By Jenny Barchfield
LISBON, Oct 19 (Thomson Reuters Foundation) - Carla da Cunha has a tight budget with which to find a new home in Portugal's newly-fashionable capital, Lisbon, or else she and her two children could be out on the streets.
She has been unable to renew the lease on her 20-square-metre flat in the sought-after Alfama neighbourhood after it was bought by a company offering short-term rentals to tourists.
"I was born in Lisbon and raised in Lisbon, and now there's just no place for me in Lisbon," said da Cunha, who relies on a monthly government subsidy of 485 euros ($575) to top up her earnings selling handicrafts to tourists.
"Poor people like us are now seen as vermin, vermin that have to be eliminated and pushed out of town."
As Lisbon has transformed from a sleepy backwater to one of Europe's hottest tourist destinations, critics say locals are being squeezed out of their own city by an international elite.
Pop singer Madonna and film stars Monica Belluci and Michael Fassbender are among a growing number of foreigners said to have bought property in Lisbon in the past year.
Rents have risen briskly as demand rises and landlords shift to lucrative short-term rental services like Airbnb.
Locals earning Portugal's monthly minimum wage of 557 euros say they are being priced out of neighbourhoods that they have lived in for decades. Da Cunha, who was paying 220 euros a month, said she cannot afford anything on today's market.
MOST FASHIONABLE ON EARTH
For 71-year-old António Melo, the choice to fight to stay in the Alfama apartment that he has rented for a decade was easy.
He cannot find a place near his doctor and other services in the historic district, with its narrow cobbled streets and pastel buildings, for anything close to the 277 euros a month he currently pays.
He is defying the eviction notices that started arriving after his building was bought by a tourist rental company.
"If things continue like this, pretty soon you won't have a single Portuguese person living here," he said, adding that souvenir shops hawking porcelain sardines and cork handbags have replaced local pharmacies, bakeries and grocery stores.
Portugal was named last month as Europe's best destination for expatriates to live in 2017 and the world's best for quality of life, in a survey published by social network InterNations.
House prices in Lisbon have risen by about 25 percent since 2011, according to Confidencial Imobiliário, a company that tracks real estate data.
Patrícia Barão, who heads JLL real estate firm's residential team in Lisbon, said the wave of foreign buyers is like nothing she has ever seen.
"Last year was our best year ever, and this year is on track to be even better," she said, adding that six out of 10 of her clients were foreign, with Brazilians, French, Turks and Chinese topping the list of buyers from 43 nations.
Portugal's real estate boom and tourists flocking to its sandy beaches and historical castles have helped drive recovery after an economic and debt crisis that started in 2010.
"It's nothing short of a miracle," said Hugo Ferreira, executive director of the Portuguese Association of Real Estate Developers and Investors.
"The stars aligned, and today Portugal is one of the most fashionable places on the planet."
COLOUR AND LIFE
Lisbon old-timers say the property boom, fuelled by tax breaks for foreign investors, has displaced tens or hundreds of thousands of people in western Europe's poorest country.
In an open letter to the government, the campaign group Morar em Lisboa or 'Living in Lisbon' said local communities that give colour and life to the city are on the verge of collapse and called for rent controls to be introduced.
It said speculation has been driven by a golden visa programme, which gives Portuguese residency to foreign buyers who spend at least 500,000 euros on real estate, allowing them to travel freely within Europe's 26-country Schengen zone.
More than 4,400 foreigners, overwhelmingly Chinese investors, have acquired golden visas since in 2012, government data shows.
Portugal's Socialist government created the position of Secretary of State of Housing in July, appointing Ana Pinho, an architect, who has expressed reservations about gentrification.
Pinho's office declined an interview request but said she would soon unveil a new housing strategy.
Developers say foreign investors are doing Lisbon a service by renovating a huge number of dilapidated buildings which poorly remunerated landlords allowed to crumble.
But campaigners are urging the government to rethink reforms which abolished decades-old rent controls to stimulate the rental market.
"By pushing locals out, they're killing the goose that lays the golden eggs," said Luís Mendes, a geographer with the University of Lisbon, who supports Morar em Lisboa.
"Who's going to want to come to a city that's been completely stripped of the very character that drew the tourists and investors in the first place?"
($1 = 0.8442 euros)
(Reporting by Jenny Barchfield , Editing by Katy Migiro. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking, property rights, climate change and resilience. Visit http://news.trust.org)
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