70% of Lisbon’s tenants struggle with housing costs
Housing is increasingly becoming a factor in the reproduction of social inequalities related to class, age, gender, nationality, and ethnicity.
A new study by the Centre for Social Studies at the University of Coimbra, presented this Thursday, has revealed that over 70% of tenants in the Lisbon Metropolitan Area (AML) are facing financial strain due to housing expenses.
The findings indicate that many tenants spend more than 35% of their income on rent and essential housing costs, placing them in a state of financial overload.
In the majority of cases, this burden is classified as “high,” with housing expenses consuming more than half of tenants’ available income.
The three segments of the housing market
The study, conducted in partnership with the housing rights association Habita, surveyed 959 people between February and April 2023. It identifies three distinct segments in Lisbon’s rental market:
Liberalized Market: The largest segment, consisting of recent rental contracts. Tenants in this group face high financial strain and a high level of contractual instability.
Protected Market: Comprising rental contracts signed before 1990 (known as “old rents”). Properties in this category often suffer from poor living conditions and, in some cases, severe degradation.
Informal Market: A smaller but growing segment, where housing arrangements exist without formal rental contracts. Tenants in this category often experience overlapping precarity in employment, housing, and legal status.
The study paints a grim picture of a housing crisis that affects a broad spectrum of the tenant population, albeit in different ways depending on the market segment.
The researchers - Carlotta Monini, Raquel Ribeiro, Ana Cordeiro Santos, and Rita Silva - highlight that the housing crisis is exacerbating inequalities, not only between tenants and landlords but also among different tenant groups.
Housing is increasingly becoming a factor in the reproduction of social inequalities related to class, age, gender, nationality, and ethnicity.
Skyrocketing rents
One of the key contributors to the housing crisis is the continuously rising rental prices.
Lisbon’s metropolitan region remains the most expensive area to rent in Portugal. According to data from the National Statistics Institute (INE) for the third quarter of 2024, median rents stood at €13.53 per square meter in Greater Lisbon and €10.18 per square meter in the Setúbal Peninsula - both the highest in the country.
With rent and essential services such as water and electricity consuming a significant portion of household income, many tenants are financially overburdened.
The study defines an “affordable” rent as one that does not exceed 35% of a household’s income. However, only 26% of respondents reported having a rent-to-income ratio at or below this threshold.
29% of tenants were classified as having a “moderate financial overload,” spending between 35% and 50% of their income on housing.
45% faced “high financial overload,” spending more than half of their income on housing costs.
74% of all respondents were financially strained, whether at a moderate or high level.
Financial burden varies depending on market segment, but it is particularly high among low-income populations, unemployed individuals, precarious workers, and those aged 35-50. Women and foreign residents are also disproportionately affected.
Substandard housing conditions
Beyond financial struggles, the study also reveals alarming data on housing quality.
Only 13% of respondents reported living in homes without habitability issues, while the majority reported at least one major problem in their residence.
The most commonly cited issues included:
Dampness, mold, and water leaks (53%)
Poor thermal insulation (49%)
Deterioration and lack of maintenance (35%)
Inadequate sound insulation (33%)
Insufficient heating installations (30%)
More extreme cases included “deplorable living conditions,” such as broken windows, rotting floors, faulty electrical installations, and inadequate ventilation.
These problems disproportionately affect tenants in the informal and protected market segments.
Informal market tenants lack legal contracts that would allow them to demand necessary repairs, while those in the protected market often live in buildings in advanced states of deterioration.
A System in Crisis
The study, which will be presented on Thursday as part of a broader European research project, compares Lisbon’s situation with that of other metropolitan areas such as Barcelona and Manchester.
The findings underscore that housing inequalities are becoming more pronounced and that rising rental prices are deepening economic disparities.
According to researcher Ana Cordeiro Santos, “Rent accounts for about 40% of the total income of tenants in the liberalized market, and housing expenses represent 76% of their total living costs.”