Transforming Portugal's Housing Crisis: PS Proposes Funding Solutions from CGD Dividends

A Bold Proposal for Housing in Portugal

The Secretary-General of the Socialist Party (PS), Pedro Nuno Santos, has put forth a compelling proposal to allocate a portion of the dividends from Caixa Geral de Depósitos (CGD) to fund local municipalities in their efforts to construct housing. He emphasized that this initiative addresses what he considers "the main national problem".

During the opening session focused on housing, which marks the beginning of the electoral program update leading to the 2025 Legislative Manifesto, Santos stated, "We believe it is a good idea that part of the CGD dividends feed a state account that allows our municipalities to access financing for housing projects." According to him, "the state has this capacity, the country has this need", and many municipalities in Portugal possess the dynamism and initiative needed to build housing for the middle-income population.

In 2024, the public bank distributed 50% of its net income to the state, which amounted to approximately €1.6 billion, largely derived from housing revenue. Santos expressed his desire to hear from former government officials and experts in the field to enhance the PS's political response to this pressing issue.

Addressing Housing Challenges

Santos argued that "there is no silver bullet for housing", and that all possible solutions must be explored. He called for a significant increase in public construction and rehabilitation of public properties, asserting that "the state has the obligation to scale up public construction", a key objective of the PS.

Criticizing the current PSD/CDS-PP government, Santos claimed their housing measures have only worsened the problem, particularly highlighting the impact of the IMT exemption, which has pushed young people further away from home ownership. He acknowledged the need to possibly regulate the housing market, stating that housing is increasingly viewed as a financial asset rather than a basic living necessity.

The Need for More Houses

Santos pointed out that transnational demand has severe repercussions on prices and has excluded many Portuguese from accessing housing, stating that "we have no doubt that we need more houses in the market. This requires regulation and mobilization of numerous vacant properties." He noted that while Portugal used to construct 100,000 units per year, the current figure has dropped to around 30,000. Many of these units are located in areas where they are not as needed, complicating efforts to ensure they are used for housing.