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OPINION AND ANALYSIS | 30-11-2021 09:00

Housing crisis in Argentina: the necessity to address the problem from a broader perspective

Could a repeal of the new rental law solve the massive debt situation of the tenant population? Or improve access to homes?

It is crucial: Argentina needs a change in its housing dynamics.

According to the Housing Institute of the Autonomous City of Buenos Aires (IVC), in 2018, 35 percent of the capital’s inhabitants rented a home – almost a million people. But what does (and did) this condition imply?

First, it meant the need to comply with broad norms such as those of the National Civil Code, whose legal greys allowed abusive contractual ties that were difficult to remedy outside of contractual termination. Second, it implied an acceptance of dollarised (and often speculative) prices and unpredictable increases in a changing national economy, but above all, degrading, allocating a disproportionate percentage of income to inhabit a space. Finally, it meant hoping for something better.

At the end of 2019, a long-delayed legislative discussion was raised: a new rental act to be enacted in 2020. But, from now on – and as we can imagine – laws cannot be isolated from the context in which they are debated, and the global Covid-19 pandemic came to jeopardise many expectations of consolidating certain rights to tenants, improving the conditions of access to available rental housing.

Although the new bill passed by the National Congress proposed advances in contractual terms, entry prices, precise HOA, and expected adjustments, nowadays, an alternative reality to that which sought to be a better reality is manifested. 

Towards the end of 2020, there were more than 76,000 homes for sale in the Autonomous City of Buenos Aires compared to just a little more than 25,000 for non-temporary rent. Before this situation, and in 2019, the IVC carried out a joint study with the Rentals Bureau, which concluded that 9.2 percent of the homes in the City are empty ( Recoleta, Puerto Madero, Retiro, and Palermo neighbourhoods having the the highest number of homes in this state). Even though we do not have specific data on the number of uninhabited dwellings for the 2020/21 period, considering the data already mentioned, this percentage is probably higher.

Furthermore, the dictate and coexistence of Executive Orders 320/20 and 766/20 sought to alleviate the existing situations of tenants due to the impossibility, for many, of generating income in a sustained manner from their homes. The norms proposed suspended evictions for non-payment, froze rent increases, automatically extended expired contracts – those measures, among others, were designed to avoid the worst in the pandemic context. 

Nevertheless, can we say that these measures avoided the worst? After the expiration of the last extension of the Executive Order at the end of March 2021, the scenario changed dramatically. Evictions were reactivated (always going through a mediation process), and the payment of the contracted debts began the month following the expiration of the decree (proposed in 12 installments without interest). 

With more than 65 percent of rented homes having accumulated significant debts in the Buenos Aires Metropolitan Area (AMBA), it is difficult to know how many of them will be able to pay off these debts with the scheduled payments, especially when understanding that Argentina’s economic reactivation did not show positive signs at the time of the order’s expiration date. 

To conclude, it is logical to ask what is left for us to do. Could a repeal of the new rental law solve the massive debt situation of the tenant population? Or improve access to homes?

It is necessary to provide information and strategic suggestions to tackle the current situation, always seeking to take into account and reflect the following: access to housing needs to be comprehensively addressed. Without a holistic perspective, we are doomed to continue to make past mistakes with shades of the present.

 

* Mg. Joaquín Tome
Master in Urban Planning (candidate) – Harvard University
Director Center for Urban Economics Studies – National University of San Martín

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Joaquín Tome

Joaquín Tome

Mg. Joaquin Tome. Master in Urban Planning (candidate) – Harvard University. Director Center for Urban Economics Studies – National University of San Martin

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