Priced out by tourists: The Airbnb effect in Lisbon's historic centre

Kids play in the streets of Alfama neighborhood in Lisbon on June 29.
Kids play in the streets of Alfama neighborhood in Lisbon on June 29.PHOTO: AFP

LISBON (AFP) - Alfama, one of the oldest and most picturesque areas of Lisbon, is becoming a victim of its own charm. Short-term lets to tourists are driving up rents and driving out old residents.

"They want to throw me out to rent my home to tourists," complained retired salesman Antonio Melo, 70. His house has changed owners four times over the last year and his new landlord has just told him his lease will not be renewed.

"Soon there will only be tourists in Alfama," he said. Melo has lived in the district since he was five years old but now fears he will have no choice but to leave because his 600-euro pension won't cover the rent of any property there.

Local mayor Miguel Coelho echoed the concerns of many in Alfama.

"Real estate speculation in Lisbon's historic centre, which is particularly evident in Alfama, is causing a lot of stress," he said.

"House prices and rents are exorbitant and people are having to think about other options," he added.

The mayors of three of Lisbon's central districts have called on the government to intervene urgently. They attributed spiralling prices to an "excessive proliferation" of short-term rentals.

Coelho said that while tourism was a boon to the local economy, "when it becomes excessive it's a real threat to the district's identity".

This is especially so in Alfama, a pretty maze of narrow streets leading up from the Tagus estuary that is one of Lisbon's biggest tourist attractions.

"Every day we see estate agents going door to door to find people willing to leave," said Ana Gago, a 28-year-old geography student who is conducting a survey of people moving out of the district because of the rising costs.

Airbnb, the world's leader in short-term private rentals, says bookings in Lisbon using its service doubled in 2015, to 433,000 visitors. The traditional hotel sector saw bookings by foreign tourists rise by a more modest 7.5 per cent.

In Lisbon, which is among Airbnb's top 10 global destinations, those renting space via the company are not just "hosts" offering a spare room to "guests": over a quarter of owners place more than one advertisement on the site, and 73 per cent have whole apartments available.

Cities like Berlin and San Fransisco have taken steps to prevent landlords abandoning residential leases in favour of short holiday lets, and have kept rents in check as a result.

Conversely, Portugal, hit hard by a financial crisis in 2011, levies less tax on income derived on rent from tourists than it does on that from longer term tenants.

The idea was to attract foreign investment and boost the real estate sector, and the policy has contributed to the renovation of many dilapidated buildings.

But it risks accelerating Lisbon's population flight: half a million people now live in the city, against 800,000 in the early 1980s.

"It's good to renovate, but the problem is all the work is aimed at tourists. People who live here would like their children to stay in the district, but that has become impossible," said Maria de Lurdes Pinheiro, who heads the Alfama Heritage and Population Association.

Long-term rental housing stock in Portugal has shrunk by a third over the past five years. In Lisbon, rents rose by an average of 7.6 percent between 2014 and 2015.

Airbnb hosts in the city earned 43 million euros in rent from tourists last year, according to the company, which added that the visitors spent a further 225 million euros during their stay.

"There's more money going around but the local community is disappearing," said retired psychologist Leonor Duarte, 63, who has lived in Alfama for five years.

Duarte has joined forces with other Lisbon citizens to urge authorities to "halt the bleeding-dry of the historic centre".

She is also among many people from Alfama who complained about the noise tourists make late into the night and the space they take up in the ancient trams that snake through the district's narrow streets.