Why Homes Stay Empty: Understanding Property Owner Withdrawal in Lisbon’s Housing Crisis

Abstract

Amidst Portugal’s ongoing housing crisis, particularly pronounced in the Lisbon Metropolitan Area, thousands of residential units remain vacant. This article investigates why property owners often refrain from placing these homes on the rental market, despite high demand and rising prices. Drawing on empirical data from successive editions of the ALP (Lisbon Landlords Association) Barometer and framed by the literature on housing financialization, institutional trust, and patrimonial ownership cultures, the study shows that vacancy is not merely a result of speculation or neglect. Rather, it emerges as a rational response to a complex interplay of regulatory instability, legal mistrust, and deeply rooted socio-cultural norms. Landlords act not only as economic agents but also as custodians of family heritage, navigating uncertainty in a legal and symbolic environment increasingly perceived as hostile. The article argues that mobilizing Lisbon’s empty housing stock requires more than tax incentives or coercive measures. It demands rebuilding trust, ensuring legal predictability, and acknowledging the cultural meanings that shape property decisions. Policy recommendations include stabilizing rental legislation and designing culturally sensitive engagement strategies for small landlords.

1. Introduction

In recent years, Portugal has faced a worsening housing crisis, particularly acute in urban centres such as Lisbon, where growing demand coexists with the paradox of thousands of homes remaining unoccupied. While public and political attention has often focused on increasing housing supply and regulating tenant protection, relatively little research has examined the motivations of those who control this hidden stock—the property owners themselves.

This study addresses this gap by focusing on the subjective rationalities and lived perceptions of property owners in the Lisbon Metropolitan Area (LMA). Rather than portraying landlords merely as obstacles to housing reform, we adopt an empathetic and systemic perspective, exploring how legal, financial, and cultural factors shape their choices. Understanding these dynamics is crucial for designing housing policies that effectively address vacancy.

The analysis focuses on the LMA, given its central role in the national housing crisis and its function as a testing ground for successive housing policy reforms. Over the last decade, many of Portugal’s major housing initiatives, including the New Urban Rental Regime (2012), the Affordable Rental Programme (2019) and, more recently, the Mais Habitação (More Housing) package (2023), have been implemented or debated most intensively in the context of Lisbon, given that it is the epicentre of housing pressures in the country.

Although the weight of real estate in the LMA (63%) is slightly lower than the continental average (69%) [1], this territory offers a distinct context where the intersections between financialization, regulatory changes, and patrimonial attitudes towards property can be observed with greater clarity and usefulness. Portugal presents a particularly instructive case. A combination of historical rent freezes, frequent legislative changes, and unstable tax incentives has created a disproportionately elderly class of landlords who are risk-averse and deeply distrustful of the state. This pattern is, one more time, especially visible in Lisbon, where over 40% of landlords are small-scale owners aged 65 or older, and most inherited their properties rather than acquiring them through active investment [2].

Drawing on international literature and empirical data from several editions of the ALP Landlords’ Confidence Barometer [2], this study examines the multiple reasons behind landlords’ reluctance to rent. We argue that this resistance is not irrational or purely speculative. It reflects a broader crisis of confidence in both the state and the rental market. Without accounting for this distrust, housing policies, however well-intentioned, risk failing to activate a substantial portion of underutilized housing stock.

The main objective focuses on finding the reasons why landlords in Lisbon refrain from putting vacant houses on the rental market, despite high demand and rising prices. In line with this central concern, our research question asks: what factors (economic, institutional and cultural) explain landlords’ withdrawal from the rental market during the housing crisis in Lisbon?

The article is structured in such a way as to progressively relate the conceptual approach, the empirical framework and the interpretation of policies. Thus, Section 2 describes the theoretical framework underlying the research, drawing on debates about the financialisation of housing, institutional trust, and the patrimonial logic of property to explain how these factors interact in shaping homeowners’ behaviour. Section 3 details the methodological design and presents the empirical analysis based on five editions of the ALP Homeowners’ Confidence Barometer [2], mapping homeowners’ profiles, fears, and decisions in the context of the Lisbon housing crisis. Section 4 discusses the implications of these findings for public policy, advocating trust-based governance approaches that frame landlords as potential partners, rather than enemies, in the pursuit of equitable access to housing. Section 5 deepens the analytical discussion, interpreting vacancy as a form of rational withdrawal within a dysfunctional institutional system, showing how economic caution, regulatory distrust, and patrimonial values converge in a coherent ecology of withdrawal. Section 6 reflects on the methodological and analytical limitations of the study, addressing issues of data representativeness, geographical scope, and interpretative bias. Finally, Section 7 concludes by summarising the main contributions and presenting a set of policy recommendations aimed at restoring legal predictability, relational trust, and cultural recognition in housing governance.

2. Theoretical Framework and Literature Review

Understanding why property owners in Lisbon refrain from renting out vacant housing requires a multi-dimensional approach that integrates theoretical insights with empirical evidence. This section consolidates key literature across three interconnected axes: the financialization of housing, institutional trust and regulatory risk, and patrimonial logics of property ownership.

2.1. Housing Financialization: From Use Value to Asset Strategy

The financialization of housing refers to the growing integration of residential properties into financial circuits, leading to houses that were once spaces for social reproduction becoming vehicles for capital accumulation. This change implies a redefinition of the value of housing, which is no longer seen as use value (a place to live), but as exchange value (an asset capable of generating financial returns), protecting against inflation and sustaining intergenerational wealth [3,4,5].

Over the last decade, this shift has intensified in southern Europe, where property markets have become key locations for post-crisis investment and speculative restructuring. Reference [6] argue that the financialization of housing and the state are co-constitutive processes because, far from being passive regulators, states actively create markets through legal structures, tax incentives and planning regimes.

This perspective complements [7], who emphasise that states do not merely regulate markets, but constitute them through institutional routines and fiscal architectures. These now-established structures have been fundamental to the liberalisation and commodification of the real estate sectors in Portugal, Spain, Italy and Greece.

In Portugal, financialization followed a different trajectory. The global financial crisis of 2008 marked a turning point in how Portuguese families perceived housing, transforming it from a place of stability into a strategic financial asset [8]. This cultural shift coincided with legislative reforms and fiscal instruments, such as Golden Visa programmes, Real Estate Investment Funds, and the deregulation of short-term rentals, which attracted foreign investment to urban centres [9,10]. As a result, Lisbon’s property market became involved in the speculative dynamics of urban tourism and gentrification, leading to an increase in property values and the rationalisation of vacancy as a wealth preservation strategy.

Portuguese literature shows that this process was not based on large institutional landowners, as in northern contexts, but on the widespread financialization of families [11]. Reference [12] identifies the emergence of a new generation of small landowners, who are younger and financially motivated, and who view housing as an investment and social security. This dual rationality, half defensive, half speculative, illustrates how financial logic is introduced into family property economies. These conclusions echo the pattern in southern Europe described by [13,14], where familism and weak social welfare regimes transform private housing into the main instrument of financial security.

Furthermore, the interesting and recent comparative work [15] on Iberian real estate circuits reveals that Portuguese financialization was mediated by fiscal policy and banking reforms, rather than by pure market liberalisation. Tax incentives for renovation and the liberalisation of rental contracts since 2012, followed by successive reversals, have generated institutional volatility that amplifies both speculative holding and defensive withdrawal. As reference [16] observe, this creates an ambiguous field of governance, where property is simultaneously encouraged as an investment and restricted as a social asset.

In this sense, Lisbon exemplifies the intersection between financial and cultural rationalities. Real estate property functions as a protection against institutional uncertainty, as much as a financial asset. The perception of housing as ‘stored value’ or ‘family reserve’ [11] illustrates how financial logics become naturalised through affective and intergenerational meanings. This cultural incorporation of finance challenges the binary oppositions between speculative and moral property.

Together, these studies and authors show that the financialization of housing in Portugal is not a simple importation of global capitalist mechanisms, but rather a local adaptation rooted in patrimonial, cultural, and institutional contexts. The Portuguese case exemplifies what [6] describe as financialization enabled by the state, where policies, legal frameworks and fiscal instruments co-produce the financialization of everyday life. Based on this literature, this study contributes by relating these macro-level processes to the microeconomic behaviours of landlords, showing how financial rationalities, institutional distrust and patrimonial logics converge to produce the rational wave, that is, a culturally rooted form of withdrawal from the rental market.

2.2. Institutional Trust and Regulatory Uncertainty

Institutional trust is decisive in landlords’ decisions to enter or exit the residential rental market. In contexts where legal frameworks, fiscal instruments, and administrative practices are perceived as unstable, landlords tend to adopt defensive strategies, prioritising asset preservation over market participation [17]. In Portugal, the historical legacy of abrupt policy changes, from long-term rent freezes to coercive rental proposals, has contributed to what [15] call regulatory fatigue, a lasting scepticism about the reliability of state intervention.

But institutional trust goes beyond mere trust in the government or certain political actors. It encompasses perceptions of fairness, transparency, and predictability of the rules governing property rights, taxation, and judicial enforcement [7,18]. When these dimensions are fragile, as in the Portuguese housing system, regulation itself becomes a source of risk rather than protection. This paradox transforms the legal environment into an arena of uncertainty, in which property owners interpret new policy initiatives through the lens of past volatility.

Recent studies on southern Europe confirm that the state often acts as both a facilitator and a destabiliser of property markets. References [6,9] demonstrate that fiscal and legislative reforms aimed at attracting investment can simultaneously undermine procedural confidence by creating short-lived or contradictory measures. In Portugal, the rapid succession of programmes such as the New Urban Rental Regime (2012), the Affordable Rental Programme (2019) and the Mais Habitação (More Housing) package (2023) exemplify this instability. Each reform sought to correct the flaws of the previous one, but the cumulative effect was to signal unpredictability, reinforcing the perception that the ‘rules of the game’ are constantly changing.

Empirical studies corroborate this dynamic. According to the ALP Landlords’ Confidence Barometers (2020–2025) [2], over 90% of landlords report low confidence in the consistency of housing regulation, and almost all express scepticism about state-run rental programmes. Similar results are repeated in [19], who found that Portuguese landlords often interpret new legal measures as politically motivated and morally delegitimising. This perception is not merely cognitive, but emotional, giving the impression that property ownership has become politically stigmatised, with landlords portrayed as obstacles to social progress rather than legitimate economic actors.

This moral delegitimization plays a crucial role in the erosion of institutional trust. As [20] observes, decisions about property in post-crisis Southern Europe are shaped by moral economies, socially rooted systems of reciprocity and recognition that transcend formal law. When state narratives conflict with these moral orders, law enforcement declines and informal practices proliferate. In Portugal, this tension is visible in the widespread use of unregistered leases and verbal agreements, which allow landlords to maintain control and minimise exposure to bureaucratic complications. The 2024 report by the Inspectorate-General of Finance [21] revealed that most rental relationships remain undeclared, confirming a structural mismatch between the legal framework and landlords’ networks of trust.

This institutional fragility is not only legal, but also procedural. Reference [18] describes how fragmented bureaucracies and non-programmatic decision-making undermine the credibility of the state. The result is a form of structural disengagement [22] corresponding to the progressive withdrawal of owners from formal frameworks, relying instead on informal agreements, long-term leases, or transfers of assets within families. This behaviour reflects a rational adaptation to institutional dysfunction, rather than market inefficiency. In this context, trust functions as an economic and symbolic variable. As seems clear, owners’ perceptions of fairness and recognition directly condition their willingness to risk involvement with formal governance structures.

The situation in Portugal illustrates an even broader paradox identified by [6,7], as states that actively shape markets can simultaneously erode the legitimacy of those markets through inconsistent or politicised regulation. In the Portuguese case, the institutional environment functions less as a stabilising framework and more as a generator of uncertainty. Consequently, the decision to hold on to properties often represents not speculative anticipation, but a defensive strategy of retaining trust, i.e., a refusal to engage with institutions perceived as untrustworthy or adversarial.

Understanding institutional trust as relational and procedural helps to clarify why tax incentives or new legal frameworks alone rarely succeed in bringing vacant housing onto the market. Without addressing the symbolic and procedural dimensions of trust, such as consistency and fairness, policy interventions risk perpetuating or even deepening withdrawal. As this study shows, rebuilding trust among homeowners requires not only legal predictability but also relational legitimacy, building a sense that the state acts as a reliable partner rather than an unpredictable adversary.

2.3. Patrimonial Logics and the Moral Economies of Ownership, and an Integrated Understanding

Beyond financial and institutional explanations, property ownership in Portugal remains deeply rooted in family, moral and symbolic systems that shape how individuals relate to housing and the state. These patrimonial logics are the cultural counterpart to the financialization of housing, reflecting the long tradition in southern Europe of property-based welfare [13,23]. In this configuration, housing functions simultaneously as a family legacy, a moral duty and financial insurance, that is, an asset to be protected, transmitted and used selectively across generations, rather than circulating freely in the markets [14].

In Portugal, this moral economy of property is particularly pronounced among small landlords, who dominate the urban housing stock. Many have inherited their properties, consider them extensions of their family identity, and are reluctant to rent them to strangers or through state-managed programmes [2]. For these actors, renting is not a neutral market exchange, but a relational exposure that carries emotional and reputational risks [24]. The decision to keep a property vacant, therefore, may signify prudence, respect for heritage, or avoidance of conflict, rather than simply speculation.

The patrimonial structure operates through affective economies [25], in which feelings such as pride, mistrust or obligation structure economic choices. This is evident in the practice of reserving empty homes for children or grandchildren, seen as an expression of care and intergenerational continuity [26,27]. It is also manifested in the widespread preference for informal agreements (verbal agreements, unregistered leases or ‘trusted tenants’) that allow owners to maintain control and moral discretion outside bureaucratic supervision. These strategies form what Scott [28] called a moral economy, that is, a domain where social legitimacy can override legal compliance.

Current studies on Portugal and Greece [8,14] show that the financialization of housing is increasingly mediated by these moral and affective logics. As property becomes more intertwined with financial expectations, traditional notions of stewardship, trust, and family duty are not replaced but reconfigured. Owners oscillate between moral obligation and market calculation, producing hybrid behaviours that defy simple categorisations as ‘rational’ or ‘irrational’. This cultural integration explains why policy instruments based exclusively on economic rationality often fail to mobilise underutilised housing.

The interaction between patrimonialism, distrust and financial rationality produces what can be described as an ecology of defensive property. Within this ecology, vacancy is not an accident or a pathology, but a coherent strategy situated at the intersection of three logics:

• Financial rationality: housing as a valuable asset and protection against inflation;
• Institutional caution: housing as a refuge from unstable regulations and unreliable governance;
• Cultural patrimonialism: housing as a moral and emotional pillar of family identity.

Understanding vacancy as an emergent result of these logics working in conjunction allows us to arrive at a more comprehensive theoretical synthesis. As [29] argued, economic actions are always embedded in social relations. In the Portuguese case, real estate decisions are shaped by dense kinship networks, neighbourhood reputation and collective memory, factors that filter how owners perceive and respond to political incentives. The present study expands this framework by linking the macroeconomic processes of financialization and regulatory volatility (Section 2.1 and Section 2.2) to the affective and symbolic microeconomic practices that underpin landlords’ withdrawal.

This integrated understanding challenges conventional political narratives that reduce vacancy to economic inefficiency or individual greed. Instead, it highlights vacancy as the relational outcome of a product of misaligned systems of trust, meaning, and governance. The persistence of empty houses in Lisbon thus reflects not only structural failures in housing policy, but also a deeper social fracture between a state that seeks to regulate housing as a public good and citizens who view property as a private and moral inheritance.

To further situate the withdrawal of owners within a broader theoretical tradition, the research also draws on fundamental works that conceptualise property rights and urban governance as incomplete, negotiated and historically contingent. Reference [30] shows that property should not be understood as a fixed or absolute right, but as a social and legal convention whose meaning and uses evolve over time. From this perspective, non-use, retention or strategic withdrawal are not anomalies, but should be understood as legitimate responses in uncertain institutional environments.

This understanding is in line with analyses conducted in [31,32] of metropolitan governance, which emphasises fragmentation and non-linearity as constitutive features of contemporary urban regulation. Rather than operating through coherent and predictable policy trajectories, housing governance unfolds through overlapping reforms, partial instruments, and weak coordination across scales. In such contexts, behavioural outcomes emerge less from direct incentives than from accumulated signals of instability and misalignment.

From this perspective, the contribution of this study lies in reframing vacancy as a deliberate form of patrimonial withdrawal, a culturally and institutionally situated response to governance fatigue. By integrating several dimensions, this theoretical model offers a lens through which to interpret how defensive rationalities are produced and reproduced in Portugal’s housing system. It suggests that restoring functional property markets will require more than tax incentives or coercive policies; it will require rebuilding trust, ensuring predictability, and recognising the emotional and cultural significance of property ownership in the moral economies of southern Europe.

3. Methodology

3.1. Research Design

A qualitative case study design was adopted, focusing on the Lisbon Metropolitan Area, a critical site for understanding landlord behaviour and urban vacancy. Lisbon was chosen for its concentration of rental housing, visible housing pressures, and its role as a testing ground for rent regulation and housing taxation reforms since 2012. The city offers a paradigmatic example of how national housing policies manifest locally.

Following the logic of a critical case study, Lisbon emerges as a revealing context: if landlords here, where demand for rentals is strongest, withdraw from the market, similar dynamics are likely to occur elsewhere in Portugal. The study aims at analytical generalisation rather than statistical inference, identifying mechanisms and fundamentals that shed light on broader urban and political processes.

3.2. Data Sources

The empirical analysis integrates three complementary strands:

• Survey data were employed from all five editions of the ALP Landlord Confidence Barometer [2], published annually. These barometers are based on non-probabilistic but longitudinally stable samples of small and medium-scale property owners within the Lisbon region, using online questionnaires distributed through the association’s membership base. Key indicators include trust in institutions, rent arrears, participation in public programmes, legislative perceptions, and behavioural intentions.
• Policy and legislative documents were selected according to three criteria: (i) direct relevance to landlord regulation or tax/fiscal measures between 2010 and 2025, (ii) citation or discussion in parliamentary debates or media with significant reach, and (iii) public accessibility through official channels (e.g., Diário da República, Government websites). This includes programmes such as New Urban Rental Regime, Mais Habitação package, and fiscal reform proposals, but also local instruments, such as the Lisbon Municipal Housing Charter.
• In addition to quantitative sources from the ALP Barometers [2], the study also included a complementary qualitative component based on semi-structured interviews with representatives of local landlords’ associations. Among these, the contribution of the Setúbal Builders and Owners Association [33,34] stands out, representing 580 members with around 2650 rentals under management. The interview aimed to capture institutional perceptions and proposals from the sector regarding current legislation, rental risks and possible incentives for placing properties on the market. The association’s written response was treated as a documentary source and analysed in light of the same interpretative framework applied to the ALP Barometer data [2], allowing triangulation with pre-existing empirical evidence. The inclusion of this interview aims to deepen the understanding of the defensive rationales and proposed solutions formulated directly by actors in the sector. In addition to the Setúbal Builders and Owners Association (ACPS) [33,34], a second institutional interview was conducted with the Portuguese Association of Real Estate Developers and Investors (APPII), representing large-scale property developers and investment entities active in Portugal’s residential market. This contribution broadens the empirical scope of the study by incorporating the perspective of institutional actors who, unlike small landlords, operate with professionalized capital structures and long-term investment strategies.
• Secondary sources include academic articles, press coverage, and reports from housing associations and think tanks. For the literature review, a narrative approach was adopted. Searches were conducted in Web of Science, Scopus, RCAAP, and Google Scholar using combinations of keywords such as “housing vacancy”, “landlord behaviour”, “financialization”, “institutional trust”, and “Portugal housing”. Sources were included if they provided empirical or theoretical insights relevant to one or more of the three analytic categories discussed below.

To further clarify the empirical basis of this study,

Table 1. Summary Table—ALP Landlords’ Confidence Barometer (2020–2025).

Year	Number of Responses	Geographic Focus	Access Type	Main Themes
2020	320 answers	56.1% rent real estate in the Great Lisbon Area	Public summary reports	COVID-19 response, rent arrears, trust
2021	~200 answers	48.6% rent real estate in the Lisbon Metropolitan Area	Public summary reports	Regulatory fatigue, legal uncertainty
2022	259 answers	~50% in the Lisbon Metropolitan Area	Public summary reports	Rent control fears, program avoidance
2023	770 answers	47% rent real estate in the Lisbon Metropolitan Area	Public summary reports	Impact of Mais Habitação package
2024	525 answers	No reference	Public summary reports	Shift to short-term rentals
2025	169 answers	No reference	Public summary reports	Persistent institutional fatigue

summarises the available information from the ALP Owner Confidence Barometers [2]. Although the authors did not have access to the raw data sets due to confidentiality agreements with respondents, all editions were analysed based on public summary reports released by the Lisbon Owners Association (ALP). These reports include aggregate trends in owner confidence, rent payment delays, institutional trust, and involvement in public programmes. The volume of responses ranged from approximately 150 to 500 per edition, with all data focused on the Lisbon Metropolitan Area. Although sociodemographic breakdowns were not disclosed, the consistency of responses over the years increases analytical reliability. The themes identified in the various editions are summarised in the table below.

3.3. Analytical Process

An interpretative framework was applied, combining qualitative content analysis with thematic coding. The process took place in three steps:

• Descriptive synthesis of ALP data [2], identifying longitudinal patterns in terms of trust, delays, and programme participation.
• Interpretative correlation, exploring how these trends reflect the underlying reasons for asset protection, institutional mistrust and financial strategies.
• Contextual insertion, situating Lisbon’s patterns within broader debates on the financialization of housing, relations between the state and citizens, and models of social welfare in southern Europe.

The three categories used to frame the findings, financial rationale, institutional distrust, and patrimonial logic, were not imposed a priori, but emerged inductively from both the literature review and the coding of empirical materials. Coding was assisted manually using spreadsheet matrices, focusing on recurring themes such as legal volatility, emotional cost, symbolic resistance, and intergenerational preservation.

Triangulation between data types (survey results, policy discourse, academic framing) was used to strengthen validity.

3.4. Reflexivity and Limitations

Although the ALP Owner Confidence Barometers provide a valuable longitudinal approximation for understanding owners’ perceptions and behaviours, they do not strictly represent the entire population of owners in Portugal or even the LMA. Specifically, Barometer respondents are predominantly active landlords, meaning that landlords who own additional properties but do not rent them out remain underrepresented. This highlights a broader gap in the national statistical landscape, namely the absence of comprehensive data sets that identify, quantify and characterise non-renting owners and their motivations. It is critical to recognise this gap, as it limits the ability to generalise findings beyond the active letting segment and points to an important direction for future empirical research.

It is important to note that the ALP Barometer is based on non-probabilistic samples drawn from the association’s membership base, which means that the results cannot be considered statistically representative of the total population of property owners in Lisbon or Portugal. However, the longitudinal design of the barometers, the thematic consistency and stable response patterns across editions (2020–2025) increase their analytical reliability. In this sense, the study does not seek statistical inferences, but rather analytical generalisations, identifying mechanisms and behavioural logics that shed light on broader urban and institutional processes.

The ALP Barometer sample is self-selected and regionally concentrated, involving mainly small and medium-sized property owners in the LMA [2]. Although it is not possible to know whether it is statistically representative, the barometer provides valuable information on perceived risks, policy reactions and confidence dynamics. Consistent response patterns over five years reinforce the robustness of the findings.

This research seeks not to judge, but rather to interpret the logic behind the owners’ decisions. The conceptual categories applied were constructed jointly with reference to both data and theory. The aim is to clarify how rational withdrawal arises in a context of legal ambiguity, cultural attachment, and misguided political recognition.

4. Lisbon Case Study: Distrust, and the Limits of Policy Activation

The LMA offers a revealing test case for understanding the paradox of housing abundance amid acute social inaccessibility. Although demand for affordable housing has risen sharply in the past decade, thousands of dwellings remain vacant or withheld from the long-term rental market. According to the Lisbon Municipal Housing Charter, in 2022 the city identified around 1000 fully vacant buildings and around 1600 partially vacant ones, representing around 5% of Lisbon’s classical building stock. Census-based vacancy counts are even higher, partly because they include units without active water consumption: of approximately 309,000 domestic water contracts, only 279,000 registered readings in 2022, indicating a substantial pool of dwellings with no confirmed occupancy (Lisbon Municipal Housing Charter).

Importantly, vacancy is neither spatially random nor socially neutral. The distribution of empty or derelict dwellings is highly concentrated in the historic centre and the riverside parishes, with Santa Maria Maior showing the highest share (around 12% of classical buildings fully or partially derelict), followed by Santo António, Misericórdia, Marvila and Estrela (Lisbon Municipal Housing Charter). These areas correspond to zones of intense urban rehabilitation, often linked to tourism-oriented redevelopment and the conversion of traditional dwellings into high-yield short-term rental uses.

The first key insight from the Housing Charter is that declining vacancy rates at the citywide scale can mask more disruptive local processes. In parishes such as Misericórdia, Santa Maria Maior and São Vicente, the apparent reduction in vacant units is overshadowed by a shrinking housing stock itself, driven by the replacement of long-term residential units with tourist-oriented or luxury redevelopments. Conversely, in parishes like Ajuda and Olivais, the contraction in occupied dwellings reflects a different dynamic: a gradual emptying-out of the existing stock, with 4.9% and 3.4% of the total number of dwellings, respectively, falling vacant between 2011 and 2021 (Lisbon Municipal Housing Charter).

A second insight concerns the temporal dimension. Even where recent rehabilitation activity has occurred, vacancy frequently persists over long cycles. Municipal data show that around 80% of derelict buildings have been classified as such for five years or more, and 20% for over a decade, demonstrating that vacancy is embedded in long-term structural patterns rather than short-term fluctuations.

Third, the Housing Charter highlights that vacancy stems from different mechanisms across the housing stock. Recent developments may remain empty while awaiting sale or rent, whereas older buildings—often in advanced disrepair—are kept out of the market due to structural degradation, legal disputes, inheritance fragmentation or speculative holding.

Fourth, the Charter’s analysis of water consumption patterns shows that administrative vacancy registries systematically underestimate the true extent of underuse, reinforcing the argument that the city suffers from a deeper, more pervasive form of non-occupation.

While aggregate vacancy has decreased only marginally, nine parishes recorded an increase of nearly 2000 vacant dwellings over the past decade. This long-term persistence of underuse, combined with the intensification of tourism-driven redevelopment, provides crucial background to understanding landlords’ behaviour and the limits of policy mobilisation.

4.1. Structural–Economic Factors: When Profitability Is Not Enough

The most immediate hypothesis for vacancy—that rents are too low to justify participation—proves inadequate when examined against the Lisbon context. Rents have climbed steadily for a decade, and rental demand remains exceptionally strong, yet the market continues to repel a substantial portion of property owners.

Table 2. Summary Table: Key Findings from ALP Barometers [2].

Year	Barometer No.	Main Theme	Key Indicators	Link
2020	I	Pandemic response, trust erosion	63% no confidence in gov.; 59% arrears	https://www.alp.pt/ (accessed on 22 November 2025)
2021	II	Regulatory fatigue, fear of instability	92.6% concern over policy shifts	https://www.alp.pt/ (accessed on 22 November 2025)
2022	III	Rising distrust, rent control anticipation	90% distrust; 64.7% support rent freezes	https://www.alp.pt/ (accessed on 22 November 2025)
2023	IV	Response to ‘Mais Habitação’	96% reject state programs; 9% sold units	https://www.alp.pt/ (accessed on 22 November 2025)
2024	V	Shift to short-term markets	6% shift to short-term; 98% reject programs	https://www.alp.pt/ (accessed on 22 November 2025)
2025	VI	Entrenched mistrust, legal caution	58% cite legal stability as key factor	https://www.alp.pt/ (accessed on 22 November 2025)

summarises the main findings of each edition of the ALP Landlord Confidence Barometer [2]. Each entry lists the barometer number, the main theme of the edition, the key indicators cited in the public summaries, and a link to the official report. Although the authors did not have access to the raw data sets, this structured summary allows for transparent references throughout the empirical analysis.

ALP Barometer data show that only 15% of landlords identify net rental yield as the primary determinant in decisions to rent [2]. By contrast, 57.8% cite legislative predictability as the decisive factor, strongly suggesting that the structural fragility of rental income undermines the appeal of leasing, even where financial returns exist.

This pattern reflects the composition of Lisbon’s landlord class. Many are small-scale, ageing owners who inherited their properties rather than acquiring them for investment. For these actors, real estate functions primarily as a store of value, not a source of revenue. Vacancy therefore operates as a form of asset stewardship: a means of avoiding wear and tear, tenant disputes, bureaucratic entanglements, or a perceived erosion of control over one’s property.

Neighbourhood dynamics reinforce this logic. In gentrifying parishes—Misericórdia, Santa Maria Maior, São Vicente, and Estrela—property values have risen faster than rental yields. Holding a dwelling vacant until a favourable moment to sell, convert to short-term rental, or pass it on to family may be financially and emotionally more rational than entering the long-term market.

The introduction of the Mais Habitação package intensified this defensive behaviour [35]. The VII Barometer (2024) recorded a 20% rise in rent increases above the legal indexation coefficient, often as a hedge against anticipated regulation rather than an attempt to maximise profit. Simultaneously, 9% of landlords sold previously rented units and 6% shifted them to short-term rental or temporary student/professional accommodation.

In this landscape, vacancy functions as a rational strategy of risk management, reflecting a widespread perception that rental income is slow, uncertain, bureaucratically burdensome, and emotionally costly. Until these structural risks are reduced, profitability alone is unlikely to activate vacant units.

4.2. Institutional and Legal Distrust: Opting out of an Unreliable System

Financial considerations, however, do not fully explain the depth of landlords’ disengagement. A stronger force emerges from survey responses: a profound distrust in the institutions responsible for governing the rental system.

This distrust is longstanding, shaped by decades of abrupt policy shifts and perceived hostility towards property owners. The pandemic-era eviction moratorium, followed by the Mais Habitação package [35], including the proposal for coercive leasing of vacant properties, consolidated the belief that property rights are unstable and vulnerable to sudden, ideologically driven intervention.

The consequences are striking. In 2024, 96% of landlords stated that they would refuse participation in any state-run rental programme, even with favourable conditions or tax benefits. Furthermore, 92.7% declared they would pursue legal action if their vacant property were requisitioned for public use.

Distrust extends beyond legislation to the broader judicial and fiscal framework. Courts are seen as slow and unpredictable; tax regimes as punitive; rental contracts as biased towards tenants; and eviction processes as prohibitively uncertain. Even when statistically rare, “nightmare scenarios” of non-paying tenants carry enormous symbolic weight, especially among older landlords with limited financial buffers.

This institutional uncertainty transforms vacancy into a political stance as much as a market behaviour, a form of silent resistance to a system perceived as unfair and unreliable. Without restoring trust, predictability, and procedural clarity, public incentives will remain largely ineffective.

The institutional mistrust expressed in the ALP Barometers is echoed in statements obtained from other associations in the sector [2]. In a written interview, the Setúbal Association of Builders and Owners (ACPS) stresses that ‘an eviction (for serious breach of contract) takes more than 12 months’ and that ‘the law limits the security deposit to two months’ rent,’ which, according to the association, exposes landlords to ‘excessive risk’ [30]. This perception of contractual imbalance reinforces the idea that the current legal framework creates uncertainty and encourages defensive withdrawal.

ACPS proposes two concrete solutions: (i) to legally guarantee eviction within a period shorter than that of the security deposit (e.g., two months), through summary proceedings in local civil courts; or (ii) the creation of a ‘universal public guarantee’ on rental contracts, managed by the State and compensated via Personal Income Tax (IRS). This proposal reflects an attempt to design ‘risk-sharing’ mechanisms that make renting less vulnerable to judicial delays.

This testimony corroborates the analysis developed here, which emphasises that mistrust is not limited to legislative instability, but extends to the perception that the judicial and tax systems are ineffective, slow and asymmetrical. The systematic refusal to participate in public programmes, as indicated by data from the 2024 Barometer, where 96% of respondents rejected state involvement, seems to be rooted in a broader pattern of institutional delegitimization.

The inclusion of testimony from the Portuguese Association of Real Estate Developers and Investors (APPII) provides a valuable counterpoint to the defensive logic expressed by small-scale landlords’ associations. While both groups identify legal uncertainty, judicial inefficiency, and fiscal instability as the core obstacles to market participation, their positions diverge in rationale and scale. For local landlords, as represented by the Setúbal Association of Builders and Owners (ACPS), distrust leads to protective withdrawal, a form of retreat from a system perceived as hostile and unpredictable [33,34]. For institutional investors and developers, however, represented by APPII, disengagement is framed as a strategic suspension of investment pending regulatory reform. Their proposed remedies are structural rather than reactive: long-term contractual flexibility, judicial efficiency, and predictable fiscal frameworks aimed at stimulating build-to-rent schemes and housing rehabilitation. This contrast reveals a layered landscape of mistrust: at one end, small proprietors withdraw to protect family assets; at the other, professional investors delay engagement until governance credibility is restored. Both dynamics reflect the same institutional fatigue but operate through distinct temporal and economic logics.

4.3. Sociocultural Dimensions: Patrimony, Identity, and the Right to Withhold

Beneath the economic calculus and legal hesitations that shape property owner behaviour in the LMA lies a deeper, more intimate layer of motivation, one rooted not in profit or policy, but in cultural norms, affective attachments, and intergenerational logics of patrimony. For many landlords in Portugal, property is not merely an investment or a utility. It is a symbolic asset, woven into family identity, social status, and long-term life planning.

The ALP Barometers consistently reveal that most landlords in the LMA are not corporate entities or large-scale investors, but older individuals managing inherited property. Over 60% of respondents are aged 55 or older, with many owning between one and five units -often buildings passed down through generations, concentrated in the same neighbourhoods where they themselves live or grew up [2]. These landlords operate not within the rationalist frameworks of institutional investors, but within what might be described as a “familiar moral economy”, where the use of property is embedded in kinship obligations, emotional continuity, and informal inheritance strategies.

Within this worldview, vacancy is not wasteful but often a strategic, value-laden choice. An empty apartment may be reserved for a child or grandchild not yet ready to leave home. It may be kept unrented to avoid disputes, wear-and-tear, or conflicts that could tarnish a family asset. In other cases, it is simply held in stasis, neither sold nor leased, because it represents something more than shelter or income: it represents control, memory, dignity, and future security.

This “withholding” behaviour aligns with a broader Southern European pattern, where homeownership has historically functioned as a substitute for underdeveloped welfare regimes. In Portugal, owning property is often a form of private social insurance. It provides backup housing in times of crisis, serves as a fallback pension, and enables parents to offer their children a foothold in increasingly unaffordable urban markets. As [9] argues in the Greek context, but equally applicable here, real estate is often the most reliable asset in a context of institutional fragility and market volatility, and its symbolic value can eclipse any potential rental yield [14].

This patrimonial logic also interacts with affective economies of risk. Older landlords, especially those with few properties, often describe themselves as emotionally unprepared for the strain of dealing with problematic tenants, eviction proceedings, or public bureaucracy. Many express a preference for “peace of mind” over income, and a strong desire to maintain full control over how, when, and to whom their property is leased. In this sense, leasing is not just a financial transaction, it is a relational exposure, one that many would prefer to avoid altogether.

These choices are further reinforced by a moral narrative of responsibility. Contrary to stereotypes of landlord greed, many Lisbon owners describe themselves as careful, even paternalistic stewards of their properties. Some deliberately refrain from raising rents, even in the face of inflation, out of loyalty to long-term tenants. Others refuse to enter public programs because they believe the state would assign tenants they cannot vet personally, thereby compromising the integrity of the housing relationship. For these actors, rental decisions are guided not only by rational interest, but by reputational, familial, and emotional considerations.

Seen from this perspective, vacancy is neither passive nor antisocial. It is an active form of management, one that privileges long-term family strategies, personal autonomy, and asset preservation over short-term profit or public interest. It is, in effect, a cultural practice, shaped by generational memory, neighbourhood identity, and a deep scepticism of formal institutions.

As such, any policy that seeks to mobilize these vacant units must contend not only with legal and financial barriers, but also with these non-economic meanings of property. Designing effective interventions will require more than tax breaks or subsidies; it will demand culturally sensitive engagement with landlords’ values, identities, and lifeworld’s, and an acknowledgment that for many, renting out a home is not a business decision, but a deeply personal one.

This perception is not limited to rhetoric. It is grounded in concrete experience. Successive legislative shifts have altered the terms of leasing with little warning: rent freezes were reinstated after partial liberalization, eviction moratoria were introduced during the COVID-19 pandemic with minimal compensatory mechanisms, and the proposal for coercive rental, forced leasing of vacant properties by municipalities, was interpreted by many as a direct threat to the sanctity of ownership itself. Such policies, even when temporary or largely symbolic, send a clear message to landlords: your property is not entirely yours.

The data from the ALP Barometers is unequivocal [2]. In 2024, 96% of surveyed property owners stated they would not participate in state-run rental programs, even those offering favourable conditions or tax benefits. Equally striking, 92.7% said they would pursue legal action if their vacant property were requisitioned for public use under new legislation. These are not marginal sentiments. They represent a near-consensus among a critical mass of active landlords in the metropolitan region of Lisbon.

Distrust also extends beyond specific policies to broader institutional arrangements. Courts are seen as slow and unpredictable; tax regimes are viewed as punitive and retroactive; rental contract frameworks are considered biased in favour of tenants. Eviction processes, in particular, are cited repeatedly as a deterrent. While not always statistically common, the perception of “nightmare scenarios”, where non-paying tenants occupy properties for months or even years without resolution, carries extraordinary symbolic weight, especially among older landlords or those with limited financial buffers. In this sense, the fear of legal entrapment often outweighs the financial benefits of occupancy.

Importantly, this climate of mistrust is not only institutional but relational and cultural. Landlords often report feeling politically vilified, portrayed in public discourse as profiteers, speculators, or hoarders, rather than as contributors to urban housing ecosystems. This symbolic delegitimization further entrenches their resistance to state programs. As the ALP barometers reveal [2], many owners do not merely opt out of government schemes because they are inefficient; they do so because they feel fundamentally misrecognized by them.

What emerges from this data is not just a market failure, but a failure of mutual recognition between the state and a key class of urban stakeholders. While public authorities frame vacancy as a policy problem to be corrected, many owners experience it as a last refuge of autonomy in an environment where other rights, contractual, fiscal, reputational, have been gradually eroded.

Vacancy, in this light, becomes a political stance as much as a market behaviour. It is a way for owners to assert control, to resist participation in systems they no longer trust, and to insulate themselves from what they see as an unstable and ideologically shifting legal terrain. This dynamic fundamentally alters how policymakers must approach the problem: no amount of financial incentive will succeed unless it is accompanied by a restoration of trust, legal predictability, and symbolic legitimacy.

4.4. The Evolution of Landlord Confidence (2020–2025)

The evolution of owners’ attitudes between 2020 and 2025 highlights the procedural nature of withdrawal. Rather than being static or reactive, owners’ behaviour shows evidence of cumulative adaptation, shaped by repeated institutional disappointments, regulatory changes and deteriorating symbolic legitimacy. The ALP Barometers [2] allow us to trace this trajectory in detail: initial caution induced by the pandemic gives way to chronic scepticism, especially in response to contested policy packages such as Mais Habitação [35]. What emerges is not a one-off reaction, but a dynamic learning process in which landlords recalibrate expectations and reduce engagement with the rental market over time. This longitudinal evidence challenges purely structural explanations and underscores the importance of the time sequence for understanding how withdrawal becomes entrenched (

Table 3. Summary of ALP Barometer indicators (2020–2025). Source: ALP Barometer [2].

Year	% Without Confidence in Government	% Supporting Rent Freeze Contracts	% Declaring Rental Arrears	% Refusing State Programs	Key Emerging Pattern
2020	63%	53.5%	59%	99%	Pandemic-induced mistrust
2021	92.6%	61.4%	33%	95%	Fear of instability, regulatory fatigue
2022	90%	64.7%	24%	92%	Rising fear of rent control
2023	96%	56%	30%	98%	Reaction to Mais Habitação package
2024	93%	56.4%	23.6%	98%	Exit to short-term markets
2025	89%	65.5%	21.2%	96%	Institutional fatigue and legal caution

).

The trajectory of landlords’ confidence over the five years covered by the ALP Landlord Confidence Barometer provides us with a longitudinal dimension that supports the conclusions discussed above [2]. Taken together, these barometers reveal not inconsistent fluctuations, but a persistent and cumulative process of withdrawal and mistrust. What began in 2020 as a reaction to the pandemic and emergency legislation has gradually become established as a structural feature of the rental landscape in Portugal, namely a widespread belief that the institutional environment is unpredictable and that the safest response is disengagement.

Since the first edition, following the COVID-19 moratorium, more than half of landlords reported serious delays in rent payments, and more than sixty per cent said they had lost confidence in the government’s handling of the housing crisis. Five years on, the same scepticism dominates the responses, even though the context has changed. The 2025 Barometer shows that 57.8% of landlords now identify legal and legislative stability as the decisive factor determining their participation in the rental market, far surpassing profitability or taxation as reasons for acting. This is perhaps the most direct statistical confirmation to date of the argument put forward in this research. Concretely, the primary barrier to mobilising private housing is institutional and symbolic, rather than economic. Once eroded, trust does not return with tax incentives, as it requires the rebuilding of predictability and respect.

Over the course of half a decade, this erosion accelerated under the weight of political controversy. The 2023’ Mais Habitação package, designed to expand the supply of rentals, had the opposite effect [35]. According to ALP data [2], two in ten landlords sold previously rented properties, while another in ten increased rents or converted them to short-term rentals. More tellingly, 96% of respondents said they would not rent to the state under any circumstances, and over 92% said they would go to court if faced with compulsory leases. The package, designed to engage landlords, ended up reinforcing the perception that government policy was volatile and contradictory. In subsequent editions, this sentiment did not diminish, as in 2024, about a quarter of landlords still reported delays in rent payments and more than half said they expected the situation to worsen.

The profile of landlords remained stable throughout this period. Each barometer confirms that the Portuguese rental market continues to be dominated by elderly, small-scale landlords (around 60% are over 55 years old and half have inherited their properties rather than buying them as an investment). The 2025 Barometer makes this dynamic explicit, noting that 44% of landlords are between 65 and 85 years old and that 58% did not even apply for the state compensation available for frozen rents, largely because they considered the process bureaucratically exhausting or unreliable. These details lend empirical depth to the argument developed earlier in this article, that the apparent “inertia” of landlords is in fact a culturally rooted strategy of protection and continuity.

Over these five years, the data reveal a consistent pattern of mainly defensive rationality. Landlords report similar levels of rent arrears (ranging from 20 to 30 per cent of respondents) and an almost unchanged refusal to participate in public programmes (over 90 per cent in all editions). Even with the change in the political landscape (from the socialist majority of the pandemic era to the new centre-right coalition in 2025), the feeling of mistrust persisted. As the latest Barometer concludes, most respondents do not believe that the current government’s tax reforms or “housing shock” initiatives will change their behaviour. Half say they will not put additional units on the market, and most will limit rent increases to the legal indexation coefficient.

Taken together, these successive surveys over the past five years transform what might appear to be a one-off dissatisfaction into a measurable continuity. The data reveals a class of small property owners who have learned to live defensively, conserving their property, avoiding involvement with state programmes and considering the legal framework as an unpredictable risk. In this sense, the housing crisis is not a temporary distortion of market dynamics, but the external symptom of long-term institutional fatigue. The lack of trust documented in the ALP Barometers for 2020–2025 reveals a housing system mired in mutual suspicion, where private landlords no longer expect the state to be a “person of good faith” and where public policies oscillate between dependence and hostility towards them [2]. The challenge for the coming years will not only be to legislate differently, but to rebuild a relationship of trust, without which no incentive, however generous, will be able to transform empty houses into homes for families to live in.

The case studied suggests that the mechanisms underpinning vacancy are not isolated acts of resistance or purely cultural reflexes (Figure 1). They are reproduced by a political environment that alternates between over-regulation and crisis management. Before proposing solutions, it is necessary to recognise that the governance structure itself has become a generator of risk perception.

5. Vacancy as a Rational Withdrawal in a Dysfunctional System

Beyond individual cost–benefit assessments, this article conceptualises incentives in housing governance as being collectively configured and institutionally mediated. In urban policy, incentives do not work solely through isolated economic signals, but through shared expectations, reputational norms, and anticipatory behaviours that emerge in specific governance environments. As the literature on urban incentives suggests, behavioural outcomes are shaped less by the presence of formal rewards or penalties than by how these instruments are collectively perceived, interpreted, and internalised over time.

In the case of Lisbon, political incentives aimed at activating vacant housing fail not because they are insufficiently generous, but because they are embedded in a broader incentive structure that consistently rewards risk avoidance and withdrawal. Legislative volatility, the symbolic delegitimisation of landlords, and procedural uncertainty collectively signal that non-participation is the safest and most legitimate strategy. As a result, individual landlords respond not to isolated incentives, but to a shared institutional climate in which vacancy functions as a collectively rational outcome.

This perspective helps explain why repeated fiscal incentives and regulatory adjustments have produced limited behavioural change. When incentives are misaligned at the collective level, additional measures tend to reinforce defensive expectations rather than counteract them. Vacancy thus reflects not the failure of individual motivation, but rather the cumulative effect of incentive configurations that normalise caution, delay, and disengagement within the housing system.

The conclusions of the Lisbon case are consistent with the theoretical framework discussed above, linked to financial rationality, institutional mistrust, and patrimonial logic. In line with studies on financialization promoted by the state [3,7] and on the moral economies of property [36], the data suggest that the withdrawal of owners from the rental market represents an adaptation to regulatory uncertainty rather than an act of pure speculation.

The findings from the LMA case reveal a picture far more complex than the conventional narrative of “empty homes amidst housing crisis” might suggest. Far from being irrational or speculative, withholding properties from the rental market represents a rational withdrawal—a strategic, often deeply personal response to dysfunctional market signals, institutional frameworks, and sociocultural expectations.

Rather than a sign of market inefficiency, vacancy can be interpreted as part of a broader ecology of heritage withdrawal, that is, a constellation of behaviours in which financial caution, legal distrust, and heritage management coexist. This interpretation is in line with the work of Vrantsis [14], who refers to similar dynamics of possessive familism in southern European property markets.

The three primary rationales identified, financial caution, institutional distrust, and patrimonial logic, reflect not only different motivations, but different modes of risk perception. For the economically cautious owner, vacancy is a hedge against weak rental yields and rising regulatory costs. For the distrustful owner, it is a shield against perceived state overreach and legal uncertainty. For the patrimonial owner, it is a means of preserving identity, dignity, and intergenerational autonomy. These rationales are not mutually exclusive. In many cases, they reinforce each other, creating a layered ecology of non-participation.

A further insight from the Lisbon Municipal Housing Charter reinforces this interpretation. Vacancy is driven not by a single mechanism but by coexisting structural processes across the housing stock. Newly built units may remain unused while awaiting sale or long-term tenants, whereas older buildings—often in poor condition or subject to inheritance fragmentation, legal disputes or protected tenancy legacies—are kept offline for years. This duality challenges policy narratives that treat vacancy as a homogeneous category. Instead, it reveals a stratified landscape in which different segments of the housing stock respond to different forms of uncertainty and risk.

Equally important is the temporal persistence of vacancy. Municipal data show that around 80% of derelict buildings have been classified as such for at least five years, and around 20% for over a decade, underscoring the difficulty of reactivating units once they fall out of circulation. Long-term vacancy is reinforced by procedural bottlenecks, from slow administrative classification to the numerous legal exceptions that exempt properties from intervention. These conditions contribute to a self-reinforcing cycle in which the longer a dwelling remains vacant, the harder it becomes to return it to productive use. Such persistence cannot be explained by short-term market fluctuations; it reflects structural fatigue.

Taken together, these insights suggest that vacancy in the LMA is not caused by any single market failure or policy gap, but by robust misalignments across several domains. Economic incentives remain too weak when compared to the perceived risks of tenancy and regulation. Institutional frameworks lack credibility, and their instability amplifies owners’ perception that renting exposes them to unpredictable burdens. Cultural and affective dimensions of property use—including deep-seated patrimonial logics—are routinely overlooked by policy instruments designed through economic or regulatory framings.

From a theoretical standpoint, the LMA case underscores the need to conceptualise housing not merely as an economic asset or regulatory object, but as a socially embedded, historically layered, and symbolically charged good. In Southern European contexts, where property ownership is intertwined with familial security, moral economies, and long-term strategies of intergenerational continuity, vacancy often reflects long-standing social norms rather than opportunistic behaviour.

Furthermore, the findings highlight a central paradox of housing governance: policies aimed at increasing supply may, if perceived as coercive or unstable, deepen withdrawal and entrench vacancy. Measures such as rent freezes, forced leasing, sudden tax reforms or abrupt changes in tenancy law can inadvertently validate landlords’ worst fears and reinforce non-participation. In this sense, the governance environment becomes a generator of risk perception rather than a mitigator. The evidence suggests that institutional distrust operates as a relational and symbolic mechanism, not merely a reaction to specific policies. Echoing Ferreira [18], landlords’ withdrawal reflects a deeper erosion of procedural legitimacy, where policy volatility and administrative opacity translate into moral fatigue and political alienation.

Interpreted through this lens, the Lisbon case illustrates how vacancy emerges within what [30] describes as an incomplete property regime, where ownership entails not only rights but also exposure to institutional uncertainty. At the same time, consistent with [31,32] account of fragmented urban governance, withdrawal reflects adaptation to a policy environment characterised by discontinuity, overlapping reforms and weak temporal coherence. Vacancy thus appears not as a passive residue of dysfunction, but as an active and rational adjustment to the way housing is governed.

This does not mean that regulation is inherently counterproductive. Rather, it underscores the importance of predictability, procedural fairness, and symbolic legitimacy. Landlords will not be compelled into participation through pressure alone. They must also be invited into partnership, with policy frameworks that offer not just incentives, but respect and recognition.

Finally, the case of the LMA points to a broader conceptual shift: rather than seeing vacancy as a purely negative externality, we might understand it as a barometer of institutional health. Persistent vacancy amid high demand signals not only a supply-demand mismatch but a rupture in the housing social contract, a breakdown of trust, reciprocity, and cooperation between private owners and public institutions.

Taken together, these findings point to an interdependent triad of mechanisms (financial, institutional, and cultural) that collectively sustain the persistence of vacancy. This synthesis supports the integrated framework proposed in Section 2, showing that defensive withdrawal is not a deviation from rational behaviour but a culturally rooted adaptation to systemic uncertainty. Although further empirical research is needed to validate these patterns beyond Lisbon, the interpretative model developed here suggests a coherent explanation of how trust, political volatility, and patrimonial culture interact to shape housing outcomes.

6. Limitations and Reflexivity

This study is subject to several important limitations. First, the analysis is based on publicly available summary data from the ALP Homeowners’ Confidence Barometer [2]. Although these barometers provide longitudinal consistency and thematic coherence, the authors did not have access to the raw data sets or socio-demographic variables at the respondent level. This limits the granularity of the analysis, particularly in terms of age, income, and housing portfolio.

Second, although the analysis focuses on the LMA, the ALP survey set is not strictly limited to that region [2]. The barometers include respondents from across the country, which may introduce some heterogeneity in motivations, especially for variables such as urban regulation, market dynamics and exposure to tourism pressures. However, the majority of respondents are based in Lisbon and all the policy measures analysed were first implemented or had a primary impact in the Lisbon context.

Thirdly, this study focuses on small and medium-sized owners, represented by ALP members [2]. It does not capture the perspectives or behaviours of large institutional investors, real estate funds, or international actors, whose presence in the Lisbon market has grown significantly in recent years. These actors often operate on different grounds, including yield optimisation, tax engineering, and portfolio diversification, which were outside the scope of this research.

Although ALP Landlord Confidence Barometers offer valuable longitudinal information on the dynamics of confidence and behavioural attitudes among landlords, they predominantly represent the perspectives of active landlords who continue to participate in the rental market. This introduces an obvious structural limitation as the study does not directly capture the views of landlords who do not let, i.e., those who own additional properties but choose to keep them vacant or use them informally. Understanding this ‘silent segment’ is crucial, as their absence from the rental market is a key mechanism in the persistence of urban vacancy.

Finally, as in any interpretative study, there is a risk of analytical bias. The thematic categories used (financial, institutional, patrimonial) were developed inductively but inevitably reflect the researcher’s perspective. Reflexivity was maintained throughout the study, triangulating the results with multiple data sources and positioning the analysis within the broader literature.

7. Conclusions and Policy Recommendations

This article has argued that the persistence of vacant housing in the LMA cannot be adequately explained by conventional explanations of market inefficiency, regulatory friction, or owner neglect. Instead, vacancy emerges as the result of a multidimensional ecology, shaped by financial rationality, institutional distrust, and patrimonial values.

By introducing the concept of ‘heritage withdrawal ecology’, the article advances the existing literature in several ways. First, it integrates cultural and affective dimensions into economic decision-making structures, showing that property is not only a financial asset but also a symbolic and intergenerational anchor. Second, it reframes institutional distrust as a processual phenomenon, not merely a perception but a sedimented outcome of erratic governance, bureaucratic opacity, and symbolic delegitimization. Third, it brings to the fore the relational and moral logics behind withdrawal, revealing how legal evasion and empathy often coexist in homeowners’ strategies.

Methodologically, the article draws on five years of sequential barometric data to trace the evolution of landlords’ attitudes, demonstrating that withdrawal is neither irrational nor abrupt, but learned, adaptive, and reinforced by political signals over time.

The case of Lisbon illustrates a paradox that extends beyond the local property market. Over five years, evidence shows that landlords’ withdrawal from the rental sector is not only a response to low returns, but a rational adaptation to legal instability, fiscal volatility and symbolic delegitimization. Financialization and regulation, far from being opposing forces, have interacted to produce an environment in which property is both an investment vehicle and a potential liability. This results in widespread “defensive rationality”, whereby landlords hold on to assets rather than putting them into circulation, making vacancy a structural feature of the urban landscape.

The evidence presented in this study suggests that the persistence of vacant housing in Lisbon cannot be fully explained by conventional accounts of market inefficiency or owner negligence. Instead, the findings indicate that vacancy often emerges as a multidimensional and rational response to a combination of financial caution, institutional distrust, and patrimonial values. Within this interpretive framework, what we describe as a heritage withdrawal ecology reflects the ways in which small property owners navigate uncertainty and preserve autonomy within an unstable regulatory environment.

These interpretations should, however, be read in light of the study’s methodological limitations. Because the ALP Barometer data primarily represent active landlords and are not statistically representative of the total population of property owners, the conclusions drawn here are indicative rather than definitive. The patterns identified reveal plausible mechanisms and relational dynamics rather than measurable proportions. Future research using broader datasets and complementary qualitative methods will be essential to test and refine these hypotheses.

Nevertheless, the overall evidence points consistently toward one critical implication: addressing housing vacancy in Portugal will require not only economic or fiscal instruments but also the gradual rebuilding of institutional trust, procedural stability, and symbolic recognition of small landlords as legitimate partners in housing governance. While the data do not “prove” this claim beyond doubt, they strongly suggest that without such trust-based reforms, the structural disengagement of private owners is likely to persist, leaving a significant share of Portugal’s housing stock underutilized.

7.1. Structural Predictability

The need for predictability and risk sharing is also emphasised by representatives of the private sector. ACPS, for example, proposes the creation of an ‘automatic public guarantee’ in rental contracts, managed by the State and compensated via income tax, in order to guarantee the payment of rent in the event of default. Alternatively, it advocates the implementation of simplified judicial mechanisms for evictions, similar to the former “eviction warrant”, with binding deadlines of less than two months. Both proposals are based on a diagnosis that makes it clear that the perception of legal risk is greater than the expected return, which discourages the placing of properties on the market.

When comparing small landlords and institutional investors, it is clear that mistrust is a common condition, but not a uniform experience. For small landlords, withdrawal from the rental market represents a defensive strategy rooted in asset preservation and emotional risk aversion; for institutional actors such as those represented by APPII, disengagement reflects a rational response to an unstable and inefficient governance environment. Although both groups demand greater predictability and legal protection, their preferred paths differ: micro-owners seek procedural safeguards and relational recognition, while developers and investors advocate structural reforms that increase contractual freedom, fiscal stability, and regulatory continuity. An effective housing policy must therefore adopt a differentiated approach that combines security and simplicity for small owners with credibility and long-term certainty for institutional capital. Only by aligning these parallel forms of rebuilding trust can policy restore confidence across the spectrum of private property and activate the housing stock that remains underutilised.

Including such proposals in the political debate does not imply their direct adoption but rather recognises that the actors in the sector themselves offer pragmatic solutions aimed at restoring confidence and reducing legal vulnerability. Such measures, if designed with balance and institutional safeguards, could represent important steps in rebuilding a stable and cooperative contractual environment.

At the heart of the crisis is the lack of legal and fiscal predictability. Longitudinal ALP Barometers [2] suggest that legislative instability now surpasses profitability as the main determinant of landlords’ behaviour. Policies should prioritise stability and predictability over novelty. Introducing multi-year stability clauses in rental legislation—ensuring that contractual and fiscal conditions cannot be retroactively altered—would send a strong signal of reliability. Similarly, tax reform should aim for neutrality rather than incentives, as simplifying tax codes and unifying deductions for small landlords would reduce the perception of discretionary intervention that currently drives defensive behaviour.

7.2. Relational Trust

Rebuilding trust requires more than legal initiatives. The analysis suggest that landlords view the state not as a partner, but as an adversary with unpredictable behaviour. To counter this perception, intermediary institutions are essential. Independent agencies or municipal housing funds could act as mediators, ensuring transparent communication, fair dispute resolution, and protection against unilateral policy reversals. These intermediaries would translate abstract policies into credible practices, restoring relational trust where institutional trust has been degraded.

7.3. Socio-Cultural Recognition

The data also suggest that Portuguese landlords are predominantly elderly and often owners ‘by inheritance’. Their relationship with housing is patrimonial and affective, as well as economic. Policies portraying landlords solely as income-seekers ignore this dimension, thereby alienating them. Measures based on recognition, for example, heritage-sensitive rehabilitation programmes or the symbolic recognition of long-standing small property owners as civic contributors, can rebuild legitimacy. Integrating this sociocultural understanding into housing policy is not a mere aspect. It is more the pragmatic recognition of the moral economy that underpins real estate decisions.

7.4. Institutional Coherence

The case of Lisbon further highlights how successive and contradictory policy packages have eroded credibility. Fragmented interventions, oscillating between punitive taxation and subsidy schemes, signal a short-term vision and amplify uncertainty. A coherent national framework for housing, ideally enshrined in a parliamentary agreement between parties, would stabilise expectations across political cycles. The focus must shift from piecemeal and incoherent responses to the crisis to institutional reliability. Only coherence can transform the relationship between private owners and public objectives from transactional to cooperative.

7.5. Beyond Incentives

Finally, data suggest that fiscal incentives alone are not enough to rebuild lost trust. Trust is cumulative and relational and cannot arise spontaneously. The challenge is not so much to create new subsidies, investing money in the problem, but to ensure that existing promises are kept. This requires transparent monitoring, accessible complaint mechanisms, and political discipline to enforce the rules once they are established.

This article has argued that the persistence of vacant housing in the region of Lisbon cannot be adequately explained by conventional explanations of market inefficiency, regulatory friction, or owner neglect. Instead, vacancy emerges as the result of a multidimensional ecology, shaped by financial rationality, institutional distrust, and patrimonial values.

By introducing the concept of ‘patrimonial withdrawal ecology’, the article advances the existing literature in three main ways. First, it integrates cultural and affective dimensions into economic decision-making structures, showing that property is not only a financial asset but also a symbolic and intergenerational anchor. Second, it reframes institutional distrust as a processual phenomenon, not merely a perception but a sedimented outcome of erratic governance, bureaucratic opacity, and symbolic delegitimization. Third, it brings to the fore the relational and moral logics behind withdrawal, revealing how legal evasion and empathy often coexist in homeowners’ strategies.

Policy responses that focus exclusively on economic incentives or coercive measures are unlikely to succeed without restoring legal stability, symbolic recognition, and administrative coherence. Future research should explore how hybrid models of governance, combining fiscal predictability with the building of trust relationships, can promote re-engagement among small landlords.

7.6. Further Research

Future research should therefore aim to complement barometric data with targeted surveys and mixed-method approaches capable of identifying the profile, scale, and motivations of these owners. This would allow for a more accurate quantification of how many housing units are intentionally retained and the reasons (socioeconomic, emotional, or institutional) behind this decision. Combining administrative data (e.g., tax returns, registration information, or water consumption records) with qualitative interviews could provide a richer understanding of the logic behind defensive withdrawal. Such research would not only refine the explanatory model proposed here, but also strengthen the empirical basis for the development of trust-based housing policies capable of re-engaging owners who do not rent out their properties.