The housing crisis in Portugal is at the centre of the latest debates taking place in the Assembly of the Republic.
At the root of this legislative controversy is Decree-Law No. 117/2024, approved by the Government on November 30, 2024, which amends the Regime Jurídico dos Instrumentos de Gestão Territorial, also known as the “Lei dos Solos”.
Currently, under parliamentary scrutiny and the subject of several resolutions, this decree-law aims to:
- Establish an “exceptional” mechanism for the reclassification of certain rural properties into urban properties;
- Assign municipalities the authority to carry out this reclassification.
According to the Government, the exceptional nature of this reclassification is based on strict requirements and conditions, which municipalities must ensure, including:
- At least 70% of the total above-ground construction area must be allocated to public housing or moderately priced housing;
- A development unit must be demarcated and planned;
- The presence of essential infrastructure, public facilities, and green spaces must be guaranteed to support the new uses;
- The reclassification must align with the local housing strategy, municipal housing plan, or housing stock policies;
- The reclassification must be executed within five years of obtaining municipal authorization, with possible extensions under justified circumstances;
- Certain areas are explicitly excluded from reclassification, such as:
- Land within classified environmental protection areas, unless exempt from specific protection regimes;
- Areas subject to special coastal, reservoir, and estuary regulations;
- Flood-prone zones as identified in risk management plans;
- Agricultural irrigation projects;
- Areas classified under the Reserva Ecológica Nacional (REN) framework, among others.
Despite the Government’s assurances, the proposal has faced strong opposition. Critics argue that the law could fuel real estate speculation, benefiting developers rather than addressing housing shortages. Allegations of lobbying pressure surrounding the legislative process have further intensified the debate, culminating in the recent resignation of Secretary of State Hernâni Dias.
As political tensions rise, the fate of Decree-Law No. 117/2024 remains uncertain. Whether it will effectively contribute to solving the housing crisis or exacerbate existing inequalities is a question that will be answered in the coming months.
