- ~ 6,000 housing units
- 89 buildings
- 621,000 m2 of gross construction area (mixed uses)
- 867,000 m2 of land
- 708 M€ of total private investment
- Locations can be subdivided into operations (or aggregated) to match investor requirements for scale. Operations can be sized from 12M€ to 300M€
- Designs the buildings and local amenities (projects)
- Builds/rehabilitates according to the approved projects
- Manages operations, maintenance and regular conservation works
- Manages the relationship with the tenants
- Collects the rents
- Provides municipal land/buildings for construction/rehabilitation for affordable housing
- Finances the structural urbanization works
- Establishes the basic quality standards for the construction, maintenance, conservation works and customer service
- Promotes the required public tenders and procedures to select the private partners
- Provides research on potential housing demand
- Organizes the demand of tenants based on a lottery procedure, after admission of the respective candidates based on their middle-class income thresholds
- Promotes risk minimization (eliminates uncertainty and spending time on obtaining construction permits, attractive locations,…)
- Promotes institutional initiatives to encourage the availability of financial conditions for investment in affordable housing
- Ongoing partnership contract control/audit
- Sign a lease contract with the private partner
- Pay the rents
- Use the building and facilities according to the law and building regulations
- Long term contracts.
- The private partner can trade his contract position.
- Land investment is not required (use of municipal real properties: plots to build or buildings to renovate).
- A share of the gross construction area (around 30%) of each operation can be leased by the private partner in the free market.
- The ownership of autonomous plot(s) should be transferred to the private partner at an early stage of the operation (just after the construction works are concluded and the respective housing units are rented).
- Plots/buildings will return to the Municipality at the end of the partnership contract.
- Rents annually updated by the Portuguese Consumer Price Index (ICP), without housing, published by EUROSTAT.
- The affordable housing operations are at 7 locations in Lisbon, well served by public transport, local commerce, public facilities and green areas.
- Locations can be subdivided into projects/operations (or aggregated) to match investor requirements for scale. Operations can be sized from 3M€ to 300M€.
- Mix of rent prices: market prices for non-residential units and mix of housing affordable rents.
- Potential demand for affordable housing in Lisbon (estimated >25,000 households for 2016-2019) i.e. about 5 times the planned supply under this program.
- Value-Added Tax (VAT) at 6% may be applicable under certain conditions (see legal models).
- Demand from tenants with middle-income thresholds, mixed age portfolio.
- The private partner is responsible for the usual business risks (construction, infrastructure availability and demand), except the land provision.
- The Municipality minimizes risk (eliminating uncertainty and time spent obtaining construction permits, attractive locations…). Building permits or the respective preliminary feasibility agreement, are issued to the selected private partner/successful bidder at the same time as the adjudication of the partnership contract.
- This is a standard legal contract, regulated by Public Procurement Laws (National and European) and by contract
- The land and buildings involved in the operation are transfered in a lease/hold model during the concession period.
- Usual private permits' obtaining procedures for Affordable Housing operations are not applicable.
- The key points of the presented business models are subject to adjustments that are deemed necessary in each project, in order to ensure their economic and financial viability. Therefore, the award will include a possible negotiation with the interested parties/bidders. The negotiations will also consider possible factors for risk minimization.
- If there are economic and financial advantages, the concession and surface rights models presented may be combined in a mixed model.
- The indicated percentages of the IRR are merely estimates and are not legally or contractually binding.