Urban Rehabilitation and Tourism: Lessons from Porto (2010–2020)

Abstract

Cities experience rapid growth and transformation. Over the past decades, change has been particularly intense and complex, associated to globalization, spatial compression and temporal acceleration. Within this context, the EU funds introduced new urban rehabilitation dynamics that made a city center more and more attractive. This, alongside the growth of international tourism, has increased the number of city users, which has furthered the discussion on the relation between the physical, economic, social and environmental intervention of the city, as well as the debates on the positive and negative impacts of tourism in cities. With that in mind, we look at the intense change that occurred in the city of Porto, Portugal, in the period from an intense economic crisis to the COVID-19 confinement. We consider changes in buildings, retail and policies to conclude that a neoliberal attitude favoured a tourism-led and sustainability blind gentrification. Based on a survey and analysis of 50 urban rehabilitation initiatives in downtown Porto and on the analysis of recent public policies, we discuss the relation between urban rehabilitation and tourism in Porto, and therefore the effectiveness of public policies and its contribution to sustainable urban development.

1. Introduction

Tourism has become an increasingly important sector for many urban areas, providing economic opportunities and contributing to the revitalization of previously neglected neighborhoods [1]. Urban rehabilitation, the process of restoring or renovating existing urban areas, can serve as a catalyst for tourism growth by creating a more attractive and accessible destination for tourists. By improving the aesthetics and functionality of urban spaces, rehabilitation projects can enhance the appeal of urban areas to both tourists and locals [2,3]. This can lead to an increase in tourist spending, as well as increased investment in the area from businesses seeking to cater to the growing tourism market. Additionally, the presence of tourists can reinforce the need for further rehabilitation, creating a virtuous cycle of investment and improvement [1,4].

However, there are also potential downsides to the relationship between urban rehabilitation and tourism growth. Rapid tourism growth in rehabilitated urban areas can lead to gentrification and the displacement of long-time residents, as property values and rents increase. Additionally, the focus on attracting tourists can lead to an over-reliance on tourism as a source of economic growth, potentially obscuring other important issues

Facing urban areas, such as environmental sustainability or social equity. Therefore, the international literature [1,3,4,5,6] highlights that it is important to carefully manage the relationship between urban rehabilitation and tourism growth to ensure that both contribute to sustainable and equitable development in urban areas.

This paper works on the idea that tourism has been a major driving force in the transformation of cities for centuries. On the one hand, tourism is expanding to an increasing number of cities, including Porto, a particular destination of recent growth in the second decade of the 20th century. On the other hand, the rehabilitation approach, directed to the “exiting city”, extends from isolated places or buildings to extended zones and blocks of real estate through different types of interventions, which challenge the elasticity of the concept of rehabilitation itself.

The intense transformation that we seek to address here by associating rehabilitation with the principles of sustainability, is particularly felt—and welcomed—as it occurs in the post-2008 crisis period, thus coinciding with an increase in the arrival of foreign investment and the application of public policies of a neoliberal nature to tackle the financial crisis [7].

This study, using the municipality of Porto (Portugal) as the study area, poses the following research question: is the relation between urban rehabilitation and tourism being well-managed in Porto, and therefore contributing to sustainable urban development? This research question has generated several subsequent questions, such as the following:

• Q1. Which were the main architectural intervention in the city centre of Porto (Baixa)?
• Q2. What were its effects on the economic and social organization of the city?
• Q3. Are the sustainability principles evident in the urban public policies in Porto?

In order to address these questions, the text is divided into several parts. Between this small introduction and the conclusion, a theoretical context is provided, which helps us to understand the particular case of Porto, addressed in two parts: the explanation of the situation at the beginning of the 21st century and the specific case of the changes occurred in the city centre after 2010. Section 3 presents the materials and methods, sharing some characteristics of Porto’s recent dynamics. Section 4 presents the results, and Section 5 discusses the major lessons from Porto.

2. Theoretical Background

The discussion on urban sustainable development is not recent, and it has been reinforcing the role of academia in planning policy and practice. In this context, we highlight the study of the interaction between urban rehabilitation and tourism, considering the following topics.

2.1. Rehabilitation: The Buildings and the City

The debate on the value of historic buildings and the traditional city was particularly relevant in the second half of the 19th century. Among other publications, Viollet-le-Duc, John Ruskin and Camillo Sitte’s extensive work is considered referential in the analysis of historical buildings and the value of the architectural and urban image of the past, respectively [8,9]. However, it was only at the beginning of the 20th century, after the Great War of 1914–1918, that an international summit was held with the specific goal of debating and regulating the conservation of architectural and urban heritage. The meeting took place in October 1931 in Athens, with the representation of 20 countries, and concluded with the approval of an International Charter for Restoration.

Later, at the International Congresses of Modern Architects (CIAM), the 1931 principles were replaced with a more modernist view, approved as the Athens Charter of 1933, which included the basic criteria of what was to be considered as modern restoration, while casting a negative light on the conservation of the traditional city.

Thirty years later, in the midst of the economic development experienced in the post-World War II period, these principles are considered outdated especially for devaluing the traditional city, but also for disregarding the buildings from the 19th and early 20th centuries. It is within this context that concerns for commonplace, or vernacular, architecture and landscape arise, in line with Riegl, Boitio e Giovanonni [10] and overseas work [11].

The attitude that predominates in the mid-20th century is one of renovation, connected to the goals of development and progress, and a look at the old city as a problem. However, the voices of some critics of such an attitude, such as Jane Jacobs (1961) [12], the evident failure of modernist solutions (as the residential area of Pruitt-Igoe, in St. Louis, or Sarcelles, in Paris) and the controversial demolition of several historic buildings in the early 1960s (such as the Maison du Peuple in Brussels, the Penn Station in New York and Les Halles in Paris), fueled the debate on the concepts of safeguarding, preservation and restoration. This was discussed in 1964 at the Second International Congress of Architects and Specialists in Historic Buildings in Venice. Some of the principles established go beyond the safeguarding of monuments by also including the surrounding urban spaces, advocating on its article 6 that “the conservation of a monument implies preserving a setting which is not out of scale”, that “wherever the traditional setting exists, it must be kept”, and that “no new construction, demolition or modification which would alter the relations of mass and colour must be allowed” [13]. In its aftermath, the ICOMOS—International Council on Monuments and Sites—is created by the United Nations.

However, the charter does not establish principles for the safeguarding of historical centres. In that direction, the Bologna Plan of 1969 would be a reference as an urban conservation effort to maintain the resident population by deterring action “…from the economical and private real estate mechanisms, by refusing the replacement of buildings and imposing an almost absolute respect for the morphotypes of the historical city and its architecture” [14]. This and other planning experiences resulted in the drafting of several documents in international summits and the emergence of rehabilitation as the central concept in public policy for the city historical center.

In the Amsterdam Charter, in 1975, the notion of “integrated conservation” is mentioned. Restauration and requalification also become stronger words in public policies, as ICOMOS begins to classify and promote the protection of urban areas considered of special value. Heritage becomes associated with the concept of “urban ensemble”, in which the notions of “heritage” and “monument” intertwine. It is also recommended to apply a common integrated conservation policy aiming to integrate the architectural heritage into social life, counteracting social exclusion or segregation in the old city (gentrification), and the displacement of populations. The document also stresses that integrated conservation is not necessarily more costly, making it possible to maintain and transmit traditional artistic and craft techniques, which are disappearing. It is also following the Amsterdam meeting that the notion of what is understood today as rehabilitation is established, through the possibility of adapting the internal structures of old residential buildings to the contemporary needs and requirements of use, thus avoiding the loss of essential architectural and urban values [14].

The La Valetta Charter, from 2011, and the recently updated ICOMOS charter of cultural tourism deepens the lines of previous documents, especially those of a more formal nature, by arguing that new interventions in the old city should be adequate (in spatial, visual, intangible and functional terms), while taking into account the respect for historical values, patterns and strata. While opening the doors to contemporary interventions, the new architecture must be consistent with the spatial organization of the historical centre and respect its traditional morphology and scale.

2.2. Rehabilitation and Other Re’s

The debate and the intervention in the city centre have seen a new approach in recent decades, as financial and economic power weighted dramatically in political decision and urban transformation in a large number of cities. Such has been especially evident in the older and more visitable areas of touristic cities where international interest in real estate has become relevant in the urban economy and floating populations have overcrowded residents [15,16]. In this transition, the historical city is treated more as a product to be sold and a pole of consummation rather than a place or a network of places where people live, with housing becoming the key domain for funding [17].

Under a neoliberal regime, the existing city architecture and urbanism are transformed to appease both the investor and the visitor. In some cases, there is a “Disneyland effect” [18,19,20,21] with a pseudo historical reference in the approach to buildings and places, and a clear preference for bright colours as well as façade-centred intervention. This is translated into a shift in urban and social landscapes, as well as into cultural homogenization [22]. Meanwhile, urbanism tends to transform public space in multiuse platforms, where the area dedicated to privately explored terraces is important. Attractions play a relevant role, and not only are monuments essential nodes of the “best treated” streets and squares, but also shops, cafés and other elements that are sold/marketed, especially those that may be associated with some relevant film, book or curious story. In this “attractive city,” entertainment plays a relevant role as both world-scale and local events are relevant in creating the sensation of joy and dynamism that one may also associate with a thematic park.

In this context, urban rehabilitation—understood as a form of integrated intervention on the existing urban fabric, in which urban and real estate assets are maintained, either entirely or partially, and modernised through works of refurbishment or improvement of their urban infrastructure systems, equipment and urban or green spaces for collective use and works of construction, reconstruction, expansion, alteration, conservation or the demolition of buildings—is no longer dominant. Other concepts and models of urban intervention become more important. It is the case of urban renovation, renewal and regeneration. Urban renovation was initially associated with large demolition operations and the new construction or development of central areas or large housing blocks. It consists of an intervention on the existing urban fabric and/or real estate with complete or partial replacement.

Urban renewal refers to a set of plans and activities designed to upgrade neighbourhoods and suburbs in a state of distress or decay. Urban renewal programmes address the physical aspects of urban decay, seeking to solve problems such as deteriorating housing units, poor physical infrastructure and poor community services [23,24]. It can be distinguished from urban regeneration [25], as urban regeneration has a wider range, being associated with a more holistic policy intervention that incorporates physical, social and environmental regeneration [26] guided by strategic urban development goals.

After the La Valetta Charter and with neoliberalism, the possibility of introducing contemporary elements into the historical city has become increasingly acceptable, which allows the city to feature elements of the present in the future. In addition, the works of renovation (or reconstruction of the new) and façadism multiply, in some cases with the adoption of the pastiche replica, the “make-believe”, to deceive the visitor, in the construction of an attractive city, that is lively and able to maximise profit [27].

This is the case in Porto, where this approach is popular, but there are two phases. In the first decade of the century, urbanism was especially related with regeneration and integrated projects. Several initiatives of this kind were promoted, especially in the areas of Morro da Sé (an important part of the historical centre) and Mouzinho-Flores (in the connection between Ribeira and Baixa, the city centre), in which the requalification of the physical space (clearly dominant) was articulated with actions of an economic and social nature [28]. In a second phase, more recently, many private actions have been put in place, with the integral purchase of buildings (many of them historical) and their functional renovation and conversion (into high-end housing or accommodation units), mainly associated with modernisation and façadism interventions [7]. This has a political correspondence. In the first phase, which goes back to 1974, the city was practically always governed by the centre-left and the structure with responsibility for rehabilitation in the historical centre (CRUARB), later extended downtown, adopted the Bologna model, keeping the residents and a dependency from public investment. CRUARB was extinguished in 2003 and SRU Porto Vivo, created in November 2004 had a dramatically different approach, trying to attract and help investors to rehabilitate the housing stock.

2.3. Tourism, Overtourism and Touristification

Tourism, considered within this research as the set that includes the trips of people to other cities and countries, the activities they carry out in the destination places as well as their expenses [7], has been increasing over the past decades. Recent data also points out that 2022 registers a complete recovery from the COVID-19 pandemic effects. Countless scientific papers have been produced around the concept of “overtourism”, trying to clarify its rather ambiguous approach. Due to the fact that there are no instruments, nor indices to clearly define it, “overtourism” operated, in some cases, as a kind of “horn of plenty” where many ideas and proposals, many problems and concerns would be placed [29]. More recently, the concept was defined by several authors, based on the process that occurs in tourist destinations of varying nature, where residents or visitors feel there is an excess of tourists and that the quality of life, or the quality of the tourist experience, has deteriorated beyond a point of reasonableness. This concept opposes the one of sustainable tourism (or “responsible tourism”, in Goodwin’s words), in which tourism does no harm. Quite the opposite: it benefits the destination, so that it may improve both for those who live in such destination and those who visit [30].

The phenomenon takes on particular contours in contemporaneity, but it is not new at all. In 1877, while on holiday in the Swiss Alps, actor Fanny Kemble stated: “The present mode of travelling detracts much from its pleasure, in consequence of the vast crowds of people one meets in every direction”. At the beginning of that century, in Rome, the stairway of the Trinity Church was known as “Il gueto degli Inglese”, due to the high number of British tourists occupying the site [31].

However, in the last 20 years, the increase in the number of trips and tourists has been extraordinary, so the concept of “overtourism” has necessarily gained other contours, thus promoting the conceptualization of the process and a widespread awareness of its impacts [32]. In fact, with the increase in the world’s population, the significant drop in air transport prices and the globalization of the tourist market, certain destinations, in particular urban areas served by international airports, have received a very important number of visitors throughout the year, especially under the “city break” modality. This “explosion” is also justified by the broadening of the middle class and, consequently, by the increase in the number of people with availability to travel. South-East Asia, in particular, is one of the main drivers of such growth, both as the issuing market as in the role of destination that the many cities comprising it now play [33].

There are more tourists in more destinations also thanks to technological development, both in transport infrastructure and in global communications. These transformations facilitate the travel, make the use of leisure time more flexible and give greater freedom in the choice of destination and in the organization of their journey. In this respect, particular emphasis should be placed on the changes occurred in the digital field. On the one hand, the digital environment and the world wide web enabled the development and implementation of an aggressive territorial marketing strategy targeting the supply. On the other hand, regarding demand, the tourist has gained incomparably easier access to detailed information in any destination, and connection to a structured offer at lower prices both for accommodation and catering, thus facilitating the acquisition of these services and significantly reducing the number of intermediaries, as in the case of local lodging, of which Airbnb is an example. Another fundamental change is the rapid proliferation of low-cost airlines and high-speed trains, which have reduced the travel cost and/or time to almost the entire planet. All in all, any location has become a destination [33].

This growth has been proved very difficult to contain and its management is often the target of extreme and irreconcilable opinions. On the one hand, visitor control (almost) always triggers resistance from private companies that depend on the activity and whose primary concern is to ensure an increasing number of tourists in order to immediately multiply their income. On the other hand, residents (at least part of them) take their stand according to the issues resulting from the arrival of a high volume of tourists, which is usually reflected in a general increase in prices, traffic, excessive occupation in public transport, pollution and noise, real estate pressure, which results in their expulsion, the provision of services focused solely on tourists, the loss of community ties, among other more or less perverse effects [34].

As to policies and land planning, the standard has been to place the growth in the number of visitors first and only then the investment in sustainable development, thus raising a debate on the capacity of a destination or its resilience against “overtourism” [33]. However, one should always consider the more or less widespread opposition of the private sector, whether in aviation, cruises, hospitality, catering or any other area directly involved in tourist activity.

Such is the case of Porto, where, after decades of difficulty in attracting investment to the oldest part of the city, tourism was seen as a “saviour”. Therefore, and also because of the weight of real estate interests and the municipal political inclination, only very recently concerns arisen regarding the sustainability of the tourism specialization/dependence model.

In fact, until now, neither the public interest nor the sensitivity of the companies have avoided the demolition and landfilling of a significant volume of materials from the building industry, often carried out in the name of urban rehabilitation. The heavy vehicles that ensure the exit and entry of construction materials have been, for a long time—and still are today—a source of intense noise and air pollution, in addition to the use and transformation of natural resources and the creation of large amounts of waste, while cranes disrupt the landscape. Meanwhile, aircraft cross the skies and pollute the atmosphere, and tourists test the limits of water and sanitation infrastructure, transport capacity, the supply of food and several equipment, particularly those of cultural nature [34].

3. Materials and Methods

3.1. Study Area

The case-study area is the municipality of Porto, but the article has a particular focus in its downtown (Baixa). While it is not the second most populated Porto is consensually considered the second most important city of the country, being the city centre of the Porto Metropolitan Area, in the North of Portugal. Over the first decade of this century, important urban rehabilitation/regeneration projects were implemented. They were associated to the Porto 2021 Capital of Culture, the creation of the urban light rail system, the 2004 European of Football and several EU-funded projects, that introduced strategic integration, and participatory principles within urbanism in Porto [22].

The valuation in real estate, intrinsically associated with tourism, but also the consequence of public space rehabilitation and increased accessibility, will lead to a significant private led rehabilitation process of the buildings, that it is well worth to analyse from a sustainability perspective.

In its administrative limits Porto’s has a population of 231.800 inhabitants (in 2021) and presents a strong growth of its city-users. Between 2010 and 2019 (prior to the pandemics) (Figure 1 and Figure 2), registered a growth of 293% in the number of short rental accommodation units and of 114% in the capacity for accommodation in traditional hotels [7], as the number of passengers at the airport rose from 4.5 M, in 2010, to 10.8, in 2017.

3.2. Methodology

In order to carry out this work, an area was delimited in coincidence to the city centre, commonly called Baixa do Porto. Baixa was originated with the urban expansion which took place as of the beginning of the 18th century and received nodes of relationship networks (the São Bento train station and the Trindade metro station) and a large concentration of institution, namely the City Hall and the Rectory of the University of Porto. There exists also a large number of shops and restaurants, and the highest density of accommodation supply in the metropolitan area. Since the borders of the Baixa do Porto are not formally established, its limits were defined by approximation, based on the urban morphology combined with the economic activity and especially the tourist vocation.

A survey of the transformations occurred in this area between 2010 and 2020 was carried out. In addition to identifying potential changes in the public space, 98 buildings, which had suffered small or large interventions, developed by both the public and the private sector, were also identified. Subsequently, 50 buildings were selected. These were considered the most representative, considering the size, location, and symbolism, of the different types of intervention. Based on this selection, the type of action and the use of the property, before and after the transformations, occurred between 2010 and 2020, were analysed. Analysis sheets were built for each property, together with its history, protagonists (technicians and entrepreneurs), materials used and urban context, among other observations. This collection and systematization resulted in synthesis and cartography that summarise and systematise the information, considering four big types of intervention identified: restoration, façadism, demolition and disneyfication.

3.3. Recent Dynamics in Portugal and Porto

3.3.1. Neoliberalism and Architecture

The Socialist Party (social democrats) have ruled 70% of the time since the first democratic elections in Portugal (in 1976). However, the pressure of the global financial crisis, the frailty of the Portuguese economy, which would require external intervention, a right-wing coalition government, and the former Prime Minister and leader of the Socialist Party’s subsequent fall in disgrace by facing problems with the law, would create optimum conditions for major changes.

Within this context, Portugal would welcome any economic development initiative, including the city of Porto, with a centre-right mayor, followed by an even more liberal one.

A first boost—as in other European cities—is a direct consequence of the successive decrease in interest rates decreed by the European central bank, which leads depositors to invest their money elsewhere, particularly in real estate. A second one arises from the enforcement of a “New Lease Law” (DL-31/2012) in Portugal, which results from the transposition into national law of the primary crisis policy established by the “Troika” (ECB, IMF and EC) in the “Memorandum of Understanding”, of May 2011. The liberalization of the rental market leads to a sharp rise in leasing prices, contaminating the housing market and promoting inflation in real estate prices, thus leading old owners—or new buyers—to rehabilitation works.

This explains the end to the accumulation of derelict buildings and houses in ruins. The liberalization of leasing practices would also enable the creation a short-term rental market to keep up with the increasing demand by tourists. As a consequence, the rental market becomes inaccessible to the low Portuguese wages and pensions and prohibitive for “local” tenants. In the year 2020, the minimum wage (EUR 635.00/month) was identical to the average rental of an accommodation with just over 60 m² in the city of Porto, since the average monthly rental was around EUR 10/m². In 2022 the minimum wage has increased to EUR 705.00/month, while the average salary is of EUR 1310/m but the average monthly rental of a single room apartment in central Porto rarely goes behind EUR 1000/month (EUR 25/m²).

A third real estate boost stems from the adoption of the “Gold Visa” mechanism in Portugal in 2012, which aimed to attract foreign capital by granting Portuguese nationality to those who acquire real estate worth EUR 500,000.00 or more. With the investment opportunities opened by the “new lease law”, cuts in interest rates, “gold visas”, and increasing tourist demand, the city experienced a vertiginous period of private investment, price increase in real estate and rental, and evictions of tenants. In addition, to the public policies stemming from the implementation of the neoliberal post-financial crisis programme, new tax legislation was added to facilitate building demolition, construction, and rehabilitation.

Among other advantages, the exemption from IMT (the municipal tax on transmissions) upon the first transmission (sale) of the property after requalification encouraged those who could not rehabilitate the building to sell the property to whom might be able to do so, thus expediting the transaction. Many large-scale investments and real estate funds were also exempted from or saw the collection of taxes and fees reduced, such as the IMI, IMT and IRC. In addition, in the UNESCO World Heritage Site of the Historic Centre of Porto, the owners are exempted from the payment of the municipal property tax.

In urban planning procedures, these new rules allow deadlines to be shortened, the licensing period to be more flexible or even cancelled, and the public approach to some more restrictive architectural and constructive aspects to be more flexible. In this sense, for example, Law 32/2012 excludes the authorities of structural surveillance, thus decisively contributing to the multiplication of façadism interventions and the creation of smaller apartments, with consequences on the physical reality of the buildings.

3.3.2. Public Policies and (Public and Private) Investment

In 2001, as the consequence of suburbanization and rent freezing, the housing stock is extremely degraded, especially in some central areas where the percentage of buildings with structural issues surpasses 15%, as in Vitória (38.8%), Miragaia (27.3%) and Bonfim (16.1%). Meanwhile, between 2001 and 2011, Porto lost 9.71% of its resident population. Understandably, the 2008 economic crisis is strongly felt during this time, with the loss of 13% of the companies until 2013.

Despite this context, many of the elements that explain the changes of the last decade emerge around this time. The classification of Porto’s Historical Centre as a World Heritage Site by UNESCO, in 1996, is an example of one of those changes. A period of adaptation of public policies follows and the State seizes the potential for urbanism in association with major events (European Capital of Culture in 2001; European Football Cup in 2004) and mobility projects (creation of the metro system between 2001 and 2005). The expansion of the airport also takes place, where the 33rd base of the low-cost airline Ryanair opens in 2009, to which EU funding for urban regeneration is added near Baixa, at Mouzinho-Flores and Sé.

However, the focus is on the involvement of the private sector, which receives validation in the formation of urban rehabilitation companies (DL 104/2004). In Porto, the urban rehabilitation company Porto Vivo, a public company controlled by the municipality, was created, playing a decisive role in boosting the dynamics and processes of urban intervention, namely in the historical centre, mobilizing investment (public and private, often in partnership) and facilitating the implementation of rehabilitation and renovation of the buildings, on the pretext of combatting population and economic depletion and the dismemberment of the social fabric, as well as physical degradation and the associated insecurity.

In addition, the international perception of the city changes, to which the interventions in the buildings and public spaces contribute simultaneously with changes in the economic fabric. Special emphasis should be placed on the use of European funds to finance private investment in hotels and on the public action needed to encourage private investment, with reduced social and economic protection only present recently, and mostly as the consequence of initiatives by the national government, especially with areas most affected by gentrification, namely, housing and the most fragile economic fabric.

Without questioning the strict legal possibility, the use of public funds (from the European Union) in hotels is, of course, debatable. Moreover, in some cases, it is controversial what some posters from the EU-funded programs NOVO NORTE and COMPETE 2020 claim, for example, those posted during the construction of the Hotel Congregados, whose co-funding is based on the “requalification of a hotel unit”. In the case of Hotel A Brazileira, its goal would be to “strengthen the competitiveness of small and medium-sized companies”. Regarding the funding of the Hotel Monumental Palace, such is justified by the “creation of a hotel unit from the rehabilitation and recovery of an historical building” (Figure 3).

With the change in government, with the Socialist Party back in power, the Central State finally recognises there is a problem and launches in 2018 a package of measures to mitigate the difficulties in access to housing, the “1st Right” programme, with Local Housing Strategies (LHS).

In the case of Porto, the diagnosis prior to the local housing strategy (LHS) recognises about 3000 families (approximately 7000 people) living in need of housing. An investment of a total of EUR 119 M (EUR 47 M from the municipal budget and EUR 72 M from other sources), to be made between 2020 and 2025, is proposed in order to “eliminate situations of severe housing shortage”. At the same time, the city of Porto also develops the “Porto de Tradição” project, by locally implementing Law 42/2017, aimed at identifying and classifying local social and cultural historical entities (mostly street shops and restaurants) as assets, including a set of benefits, such as lease protection.

4. Results

Since 2010, the Baixa has undergone a considerable transformation, similar to what happened in other European cities such as Amsterdam [35], Milan [36] or Lisbon [37].

In the architecture, there were many major changes (demolition, addition of floors, etc.), normally with the integral or partial maintenance of the façade of the previous building in order to evoke the architectural past of the city, and complete modernization of its interior. Such interventions are usually justified by the need to change the materials the buildings were made of, which are old and, in many situations, degraded by time and neglect. Other times, because the new use for the block—generally for a hotel or accommodation—is not compatible with the previous internal organization of the buildings, originally thought of, in most cases, as residential spaces.

This process, when interrupted by financial or real estate strategy issues, creates somewhat bizarre situations in the landscape, such as keeping just the buildings’ façades in central streets of the city after the complete emptying of their content where the sky behind the holes of the windows captures general attention. After the rehabilitation/renovation work is completed, the solution is often criticised as a form of “simulation”.

We analysed approximately 50 properties within the area commonly designated as the Baixa do Porto, concluding that only a small part of the buildings was restored or subjected to minor requalification. That is especially noticeable considering that a large part of the area is located within the National Monument Special Protection Zone (Historical Centre of Porto), classified as a World Heritage Site by ICOMOS (Figure 4).

Functionally, until 2010, the city’s central area was dominated by residence, commerce and services. However, housing, already in decline since the second half of the 20th century (which led to the presence of a significant number of derelict properties), was replaced by the hotel and “short rent apartments” in a great number of cases, thus responding to the extraordinary growth in the number of tourists in the city.

After 2010 (see Figure 5 and Figure 6), a significant number of buildings in ruin or mixed—“ruin/services” and “ruin/services/commerce”—became hotel units (Figure 6), with much more being partially transformed. On the ground floor, we could observe a considerable replacement in shop ownership and the significant addition of bars and restaurants as well as tourist-oriented retail.

As an illustrative example of these changes, we present five different cases of intervention in buildings located in the city centre which changed their use for tourist purposes, with exemplary proposals of the several current types of urban transformation and different project standpoint: restoration, new construction, demolition/façadism and “disneylandification”.

4.1. Cardosas

The urban complex located between Largo dos Lóios, Rua das Flores and Praça Almeida Garrett was occupied until the beginning of the 19th century by the Convent of Santa Maria da Consolação. It is after the demolition of the convent that the front facing Largo dos Lóios and Rua Trindade Coelho was erected, constituting an urban ensemble typical of mid-19th century architecture.

The intervention undertaken here between 2009 and 2013 is one of the key interventions of the so-called urban regeneration masterplan of “Porto Vivo—Sociedade de Reabilitação Urbana”. It was carried out because the building that faces Praça da Liberdade was being transformed into a five-star hotel. The initial project by Ferreira Almeida Arquitetos, developed in a public-private partnership between SRU Porto Vivo and Lúcios, one of the largest Portuguese construction companies, with a foreseen investment of EUR 27 million. A collective outdoor space is created inside the block, featuring several connections to the adjacent streets that forced the demolition of 19th century buildings inside the UNESCO protected area. However, given its configuration, this space is not used that much, either as a passage or for permanence, and the intervention is still the reason for controversy (Figure 7).

4.2. Pestana Porto—A Brasileira

The large building located on the corner of Rua Sá da Bandeira and Rua do Bonjardim was designed by António de Fontes Soares and built between 1877 and 1881 on the initiative of Manuel Moreira Dias. At the beginning of the 20th century, the company “A Brasileira” was installed on the ground floor of the building, which would transform several spaces at different times with projects by Francisco d’Oliveira Ferreira and Januário Godinho.

The adaptation of the building of “A Brasileira” to a hotel, completed in 2018, required the almost complete demolition of its structure. At that time, the interior was dismantled, including the famous café on the ground floor.

The reconstruction is carried out according to a project by architect Ginestal Machado, with the 19th century façade increased by one floor in the same alignment. On top of this new floor, two other recessed floors were added, one of them forming a high attic. Inside, the café spaces were reconstructed in an effort to replicate the old image (Figure 8).

4.3. S. Bento Residences

The construction of S. Bento Residences, as a hotel and services unit (c. 2019), constitutes a controversial example of the possibilities of confrontation or immersion of a new building into an Historical Centre. It clearly assumes a contemporary architectural language, being located on the other side of the street of the “Beaux-art” central train station of S. Bento (c. 1904–1916), in the continuity of the urban façade of a row of 18th century houses in the historical Rua do Loureiro. The new construction is the result of the current occupation of the ruins of two old houses. It maintains the existing main façade before the bending of the angle on the east corner of Avenida D. Afonso Henriques for a new cantilevered volume over the public space.

The new volume is made of exposed concrete, giving rise to a lively public debate in the city about the limits of the use of an “old” or “contemporary” image, the use of a “new” (concrete) or “old” (stone) materials, and the way the windows of a façade may be, or not, arranged in a classified Historical Centre (Figure 9).

4.4. Hotel Torel Palace Porto

The Hotel Torel Palace Porto (c. 2020), built on a property classified as of municipal interest, is an important example of restoration and minor requalification, where the comfort required in a five-star hotel forced the use of several creative solutions. The intervention to install a hotel unit implied the necessity to replace several elements of the building, especially in its interior spaces. It was necessary to attempt a re-approximation to the original appearance of the mansion, whose internal image had been significantly changed over the years. For example, with a careful intervention, it was possible to rehabilitate the decorative paintings on the walls, doors and the wooden floors, and keep the original plastered and carved ceilings intact.

In an attempt to rehabilitate without destroying the existing walls and ceilings, new bathrooms were built in the high-ceiling rooms as small independent blocks, a simple and practical solution, disguised and almost invisible. On the outside, the main façade was rehabilitated and repainted with a reddish-pink colour different from the previously existing yellowish colour, the wrought iron guardrails of the central balcony and balconies on the main floor were rehabilitated and repainted, and the exterior wooden window frames received a design different from the original.

The installation of the Hotel Torel Palace in one of the largest bourgeois houses in the central-eastern part of the city is the most recent chapter in the evolution of this building and ultimate proof of its architectural flexibility and constructive resistance, which, over time, has included the adaptation to various public services, including a school (Figure 10).

4.5. Casa Oriental

The commercial house “Casa Oriental” has been operating since 1910 in a bicentennial building, leaning against the old Gothic wall of Porto built in the 14th century by Afonso IV.

“Casa Oriental” sold products from the Portuguese colonies in Africa and the East (namely coffee, tea and chocolate). From the 1950s onwards, it became a grocery, and, in the 1970s, it specialized in salted cod, a product widely consumed in Portugal. The façade was decorated with huge specimens of dried cod hanging from strings, thus becoming a hallmark of the store and a popular icon of the local landscape.

After 2010, the Fábrica das Conservas da Murtosa (COMUR) buys the store, and, while keeping the name “Casa Oriental”, starts selling canned sardines only, another classic product of Portugal, but simply as a souvenir for tourists. The façade is painted in a strong colour and decorated with evocative elements of the “imagined” past, as salted cod in plastic and clothes hanged on the 2nd floor drying rack, where no one lives. The building thus resembles a fantasy setting, in the style of a theme park, together with one of the neighbouring buildings, also oriented towards the tourist by selling an alleged typical product, both profusely lit at night (Figure 11).

5. Discussion

The COVID-19 pandemic, in addition to its immediate effects as a public health outbreak, has promoted a totally unforeseen economic crisis. Tourism was one of the most affected activities, in view of the confinement, lockdown policies and air transport stoppage measures, which made 2020 one of the most difficult years for tourism-dependent territories in recent times. Within the context of a threefold threat—climate, nature and pollution—and now a global pandemic, those responsible for planning, regulating and boosting the tourism activity embraced the redefinition of the role played by tourism and in the way it interacts with local residents and the environment. In the same vein, Mark Radka (Chief of the Energy and Climate Branch of the UN Environment Programme) stated that “This pandemic sent a warning that we need to change the way we live, travel and see the world. We have an opportunity to build back greener and opt for low-carbon measures that protect nature and biodiversity while maintaining the economic benefits that the multi-million-dollar tourism industry brings to local communities around the world.” (https://www.unep.org/ar/node/28677, accessed on 4 January 2023).

Within the context of the European Union, it urged to maintain the employment of 13 million people in the industry by reinforcing their association with the sustainability and resilience of destination territories. This strategy includes a relation with decarbonization, the investment in ecotourism, the strengthening of the relationship and partnerships with local communities, increased security, digitalisation and promotion of a circular economy.

The COVID-19 pandemic and debate on new strategic guidelines for tourism was also intense in Portugal, as it severely affected the economy. In the case of Porto, from 2019 to 2020, the number of guests fell by 72%, income fell by 78% and 37% of the hotel units closed.

The pandemic contingency measures had a major impact by shifting the debate around “overtourism” onto tourism recovery. In order to minimise the impact of the temporary reduction in demand, Turismo de Portugal developed a strategy based on three key messages: trust, hope and reinvention. Confidence was boosted through initiatives such as the creation of the “Clean & Safe” seal, awarding the companies that ensured compliance with hygiene and cleanliness standards for the prevention and control of COVID-19 and other potential infections. The message of hope was associated with an awareness campaign on the topic of social distancing, changing the “Can’t Skip Portugal” icon into “Can’t Skip Hope”. The concept of reinvention was also associated with the promotion of low-density territories, thus valuing destinations connected to natural landscapes, the outdoors and more sustainable activities.

The strategy defined by Porto was similar. On 1 February 2021, on the municipality’s website and in an interview with the newspaper Público, Mayor Rui Moreira stated that “It is in the sense of security, in the defence of sustainable practices, in the differentiation of the supply within a polycentric city, with much more to discover beyond its historical centre, in the cooperation with Portugal’s Northern Region, and in the investment in culture that the city of Porto is venturing to relaunch tourism in the post-pandemic period. There are projects being finalised and, more importantly, a new strategy sharing a transversal perception: the future of tourism in cities depends on its ability for reinvention.”.

In this regard, at the end of the same month, several measures were submitted to the Municipal Council for Tourism in order to mitigate the negative impact caused by the pandemic, both from an economic and a social standpoint. One of these measures aims to distinguish the local lodgings and tourist ventures that best represent the features that attract people to the city, through the municipal programme “Confiança Porto”.

However, the main transformation seems to be that of considering housing as a priority. In fact, through the approval of the “Porto com Sentido” programme, an affordable housing offer was established through long-term lease contracts guaranteed by the municipality. This project aims to address the serious shortage identified in the traditional leasing market by developing partnerships with the private sector to serve all those who cannot afford the rents dictated by the free rental market.

In tourism, the city’s strategy is aligned with the goals of sustainable development. Publicly accepting the impossibility of returning to the tourist dynamics reported until 2019, Rui Moreira stated that Porto’s future is in sustainable tourism, since “…we will no longer be able to attract the tourists who would come to the city in organized groups. And maybe that’s for the best.”.

This shift to a greater focus placed on housing and the mindset geared towards “sustainable tourism” is naturally very much associated with the impact of COVID-19, but it also results from the disadvantages of territorial specialization because, while it is true that, as it has often been seen in history and different geographical contexts, specialization has an undeniable advantage in creating critical mass around a particular domain, thereby strengthening the competitiveness of a particular place or region, it has also been seen in various other circumstances, wherein this same specialization reduces flexibility and hinders resilience.

6. Conclusions

In recent years, the recovery of the central area of the city of Porto has revealed a change also experienced in other European cities, with an increase in the relevance of consumption and real estate mainly as a result of the increase in the emphasis placed on urban tourism. The floating population has grown particularly sharply.

A certain physical decadence and neoliberalism has created optimum conditions for a change, which, in addition to being more intense than in most cities, has gone beyond what is acceptable when considering environmental, social and economic sustainability.

First, because there was a dramatic change in the physiognomy of a considerable part of the city, with the unnecessary piling of rubble and mobilization of new materials. Furthermore, ever since the 18th and 19th centuries, Porto has been the city of long and narrow “Gothic-mercantile” blocks, traditionally occupied by three- and four-floor single family residences, 300–500 m² “bourgeois houses”, mass-subdivided for investments in multiple units from 20 to 50 m². The maximization of the profit rate by creating smaller fractions to rent, while being able to maintain the façade, changed the city, resulting in the disappearance of many traditional houses, mostly in their structure, along with traditional wood and gypsum materials and some notable elements, right in the heart of the area classified as a World Heritage Site.

At the architectural level, interventions associated with great transformations prevail. Demolition is common (total or partial), as well as new construction (with horizontal occupancy of new areas) and the addition of floors (high-rise construction). Restoration and careful rehabilitation, which would be expected to be dominant in a space that is largely part of the National Monument Special Protection Zone (Historical Centre of Porto) is far less frequent.

This process, especially intense in the last decade, is associated to significant changes in the urban landscape and in the uses of many of its buildings. Often, these uses changed after an intervention in the buildings, as was seen in fifty buildings or sets of buildings that were analysed before.

Porto’s Baixa, which was formerly dominated by three functions—residence, retail and services—is currently characterised by the strong presence of hotel units, short term retail and restaurants), with a decrease in commercial area and the almost entire disappearance of residential occupation. It is also important to notice that, at the beginning of the interventions occurred in the last two decades, Porto’s Baixa accounted for a large percentage of totally or partially derelict buildings.

In this process of change, medium-term sustainability is a highly debatable goal. However, the State, via the European Union, has been actively involved in the urban change, not only by facilitating the transformation of buildings and procedures, by lowering or eliminating taxes, but also by financially supporting investments. Since 2009, at least 10 hotels have been co-funded by EU public moneies, with such funding varying from around 30% to 50% of the amount invested. From an economic standpoint, it is also worth noting the disadvantages that arise from the hyperspecialization of the central area in terms of accommodation and restauration, in a process that, while being normal in every city (where everything changes), has perhaps been too careless.

Finally, from a social standpoint, the considerable concentration of the floating population is noticeable in some restricted places in the city, turned into spaces to “sleep, eat, drink and photograph” [38], which, in the COVID-19 period, became deserted, with business owners totally dependent on the support provided by the State.

Considering the ongoing transformations over the last decade, and post-pandemic recovery, the challenges and opportunities of digital and ecological transitions are essential to global cities such as Porto. Concerns about climate change and the importance of education for sustainability highlight the importance of sustainable urban development as a practice and the goal of any urban policy. The performance and success of these transitions depend on how the different sectors and agents interact in the construction, implementation and monitoring of the measures set in place to build greener and technologically advanced urban spaces and fairer societies.

In recent decades, the concept of sustainability has already influenced several urban policies, especially those guided by an ecological perspective, but new challenges continue to arise, many of them reinforced by the pandemic. In addition, the last few years have brought, not only to Porto but also to several world cities, increased challenges associated with the economic and social transformation.

Permanent change requires proactive, and not just reactive, urban management in line with sustainable development goals. Within this context if, in the recent past, the role of tourism was crucial to boost economies and decadent spaces, while at present the current policy is placing people and not attractiveness or business at the core of urban development goals. In that direction, sustainability and social and spatial justice are being assumed as policy goals and ecological and digital transitions as the path to overcome social and economic challenges in an integrated manner.

7. Managerial Implications and Public Policies Recommendations

This research was designed to analyse the relation between urban rehabilitation and tourism, looking mainly at recent transformations and to understand how public policies and governance options are contributing to sustainable urban development. We have selected the municipality of Porto (Portugal) and its downtown (Baixa) as the case study. Within this project we have analysed all the rehabilitation projects implemented between 2010 and 2020. We had some data/information access limitations, but we were able to characterize 50 remarkable projects, which we have presented in detail in previous work [7]. The results were publicly presented and discussed with public and private entities, as well as civil society representatives. In view of the sustainability principles and its increased relevance in public policies and citizen behavior, real estate investment in rehabilitation must seriously consider alternatives for short-term rentability. A change from a single economic and financial approach to a more relevant attitude for the environmental and social responsibilities must also be taken into consideration.

Public policies must recognize that in the polycentric, extended and complex urban spaces, the “old” city centre normally plays a very special role. It is a treasured symbolic place for a large community of residents, sometimes conflicting with the selling values of the area for visitors. A balanced and proactive approach is much needed. Instead of a dominant “let it go” praxis, we tend to consider that urban management is much needed to promote a city that is open to everyone, and residents can profit from the experience of diversity and cosmopolitism, yet at the same time a balance is achieved so that visitors are able to feel the spirit of the place and residents and local businesses do not feel pushed apart.