Lisbon, a city dying from its own success
english.elpais.com
english.elpais.com
I.e. heavily incentivize renovating/building and selling properties to individuals/families. Mildly incentivize renovating/building and putting up for long-term rental. Heavily disincentivize accumulating unused properties and short-term rentals.
And no, the market won't properly regulate itself. That should be pretty obvious at this point.
For comercial rentals, require that they are registred as businesses and taxed as such.
Frankly, owner-occupied vs renter-occupied is not a helpful distinction here. Instead, tax short-term rentals heavily and leave year-or-more rentals as they are. Bonus feature: you don't have a massive database listing where everybody sleeps at night, including domestic violence victims, sitting around on some poorly-secured government server.
If the problem is properties left empty the solution is simple: raise property taxes and credit the collected amount back on VAT/sales/income tax (depending on country) so the end result is revenue-neutral. Yes, the property tax will be passed on to tenants, but those tenants also enjoy the reduced VAT tax. For an empty apartment nobody recieves any counterbalancing benefit.
Also, the point is not to abolish AirBnB, but rather force it to return to its roots: rent your extra room or your house while you're away. The problem right now is that AirBnB is used as a loophole to eschew the expenses of building and maintaining a real hotel, while at the same time creates aberrations to the housing market that tear the local society apart.
So similar to Lisbon "losing its essence" I was in Berlin recently and noticed many of the city's distinctive hallmarks had been internationalised/Millenialised away. The weird German toilets, the day drinking punks outside the rail stations, the ubiquitous graffiti and smell of beer (or urine). And the rental costs have shot up.
Not to sound like I knew the city before it was cool, but the general flattening of cities into predictable, quality consumer products seems to be happening everywhere, not just Lisbon.
That's not the main problem. IMHO the bige one is that cities are no longer people's homes and hubs of culture, but have turned into highly efficient wealth extracting machines (from the tourists and immigrants, as well as from the locals) where the owning class try to extract as much money as possible from the have-nots, like you point out the rents shooting up.
Once everything becomes about making as much money as possible at the expense of everyone else around me, where the locals don't work anymore to support local business in their community but work to help bulldoze piles of money into the hands of a few foreign multinational corporations with HQs in tax heavens, then things inevitably turn to shit: society becomes low-trust, people more divided, wealth inequality increases, crime increases, ghettoization, homelessness, political extremism, communities and family units breaking up, social services decaying, loneliness epidemic despite living in a large city, etc. And all these things can happen despite or maybe even because, an economy and GDP going up.
This isn't something new either but has been going on for 20+ years AFAIK. Not sure how to fix this though since it seems like the effects caused by an unregulated globalization which seeks to MIN/MAX everything financially, creating huge gaps between the winners and the losers of the new order, both at national levels, and at individual level.
You'd have to prove that there's something particularly special about urban decay as opposed to rural decay, and rural decay is a very strong force in the Western world. Where I am in the USA, rural properties and home prices are skyrocketing, the original communities are being hollowed out, old folks are dying to fentanyl while their grandchildren fly off to urban centers around the country, and investment firms gobble up huge amounts of land. It's just as greedy and unaffordable as the urban landscape.
We have systemic changes with robust explanatory power, and I already gave two. People's character tends to reflect the environment they are trying to survive in; try not to look at people's behavior as a cause, but a symptom.
I didn't claim otherwise. And I don't think you're contradicting me. I think your argument simply slides along with mine.
And let's not pretend that only the big evil faceless banks and corporations are to blame for everything skyrocketing. Oh no, the average joe has also given into mass greed as well, who'd more likely rent out his inherited apartment to a tourist for 50 Euros/day than a local broke ass student for 500/month.
Second, your idea that our societies are suffering from deregulation is downright delusional. Artificially set interest rates and liquidity injections are the ultimate form of regulation, wherein governments actively decrease the entire population's time preference by inflating away their savings, impoverish everybody but the wealthy by boosting assets, and reduce competition by shoring up the biggest businesses to bloat up even bigger. Remove this ultimate regulation, and with the current conditions, markets would choose staggeringly high interest rates, forcing deflation and thus absolutely demolishing fast money, investment scamming, and real estate speculation overnight.
So no, my line of argumentation does not slide into yours. You actually don't know what you're talking about and rely on appeals to fantastical sentiment.
But, but ..muh "Japan's economy hasn't grown in 30 years" argument against deflation.
>Second, your idea that our societies are suffering from deregulation is downright delusional.
I never made such a claim, so funny that I'm the one being delusional here. Are you off your meds?
>So no, my line of argumentation does not slide into yours. You actually don't know what you're talking about
Oh please, stop it with the kind words, you're making me blush.
I advise staying in your lane.
Easy there tough guy. I wouldn't want to anger such a well spoken sophisticated and modest economics genius, pasting stuff off ChatGPT.
I heard North Korea calls it's self a democracy too since it's in their name. Please tell me how democracy is a failure because of that.
To you, it's the central planning and state ownership that causes economic collapse?
Anyway, yes, the state run economy was doing poorly (especially compared to small capitalist bits).
At the moment we encourage rentseeking and punish labour/productive work.
Cheap healthcare housing and education at the expense of less billionaires
PS - the last time we tried a world war it didn’t end well either, i think the stakes are that high
Last week went to Lisbon. I've been avoiding it because I knew it wasn't going to be anything of what I remember, and it was much worse than I expected.
It saddens me so much. It's like Barcelona but even worse.
But this phenomenon is now even happening in my mid-sized spanish city. It's starting, but there are already loads of foreigners buying everything, places I used to go closing because they can't compete with chains that are contacting landlords for paying x2 for the same spot, etc.
I've talked a lot with my girlfriend about this. The lifestyle we have is not going to be possible anymore in a few years. Quality of food is dropping like a rock while prices go up, the average rent in my area is already 2.5x of what I'm currently paying, when both of us are under 20k/y, so mostly just waiting to be kicked out.
But it's not only about getting priced out or the culture loss. I work in IT and my GF works two jobs, one as freelance designer (impossible to get into UX) and another in hospitality. And people treats her like shit. She works from home and I can hear the calls sometimes and the level of entitlement and rudeness is incredible. And she's, in theory, dealing with that kind of premium tourism that gets talked a lot, this city is far from the trashy drunken visitors typical in the mediterranean.
Yet there you go, your well off central europeans treating her like shit, trying to get refunds with lies, and the whole package.
But that's not everything. It gets more personal for me, because I used to go with a friend to a lot of language exchange meetups. The've grown in popularity, but also the kind of people that goes now completely changed. We don't go anymore because it's not fun anymore.
We've discussed about this, and between the comments in the FB groups complaining that we don't want to be their friends, and the feeling in the meetups that we're there to provide entertaining to this people, I think it's over.
This experience matches with my Portuguese friends. They've warned us about this, and I worry this place is going to go through the same and I will have to go, leaving friends and family to go somewhere else. Not fun.
Every time I see this city mentioned in travel or lifestile post in YT or Instagram I know what's coming.
Not trying to disregard your experience here, but this phenomenon happens everywhere in Europe. In „Central European“ Germany most of the larger cities are becoming inaccessible to the lower to middle class population. Rents increasing, and cost of living rising drastically when it has historically been relatively low. I‘d wager tourism isn’t the driving factor in most cases there, but the trend is there.
Welcome to late stage capitalism where people and culture don't matter. It's now all about the Benjamins baby. Whoever brings in more dollarydoos is the new king of the hill, doesn't matter the local lives and culture are destroyed, all that matters is "the economy" and "line-goes-up".
But don't worry, the well-off locals, the asset owning class, they'll be just fine, it's only the not-haves rentoids that end up getting the short stick.
My GF was having a very difficult moment financially early this year. We reached out to our foreign friends asking for help, because we know they're better connected, some work in companies where her experience is valued, etc. I mean, it wasn't like a moonshot, we tried to make sense.
Completely cold shoulder. This is people we've know for about 2 years at least. She got the job because of a spanish friend told some other spanish friend that has a company in hospitality. Another Italian friend tried to help too, and the portuguese ones, well, they're barely surviving so...
I mean, there's a clear line I can draw here. I don't want to point fingers and that's our personal experience, but I mean, it isn't the only imput that lead us to feel like we're just entertaining.
But then I have to be their friend, and play local, or I'm rude.
IDK man.
I'm not saying you're wrong, far from it, but I've noticed that in Spain a lot of locals go to these language exchange events, where in other countries it's not the case. And I agree with your expectation to not need to 'pamper' the visitors.
(of course they're welcome and I've talked to some of them - though it is my impression they kept a bit distant).
Cultural clashes are hard.
Not to mention that the've reached for help and I did indeed help them.
I had this conversation with a newly made friend of mine who has a lot more knowledge, connections and experience. The convo was headed to networking and I asked him what's the point in networking if the other person is not willing to share their experience or connections - like the vast mojority of them aren't. (including even family members due to envy)
At the end of the day it's always best to connect with people from your own culture because they are more likely to honestly share tips as opposed to random jimmies.
I didn't felt we were super friends, but you know, maybe I expected something more. They weren't random jimmies.
Basically, businesses which are in closer economic proximity are receiving the benefits of inflationary monetary policy sooner. This leads to higher wages for their employees, and higher profits for the B2B business partners, slowly spreading the new money out into the economy.
This seems to be leading to large gluts of artificially wealthy people in some areas, bidding up prices in their local economy, and then searching for areas to move into where the effect of the recently printed money hasn't taken hold yet.
The result of this would be a shift in those new economies to cater for the influx of new money coming from the newcomers, and away from dealing with locals who, for the most part, are yet to receive any of this money. And when they finally do begin to have wage increases, even more money has been created flowing at a greater rate to the newcomers.
But on the other hand there is the self-centeredness where everyone wants to be the last person allowed in, lock the door behind me, this place is my little paradise.
I think the only long term solution is to create more desirable places instead of clinging on to the corpse of what once was. Build new places, neighborhoods, and towns centered around people and let them develop their own charm.
Even if you were to block tourism 100%, it doesn't stop you from being displaced by all of your compatriots that make more money than you, because you're fighting for access to a very limited resource. So, expand the supply.
This is unfortunately what it comes down to. Every tourist destination wants to be one for luxury tourists. I understand this on an emotional level, but it requires rolling back access to tourism and taking it away from the economically disfavored population.
Rich people will benefit because there are too many poor people for mass tourism.
FYI, I work in tech. And I consult in tech as well, and there are successive waves of tech startups in the country. Some amazing unicorn flops (and some of them fed off the WebSummit until they burst), but enough to believe that the country can move away from wineries, shoe manufacturing and hospitality if it puts its mind to it.
Right now, tech wages are high enough that many companies look elsewhere for cheap labor (typically towards the former eastern block), but only yesterday I had a chat with a CEO looking to put their R&D centre here because there is some very highly skilled labor here--and he wasn't talking about expats.
The Eastern block countries had their little economic miracle by having their monopoly board reset thanks to the fall of the USSR and all the communist regimes in Europe which caused insane levels of poverty in the 90s, especially amongst the old age workers, before things could get better.
Spain and Portugal and any other EU country can't and don't want to have such a hard reset with a decade of poverty and bankruptcies, since every country is now about building wealth, not destroying it, all about maintaining the status quo and the generational wealth. You'll see, it will be the same in Czechia in ~30 years when the current gen of well-off young workers retires and the economic miracle growth slows down and start shafting the younger generations who will face high property prices and little job prospects like Spain and Portugal today, and you'll probably also vote to keep your wealth instead of going through another reset like in the 90s'.
> Spain has amazing weather, could be europe tech capital if they only could get their taxes and labor laws in order.
That amazing weather is their own "Dutch disease" meaning the economy is far too dependent on tourism and getting wealthy people from abroad to buy properties there, not invest in creating new jobs.
Also, personally I don't find Spanish weather too amazing. Summers are far too hot outside the beachfront areas to be pleasant to live there. Not everyone loves scorching hot sunt and 35+ Celsius outside for months needing to seek shelter at indoor AC.
Where do you live that winter is 6 months?
The smallest apartment come summer season landlords behave as if they are renting you a hilton suite at a loss. The entitlement is crazy even when I pay higher rent during summer and a lot of it doesn't make sense as well. Tourists come for a week at most but somehow that's more interesting or profitable than having a tenant use the place year round.
I have a business partner who used to rent hotel rooms to long term guests stop because the government took 6+ months to remove non paying guests. So the solution was to simply forbid everyone from staying for more than the number of nights that qualifies a hotel guest as a tenant and hence tenants' rights.
In fact, this problem of the county government not adjudicating tenant-landlord cases quickly enough got so bad, that the city government passed an ordinance that forbade hotels from renting more than 15% of hotel rooms to long term guests that qualify as tenants, because the city itself no longer wanted to deal with squatters and the accompanying problems.
Yes, the tuk-tuks are a plague in some very specific historic neighbourhoods (and it boggles the mind as to why they were imported in the first place, although there is a burgeoning trade in "pseudo-Ford-T" electric cars that seem to be almost as popular), and yes, some times it feels like a bit of a circus, but 90% of Lisbon is free from that bustle, which is circumscribed to the "old" riverside downtown.
If you ignore that are and, for instance, visit the old Expo 1998 grounds (which were turned into the Parque das Nações, a quite modern mixed business/residential district, with what I think still is Europe's largest oceanarium, modern train/tube/bus station, shopping malls and modern facilities for ministries, telcos, retailers, etc.), you see almost zero tuk-tuks and a very modern, bustling, airy city.
And yes, real estate is completely nuts. There are far too many foreigners buying out flats across the old, "traditional" zone, but at least they refurbish them before turning them into AirBnBs--whereas the original owners (which, surprise surprise, were not actually living in them) wouldn't put forward a single penny to renovate -- there are some buildings here and there that have been derelict for over 20 years, right on main avenues.
I don't blame the government for having let foreigners invest (golden visas or not). I blame them for not having disenfranchised the original owners and forced them to either maintain the buildings or sell them to local developers and enforced local housing laws.
But this being such a small country, let's just say the original landlords are very closely tied to the politicians who overlooked these things.
Have you looked deeper into this? In Greece (that is pretty much on the same boat) it is often the case that you can get a generous (typically EU-funded) subsidy to renovate the property and put it on AirBnB rent. But any renovations on your own home, you have to pay out of your own pocket, and even the banks are hard to loan you.
So governments may not exactly innocent for properties being handed off to foreigners and the AirBnB-fication of tourist destinations.
So it was at least in part self-inflicted.
They managed to put in words exactly my feelings every time I revisit Lisbon's city centre.
But the effects aren't.
Once a 180-year-old bookshop closes and moves out, it's gone.
Yeah, if the tourists go and if the AirBnB revenue dries up, and the "locals" move back into the town, then maybe another bookshop will open in its place. But it won't be a 180-year-old bookshop. Part of the beauty of a historic city is the historic part. Once that's been erased, it can't be rebuilt again, except with the long, slow passing of more history. Until then, it's just another city with a bunch of new stores that are pretty much like all the new stores in many other cities. Except maybe for a couple of plaques that say "There used to be an awesome old thing here, until globalisation swept it away."