The Americans are coming
Transnational gentrification is happening, bringing with it opportunities and challenges
LISBON, Portugal — Portugal, with its sun-kissed beaches, historic cities, and welcoming communities, has become a beacon for American expatriates seeking a blend of leisure, work, and cultural immersion. The allure of this southwestern European nation situated between Spain and the Atlantic Ocean isn't just in its picturesque landscapes but also in the quality of life it offers and its supportive environment for both retirees and working professionals.
I understand the draw as I sit here sipping a coffee and nibbling on a pastel de nata in the Bairro Alto, the artistic core of the capital, before dashing off to a speaking engagement at the Centro Cultural de Belém. The passersby are mostly Portuguese, but there are a remarkable number of Americans and foreigners, too, and they don’t all appear to be tourists.
I’m here on assignment for #NewRules this week, reporting on the lesser-studied yet growing demographic trend of Americans moving abroad. This country has become a hotbed for expatriation in recent years, with the number of Americans living here soaring by nearly 50% between 2021 and 2022 alone.
On the move
Portugal isn’t the only place Americans are moving. A growing number of them are pulling up stakes and decamping for new homes in adopted countries around the world, from Mexico to Thailand.
Although it doesn't amount to a mass departure, the exodus of Americans is far from negligible. According to a 2020 estimate from the State Department, roughly 9 million Americans called an adopted country home. The number of expats has more than doubled in the last fifteen years — growing faster than the rate of the U.S. population itself.
Expats used to be well-heeled retirees and workers. However, Bloomberg wrote in 2022 that the prime American buyers of real estate in Portugal and across Europe had shifted: “Relatively cheap housing — particularly in smaller cities and towns — and the rise of remote work have made the continent alluring to a wider range of people, including those who are younger and find themselves priced out of the housing market at home.”
Furthermore, a 2022 Gallup poll revealed that approximately 15% of all Americans want to leave the U.S. permanently — that’s nearly 50 million people. These folks are considering a number of issues, including economic and lifestyle reasons — more affordable healthcare, better cost of living, public safety, lower taxes, and improved access to education.
Sheila Callaham and her husband, who now reside in Portugal, left the U.S. partially out of fear. “One of the major reasons I wanted to move to Europe was because I feared a potential illness for me or my husband would result in bankruptcy,” she shared. “We’ve both worked and saved too hard to allow that to happen. In countries with socialized healthcare, that fear is non-existent.”
Here in Portugal, according to figures reported by The New York Times, which were sourced from the Portuguese government, nearly 10,000 Americans like Sheila and her husband had made this place their home by 2022. This marks a striking increase of 239% since 2017, equating to an uptick of just under 7,000 individuals. And according to 2022 data from the Portuguese Immigration and Border Service, Americans now make up the largest group of foreigners granted permanent residence, too.
Olá, americanos
So why are Americans moving here, in particular?
The country's cost of living, for one. It’s significantly lower than in the United States, making it a financially attractive destination for Americans. Consumer prices, including housing, dining, and everyday expenses, are roughly 38% less. For example, renting a one-bedroom apartment in the heart of Lisbon costs just over $700 per month, a stark contrast to similar cities in the U.S.
Portugal also offers a supportive environment for American workers, including digital nomads and entrepreneurs earning American salaries. The country has innovated by introducing visas like the D2, also known as the “Golden Visa,” for entrepreneurs and investors and the D8 for digital nomads to stimulate immigration and investment — both provide a legal framework for foreigners to live and work here. These visas not only make residency and work possible but also offer a pathway to Portuguese citizenship after five years, along with visa-free travel across Europe.
But it's not just the cost savings that draw Americans to Portugal. The nation boasts a high quality of life, with its mild climate, low crime, and excellent healthcare. Portugal also ranks as one of the safest countries in the world — a far cry from the U.S., where mass shootings are a regular occurrence. And its healthcare system combines private care with the public system, ensuring affordable medical services for all residents — something that’s out of reach for a growing number of Americans.
The upside
There’s no denying that new immigrants, including those expats from the United States, are influencing the Portuguese economy.
According to Catarina Reis Oliveira, the director of Portugal’s Migration Observatory, “Immigrants play a fundamental role in the efficiency of labor markets, and it is clear that without immigrants, some economic sectors and activities would collapse.”
But where do American expats fit into the mix?
It turns out that the influx of immigrants, which includes American workers and retirees, has delivered significant economic benefits for Portugal. For one, immigrants contributed 1.86 million euros to Social Security in 2022, while they only benefited from around 257 thousand euros in social benefits. This has created a positive balance in contributions from immigrants of 1.6 million euros in 2022 alone.
The arrival of expatriates has also stimulated local communities. Notably, there has been a significant uptick in average local wages, which surged around 8% within the initial months of 2023. This wage growth is attributed to the higher incomes of expatriates and their propensity to spend on everything from home renovations to eating out.
The downside
The impact of American expats can also be negative.
Their influx, especially if sudden, can lead to increased demand for housing, driving up rents and real estate prices, making it difficult for locals to afford housing in their own cities. For example, according to the Journal of Housing and the Built Environment, cities like Lisbon have experienced housing market pressures attributed to foreign investment. While this investment can lead to improved infrastructure, it can also erode local culture and community ties and create friction between newcomers and locals — an economic and cultural clash.
Rents and house prices have skyrocketed across Portugal, which is among the poorest countries in Western Europe. Over half of workers earned less than 1,000 euros per month, while rents jumped more than a third in 2022 in Lisbon alone. To slow gentrification, Portugal made significant changes to its Golden Visa Program last October. Under the new rules, it is no longer possible to invest in real estate and qualify for the program.
The demand for goods and services tailored to expats can also lead to local businesses shifting their focus away from traditional, affordable options to more expensive, international ones, potentially marginalizing local residents. Traditional shops may be forced to close, priced out by increasing rents that international chain stores, like Starbucks, McDonald’s, or Pizza Hut, which are all a stone’s throw from my hotel, can afford.
The future
Portugal stands at a crossroads.
It embodies both the promise of globalization and the challenges of demographic shifts. As American expatriates flock to its shores, they bring with them not only economic vitality but also complex dynamics that require careful navigation.
The country's embrace of these new residents speaks to its openness and adaptability, offering a model for how nations can harness the potential of international migration while attending to the needs of their native populace. This delicate balance between welcoming newcomers and preserving the essence of local communities underscores the broader narrative of our times: the search for sustainable coexistence in an increasingly interconnected world.
Portugal, with its rich history, vibrant culture, and forward-looking policies, is charting a course that others might well consider. As we navigate the future where migration and expatriation normalize, the Portuguese experience serves as a valuable lesson in building a future that honors both heritage and progress, ensuring that the benefits of a diverse, global society are shared by all.