The Funchal Municipal Assembly approved today, by majority, the temporary suspension, for a maximum period of six months, of issuing licenses for local accommodation in residential buildings.
The measure was approved in a plenary session of the municipal assembly, with abstention from the CDU and favorable votes from the majority PSD/CDS-PP, PS, MPT, and BE.
The proposal had already been approved in the Funchal City Council meeting on August 20, with favorable votes from the majority PSD/CDS-PP and abstention from the Confiança coalition councilors, led by the PS, who raised “serious doubts” about the legality of the measure.
In today’s meeting, the last of the 2021-2025 legislative session, despite the PS voting favorably, the socialists and the majority PSD/CDS-PP exchanged accusations and criticisms.
The PS, through deputy Sérgio Abreu, stated that the current executive “took four years to understand the local accommodation problem,” a criticism refuted by PSD deputies and the municipal executive’s president.
Cristina Pedra countered that, under PS-led administrations, local accommodation requests were not rejected, whereas in the last four years about “one third” faced rejection.
The mayor indicated that this year alone 451 license application requests have been rejected (48% of total), also noting that in 2022 the municipality recorded 204 rejections, in 2023 there were 409 refusals, and last year 640 requests were rejected.
Meanwhile, non-executive councilor Miguel Silva Gouveia, who was president of the municipality in 2020, clarified that 109 local accommodations were licensed that year.
On August 20, at the end of the Funchal City Council meeting, the executive deemed it essential to “conduct extensive mapping of the areas to identify those that are oversaturated,” as well as draft a regulation for local accommodation.
The mayor, Cristina Pedra, assured at the time that a “survey and diagnosis” of the AL situation in the 10 parishes constituting the municipality is underway, which will allow the identification of containment zones and liberalization zones.
The decision to temporarily suspend issuance in collective residential buildings came following the disclosure of licensing of local accommodation units in an apartment block built with public support by the Cortel housing cooperative, a situation reported in July by the Confiança coalition.
On Tuesday, at a press conference, Funchal City Council presented the conclusions of the investigation process undertaken and announced it will report Cortel housing cooperative’s non-compliances to the Public Prosecutor’s Office, revoke the tax benefits granted to it, and withdraw the local accommodation licenses granted to it.
The matter concerns a development named “Residências Cortel I”, built with public support, with three apartments licensed for local accommodation (AL).
In a statement, the City Council stated that “all legal and regulatory procedures were correctly followed, with the proper instruction and approval of the process, the granting of the expected tax benefits, and the registration of the procedure in a public City Council meeting held on January 26, 2023.”
In the municipality of Funchal, the most populous in the Autonomous Region of Madeira, with 108,129 inhabitants (official data referring to 2024), the local accommodation sector represents about 9,000 beds and 6,000 rooms, with the capacity to welcome 15,000 guests.
Between 2022 and 2025, there was a growth of 182% in the number of registrations, with the supply of beds in AL already representing more than 25% of Funchal’s hotel capacity.
