Inquiry Finished on AL Use of Affordable Housing Building
The Funchal City Council has completed its inquiry into CORTEL, the housing cooperative for postal and telecommunications workers in Madeira. The case concerns three short-term rental apartments (AL) operating in a building that had received public support under a controlled-cost housing program.
As a result, Mayor Cristina Pedra announced that the municipality will withdraw all benefits granted to the cooperative and revoke the three short-term rental licenses linked to the property “Residências Cortel I.”
Report to Be Filed With Several Authorities On Suspected Illegal Practices
The mayor stated that after presenting the investigation report to the council on Thursday, the city will formally report suspected illegal practices by CORTEL. The case will be submitted to the Public Prosecutor’s Office, the Regional Tax Authority, Investimentos Habitacionais da Madeira (IHM), and the Institute of Housing and Urban Rehabilitation (IHRU). She added that the municipality will act to recover the approximately €61,000 in public benefits that the cooperative had received.
Cristina Pedra assures that all city hall actions in this case complied with the law, having followed "all legal procedures," emphasizing that everything would be done in the same way again. The same thing didn't happen with CORTEL, which, during the legal process, received approximately 61,000 euros in municipal benefits. The mayor emphasized that the City Council will do everything possible to recover this amount.
CORTEL’s Contests AL License Withdrawal
CORTEL, however, contests the withdrawal of the short-term rental licenses. In July, the cooperative announced that it was considering legal action against its members to challenge the city’s decisions. The dispute has highlighted the tension between housing policies designed to support residents and the growing use of properties for tourism-related rentals.
The city insists that municipal support programs for affordable housing cannot be diverted to other purposes. According to Pedra, the evidence collected during the inquiry - documents from local registries, CORTEL’s internal regulations, and national housing laws - supports the decision to escalate the matter.
Broader Implications for Housing in Madeira
The controversy comes at a time when Madeira faces increasing pressure on housing availability, with many residents struggling to find affordable homes. The case of CORTEL raises questions about oversight of housing cooperatives and the enforcement of rules intended to protect public investment.
For the municipality, the next step lies with judicial and tax authorities. For residents and cooperative members, the outcome could set an important precedent for how Madeira balances housing needs with the expansion of short-term rentals.
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