The Money for Housing Is Coming. And the Houses...

For a long time, one of the explanations for the insufficient public response to the housing crisis was relatively simple: there was a lack of investment.

By Paulo Lopes, in Housing · 27 Sep 2026, 16:01 · 0 Comments

Credits: Pexels; Author: Jocelyn Erskine-Kellie;

Today, that explanation is starting to be less sufficient. Portugal is finally mobilising billions of euros for housing, and that is excellent news. The question now becomes another: will we have the capacity to transform all that money into houses within the necessary deadlines and costs?

The Government and the European Investment Bank have agreed on a new credit line of 1.5 billion euros to finance around 50 thousand social housing units identified by the municipalities that were left out of the RRP financing, which is excellent news. The first tranche is 500 million. This financing is in addition to the 2.8 billion euros already approved through the State Budget for investment in housing until 2030.

We are, therefore, facing a very different financial dimension from the one that Portugal had for decades in housing policy. And this must be recognised. But available money and built houses are not exactly the same thing, as our recent history has shown us with the PRR bazookas.

To transform financing into housing, it is necessary to have land, projects, licensing, municipal technical capacity, contractors, materials and workers. It is necessary to launch tenders, award works, monitor construction and, subsequently, manage thousands of new public housing. All this at a time when the cost of building new housing itself increased by 6.8% year-on-year, with labour growing by 7.3% and materials by 6.3%, and we do not know how much it may rise due to the crisis in the Middle East and the rise in energy costs.

This is where perhaps the next big discussion about Portuguese housing policy lies. After the battle for funding, the battle for execution begins.

The problem becomes even more relevant because public investment does not take place in a separate market. Municipalities, the State, cooperatives and private developers use the same construction companies, compete for many of the same professionals and buy materials in the same market. If we significantly increase investment without also increasing the sector's responsiveness, we can create greater pressure on costs and deadlines.

This is not an argument for investing less. It is precisely the opposite. It is an argument for preparing the economy to be able to invest more.

We need to strengthen the technical capacity of municipalities, simplify procedures, improve the predictability of tenders, speed up licensing and create conditions for the construction sector to increase its capacity. We must also be more available for collaboration models with private individuals, cooperatives and institutional investors whenever they allow for an increase in supply while maintaining the accessibility objectives defined by the government.

There is also an opportunity to think in the long term. Public housing policy cannot forever depend on extraordinary programmes. The RRP had a beginning and an end. Other European funds will also have it. The partnership with the EIB is interesting precisely because it points to financial instruments of longer duration and more favourable conditions, allowing them to create some predictability for municipal projects.

Portugal seems to have finally realised that housing requires investment on a much larger scale than we have had for decades. That is an important step. But maybe we should start measuring success differently.

Not only because of the millions announced, the credit lines approved or the number of houses provided for in the programs, but because of the time it takes between the availability of financing and a family receiving the key to a new home.

Because, once we manage to find the money, the real challenge becomes much simpler to explain and much more difficult to solve getting to build the houses.