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Alfama is the district that survived the earthquake in 1755, so that you can still find old houses at alleyways there. Many quarters are in very bad condition. Since some years Lisbon tries with help of the EC to stop the dilapidation and also to preserve the habitability of this quarter for the future. In the Alfama you can find numerous little grocer shops, workshops, taverns and small restaurants having mostly not more than 3 tables. Choose the cathedral as start/final point so that you don't get lost in the alleyways.
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