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Housing Affordability, Public Policy and Economic Dynamics: An Analysis of the City of Lisbon

Author

Listed:
  • Miguel Lorga

    (Department of Civil Engineering, Architecture and Georesources, Instituto Superior Técnico, Universidade de Lisboa, 1049-001 Lisboa, Portugal)

  • João Fragoso Januário

    (CERIS, Instituto Superior Técnico, Universidade de Lisboa, 1049-001 Lisboa, Portugal)

  • Carlos Oliveira Cruz

    (CERIS, Instituto Superior Técnico, Universidade de Lisboa, 1049-001 Lisboa, Portugal)

Abstract

The increasing growth of population living in cities, associated with the commoditization of investment in real estate, has impacted real estate prices and created obstacles for average income families to meet their housing needs. This problem is generalized to virtually all cities, but it has assumed larger proportions in cities where economic activities (tourism, financial services, high-tech industry) have flourished after the financial crisis. Lisbon is one of those cases. The growth of short-term rentals led to an increase in the property prices well above the average income growth, eroding housing affordability. This paper will focus on analyzing Lisbon´s affordability and understanding its main determinants. The analysis is carried out from the compilation and processing of data from 2004 to 2019, in the context of the municipality of Lisbon, using statistical instruments of linear regression in an exploratory and predictive approach. The results suggest a great influence of factors such as tourism, the foreign population with resident status, the propagation of short-term rentals and public policies on the worsening of housing affordability. In view of these conclusions, the preponderance of the type of public policies implemented and their relationship with the most prominent factors on housing affordability is debated.

Suggested Citation

  • Miguel Lorga & João Fragoso Januário & Carlos Oliveira Cruz, 2022. "Housing Affordability, Public Policy and Economic Dynamics: An Analysis of the City of Lisbon," JRFM, MDPI, vol. 15(12), pages 1-12, November.
    • Handle: RePEc:gam:jjrfmx:v:15:y:2022:i:12:p:560-:d:987077
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    References listed on IDEAS

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    1. John M. Quigley & Steven Raphael, 2004. "Is Housing Unaffordable? Why Isn't It More Affordable?," Journal of Economic Perspectives, American Economic Association, vol. 18(1), pages 191-214, Winter.
    2. Katrin B. Anacker, 2019. "Introduction: housing affordability and affordable housing," European Journal of Housing Policy, Taylor and Francis Journals, vol. 19(1), pages 1-16, January.
    3. Joshua C. Gordon, 2020. "Reconnecting the Housing Market to the Labour Market: Foreign Ownership and Housing Affordability in Urban Canada," Canadian Public Policy, University of Toronto Press, vol. 46(1), pages 1-22, March.
    4. Li, Keyang & Qin, Yu & Wu, Jing, 2020. "Recent housing affordability in urban China: A comprehensive overview," China Economic Review, Elsevier, vol. 59(C).
    5. Katrin B. Anacker, 2019. "Introduction: housing affordability and affordable housing," International Journal of Housing Policy, Taylor & Francis Journals, vol. 19(1), pages 1-16, January.
    6. Agustin Cocola-Gant & Ana Gago, 2021. "Airbnb, buy-to-let investment and tourism-driven displacement: A case study in Lisbon," Environment and Planning A, , vol. 53(7), pages 1671-1688, October.
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    Cited by:

    1. Jason Nassios & James Giesecke & Xianglong Locky Liu, 2024. "An impossible triangle? The impact of housing policy on affordability, accessibility, and efficiency," Centre of Policy Studies/IMPACT Centre Working Papers g-344, Victoria University, Centre of Policy Studies/IMPACT Centre.
    2. Pedro Lima & Patrícia Baptista & Ricardo Gomes, 2023. "Framework for Quantifying Energy Impacts of Rehabilitation of Derelict Buildings: Assessment in Lisbon, Portugal," Energies, MDPI, vol. 16(9), pages 1-19, April.

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