Marcelo vetoes Mais Habitação: the President’s arguments

The Head of State has decided to send the bill back to Parliament. He says it is not “sufficiently credible” in terms of its implementation.
Presidência da República Portuguesa

After the suspense of the last few days, the President of the Republic has now made his decision on Mais Habitação public. Marcelo Rebelo de Sousa has decided to veto the government’s diploma and return it to the Assembly of the Republic, leaving several “messages” for António Costa’s Socialist Executive. For the Head of State, the housing law is not “sufficiently credible” in terms of its implementation, as well as not being “easy to see where the promised supply of housing will come effectively and quickly”. Here are the arguments that explain his veto, point by point.

In the note published on the website of the Presidency of the Republic, Marcelo recalls that, “as early as 9 March”, he commented on the “risks of an excessively optimistic discourse, of high expectations for the timeframe, the means and the administrative machine available and, therefore, of possible unrealism in the projected results”. “Six months later, this law unfortunately confirms these risks,” Marcelo wrote.

The Head of State begins by recalling that the “ambitious” Mais Habitação (More Housing) programme, promoted by Minister Marina Gonçalves’ team, aimed to introduce a “rapid shock to the housing market, which would respond to the emergency, be visible until 2026 – the end of the legislature – and make it possible to halt the vertiginous rise in the cost of housing, while waiting for mortgage interest rates, which are burdening 1.2 million contracts, to stop their asphyxiating rise”, appeared above all “in the eyes of the Portuguese, centred on five very strong ideas”:

  1. The forced letting of private, vacant homes, increasing the supply of housing;
  2. Limiting local accommodation, which would also increase the supply of affordable rentals;
  3. Reinforcing the role of the state in offering more homes, by itself and in collaboration with cooperatives, extending the aforementioned affordable rent;
  4. The provision of public incentives to private individuals to increase the desired supply;
  5. Transitional measures, including limitations on rent rises during the start-up and consolidation period of the Programme.

Last week, the President of the Republic decided not to send the housing package to the Constitutional Court , stating that he had no doubts about its constitutionality, but he had already left in the air the possibility of vetoing the law, as was confirmed today.

Over the months, Marcelo has criticised, more subtly or more directly, the government’s package of measures presented by António Costa on 16 February this year and which has undergone changes since then. He considers that Mais Habitação carries several risks and “unrealistic” results, and explains why:

  1. “Except to a limited extent, and with European funds, the state will not take direct responsibility for building housing.”
  2. “The support given to co-operatives or the use of vacant public buildings, or private buildings purchased or contracted for affordable rent, implies slow bureaucracy and the use of entities overwhelmed with other tasks, such as the Banco de Fomento, or without the means to meet the demand, such as the IHRU.”
  3. “Forced renting is so limited and time-consuming that it appears as a merely symbolic emblem, with a political cost greater than the tangible social benefit.”
  4. “The same complexity of the local housing regime makes it doubtful that it will be able to quickly achieve the desired effects.”
  5. “Despite the corrections to forced renting and local accommodation, this law is unlikely to restore any lost confidence on the part of private investment, and the public and social investment it provides for is contained and slow”
  6. “There are no new measures in sight, with immediate effect, to respond to the suffocation of many families in the face of the weight of the increases in interest and, in countless situations, in rents”
  7. “There is no regime agreement and, without a change of course, there probably won’t be one until 2026.”
Presidency of the Portuguese Republic

For Marcelo, in simple terms, “it’s not easy to see where the promised supply of housing is going to come from effectively and quickly”, and he considers that this “is an example of how a bad start in responding to a need that time has made dramatic, crucial and very urgent can mark it negatively”.

All in all, says the President of the Republic about Mais Habitação, “neither in forced renting, nor in local accommodation, nor in the involvement of the state, nor in its support for cooperatives, nor in the concrete means and deadlines for action, nor in the total absence of a regime agreement or minimal party consensus, this diploma is sufficiently credible in terms of its short-term implementation, and therefore mobilising for the challenge to be faced by all its essential protagonists – public, private, social and, above all, the Portuguese in general.”

He is aware “that the absolute parliamentary majority may repeat the approval just voted in a few weeks”, but “this is not what can or should prevent the expression of a deep conviction and a serene negative analytical judgement”.

It was the 28th time that the President of the Republic has used his veto power: five of which were on government decrees and the remaining 23 on Assembly of the Republic legislation.

Meanwhile, the PS has already said that it will confirm the government’s diploma in Parliament. The other parties, from left to right, PSD, CDS, IL and BE deplore the Socialist attitude and applaud the PR’s decision.

Mais Habitação does not represent the “national support base it needed”

The President of the Republic justified his political veto of the housing decree with the lack of party consensus and alleging the reduced effectiveness of the measures, saying that “life goes on” if the PS confirms the decree.

“I list, point by point […], the shortcomings of the rapid implementation of this package and the total lack of regime agreement, total party consensus, with only one political force voting in favour, two MPs from two other political forces abstaining and everything else voting against. What we needed was a reform that wasn’t for two years, two and a half years, and for that it had to have significant support in parliament,” said Marcelo Rebelo de Sousa on the first of his two-day official visit to Warsaw.

The head of state added that, “knowing that there is a majority that can reconfirm, in all conscience I couldn’t help but say what I thought”, because the set of diplomas “didn’t represent the national support base that was needed”.

“It’s a question of the Assembly of the Republic exercising its powers and the President exercising his powers. The Assembly confirms it, life goes on and we’ll be alive to see the outcome in two or three years’ time,” he said.

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