Saturday, June 22, 2024

ARGENTINA | 15-01-2024 15:09

Tenants in Buenos Aires 'desperate' amid inflation and housing crisis

Argentina's housing crisis, set against a backdrop of 211% inflation per annum, with rent charges soaring and prices increasingly set in dollars, is leaving tenants feeling helpless.

Among empty boxes in a half-packed apartment, before a forced move, Tomás Sislián spends his last days in the first place he lived after leaving the family home.

“I’ve lived in this area all my life and it’s horrible, because I feel like I’m being evicted,” said Sislián, a 28-year-old audiovisual producer who must leave the apartment he was renting and search for a more affordable alternative.

“I’m frustrated because I’m a professional. I have two degrees and four jobs. I can’t be obliged to move 20 kilometres from where I’ve always lived," he complains.

Despite an intense search of over six months, he has yet to find a place that does not cost five times his current rent or is valued in dollars, a shelter savings currency in Argentina.

The ups and downs of both currencies heavily affects the price of rent, which is often priced in foreign currency.

The housing problem has been an issue in Buenos Aires for years. However, the crisis has become more acute for tenants after a more than 50 percent maxi-devaluation of the peso by the official exchange rate in December, which battered inflation and consequently reduced purchasing power.

In December alone, prices rose by 25.5 percent in Argentina, a country gripped by a deep economic crisis.

The government led by President Javier Milei, who was inaugurated on December 10, has repealed laws which regulated the terms of lease agreements, which can now be set in dollars.

In the case of Sislián, his landlord did not renew the lease claiming, without any explanations, that “the country’s situation is complicated.”

Argentina’s economic crisis has especially hit tenants, who suffered cumulative increases over the last year by 285 percent to 309 percent for leases of dwellings with one to three bedrooms, according to a survey by Centro de Estudios Scalabrini Ortiz.

 “We see desperate people who say they don’t know where they’ll live tomorrow", said Gervasio Muñoz, president of the Inquilinos Agrupados organisation, which fights for tenants’ rights.

Over the last few years, different organisations battled for the so-called “Rent law”, enacted in July 2020, which established a minimum term of three years and price adjustments in line with the average increase of both salaries and inflation.

Yet Milei’s ambitious emergency decree, issued soon after taking office and which came into force on December 29, has repealed that legislation. Conditions now depend exclusively on the terms both parties negotiate. 

“Why should the State meddle into the life of private parties?” asks the libertarian leader rhetorically – a line he has used on countless occasions to refer to that and other state regulations.

As a result, now “we see that not only there is no supply, but that the conditions to renew a contract come with 500-percent increases and monthly renewals tied to inflation,” Muñoz observed.

In Milei’s government they believe that the best way to improve the scant supply of housing to rent is to remove any possible state regulation. Even that which forced the parties to set a price in pesos.

Economist Hernán Letcher, director of the Argentine Centre of Political Economy, said that the impact of devaluation on the real-estate market is indirect and the Argentine problem is part of a global phenomenon.

However, the steep reduction of the purchasing power of tenants is a particular fact because, in Argentina, “the main pulley driving the inflationary process is the exchange rate,” he stated.

"Usually, when there is a devaluation in Argentina there is a direct effect on prices. And salaries tend to be updated last. Hence the loss of purchasing power,” he explained.

Inquilinos Agrupados has presented a constitutional protection “amparo” challenge to nullify the Emergency Decree which eliminates the legislation between owners and tenants.

by Martín Raschinsky, AFP


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