extremely deserted and housing is extremely cheap there (a similar house in the interior goes for about 20% of one in Lisbon/Porto).
Also, there's the problem of the government having destroyed most of the middle class to embezzle the metric of the "minimum wage". Constant mandates to increase the minimum wage (and very heavy taxes on anyone that earns more than that), make so that companies can't discriminate between good and bad workers. Most workers get paid almost the same, and as such, there's no point in trying to be a better worker.
I'm one of the "lucky ones" because I bring home about €2000/month. My company has a total cost with my salary after taxes and other state contributions of €3880/month.
Now, I know that you can have the argument that we get a lot of "free" services in return, but, sadly, no, we don't. Decades old mismanagement (governments use these "free" services to cater to their party members and get them nice administration positions for which they don't have any experience) and some outright corruption, destroyed the quality of most of these "free" services.
The SNS is in absolute shambles. Our mortality rate is the highest since 1913 (ok, you can attribute that COVID). Our infant mortality rate, the highest since 1982 (sorry, but you can't say this one is due to COVID). Now, what happened to cause this? 7 years ago, we got a center-left government into power, one of their first measures was to destroy a system where the hospitals were public, but the management was done by a private company - these hospitals had much better metrics for both costs and quality of service. They abolished that, and replaced the hospitals' administration by party members. This is the result.
Like it happened with the SNS, similar stuff happened in a lot of other areas. In the end, the government's answer is always the same: increase taxes - which strangulates the economy and destroys the middle class, and, funnily enough, transforms us all into people dependent on "government's money" and their subsidies - that ensures that they keep in power because nobody can imagine living without those "free" services with the low liquid wages we have.
Tangential, but I recently visited lisbon and realized how terribly mismanaged the airport is, as well as TAP Air (Portugal's flag airline). Everything should be well, because it's a pretty big airport but yet it was a mess, and delays of several hours was apparently an every day experience (which I learnt the hard way). It did give the impression of having root causes in corruption and complete mismanagement of public funds.
Yeah. Given that the large cities no longer qualify for 'golden visas', I think the government wants external money to go to these areas.
> Decades old mismanagement
That's quite sad to hear.
I was (guess I still am) thinking about moving to Portugal at some point, perhaps for retirement. Every single person I have ever spoken to... they can only sing praises to Portugal. Sure, sometimes they complain about bureaucracy. That's probably worrying, since most are brazilians and we supposedly used to that. If they complain, that must be bad :)
I really hope Portugal will get better.
I'll just comment on the taxes, as someone who owns a business - yes, they are high. But not that much compared to the rest of Europe. I'm sure by now you're thinking "but other countries make a lot more money!!" - and that's exactly why taxes are high here. Our GDP is much lower, so if our tax rates were also lower, how would the government afford machines for hospitals, vehicles, fuel, and so on when all these things cost the same as elsewhere in Europe? The only thing that is significantly cheaper here is labor, after all...
Yes, things aren't good. But there's no easy solution either. I personally prefer to pay higher taxes than to compromise our public services further, or privatize them in a fuck-the-poor way.
Not to retract from the article, but the city center on the capital are never supposed to be affordable for the middle-class anywhere in the world. This is the most premium space of the whole country where everyone wants to live, and housing is limited, so only those able and willing to spend top money (e.g. the wealthy, not the middle class) are usually able to live there.
The "Business district" is only relevant to new york and other big financial centers
What I see are vast numbers of uninhabited, decaying or wholly uninhabitable structures. I see 50+ age men loitering around the town, drinking beer at 10am, and playing scratch-offs.
On the roads I see absolutely bonkers drivers who have old cars which obviously have binary gas pedals. They go super slow for no reason, but at some point they flip the switch and drive like maniacs, blind curves be damned. These cars, by the way, are 80s and 90s soot-spewing diesels.
They start fires more often than mother nature does. Sometimes it's because they are crazy, but usually it's because they want to clear a natural forest so they can grow fast timber like eucalyptus (which greatly exacerbates the fire risk since they are so grow fast and are highly flammable).
VAT here is 23%. This thing about foreigners not paying tax is bs. Locals widely use a tax scheme whereby they can make tax claims on their purchases, getting some of it back. Without that tax number, you pay the full 23%.
And if you want to use a visa to live and work here, you will pay an incredible tax rate that's even higher than Netherlands (which is already 20-50% higher than the US).
Many of the "rich" foreigners coming in and buying property are Brazilians, some of whom got their riches through corruption or outright criminal activities.
There is also still good old fashioned corruption here. The laws regarding many topics such as land habitation permits vary by jurisdiction, and the common way to deal with them is to get cozy with the mayor or other important figures. Take them to dinner, buy them some gifts, play nice. You can be completely legal, but if you don't play the game right you can be denied a permit.
This is all pretty bad news, but that's not to say that Portugal is bad or Portuguese are bad. There's a lot to like here. There's a lot of charm, a lot of history, some great beaches and villages and mountainous areas. The climate can be nice, but imo it's not great and rapidly getting worse (many days this summer over 40C, and so, so many fires).
My takeaway is, to put it very bluntly, that the average Portuguese person is quite ignorant. They either don't know a lot of important things, or they know a bit but don't care (because they don't know why it's important). It feels like time stopped here in the mid 1900s.
Porgugal was once the king of the world. Then it had a several hundred year decline, reaching bottom in the latter 1900s. The younger generation learned it was better to move elsewhere to earn money, so progress ceased locally. But 10 years or so ago, the younger people who are now middle age began coming back, starting businesses, and revitalizing the country. It's going to take a few more decades before Portugal reaches the point where it is not a poor shadow of its former self. I'm not sure it will ever make it though.
Is this the catch then with those "golden visas"? Could you or someone else say what those rates are? Is Spain which also offers "golden visas" the same then in terms of a separate tax?
This is quite true, we are ranked very low on things like financial literacy, and most people here don't care why things are the way they are.
The level of "rich" necessary is quite low.
but if you want to help the cause, you can also achieve a golden visa by employing Portuguese people, instead of buying a flat.
Building more homes would help, of course, but all the expats want to live in the historic area (it seems), so those prices will still be driven up. From my visit there, a lot of the older folks were the ones still living in the old downtown area, waiting to be priced out of their homes.
If workers can't afford to live in what were the important cities, they live elsewhere.
Eventually employers move to where the workers are. The formerly important cities become tourist meccas like Venice or Granada, or ghost towns.
This is happening to London and Lisbon, and to a lesser extent to Amsterdam, Paris, New York and San Francisco, and other cities.
It's a pity, because the famous cities got big early because they're in good places for trade. Their replacements are second best in this regard.
The sad thing is that this has been done by one generation to the following one, parents impoverishing their own children. Not intentionally perhaps, but they have created the artificial supply side restrictions through planning laws and nimbyism that have resulted in their childrens impoverishment.
One of my friends is paying half his salary in rent with his own house impossibly out of sight, while his parents own multiple properties and rent them out.
Both outcomes are possible; it basically depends om whether the high productivity of the most expensive cities is truly exceptional - in which case it won't benefit most workers - or something that can be readily replicated in the rest of the country. We've mostly seen examples of the former in places like the Bay Area: there's only a limited number of Big Tech unicorns around at any given time, after all. But the latter is a theoretical possibility, perhaps driven by more ubiquitous sorts of sustained technological change and innovation.
What we are seeing more globally in Europe is the disappearance of the middle class. For the last decade this middle class had to bear all the tax (so that poor people can be lifted out of poverty and protected by the system), no reduction, no possibility of evasion (like rich people have), increase of food prices (permanent), electricity (now) and the doubling even tripling of the cost of real estate while our salaries barely grew. Entry level salaries in France or UK or Germany are not that different from 10-15 years ago while everything else exploded in cost. Add to that the fact that your city attracts foreign rich people and investments and you done. Paris real estate is a joke and the city only ends up with rich people and very poor people (hosted in projects) the middle class has to move to suburbia with limited infrastructure , doctors, things to do (obviously a nice suburb will be paris prices if not more).
In the USA you can still make a six digit salary doing blue-collar work (hard one) and many jobs pays high 5 digits for a middle-class worker. Not even talking about software that is really a class-climbing profession that we definitly don't have in europe (software doesn't pay here and its very rare to go six digits while in HCOL cities of USA its standard year 1 pay)
at the end most of the 10year ago middle class became a class of white collar workers that live paycheck by paycheck and when the economy will tank in the coming months many will go back to poverty as soon as they loose their jobs.
1) it's a nice city with nicer weather than most of the places within convenient travel range 2) the economy is remarkably unproductive, leaving Portguese people poorer than, say, Estonians, let alone Germans:
https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location...
Americans can no longer afford to live in America! Manhattan and San Francisco apartments cost over a million dollars!
This is a total waste of time, I wish I didn't read it.
If you are Portuguese you get the right to reside in Portugal for free. Everyone else (apart from EU citizens) must buy it.
That's a ~440-million-person "apart from".
Is all the economic activity concentrated in this city or is it a case of Portuguese professionals working in the city being outpriced by investors for AirBnB ???.
Outlying suburbs away from the CBD must be more affordable - why is this not an option ???.
There is a reason anyone outside Porto/Lisbon here complains that Portugal is only Lisbon/Porto, the rest is scenery. Which to be honest, if we look at the investments made throughout the country, it is quite accurate.
A queue operating at max capacity had infinite average waiting time, this is what we are experiencing right now.
The rule of thumb is to never operate at more than 80%, or the waiting time of your jobs starts to increase dramatically.
Does Portugal have US style NIMBYs ? Why not build more housing
Sounds like Golden visas worked at attracting foreigners, raising Portugal’s land value, and incentivized citizens to move to depopulated areas
Yes, real estate prices are nuts right now. I have no clue how my kids are going to find places to live when they want to move out, but I can tell you that a lot of that is just plain and simple greed from builders and homeowners who often refuse to maintain (let alone re-paint or improve) existing buildings.
There are also political aspects to how zoning and development takes place, but those vary so much depending on region and party lines that I’ll just call it lack of political responsibility (also, most people outside the extreme left or right don’t want to get involved in politics, lobbying or economic discussions).
There was a very big emphasis some 40-50 years ago on building thoroughfares, regional transportation, and nationalizing what passed for core industries, but all roads led to district capitals at the expense of doing actual regional development. Efforts to foster or sustain most industries largely failed (although there are echoes of those in current startup support programs, and some regional programs of note), so young people gravitated towards the shoreline (and towns, and the services industry) and the countryside just aged away.
I have been thinking of moving out of Lisbon to a smaller town (property prices are tempting), but health, shopping, etc., are just not there, because everything of interest (brand and specialists stores, entertainment, etc.) is mostly only available in district capitals, and most large companies only have offices in Lisbon or the mongrel outskirts of it, in business centres that are only reachable by car and lack decent public transportation.
So that makes it hard to get a decent paycheck outside Lisbon and Oporto, unless you’re willing to become a chattel to some lobbies who are sponsoring local colleges hoping to get cheap tech labor out of new graduates, paying them just enough to stick around.
A good summary of all the above is what happened in a district near Lisbon —- a previous mayor (who went to jail for corruption and actually got reelected afterwards) supported the creation of malls, business centers, etc., but punted on public transportation (leaving a local university center effectively stranded) and futzed about with zoning to allow premium villas to be built.
I have been expecting the Lisbon real estate market to crash _hard_ for a while now, but people with college degrees are somehow managing to pay rent or mortgaging other family assets to buy flats in the city. The rest struggle, of course, and are pushed out to the suburbs.
I wonder for how much longer things will stay this way. Portuguese are becoming more technically literate on average, so that gives me some hope, but I just don’t see the overall economy evolving beyond the primary industry/services and tourism dichotomy, no matter how many tech unicorns spring up and bring expats here.
(On that note, Portuguese wages, even in FAANG companies, are merely a fraction of our US, UK, German and Swiss counterparts, and that can’t be explained solely through cost of living comparisons… but that’s a completely different discussion)
Which has happened everywhere before. Americans can no longer afford to live in NYC and San Francisco. Canadians can no longer afford to live in Vancouver. The Spanish can no longer afford to live in Barcelona. The French can no longer afford to live in Paris.
Professions become obsolete. Your entire career can be for nothing. The city you have live for all life can suddenly get an economic boom, but you do not work in a booming industry, so you won’t share the profits.
(It happened even when capitalism has been taken out of the equation. Do you think the Soviets could afford to live in Moscow? It was a pipe dream for most of the population).
This has happened many times before. Such is life.
The market is mostly driven by portuguese government offering low taxes to people retiring in the country.
This won't be sustainable in the long run as all those people retiring now likely got less kids than the previous gen and will gonna die soon. This is a bubble that will pop in the next 20years when the amount of people dying and properties being put on sale will be much greater than people willing to retire there.
Also it is not like all these properties sold didn't benefit portuguese people.
Same (theorized) dynamic. Retired people dying.
The notion seems almost quaint in light of current events.
The UK could desperately do with this, too.
All day long: we’re moving to Portugal from the USA!
Tell us more!
Yipes! :-)
Canada has a well-developed and diversified economy. Portugal needs to import a lot from the world, but has very little to offer in exchange.
They found something: their real estate and city center spaces.
The country NEEDS this foreign income. It's not a self-sustainable economy and the world won't work for them for free. If the Portuguese want to solve this issue, one way is to study what else could they develop internally that would be attractive in the world trade market.
Also, foreigners are looking for the European passport, not for Portugal per se. If Portugal were to follow UK's path, demand for their Golden Visa would drop dramatically.
It doesn't benefit the rich, only. By raising real estate prices, it stimulates the construction business, which is labor intensive and has a long supply chain. It benefits the entire economy of the country.
Ukraine had traditional industries but it seems like the IT/knowledge worker base they built up over the past 5-10 years seems to be softening some of the economic blows of the war for them, but I can't imaging IT is the answer to every country...
They are looking to expand their maritime territory. They might have a credible claim to it.
The key is: stop complaining about "the rich is this, the rich is that" and start thinking about how to be competitive in the 21st century. There are many opportunities, but are Portuguese citizens interested in taking the effort and sacrifice to explore them? The answer to this question is the real explanation for the hard time they're going through, not "rich-blaming".
If the US can put 40% of its working populace into some lower-rights having class, like strip their citizenship, we would have a comparable public housing tax base.
If you live in an advanced urban economy, with relatively open borders and free market real estate, you have to get with the program or get forced out. You can argue that's a good thing, or a bad thing.
-------------
>Why is this exploitation? The country is offering a lot of positive things to foreigner
Pretty unsophisticated logic here. The idea that something good was obtained, therefore a policy can't be exploitive, is on face absolutely an unfounded and absurd claim.
I bet they're happy to live there, despite the housing costs.
Why is this exploitation? The country is offering a lot of positive things to foreigners. I'd love to have a Singaporean passport and be able to live there if I could afford.
May want to keep your comment deletion considerations to yourself.
Source:
> [immigrants population is] 1.23 million, out of which about 351 thousand were classified as skilled labor. Most of the foreign workforce [...is employed...] in construction and the service industry, or as domestic help.
-- https://www.statista.com/statistics/698035/singapore-number-...
The US is already working on this, albeit unintentionally.
Undocumented immigrants were at 3.3% of the population in 2016 and the numbers have absolutely exploded since the beginning of the Biden administration, with 2 million apprehensions so far for in 2022 [0]. The cumulative effect of this over just a single term of the Biden administration will completely reshape the demographics of most of the border states (and most major cities of the country), as the majority of immigrants are arriving with very little means, extremely limited ability to speak English, and will be mostly restricted from accessing the US financial system without legal residence status, hobbling them financially and forcing them into informal work arrangements.
[0] https://www.wsj.com/articles/illegal-immigration-arrests-hit...
I hate to be that guy but do you have a source on undocumented immigrants availing themselves of the legal system en masse in the US?
If you're interested in unfiltered perspectives, I would encourage you to focus on articles that specifically quote active Border Patrol agents who are working on the border. It's quite different than anything you hear from Washington DC.
They degraded me in almost every way possible, except penetrating me, and one other lady who they dragged to the same hospital as me wasn't even that lucky. Fuck em. Oh yes, I'm a US citizen (who looks white, middle class, speaks fluent hick english, normal), with an unquestionably valid passport who has never broken any border related law, and they never found anything. I would rather 100 illegals get through than any other single person be treated the way I have by border patrol. Border Patrol is a criminal organization, depriving rights under color of law and should be prosecuted under the RICO act.
As long as salaries in the US are double, triple, or more than people can make in their home countries, there will always be more economic migrants than the US system can accommodate. It's a very simple case of supply and demand. No "root causes" strategy is going to change anything about the situation facing destitute, rural laborers in the Northern Triangle countries in the next 5-10 years. It will always make economic sense for them to attempt to immigrate to the US. The only thing that will stop them is a significant deterrence policy from the US government.
Portugal could impose a foreign buyers tax, use it's egalitarian/socialistic political culture to incentivise some small-n natalism, and leverage the unbelievable cultural resources it has as somewhere that is a respite from the blob of tourists that it has allowed to imbalance its economy.
It's not so much IT that would change the economy, but honestly - math. It's the only real social advantage that a country can organize to leverage, and the next country that triples down on its math education investment is going to be the next power base. Given what I've seen there that the article captures perfectly, it's probably their only hope.
Ironically, excellent education might be one of the most positive legacies the Communist regimes left to Eastern European countries, and part of why countries like Estonia or Poland will be better poised in the near future.
Portugal is the only country in the OECD that has consistently risen in PISA scores since their inception in 2000.
Portugal was bottom of the table in 2000, and now it's at middle. Not the best, but not the worst either.
Source: https://link.springer.com/chapter/10.1007/978-3-030-59031-4_...
In the US there are 50 states to choose from for remote workers. And then outside that is the rest of North/South America all within a narrow time zone band.
It's just parking money. It's the last thing a socialist country like Portugal needs, because it screws up the real estate market making housing unafordable to the general population, who lives, works there, pays taxes and maybe has kids. What they can do is tax all property as if one is renting it, like Switzerland does and use the 6 month median rent as the tax base.
The Lisbon downtown is cruise ship territory anyhow, I fully understand why a group of youths was protesting against (those kind of) tourists. They treat every city like it's a theme park.
It's not hard! We knew how to build a lot of housing on a particular parcel a hundred years ago.
Maybe, but only if the increase in wages paid keeps up with the rising rents. And remember that in unregulated capitalism, most of the income from increased economic activity is captured by the wealthiest tiers, with only negligible increases for the vast majority. The rising tide indeed raises all boats, but it raises some boats far more than most. If rent rises 10% but median wages rise only 2%, most people will be losing ground, not gaining.
Cheap labor.
In fact, some of the cheapest in the EU - both qualified and non. It even can be said that the current Portuguese Economic Model is intra-EU salary dumping.
(and a lot of rent-seeking)
Whichever country has "good" real-estate prices and golden visa requirements to match will have foreigners buyers.
[1]https://fivethirtyeight.com/features/money-and-elections-a-c...
There are also countries like France which only imported cheap and poor labor. France never tried or even discouraged rich people to settle in the country with punitive taxes (compared to our neighbors and other western world countries). For instance London has (or had) rich Russians/Indians/Pakistani investors who made London their residence, not the case for Paris, foreign real estate owners don't take French permanent residency.
And nowadays, we are left with some politicians who promote economic immigration even when there is no need or deny any form of control on illegal immigration mostly to import voters.
> It's barely right/left at all, it's just nihilistic power as its own end.
These statements are skillfully leaving out "ethno" part of nationalism. Once you add that quite obviously real and active element back, it's very much a left/right difference.
The left's solution to the problems brought about by globalization is to subtly bias the scales of re-industrialization policies toward the domestic labor market - evidenced by things like the battery materials sourcing and assembly location requirements, and income limits of the recently passed EV tax credits.
The right's solution to this has been playing on fears of a purported invasion by non-white citizens from lower income countries. A decade ago that would have been a controversial claim to make about the right, but today's right openly proclaims those ideas.
Portugal's case is interesting because they lived under a nationalist dictatorship that only ended in 1968, so many people alive today remember living under that. In my travel there, I found that many people in the age groups that vote heavily conservatively in the US and UK instead vote democratic left as a result of their lived memories of nationalist dictatorship.
Portugal does need to figure out what else has to offer the world economically in addition to great weather and beautiful cities and countryside, in order to have a better balance of trade, but it's unrealistic to think it can do that while shutting down immigration.
You can have a relatively affordable city like Montreal and still a lot of homelessness.
The homeless people in my neighbourhood are all crack addicts. They get up and urinate/shit 3ft from where they are standing instead of walking 100ft to the park. They are 'feral'.
If you gave them a 'home' it would immediately be a crack den for them and their buds. The bathroom or anything else would literally never get cleaned ever. It'd fall into disrepair quickly. There'd be no hope of them having any kind of job or anything like that.
The other 1/2 are temporary homeless, usually due to some kind of calamity. Housing prices isn't so much the problem a they need to be 'stabilized'. A 20% shift in rental costs will not affect those people very much.
Low housing costs can positively affect a huge swath of people, freeing up income for other things, but it won't change the number of crackheads on the street and probably not the % of people that 'fall out of the system' for a few weeks.
High housing costs are mostly a strain on working people. w
Oh, and tax the unimproved value of land and give the proceeds to the Portuguese citizens. This will dampen the effect while supply of housing matches demand.
I know parts of UK has also experienced the same thing from my relatives there.
And speaking of Government, we have a similar left wing government which is only left wing by name, and its policies has exacerbated the housing crises.
Everyone said our housing market is in bubble for last 5yrs. But bubble has never popped. So I guess it’s something else. In Toronto and Vancouver there were ample evidences of Chinese snow washing money and buying up real estates under shell companies.
Madness.
It's a shame that the continent that was once the birthplace of democracy, the scientific method, the industrial revolution and socialism has been reduced to nothing more than an open-air museum for wealthy Americans and a refugee centre for the victims of their wars.
We need strong leaders who will put Europe first.
If the leaders of a country won't put their own citizens first, who should they put first?
I mean, for a country, which group of people are more important to that country than the citizens?
Step 2: sell out your country to wealthy foreigners to "stimulate the economy"
Step 3: act surprised that you can't afford living in your country, that got sold out to wealthy foreigners
What a fucking disaster. Selling off national assets to foreign investment groups.
>China Three Gorges Corporation, a SOE, won in December 2011 the bidding for the Portuguese government's 21.35% interest in the company. The transaction is expected to be concluded by April 2012. As of February 2014, just under 45% of the ownership of EDP was controlled by five institutional shareholders. Amongst the others were the Qatar Investment Authority and BlackRock.
Qatar, China, BlackRock. Can't find a better bunch.
Blame also the eagerly colaborationist Portuguese government from 2011–2015.