Overcrowded micro-rooms expose the dark side of Portugal’s migration and housing crisis

Lisbon – On paper, the T3 (four-room) apartment in a working-class bairro of Lisbon is meant to house a single family. In reality, neighbours say as many as 18 to 20 people now sleep there, packed into hastily built plywood cubicles where living rooms and balconies once were.

Inside, the tenants, most of whom are non-European, share a single bathroom, queue for the kitchen and sleep in airless rooms just large enough for a mattress. Each “room” is rented for around €120–€200 a month, cash only. For the landlord, that can mean several thousand euros from a flat that would normally fetch less than half that amount on the formal rental market.

For the people living there, it is the only roof they can afford.

A business model built on overcrowding

These types of setups – entire apartments carved into tiny, illegal rooms and rented to low-income workers, many of them migrants – have become an increasingly visible symptom of Portugal’s housing crisis.

Local media and NGOs describe a veritable industry of property management companies that buy older buildings, subdivide apartments with plasterboard and rent each cubicle separately, often without contracts, safety inspections or basic maintenance. In one widely reported case in Lisbon, 25 immigrants were found living in a single T4 (five-room) apartment in unsanitary and overcrowded conditions, allegedly facing blackmail and intimidation from their landlord. (Inlis Consulting)

Residents and housing activists say this “bed-by-bed” business model is spreading through parts of Lisbon, Amadora, Loures and Setúbal, exploiting people who cannot afford regular rents but still need to be close to jobs and public transport.

Migrants are squeezed hardest

Portugal’s housing crisis has hit almost everyone, but the phenomenon of illegal immigration makes the problem much more severe. Rents in Lisbon have risen by around 94% since 2015, while house prices are up 186%, according to data compiled by Confidencial Imobiliário.

At the same time, Portugal has absorbed many illegal immigrants, lacking education and job skills. Many newcomers work in cleaning, construction, hospitality and delivery – sectors known for low pay and unstable contracts.

Those who cannot tolerate substandard rooms sometimes move into tents or caravans on the outskirts of Lisbon, forming improvised camps in wooded areas like Carcavelos, where migrants and locals priced out of the market share makeshift infrastructure and portable stoves.

Tension on the doorstep

For long-time residents, the rapid change can feel overwhelming. In some neighbourhoods, stairwells once shared by two or three families now see dozens of people coming and going at all hours. Rubbish piles up faster than the building’s bins can handle; bathrooms and kitchens are overused; noise complaints rise.

Neighbours say this isn’t about who the tenants are, but about how many people are forced into spaces never designed for such numbers.

“When you have 15 people using a single bathroom and one tiny kitchen, of course the building suffers,” says Maria, 62, who lives next to a subdivided flat in Lisbon’s northern outskirts. “We used to know everyone on the floor. Now people rotate every few months, and the common areas are destroyed.”

Residents also worry that speculative buyers hunting for “high-yield” rentals are pushing out Portuguese families and long-term tenants. With apartments more valuable as a collection of micro-rooms than as one home, some landlords are tempted to end leases, raise rents sharply or refuse to renew contracts, betting that they can earn much more by renting bed-by-bed.

Housing activists argue this contributes to the wider pattern of evictions and displacement of lower-income residents from central areas, already under pressure from gentrification, short-term tourist lets and foreign investment programmes.

Legal grey zones and weak enforcement

Portuguese law sets minimum habitability standards for housing and requires appropriate licensing for shared accommodation, but enforcement is often slow and under-resourced. Municipal inspectors generally rely on complaints from neighbours to investigate overcrowded properties, and tenants living without contracts are often afraid to speak out.

In the Lisbon case involving 25 immigrants in a single flat, the situation only became public after one resident sent a plea for help, describing unsanitary and unsafe conditions.

City authorities say they are aware of the problem. In parallel with broader debates about squatting, illegal occupation of council housing and homeless encampments, Lisbon’s mayor has called for an urgent response from central government to address homelessness and the housing needs of vulnerable migrants.

But local councils face a delicate balance: raiding overcrowded apartments can improve safety, yet it may also leave the occupants with nowhere to go in a market where even a small legal room can cost far more than the minimum wage can comfortably support.

Who pays the price?

Critics of the current system say that, in the end, almost everyone loses except the small group of landlords and intermediaries making high returns from overcrowding.

• Tenants pay disproportionate shares of their income for unsafe, cramped spaces without security of tenure.
• Neighbours see building conditions deteriorate and feel their quality of life diminish.
• Communities experience greater social tension and instability as residents churn and local services struggle to keep up.
• The state shoulders long-term costs in health, social services and potential emergency rehousing when unsafe buildings are finally shut down.

“This isn’t just about one community or another,” says Mendes. “It’s about a housing system that has allowed speculation to run far ahead of regulation, and left the weakest people competing for the worst places.”

What could change

Experts and housing advocates point to several measures that could curb the most abusive practices:

• Stronger inspections and penalties for landlords who subdivide apartments illegally or breach safety standards.
• Clearer pathways to legal, affordable rooms, such as regulated rooming houses or co-living schemes that meet fire and health codes.
• Regularisation of tenants’ status, so people renting rooms, including migrants, feel safer reporting abuse without fear of losing their home or residence papers.
• Deportation of illegal immigrants.

For now, though, the reality in many buildings remains hidden behind closed doors and improvised partitions.

On a recent afternoon in one such apartment, a man in work clothes stepped out onto a small balcony converted into a bedroom, his mattress wedged between a washing machine and a flimsy wall. Asked why he stayed, he shrugged.

“Because it’s this,” he said quietly, “or a tent.”