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The house is narrow but handsome, standing straight-backed a full storey above its neighbours. Hundreds of ornate cream-and-blue tiles adorn the façade, rising to the roof. Through the front door there are more tiles, this time arranged along one wall in a mosaic of colourful flowerpots. The winding staircase has restored wooden balustrades; light pours in from the skylight three floors above. Upstairs, two decorators are working on the main bedroom, putting the finishing touches to the wooden shutters that open out onto a stunning view of the river and the immense iron bridge that spans it.

We are in the heart of Porto’s historic centre, an area of narrow stone streets, mediaeval buildings and a five-star hotel. This house will be ready for its new tenants in just a few weeks. Those tenants may be paying as little at €60 a month; a Canute-like attempt by the city’s mayor to roll back the tide of gentrification and bring poorer residents back into the heart of Porto.

Porto has a problem: for more than a generation its population has been leaving. The port closed down, industry moved out or slowly died and finance moved to Lisbon. From a height of 380,000 residents there are now just 235,000. “There was an exodus,” says Rui Moreira, the city’s mayor, with a shrug. The centre was hit hardest. The middle classes moved out to the suburbs. Then, as city-owned apartments became derelict, the poor were encouraged to leave for purpose-built blocks of flats on the city’s outskirts.

By the start of the 21st century the centre was all but deserted. “Those who stayed were those who didn’t have a chance to leave,” says Moreira. That was when Porto’s resurgence began. The city was European capital of culture in 2001, a title that brought in huge European investment. The airport was rebuilt too, attracting low-cost carriers that brought in a wave of mass tourism.

“These things transformed the city,” says Camilo Rebelo, a 42-year-old Porto-born architect. “All the theatres, museums and galleries were rebuilt. Pavements were relaid, trees were planted, everything was redone.” Rebelo is sat in a recently opened restaurant called Brick, which he argues is a symbol of the new Porto.

“Young people want to live in the city,” he says. “I know lots of people of my generation who are buying. These people open design shops, open galleries. Gentrification is completely invading the city centre.”

Rebelo says it with a sense of excitement but up the road at the imposing city hall, Mayor Moreira is more concerned. “There’s nothing wrong with some sort of gentrification. The thing is overdose.” For the past decade, publicly owned buildings have been sold off to private investors, fuelling the boom that encouraged more young people to buy apartments or open cafés. But Moreira’s worry is that the revival of Porto’s historic centre has left too many of the city’s poorer residents priced out.

So unlike mayors of other cities tempted into selling off their housing stock, Moreira has promised not to sell a single council flat. Instead he has set aside around €2m – 1 per cent of his annual budget – to renovate hundreds of derelict apartments in the centre and turn them over to tenants on the council’s housing waiting list. Last year, 548 apartments were redeveloped and handed over to council tenants. This year between 200 and 300 have so far been earmarked or completed. Not all are as stunning as the first we see. Some are far more functional; others have less impressive views. All, though, are in the heart of the city.

It’s a controversial move. House prices here have risen by around 35 per cent in the past two years, the mayor’s office estimates. “We could easily make 10 per cent of our budget [€20m] every year by selling houses,” says Moreira. “If you do that you can build a bridge and lots of mayors like that. But it will kill the city. The city will lose all the flair which attracted people in the first place.”

Porto is littered with derelict buildings. As Moreira takes MONOCLE on a walking tour of the centre, a pigeon flies through the rotting French windows of a once imposing five-storey stone-clad apartment block. It perches for a moment on a rusted balcony before soaring above the skyline. Moreira leads the group up winding streets and down narrow paths, popping in on workmen, painters and decorators as we go. He is greeted warmly by most we meet in the street: hugged and kissed by the baker’s wife, given a sturdy handshake by a bar owner.

But those in Porto who worry about rising rents and growing inequality fear Moreira may merely be tinkering at the edges. In a café a short walk up from the historic centre, João Queirós, a sociologist at the University of Porto, tries to sound optimistic. “I want to believe in these proposals but we have to see some results to believe in the will of the new mayor.”

Queirós is one of those priced out. Smartly dressed in jeans and blazer, he has a good job and can afford a car. But he can’t afford to live in the city. His two-bedroom apartment 10km outside the centre costs €350 a month. “I have a sister living in Porto. She pays three times the rent I pay for an apartment. A lot of people want to come to Porto and live here but can’t afford t0.”

In a shrinking city such as Porto, housing supply shouldn’t be a problem. The issue is how to get those homes and buildings now seemingly abandoned into the right hands. Many of those now derelict in the centre are privately owned. The council doesn’t have the money to buy them, while many of the owners don’t think it’s worth renovating them and putting them on the market. In a country where the minimum wage is €505 a month and youth unemployment is 34 per cent there is a shortage of people who can afford a decent place to live.

Rebelo, the architect, describes a block of 100 apartments built just three years ago. “One family lives there now. One. It’s a phantom structure.” When the apartments were first put on the market the asking price was €200,000 for two bedrooms. “They belong to the banks now,” says Rebelo. “We wait for better days.”

Activists such as Gui Castro Felga would like to see more radical action taken. As she guides a group of tourists on a far-left version of a sightseeing tour, looking at derelict factories and abandoned apartment blocks, she points to a slogan painted on the wall. “Tanta casa sem gente… Tanta gente sem casa!” “So many houses without people... So many people without houses!” These buildings should be reclaimed, says Felga, and handed over to those who need them.

Moreira is more cautious but no less ambitious. “Yes, I think we have the power [to change things]. We have very little excuse. We have budgetary constraints but we can’t complain.”

He is adamant he won’t move people out of the city to the type of depressing concrete developments found on the city’s eastern fringes. These Soviet-style apartment blocks – “warehouses where you stack people”, says Moreira, dismissively – were built in the 1970s and are already in a poor state of repair. It takes almost an hour to reach the centre by bus from here. It feels like another city. The wind rips through the empty roads that link the estate. We meet Eduardo Olivieira, a 54-year-old who was one of those forced to move from the centre 19 years ago. “There were more people, more possibilities,” he says with a sigh.

What Moreira is attempting here is not necessarily the solution for most cities grappling with the issue of gentrification. London, New York and Sydney are all growing, not shrinking like Porto. But the challenge of ensuring the right social mix and keeping the city cheap enough for its poorest residents is one that mayors across the world will recognise.

A degree of gentrification is necessary, Moreira accepts. “You need a change of air and new influences but you have to balance it out. A city is not a jar of marmalade.”

Success will not be a city that grows again. Rebelo believes Porto must stop trying to compete with Barcelona and Lisbon. “Porto should always be a small city. It is for people who come together to melt things.”

Moreira also believes in quality over quantity. He wants the city to be “more comfortable and more interesting. That’s the aim. I know it sounds stupid when politicians talk about happiness but the city must feel happy and at ease with its development.”







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