Loulé Council has issued a stark warning over the Algarve’s housing crisis, describing the situation as both a “housing emergency” and a “human emergency” and calling for exceptional powers to allow municipalities to make homes available more quickly.
In a strongly worded statement released on Friday (October 16), the municipality said illegal construction and makeshift housing are multiplying across the region, while workers – including some employed to build homes – are themselves living in overcrowded containers.
“This is not a forecast or a scenario,” the council said. “It is happening now, in full view of everyone, and everyone pretends not to see.”
At the heart of Loulé’s argument is the speed at which the municipality and wider Algarve have grown.
Loulé’s resident population increased from 70,266 in 2011 to 94,447 in 2025, a rise of more than 24,000 people. Over 13,000 of those residents were added since 2021, according to Pordata figures.
The council says average housing prices in the municipality have risen by around 75%, while public tenders for housing construction are sometimes attracting no bidders because official reference prices no longer reflect real building costs.
“For those who live from their work, having a home in the Algarve has become an impossibility,” it said.
‘The Algarve of 2007 no longer exists’
Loulé places much of the blame on planning rules it says have failed to keep pace with the region’s transformation.
The Algarve Regional Spatial Plan (PROT Algarve) currently in force was approved in 2007 and provides the regional framework with which municipal planning instruments must comply.
“The PROT Algarve was approved in 2007, for an Algarve that no longer exists,” the council said.
It argues that rules designed around limiting development almost two decades ago are now making it too difficult for councils to respond quickly to housing shortages.
The result, it claims, is that housing which cannot be delivered legally and in a planned manner is instead appearing “in a precarious and illegal way”.
Mayor Telmo Pinto went further, challenging the balance of power between elected councils and the regional and national bodies whose opinions are required in planning decisions.
“The mayors are elected to solve problems, but they do not have the power to decide.”
The council argues that municipal master plans can become trapped for months or years in consultation and approval procedures involving bodies whose officials are not directly accountable to local voters.
“Every opinion that drags on is a family that remains without a home,” it said, before making its most provocative assertion: “In territorial matters, there is no democracy in Portugal.”
‘We need bold decisions’
Pinto said extraordinary circumstances now require a more decisive response.
“We need bold decisions. We need to decide now. We need to act for people, for the economy and for the safety and future of our region,” he said.
“In Loulé we act, but we act only within an inadequate legal framework, with powers that are out of step with the real needs of the territory and its people.”
The council says it already has housing operations involving more than 100 homes underway and is continuing to purchase properties for public housing.
Earlier this year it launched a market consultation for the potential acquisition of up to 100 completed homes under its 2019-2032 Local Housing Strategy, while another consultation to acquire ready-to-use properties was published in September.
But it argues municipal action alone cannot keep pace with the scale of demand.
Five demands
Loulé is now calling for the urgent completion of the ongoing revision of PROT Algarve, adapted to the region’s current population pressures.
Secondly, it wants a temporary exceptional regime allowing municipalities to release land for affordable housing, with short and binding deadlines for authorities required to issue opinions. If those deadlines expire without a response, the council wants approval to be deemed granted.
It is also demanding effective enforcement to end workers being housed in containers – accompanied by proper alternative accommodation – and a dedicated financing programme for regions experiencing exceptional population growth, using construction reference prices that reflect actual market costs.
Finally, Loulé is calling for a wider reform of the State which would give elected local authorities greater powers, resources and autonomy over their territories.
The council linked its warning to recent housing protests elsewhere in Portugal and Spain, referring to tents appearing in Lisbon, Madrid’s Puerta del Sol and this week’s protest camp in Porto.
It asked whether authorities intended to wait until similar scenes appeared in Faro, Loulé or Portimão.
“The patience of those who work and have nowhere to live has run out,” the municipality said.
Its final warning was equally blunt: “Either the State wakes up now, or it will wake up too late. The Algarve cannot wait any longer.”