Porto Council Reverses Its Cash Deal With Seven Developers and Ties Their Tourism Projects' Licences to 3,323 Square Metres of Affordable Rentals

Porto's city council has gone back on its decision to let seven developers pay cash instead of providing affordable homes. At a private meeting of the executive (the mayor and the elected councillors who run the city) on Tuesday 3 November, councillors voted to revise the deliberation of 20 October, so the council no longer agrees to the developers' option of paying compensation. The seven projects, mostly tourism developments, will now be licensed only if their promoters deliver affordable rental homes, ECO reported.

We reported on 26 October that the council was weighing whether to revoke that vote, after the Socialist (PS) opposition challenged it. The council's own notice of the 20 October decisions lists the "authorisation of the payment of compensation under the inclusive zoning regime" as approved.

How the vote went

The revision passed with the votes of Mayor Pedro Duarte's PSD/CDS/IL majority and the PS councillors, according to Lusa copy carried by Observador. Chega's only councillor, Miguel Corte-Real, left the room during the vote. He said a "revision" of a deliberation does not exist as a legal procedure and that he would have liked an opinion from the Prosecutor-General's Office first, because the developers may already have acquired rights.

The PS councillor Manuel Pizarro voted in favour but said he was not yet "convinced", and would wait to see what legal solution the council's services find. ECO reported that he gave "instrumental reasons" for his vote.

Mr Duarte said paying damages to the developers was "ruled out", because the council never notified them of the earlier decision, so it "did not produce effects". He told reporters that licences for these works would be granted only when affordable homes in the historic centre are handed over: "If the developers manage to do this, they can go ahead. If not, the projects will not go ahead."

What the developers must now provide

The seven projects fall under Porto's inclusive zoning (zonamento inclusivo) rules, which require developers in certain areas to set aside part of the buildable floor space for homes let at affordable rents. ECO reported that the projects must now guarantee 3,323 square metres of affordable housing before they are licensed. Under the reversed decision, they would have paid about 1.39 million euros instead.

The mayor said the council's services had found no alternative plots with building capacity in the historic centre where the homes could go; the PS disputes that.

What it means for you

• No new homes yet. The vote does not create any flats today. Affordable rental homes appear only if the seven developers find space for them, and the mayor acknowledged that may not happen.
• The rules are being rewritten. The majority wants to bring a proposal to the next executive meeting to open a public consultation on a new inclusive zoning regime, which would oblige hotels and short-term rentals (alojamento local) to contribute affordable homes. Residents will be able to comment during that consultation. ECO reported that the revised regulation must then pass the Municipal Assembly (Assembleia Municipal), the city's elected deliberative body.
• Track record. The council majority has said that since the current regulation took effect in 2021, no home has been built or let at an affordable rent through this regime.