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Deputies approve Rental Law reform - Buenos Aires Herald
August 23, 2023
FACUNDO IGLESIA
The Chamber of Deputies passed a reform which, if approved by the Senate, would change the country’s Rental Law, shortening contract periods and increasing the frequency of price updates. The new bill passed with 125 votes for and 112 against on Wednesday afternoon.
The Ley de alquileres or Rental Law was originally passed in July 2020 and put a 3-year minimum on rental contracts. It also established yearly price updates which were calculated taking into account both the official inflation rate and the average workers’ salary.
If approved, the modified legislation would change the minimum rental contract period to two years and price increases would happen “within a period of between four and twelve months” which would have to be “agreed between the parties.”
The bulk of votes for the modification — 116 out of 125 — came from the opposition coalition Juntos por el Cambio (JxC), which had tried and failed to repeal the law altogether in the same session since it needed two-thirds of the votes to do so.
The Interbloque Federal, Juntos por Rio Negro and Ser gave two positive votes each, and one deputy from the Frente de la Concordia also voted in favor of the reform.
The bill was rejected by 99 deputies from the ruling coalition Frente de Todos (FdT). Four left-wing, three libertarian, and two Interbloque Federal lawmakers also voted against it. Three deputies — two socialists and one from the FdT — abstained from voting.
The head of the FdT coalition in the chamber, Germán Martínez, opened the debate presenting a bill that sought to give continuity to the current Rental Law and incorporated “a series of incentives to be able to increase the stock of rental housing,” which was rejected.
“It is easy to blame regulation in a complex situation like the one we are experiencing, but the complexity of being a tenant or a landlord is totally different,” Martínez said. “While the tenant lives with the sword of Damocles above them, landlords only seek to improve their economic situation.”
“Rentals don’t work,” said Ricardo López Murphy, from JxC. “Because the government, including the Congress, meddled in a very competitive market and destroyed it with regulations.”
According to a report by Zonaprop, a real state website, rental prices in Buenos Aires City increased by 11.3% in July — the third consecutive record-high monthly increase they have recorded. In 2023, rental prices accumulated 89.6%, while general inflation for the same period was 60.2%.
Zonaprop’s index could not measure prices in the city’s Puerto Madero neighborhood, since most of the apartments there are listed in US dollars. A quick visit to most real state websites demonstrates that this trend is not limited to that area.
Also, the increase in temporary rentals — destined toward tourists, digital nomads, workers, students, and affluent locals through websites like Airbnb and Booking.com — is changing the real estate market and making it increasingly difficult for locals to find an apartment in Buenos Aires.
Members of JxC, as well as real estate associations and landlords, blame regulations like the Rental Law for the current issues in the real estate market. However, Gervasio Muñoz, head of the Inquilinos Agrupados tenant organization — which convened a protest in front of the Congress after Wednesday’s vote — told the Herald that the problems were due to a lack of enforcement by the government.
“Having achieved an official state index that updates prices per year and below inflation has opened a scenario of total war,” Muñoz said. “We are losing because the state has decided not to get involved in this — it seems that nobody wants to fight with the real estate market.”
www.buysellba.com
August 23, 2023
FACUNDO IGLESIA
The Chamber of Deputies passed a reform which, if approved by the Senate, would change the country’s Rental Law, shortening contract periods and increasing the frequency of price updates. The new bill passed with 125 votes for and 112 against on Wednesday afternoon.
The Ley de alquileres or Rental Law was originally passed in July 2020 and put a 3-year minimum on rental contracts. It also established yearly price updates which were calculated taking into account both the official inflation rate and the average workers’ salary.
If approved, the modified legislation would change the minimum rental contract period to two years and price increases would happen “within a period of between four and twelve months” which would have to be “agreed between the parties.”
The bulk of votes for the modification — 116 out of 125 — came from the opposition coalition Juntos por el Cambio (JxC), which had tried and failed to repeal the law altogether in the same session since it needed two-thirds of the votes to do so.
The Interbloque Federal, Juntos por Rio Negro and Ser gave two positive votes each, and one deputy from the Frente de la Concordia also voted in favor of the reform.
The bill was rejected by 99 deputies from the ruling coalition Frente de Todos (FdT). Four left-wing, three libertarian, and two Interbloque Federal lawmakers also voted against it. Three deputies — two socialists and one from the FdT — abstained from voting.
The head of the FdT coalition in the chamber, Germán Martínez, opened the debate presenting a bill that sought to give continuity to the current Rental Law and incorporated “a series of incentives to be able to increase the stock of rental housing,” which was rejected.
“It is easy to blame regulation in a complex situation like the one we are experiencing, but the complexity of being a tenant or a landlord is totally different,” Martínez said. “While the tenant lives with the sword of Damocles above them, landlords only seek to improve their economic situation.”
“Rentals don’t work,” said Ricardo López Murphy, from JxC. “Because the government, including the Congress, meddled in a very competitive market and destroyed it with regulations.”
According to a report by Zonaprop, a real state website, rental prices in Buenos Aires City increased by 11.3% in July — the third consecutive record-high monthly increase they have recorded. In 2023, rental prices accumulated 89.6%, while general inflation for the same period was 60.2%.
Zonaprop’s index could not measure prices in the city’s Puerto Madero neighborhood, since most of the apartments there are listed in US dollars. A quick visit to most real state websites demonstrates that this trend is not limited to that area.
Also, the increase in temporary rentals — destined toward tourists, digital nomads, workers, students, and affluent locals through websites like Airbnb and Booking.com — is changing the real estate market and making it increasingly difficult for locals to find an apartment in Buenos Aires.
Members of JxC, as well as real estate associations and landlords, blame regulations like the Rental Law for the current issues in the real estate market. However, Gervasio Muñoz, head of the Inquilinos Agrupados tenant organization — which convened a protest in front of the Congress after Wednesday’s vote — told the Herald that the problems were due to a lack of enforcement by the government.
“Having achieved an official state index that updates prices per year and below inflation has opened a scenario of total war,” Muñoz said. “We are losing because the state has decided not to get involved in this — it seems that nobody wants to fight with the real estate market.”
www.buysellba.com
