Among the potential solutions to the growing housing shortage, especially affordable housing, is the adoption of modular and industrialized construction. This approach not only accelerates the construction process but also reduces costs, making it an attractive option for both public and private housing initiatives. In Portugal, several examples of completed projects, such as hotels and university residences, showcase the viability of this model.

However, despite its clear potential, the widespread adoption of industrialized construction in affordable housing projects has been slow. One of the main barriers is the lack of a comprehensive strategy and cultural resistance to this innovative approach. Public bodies and municipalities are often unprepared or unresponsive in public housing tenders, a situation exacerbated by the inefficiencies of the Housing and Urban Rehabilitation Institute (IHRU), the entity responsible for managing public housing. The new leadership of IHRU has acknowledged this issue, with delays in housing projects funded under the Recovery and Resilience Plan (PRR) often being attributed to the institute’s slow response times.

At the same time, the shortage of skilled labor makes traditional construction methods increasingly inadequate. According to experts, the only way to overcome these challenges is by embracing industrialized processes, which offer a faster and more scalable solution compared to conventional methods. This shift in paradigm is necessary to meet the urgent housing demands in Portugal.

Despite the potential of industrialized construction, excessive bureaucracy remains a significant hindrance. Delays in licensing, high taxes, and the lack of a consistent housing policy all contribute to the slow uptake of modular construction. These challenges must be addressed for the sector to truly benefit from industrialized solutions. For instance, public procurement processes often prevent the use of modular construction due to rigid requirements in the public contracting code. When tenders are open, the projects are often not designed with modular construction in mind, which makes it difficult to meet deadlines using this method.

Nevertheless, there are signs of progress. Some municipalities have already begun to incorporate modular construction solutions in their affordable housing tenders, where the project is delivered with complete designs, including modular construction methods. The potential is clear—if the sector were to fully embrace industrialized construction, it could dramatically increase the number of affordable housing units built each year, helping to resolve one of Portugal’s most pressing social issues. Ultimately, stronger collaboration between the public and private sectors, along with legislative adjustments, are key to unlocking the full potential of this construction model.

Author

Paulo Lopes is a multi-talent Portuguese citizen who made his Master of Economics in Switzerland and studied law at Lusófona in Lisbon - CEO of Casaiberia in Lisbon and Algarve.

Paulo Lopes