LISBON — Forty-seven owners filed suit on Monday to stop Lisbon from directing hundreds of little-used holiday apartments into long-term rentals, setting up a bitter court fight over who controls the city’s housing supply. The order, approved by the municipal council on 15 October, applies to licensed short-stay flats that record fewer than 60 paid nights this year.
Owners who do not sign a three-year lease through the city programme could lose their short-stay licences, according to the council’s published rules. The city estimates 1,460 apartments meet the threshold and says its rent guarantees, budgeted at €8.7 million (about $10.1 million), will protect landlords from missed payments.
A deadline with costly consequences
The lawsuit asks a Lisbon administrative court for an urgent suspension before the first lease offers go out on 2 November. Maristella Guerra, a lawyer for the owners, said the city had no right to dictate how private homes were rented. “They are making a licence conditional on surrendering control of a property,” she said.
The council says it is not taking the apartments and that owners can decline the leases, but that choice would mean giving up a short-stay permit. Francisco Javier Esteban, the council’s housing director, said the rules target properties that contribute little to the visitor economy. The city expects the programme to house about 2,900 residents at an average capped rent of €1,050 a month.
A city cannot solve a housing shortage by making one set of residents pay for another set’s emergency.
Maristella Guerra, lawyer for the owners
Lisbon has more than 12,000 registered short-stay apartments, according to municipal figures, as rising rents have pushed many workers farther from the centre. The city’s new test relies on registration records and declared booking activity, not on a blanket ban. Officials say the threshold is aimed at flats that sit largely empty while local households struggle to find leases.
Renters and hosts take sides
Gael Sales, who rents a small flat near the centre, said she welcomed the prospect of more homes but worried the council’s promises would not reach people on the lowest incomes. “If these places come back at prices ordinary workers can pay, it matters,” she said. “If they become another scheme with a queue, the street will look exactly the same.”
Tourism operators warned that the rule could also cut income for cleaners, repairers and family-run guest businesses. Sándor Török-Varga, who represents licensed hosts, said the council was treating low bookings as proof of wrongdoing when some owners had kept apartments available for relatives or seasonal use. He said the city had not offered a clear appeal route for owners who dispute their records.
The legal clash comes as Lisbon tries to ease pressure on its historic districts without hollowing out a visitor trade that supports thousands of jobs. The Portuguese government has urged cities to expand affordable rentals, but has not endorsed Lisbon’s licensing penalty. Other municipalities are watching the case before deciding whether to copy the approach.
The judge is expected to hear the emergency application on Wednesday. If the order remains in force, the council says it will begin sending lease offers next month and publish the first list of participating flats by December; if it is suspended, the city’s housing office will have to redraw its plan before winter.
