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Europe’s City Centers Pushed Out Residents for Tourists. Could the Coronavirus Reverse the Trend?

9 minute read

Carla da Cunha was convinced that sooner or later the lado negro or “dark side” of mass tourism would become apparent. But she would never have thought it would happen so rapidly, caused by a tiny, invisible virus.

Da Cunha, 40, is among the residents she calls “the resistance” of Alfama, the oldest neighborhood of the Portuguese city of Lisbon where almost 60% of the apartments are now rented out as short-term accommodation. Between 2013 and 2017, Alfama lost 2,000 residents, and now—according to local group the Association for the Heritage and People of Alfama (APPA)— only 2,030 are registered as residents.

She too nearly had to leave when, in 2017, she was evicted with her two daughters after being bullied by her landlord, who wanted to rent her apartment to tourists. Her story made national headlines, and the city gave her a rent-controlled apartment in the same area. Da Cunha got used to sharing her neighborhood with crowds of tourists, but they disappeared as the novel coronavirus spread across Europe. Soon, she found herself almost without neighbors and little in the way of local services. “I live in the desert,” she says. “To buy groceries I have to walk one kilometer uphill.”

Right across from the supermarket where da Cunha shops, is an apartment owned by Carlota Godinho, 50. After working in finance in London for 20 years, she returned to Lisbon, bought two flats in need of renovation, and made a living renting them to tourists. But her last guests checked out on March 15, and she has no reservations. She took the plants to her own place so that they wouldn’t die, she says. “I am lucky because these properties are mine, but I have several friends with a mortgage who are desperate.”

The experiences described by da Cunha and Godinho—renter and landlord—are shared by hundreds of thousands of people in other European cities, where tourism has ground to a halt as populations have been asked to avoid travel and stay at home. Urban neighborhoods where globe-trotters clustered are now semi-deserted and increasingly socially fragile, as the short-term letting economy built up over the past decade has imploded. Now, advocates across Europe are combining to attempt to use the moment to build support for fairer housing policies. “The pandemic has created a momentum for housing movements in Europe”, says Veda Popovici, facilitator of the European Coalition Network for the Right to Housing and to the City.

Many cities in Europe, from Venice and Barcelona to Reykjavik, are facing the consequences of years of unregulated mass tourism and increasing housing insecurity. But Lisbon—a city with about 500,000 inhabitants which normally welcomes more than 4 million tourists a year and has 10,000 people in precarious housing conditions—offers one of the most stark examples of how the demands of the global market superceded urban policies. Luis Mendes, Professor of Geography at the University of Lisbon and one of Portugal’s leading experts on gentrification, says that Lisbon has experienced what he calls “turbogentrification.”

In the early 2010s, as Portugal dug itself out of the global economic downturn, the government liberalized the rental market and promoted programs to attract foreign capital. It granted so-called “Golden Visas” to foreigners who can continue to live abroad but need to invest at least 500,000 euros in real estate (or 350,000 euros for houses in need of renovation), and offered significant tax relief for pensioners who, by renting or buying a property become “non-habitual residents.” With the increasing popularity of platforms such as Airbnb, short-term rentals of a room or apartment have become a widespread and easy way to make some money. For investors and companies who own entire buildings – or blocks – this created the opportunity to make them profitable right away.

Combined with the surge in mass tourism driven by low oil prices and a growing global middle class, this created what Mendes calls the “perfect storm for real estate,” altering the character of what had been a bustling residential city. “The policies put in place in response to the 2008 crisis have transformed the city dramatically in just 5 years,” he says. Lisbon has become a tourist mecca: last year, for the third time in a row, it got the World Travel Award, the Oscar of tourism, for “Best City Break Destination.” Thousands of jobs have been created in the boom, and property owners saw the value of their real estate spike.

But many of those jobs were precarious, such as cleaners and check-in staff. The spiralling costs of real estate left ordinary residents struggling to afford a place to live — rental costs now average more than €550 a month, while the minimum wage is only €600. And when the entire travel and hospitality sector effectively shut down in the second quarter of this year, the inequities of this new economy became blindingly apparent. “It took a virus to expose the contradictions of the neoliberal policies adopted in Portugal,” says Mendes. “How can we quarantine without a stable housing situation? How can we pay our rent or a mortgage if we suddenly lose our job?”

In Lisbon, advocates for housing rights are “working non-stop, both locally and online,” says Ana Gago, researcher and member of the Lisbon-based collective Habita, active for over a decade. “The health crisis has brought to light extreme, and unfortunately not isolated, cases such as overcrowded apartments with as many as 6 people per room,” Gago says.

These groups have already helped win concessions for the thousands of people in the city struggling to pay rents. Evictions have been put on hold and the most vulnerable households were allowed to postpone the payments of their rents until a month after the end of the lockdown, which was lifted on May 3. A few days later, on May 7, the Portuguese government approved a measure stating that rental contracts could not expire or be cancelled prior to the end of September.

But activist groups say this is not enough, because the economic and social crisis will last much longer than the health emergency. “We are merely postponing the problem,” Gago says. “Housing rights are linked to labor rights as well as gender and race discrimination. This is why we are joining our forces with different organizations.” With her collective she is sharing strategies and ideas with other groups from all over the world to make permanent changes. “Yesterday we took part in an online meeting with participants from 16 countries,” she says.

This kind of collaboration has to be done at a grassroots level, because the European Union’s institutions have no direct authority with regard to housing policy and require each country to deal with the issue on its own. Yet some officials in Brussels think there are several measures Europe can take to stem the current crisis in many big cities. “We need incentives for social housing, which would also create jobs in the upcoming recession. But we also need more transparency on who owns housing,” says Kim van Sparrentak, a Dutch MEP who is rapporteur of the European Parliament’s “Decent and Affordable Housing for All” initiative. “As long as offshore funds are free to invest in the real estate stock of our cities, and the short-term rental market is regulated by online platforms, it’s unlikely that anything will change.”

Not everyone who rents out short-term properties is an international investor, of course — and locals like Carlota Godinho who make a living by renting out apartments to tourists are now at a crossroads. According to data collected by Bloomer—an independent project recently launched in Portugal in order to collect data on the Airbnb market and inform hosts’ decisions in the face of this difficult time—approximately 11,000 properties listed in Lisbon saw 150,000 cancelations over a 12-day period in March, or around €7.4 million in bookings. In the five weeks that followed, 458 listings were withdrawn. If individual homeowners are forced to sell up it might actually exacerbate the housing crisis, giving investment vehicles with high liquidity opportunities to snap up more properties.

Instead, homeowners are being urged to shift from short-term to longer-term rentals. The Portuguese Local Accommodation Association (ALEP) says it is now providing advice to its members who are considering a change in direction. “Some were thinking about it already before the health crisis, but now of course the number has increased” says Eduardo Miranda, ALEP’s president. “We are working with the city on a new program for affordable rent.” Lisbon’s city government approved a plan in March to rent about a thousand apartments from private homeowners and sublet them to people in need of affordable housing.

But many landlords are wary of making a permanent change. Godinho says she’s worried about the “rental laws that are constantly changing” and she’s thinking about renting her apartments for periods of two or three months, waiting to see what happens. Private homeowners hoping to wait out the crisis “won’t solve anything,” says Gago, the housing activist. The window for more comprehensive reforms may be closing; the market for short-term rentals in Lisbon appears to be stabilizing. According to Bloomer’s data, bookings made within the prior 14 days remain level.

Carla da Cunha expects her days of wandering the deserted streets of Alfama past shuttered cafes and half-empty trams will not last long. “Everything will return to the way it was before, mass tourism is on stand by,” she says. “People forget quickly.”

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