Stravillia and MOME have joined forces to develop a cost-rental housing model in Portugal, a long-term rental solution where rent values are determined by the actual costs associated with the building, rather than market prices. This model combines real estate development, sustainable financing, building efficiency, and a long-term investment approach. The partnership brings together Stravillia's expertise in sustainability, financing, and carbon, and MOME's knowledge of residential project development.
The cost-rental model aims to create an alternative between state-promoted housing and private development for sale or rental at market prices. In cost-rental models, properties remain in long-term rental and can be owned and managed by non-profit or limited-profit entities, with generated capital remaining within the model to contribute to new operations. This approach is already used in countries such as Austria and Denmark.
Francisco Rocha Antunes, founder and CEO of MOME, stated that Portugal is accustomed to discussing housing as if only two options exist: state-built or market-driven. He emphasized that the cost-rental model offers a different approach. Portugal currently has around 2% of its housing stock in public rental, compared to 20% in Denmark, 24% in Austria, and 29% in the Netherlands.
The cost-rental model takes into account the sustainability of buildings, with characteristics such as energy efficiency, material durability, and maintenance needs playing a crucial role. Stravillia will be responsible for analyzing the carbon footprint of buildings throughout their lifecycle and identifying impact-oriented financing solutions. According to Francisco Neves, CEO of Stravillia, efficient construction, durable materials, and reduced maintenance needs help keep rents more affordable.
The partnership is still in the process of constructing the model and its respective legal and financial framework. The initial stage involves defining the model, studying the legal framework, and structuring financing, followed by project development. MOME emphasizes that cost-rental is not an immediate response to current housing demand, with the first projects potentially taking at least four years to materialize.
Francisco Rocha Antunes highlighted that the cost-rental model is not a matter of goodwill but rather a question of capital cost. He stressed that long-term financing is a central component of the model. The two companies will progressively disclose data on the model as work advances, starting with the financing structure and rental calculation assumptions.
The cost-rental model has the potential to provide a new approach to housing in Portugal, prioritizing sustainability and affordability. The partnership between Stravillia and MOME aims to adapt this model to the Portuguese context, with a focus on long-term investment and social responsibility. As the project progresses, it will be closely watched by industry stakeholders and potential beneficiaries.
Key points
- The cost-rental model aims to create an alternative to traditional housing options in Portugal.
- The model prioritizes sustainability and affordability, taking into account the actual costs associated with building and maintaining properties.
- The first projects under this model may take at least four years to materialize.
