But the political debate is being distorted by ideological populism, especially from the left, which promotes myths, ignores economic fundamentals, and pushes failed solutions that only deepen the problem.

Left-wing parties, particularly those shaping Portuguese governments since 1974 and more recently under António Costa’s coalition, continue to present the State as the ultimate provider of housing. They argue that housing is a right to be guaranteed at any cost, even if that means paralyzing the market, scaring off investment, and turning those who build homes into scapegoats. This view is not only unrealistic, but also economically and socially harmful.

Let us be clear. High housing prices are not caused by greedy landlords or ruthless developers. They are the result of an imbalance between supply and demand. More people are looking for homes than there are homes available. This is not an ideological opinion, it is a simple fact of economics. When prices rise, the rational response is to increase supply. That means building more homes, speeding up licensing processes, simplifying regulations, and unlocking urban land.

Instead of enabling these solutions, left-wing proposals aim to artificially push prices down through rent controls, price caps, and increased subsidies. These measures may sound appealing but consistently fail in practice. In Berlin, for example, a rent freeze introduced in 2020 led to a 50 percent drop in rental listings. Many landlords withdrew their properties or turned to the underground economy. Eventually, Germany’s Constitutional Court ruled the measure unconstitutional. Similar results have occurred in cities like San Francisco and Stockholm, where rent controls led to fewer homes available, declining housing quality, and tax avoidance.

Portugal risks repeating the same mistake. Property owners, many of them just regular families with inherited homes, face high taxes, legal uncertainty, and tight restrictions. Faced with these barriers, they often decide not to rent. This is not selfish behavior, it is a logical response to bad policy.

The ideological error begins with a false premise. The left treats housing as an absolute right. But even the Portuguese Constitution, in Article 65, defines it as a programmatic right. The State should promote access to housing, but it is not obliged to provide it unconditionally. Still, governments continue to distort the market in the name of social justice, creating more harm than good.

Instead of focusing on structural solutions such as construction, urban renewal, or better mobility, public policies often rely on rent subsidies. These programs increase purchasing power without increasing housing supply, pushing prices up. Even worse, they are shaped more by political goals than technical knowledge. All too often, they demonize developers and landlords as if they were the cause of the crisis, rather than key players in the solution.

This creates a dangerous narrative. It turns those who want to build into public enemies when in fact, they are essential. With the right tool, regulatory stability, clear taxation,and legal protections, they can expand the housing stock and help meet demand.

Some argue that the market has failed. But the market has been blocked by bureaucracy, political interference, and legal uncertainty. The failure is not of the market, but of the system that prevents it from functioning.

A healthy housing market is not chaotic. It needs transparency, fairness, and efficient governance. But it also needs freedom to operate. The real solution lies in creating more homes, not in controlling prices. Faster licensing, better land use, and investor confidence are the only sustainable path forward.

We need to be honest about what works. If we pretend that controlling prices can solve a shortage, we are only pushing the problem into the future. The ones who suffer most are the younger generations who are left without real solutions. If we genuinely want housing for all, we must stop relying on political slogans and start empowering those who are willing to build.

Author

Paulo Lopes is a multi-talent Portuguese citizen who made his Master of Economics in Switzerland and studied law at Lusófona in Lisbon - CEO of Casaiberia in Lisbon and Algarve.

Paulo Lopes