The city of Lisbon launched a program this spring to get vacant short-term rental units back onto the long-term rental market, and landlords appear to be taking them up on it.
The Portuguese capital is encouraging landlords to rent long-term by essentially taking on all of the risk of being a landlord for them, according to Bloomberg. If a landlord is approved for the Renda Segura, the city rents the unit themselves.
Landlords apply to rent to the city for a minimum of five years. If approved, the city pays them rents capped at levels considered affordable. For example, a landlord is paid $509 per month for a one-bedroom unit. A house could bring in $1,130 per month.
Those rents are below market value, but the city takes the responsibility of finding tenants through its affordable housing program targeted at younger renters and lower income families, according to Bloomberg. Landlords are also exempt from property and capital gains taxes.
Short-term rentals exploded in popularity across many tourism-heavy European cities in recent years, but the coronavirus pandemic has all but completely killed their viability, at least in the near term.
There are still 25,000 apartments registered as vacation rentals in Lisbon. Bookings for the week of July 13 are down 76 percent in the city compared to the same week last year. There are similar drops in bookings in Amsterdam and Paris.
Lisbon announced on Monday that it had approved 177 units in the first round of the program. [Bloomberg] — Dennis Lynch