Has the digital nomad dream turned sour?

0:00This is The Guardian.

0:07Today, how the digital nomad dream turns sour.

0:20I'd been in London for 18 years and quite frankly, I'd kind of felt like I'd done it and got everything I needed from the city and had, I guess, entered what felt like a toxic work culture at the time that I wanted to escape from. This is Alex Holder. In 2019, she was working as a freelance journalist and a corporate copywriter and was starting to wonder, is this the life I want? London felt full of edges at the time. I remember taking my three-year-old son to a local pub, a really nice pub in a residential area, and I took him to the toilets and he asked me, why are the toilets all greasy, mum?

1:02I obviously didn't explain to him it was to stop people racking up lines of cocaine on the lids. It was around this time that she went on a trip to Lisbon and realised another life was possible. It's so beautiful. You walk down the streets, there are cobbled pavements, the buildings are pastel, the light is just kind of luminescent. And then there was a culture that felt very open to family life. You take, you know, take us into a restaurant, to cafes, to parks. And I never had that feeling of he was too loud or too annoying. Families are always out. Just before COVID hit, she, her husband and their young son took the plunge.

1:42They upped sticks to Lisbon, initially just for a year. When we first moved, we found a rental apartment, and that apartment cost€2 ,100 per month. And in comparison to London, that was about a third cheaper than what we'd been paying for an apartment of kind of, you know, equivalent size in Dalston, where we lived before. Another baby came along, a daughter this time, and the family settled in a light-filled apartment in the central district of Lapa. But each of the apartment buildings has a little tiny balcony on the front. There's, you know, shutters. There's, everyone has a door that they can, like, throw wide.

2:23And if you, like, stand on your tiptoes in my apartment, you can just about see the sea. For the first few years, life was good, earning London salaries and paying Lisbon prices. But she began to notice that the city was changing, with the influx of digital nomads as well as incomers like her who were staying for longer. And she began to feel uneasy. Suddenly, it just felt like there was many more people here. And then there was this, I guess, just growing awareness that, oh, something doesn't feel right. Like there is a wealth gap growing and perhaps I'm part of it. In 2023, she and her husband opened an English language bookshop.

3:04So our bookshop is on a quiet residential street. and this local dog who's owned by a local business wandered down the street, came into the bookshop on its own and pissed all over the hardbacks. There's no other way to say it. And the first time it happened, we kind of laughed and then it happened again. And the second time I just had this internal feeling that, oh, is this a message? What is this situation telling me? I knew that I didn't have the vocabulary to talk about a dog's toilet habits with its owner. And I just kind of quietly sat with that. Like, what am I being told there? From The Guardian, I'm Helen Pidd.

3:49Today in Focus. Digital nomads, remote workers, expats, call them what you like. But are they ruining the cities they love?

4:04It wasn't just the local dogs who started to make Alex feel unwelcome. It was the growing sense that perhaps she and her husband and others like them were not paying their way, even after becoming residents. As freelancers and directors of their own limited companies, they were granted a non-habitual residency visa, brought in specifically to entice people like them. And the main benefit of this visa is that they don't pay any income tax at all on foreign earnings, which now make up about half of what Alex takes home each year. And did you have any idea about these tax breaks when you moved? Not until we moved.

4:39And then when we moved, we realised it was a conversation and people told us about them. and yeah it kind of still felt unbelievable until we'd actually submitted our tax return in the UK and submitted our tax return in Portugal and then that tax return came back for zero as in no not paying any income tax on that money here then it was like okay that is how it's working. And how did you feel about that? I mean at the time I guess ultimately it's a tax break relief of about 10 to 15 percent it wasn't something we've focused on and I felt like perhaps by paying private health insurance by paying school fees it was maybe offset I guess at the time that was probably what I thought and was there a particular moment where the penny dropped with you or you started to feel uneasy or was it just something that happened gradually over time?

5:39Opening the bookshop meant I was having many more conversations with locals. And then, yeah, there'd be like a conversation in the hairdresser where the hairdressers, you know, is pointing out to me that they're paying tax and yet all of their customers aren't. And I just really started to become aware that I think whenever there is a wealth gap and a wealth inequality happening and that is broadening, there is more ickiness and more resentment and more anger. And I, yeah, I was hearing that in conversation. And when you're having these conversations, are they in Portuguese? Can you speak Portuguese?

6:19My Portuguese is very, very basic. Many people who move here, I arrived with all the aspirations that I would be a fluent Portuguese speaker in a matter of, you know, months or years. I've done all the language courses and still my conversation is really basic and my conversational skills in Portuguese. Although, brilliantly, from having the bookshop, I now do have many interactions with Portuguese people. It's just those interactions are generally in English. Tell me, in the almost six years you've been living in Lisbon, how has the city in the country of Portugal changed. So what began as feelings earlier this year that something isn't right?

7:04The gap between the richest and the poorest residents is broadening. And then these stats came out and what we saw, so Numbeo, this cost of living index, which is the largest cost of living database that we have worldwide. And where 10 years ago, Portugal was in the like second or third most affordable European capital city. In 10 years, it has risen to the most unaffordable capital city in Europe. And what that means is that foreigners are paying on average 82 % more per property than a local. Wow, 82%, gosh. 82%. And the property price to salary ratio has reached, I guess, staggering. it's 22 to 1, which is higher than Paris, it's higher than London, it's higher than Moscow, it's higher than Croatia, which is another place that's also being hit by a similar issue.

8:03And what is the medium salary then? I don't know the medium salary, but I can tell you that 60 % of Portuguese taxpayers earn less than€1 ,000 per month. Goodness me. That's very low, isn't it, for an EU country? Yeah. And this is when we talk about language earlier. While language is a huge thing to integrate oneself, I think I'm left questioning that even if you're learning the language and you're integrating and you're out there talking to locals and perhaps you're volunteering and doing all the things that like a good citizen should do. if your economy just by the work you do every day means that you are earning five to one six to one seven to one the average portuguese salary and then not paying income tax on that you can see why this disparity is just getting wider and wider and more and more uncomfortable

9:08Aside from housing costs and salaries, how else has Lisbon changed in the time that you've been there? Kind of visually in terms of what businesses are there? Yeah, so obviously there are pockets of Lisbon that remain unchanged and I hope that remains the case. In the centre, I mean, Airbnb has had a huge impact. And then because of all the Airbnb visitors, I think it went fairly unchecked for a long time. And, you know, in some places it's over 60 % of the properties are Airbnb properties, like whole buildings, you know, and locals really have been pushed out of those areas. And what we're seeing is what a friend referred to, and I thought it was a very apt way of describing it is like Airbnb restaurants, which are these kind of, they feel like a veneer.

9:59They look beautiful for a moment when you first look in the window and then you kind of look a bit closer and, you know, they've been built quickly and you wouldn't know where in the world they're actually located and everything, all the language is in English. Recently, a German hotelier had purchased a whole building to turn into a hotel. And at the bottom of this building at street level was a traditional Gingina shop, which is a local Portuguese liqueur. and there was a protest outside this building because the owners of the liqueur shop had been evicted and what was allegedly going to happen was it was going to be turned into what was described and by the people arranging the protest as a Disney-fied version of this Gingina shop.

10:50It feels like what is happening to many places is a flattening of the culture. A flattening of the culture and pricing out the locals. And you wrote this fantastic piece for The Guardian, kind of looking within your soul, but also talking to other remote workers and crucially Portuguese people in Lisbon about how they perceive this influx of international people into the city. And tell us about some of those conversations. What sticks in your mind about what they told you? So one older Portuguese lady I spoke to, there was just a quote that really stuck with me, which was that there is an arrogance to the way they move around the city.

11:32And she described being in the supermarket and how like a hand would just reach over her to grab something. And because that person presumably doesn't have the language to say, I'm sorry, excuse me. she just felt like people were moving around her without just ignoring her and she said she you know walked down the pavements and these are pavements that she's walked down her whole life and she's like now I can't because there are just hordes of people on their phones whether that's remote workers or not and it's possible you know I think there's a lot of this driven by tourism but a feeling that she wasn't seen where she lives and that felt quite sad to me and then I spoke to another Portuguese local, Alex Couto, who has actually written a book previously about the gentrification of Lisbon.

12:22And he was very grateful in some ways. He was like, there's more cultural institutions here. I get more work. My day rate has risen. I think it's creating more stimulation in the city. You know, he had lots of positive things to say about it. And that I want, it's crucial to say that this is not all negative. In lots of ways people are looking to the future with excitement but there are as we like move into this next phase there are things we need to kind of check on and one of the things that Alex said was he's like he felt that as a Portuguese worker despite speaking perfect English and many other languages he said he he was often offered like a much lower rate like that's what you work for Right.

13:06That must be pretty insulting for him. So he sees Americans or Brits getting offered more per day than he is because the assumption is, oh, you're Portuguese, you'll accept less. Yes, for the same job, for the same companies. You can see why that would grade. I guess it's worth acknowledging that digital nomads and remote workers are not the only immigrants in Portugal. There are large numbers of people, often from the global south, doing low paid work, whether that's driving an Uber or being a delivery driver. And I wonder, have attitudes towards that community hardened as Portuguese people start to resent how many foreigners are in the country?

13:44Yeah, and that's one of the reasons that I actually wanted to speak about remote workers and our impact on Portugal. Because recently, Chega, a far right political party, have taken second majority in the government here. And a lot of their discussions is against, you know, a lot of the way they gain favor and gain votes is discussion against immigration. But I feel like remote workers, the finger is not pointed at us. The finger is pointed at immigrants from the global south who, Elizabeth, make up the majority of Uber drivers and like our equivalent of Deliveroo, which is Glovo here. and I mean it feels such a shame for me that they get the flack for actually something that the richer immigrants are doing which is causing this feeling that you you know the local Portuguese person feels pushed out of their city they're making a lot of the infrastructure the agriculture the paid per hour or very low work that needs to be done in every city they're doing

14:58Lauren Razavi, you're the Executive Director of Plumio, which is a think tank and a network that explores the future of migration and borders. You're also a former journalist and a digital nomad yourself, who lived in 60 countries around the world before settling in the Netherlands. Tell me, how have you seen this trend evolve in the last decade or so?

15:17Alex Holder:The digital nomad kind of movement as a fringe subculture really got started around the early 2000s, going into the early 2010s. The beginning of this kind of movement, it was primarily people moving from European countries, sort of from the global north. So North America, European countries, and going to lower cost of living destinations in Southeast Asia and Latin America. When I first started around 2013, we were very much a bunch of, I guess, like kind of nerdy tech people, just kind of seeing what was possible to do with a laptop. But yeah, now it's becoming a lot more diverse from people, I guess, kind of like doing more of an extended kind of gap year scenario, either before they go to university or after, right through to retirees who instead of kind of retiring to one place, decide to actually take advantage of the future.

16:14Alex Holder:the opportunity to travel the world and perhaps work a little bit at the same time. And actually, I know increasing numbers of people now who are taking their families on the road, so digital nomad families. Oh, interesting. And how have things evolved since the pandemic to make it easier for people to move? One of the sort of changes that happened since 2020 is the introduction of digital nomad visas. And one of the very interesting things about those visas is that fundamentally with immigration, you see most restrictions happen or be based on where a person is from. So the sort of coincidence of their birthplace.

16:55Alex Holder:But with these digital nomad visas, what you see is an emphasis now on income and profession instead. So this has unlocked the ability for people from, let's say, countries like India, which can be quite restricted in terms of visas, to be able to access countries that otherwise they would have had to have had very solid plans, perhaps only been granted a tourist visa for a week or two. So you say that this group has become more diverse, but they are presumably, as a group, still wealthy and can potentially pay over the odds to live in these cities, whether that's for of weeks or months or years.

17:34I wonder if you see a difference in the way that they are welcomed and treated compared with perhaps people who would often be described as immigrants who may come from poorer countries to do lower paid work like cleaning or food delivery.

17:46Alex Holder:Yeah I mean I think there's a sort of an important distinction to be made here actually between digital nomads and digital expats or digital immigrants. I mean this is a real forest fire of language here. I think in general, there can be racial and class undertones when it comes to whether we're calling anybody an expat or an immigrant. So I'd start with that as a problematic kind of distinction that happens. But there's also a difference here between digital nomads and I'm going to call them sort of digital expats. Digital nomads tend to be people who are moving around the world. They might be traveling on tourist visas or digital nomad visas.

18:29Alex Holder:And they tend to stay for somewhere between one and six months in a place. They do not tend to compete with local people for accommodation because they will tend to be in Airbnbs, more like tourist accommodation. Right. But that does price out locals, doesn't it, if buildings get bought up for Airbnbs? Absolutely. But then when you get into that, it's not just digital nomads or digital expats, because certainly digital expats are not the ones living in Airbnbs. but the sort of incentives and the lack of good policy that actually protects local people from the impact of tourism being a booming market.

19:06Alex Holder:I mean I live in Amsterdam and in Amsterdam Airbnb is restricted to a maximum of 30 days for homeowners and is you know you need a license from the city to do anything more than that. Right so it's basically a cap to limit the number of Airbnb rentals? You know, we still have a housing crisis here, as most cities in the world do right now. A sort of huge kind of gentrification and housing issue is present there in most cities. But here, the government has actually been very effective in sitting down with tech platforms and saying, OK, here's what we need. And I think certainly in places like Lisbon and places like Bali, places like Chiang Mai and Thailand, you have these kind of nomad hubs where some of this has gotten very out of control because there is a lack of good policy that's trying to create triple wins.

19:56Alex Holder:Wins for governments, wins for locals and wins for travellers or expats. Could you tell us a bit about how other hotspots for digital nomads or digital expats incentivise this kind of remote worker to relocate temporarily or permanently? Digital nomad visas are a tool that governments are using to attract people who fit a particular kind of category of person. They tend to be tech workers or digital workers. They will be subject to income minimums. So you have to have a minimum annual salary, whether that's as a freelancer or as a full-time employee for a company, in which case you're likely a remote worker.

20:39Alex Holder:And there can be requirements in terms of health insurance. There can be requirements in terms of having a particular type of housing or co-working space membership. And there are now around 80 countries in the world that are offering these types of digital nomad visas. And the idea is to attract these people in and to have them spending in the local economy. A very key part is that if you are taking a digital nomad visa, you already have a job outside of the jurisdiction in which you're being granted the visa. And that is very important because, of course, traditionally, the fear of any kind of migration is that people are going to come and take jobs, which is not the case in this kind of remote work scenario.

21:26You've spoken about the incentives that governments have put in in some places to bring people in with the view, I guess, that ultimately all of this foreign money will flood into local economies and trickle down to the native population there. But could you give us some examples of when that just doesn't work and there's this sort of two-track economy that develops where wealthy foreign workers are just living a completely different life from those who were born there.

21:53Alex Holder:Yeah absolutely so a really stark example that spoke to me in a very shocking way when I spent time there and did lead me to not go back is the area of Tulum, Playa del Carmen in Mexico. So when I was there, I guess it would have been 2021, I was absolutely shocked to find that this is an area of Mexico that is essentially holiday resorts and fancy apartment buildings, all of which are sort of staffed and kept running by local Mexicans who essentially live in ramshackle kind of squats. And you see billboards all over town saying zero percent interest for Americans and Canadians to come and buy properties to turn into Airbnbs in this area.

22:40Alex Holder:If you track that back to policy, what it actually comes from is during COVID, the Mexican government made it very, very easy for Americans and Canadians to come to Mexico as a way to try and save their ailing tourism. What it actually looks like on the ground is incredibly stark and is really, really direct inequality. Coming up, where are digital nomads welcome?

23:20You've said in your research that this isn't just a lifestyle trend, but also a kind of economic migration. Can you just explain what you mean by that?

23:29Alex Holder:Many digital nomads, when I started over a decade ago, many digital nomads now are in fact fleeing gentrification themselves, you know? People do not move from London to Lisbon purely for the sun. They also move for a better life, right? Or even as a lot of nomads do to go and test a whole bunch of different potential lives with short-term stays and then kind of decide where you'd like to make your life. You know, if every digital nomad or immigrant went back to where they came from, wherever that may be, it's not actually solving the fundamental problems of increased cost of living, of basically cities and governments not making a lot of sense in terms of solving the problems that we all encounter wherever we are in the world now.

24:16Yeah. But isn't there an issue if you, you know, say you flee London because of the crazy property prices. And then you show up in Berlin, say 10 years ago, or 15 years ago, when it was still cheap. And the pounds that you've got in your bank account go so far in a city like that, or they used to anyway. And then you are gentrifying that city and you're pricing out people there. And then they go to Eastern Europe or wherever it may be. And ultimately, it's going to be the poorest countries that lose out the most.

24:41Alex Holder:On that last point, the idea of the poorest countries losing out the most, I don't think that that bears out. I think that some of the most interesting kind of countries and governments in the world right now are the underdogs who are spotting an opportunity and going, hang on, if we can bring digital nomads or we can bring global tech workers here, we can really, really boost our economy. Like where? In the Balkans. Moldova is making a lot of noise about sort of technology, trying to attract tech workers. And then you have countries like Serbia, Montenegro, and Bosnia as well, I believe. Like they're all announcing digital nomad programs.

25:21Alex Holder:And are there any examples where this is working well, where digital nomads, digital expats are not only welcomed by governments, but also the local population? One of the best designed, most robust digital nomad policies in the world right now is that of Malaysia. Malaysia has an oversupply of housing. They basically have built too many skyscrapers and they can't fill all the apartments there. And they have been very, very effective in creating a digital nomad program that is designed specifically to their economy's needs. And then they have done a very, very good job of integrating local remote workers and digital nomads and the tech scene with the people who are coming in.

26:01Alex Holder:I think so much of the kind of protest that we are seeing in the world is actually a failure of integration more than it is a failure of people moving places, failing to actually design the systems by which local people benefit from the presence of highly skilled tech migrants coming in. Alex, you've clearly started to question your own position and your own future in Lisbon. I wonder whether the authorities in Portugal are starting to reassess whether these incredible tax breaks are the right route to go down? I'd say only recently, and I think it's happened so quickly. Nobody's come here thinking, I'm going to deliberately abuse the tax system for my own benefit.