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Housing, a key axis for growth: What is Javier Milei's proposal and what will happen to Procrear
November 26, 2023
In the transition immersed in a deep housing deficit and the rental crisis, several fronts appear to be resolved. The precariousness recorded by the 2022 Indec Census
The incoming government's plan is that 3,000,000 homes can be built, including new ones, extensions and renovations
In the midst of a government transition, Argentina faces a housing crisis of significant proportions. An alarming fact reveals that 1 in 3 households lacks adequate housing.
The problem covers those looking to expand, renovate or acquire a brand-new property, as well as those who face the urge to rent.
The situation is aggravated by a marked shortage of supply without precedent, generating a dramatic panorama for those in search of a roof through a location. In addition, rental values experienced an increase of more than 206% year-on-year throughout the national territory.
President-elect Javier Milei will face a challenging panorama for what is to come in terms of housing where there are several fronts to be resolved. As announced by Infobae, the man who will lead this activity is Ricardo Inti Alpert , a professional with experience in the field of construction, social entrepreneur and expert in urban development financing.
Important changes are anticipated in the ministerial structure. Alpert will head the Housing Secretariat, which could be part of the future Ministry of Human Capital, led by Sandra Pettovello, or be integrated into Infrastructure (to be carried out by Guillermo Ferraro). The final resolution is still pending confirmation.
What is certain is the disappearance of the Ministry of Territorial Development and Habitat, currently directed by Santiago Maggiotti.
Ricardo Inti Alpert, the future secretary who will be in charge of Housing in the national Government that will take office on December 10.
In line with the general vision of economic management, public housing policy under the next government seeks to generate a shock impact, avoiding the path of gradualism.
Alpert confirmed to Infobae that at least 3,000,000 families need to build a home, expand it, repair it or provide it with basic services. No less than 10,000 neighborhoods need to improve their infrastructure and more than 200,000 multifamily buildings need to be repaired.
“The intention is to eliminate state financing for new housing construction,” he commented.
Alpert stressed the importance of reducing inflation as a means of channeling savings towards boosting credits for works without public spending.
The expert emphasized that, by allowing homes built by public works to be acquired by families, the transition to private works would not stop the construction process, thus guaranteeing the continuity of employment for the sector and this would promote a large number of new jobs.
Housing policy, as highlighted by Ricardo Inti Alpert, will focus on reducing inflation and increasing the level of activity.
“The proposal also includes the private construction of 1,000,000 homes in different locations, the provision of services and infrastructure, and the provision of documentation to 1,000,000 families in popular neighborhoods that do not have them today. The key will be a Program to Promote Social Urbanization and Affordable Housing Trusts,” said the expert.
The intention is also to urbanize, provide services and create conditions so that 10,000 deprived neighborhoods change their appearance and people can live in a dignified manner.
The libertarian plan aims to build particular works within a period of six years, estimating an investment of USD 53 billion. With a percentage of less than 2% of GDP annually allocated to loans between individuals, without subsidies or state budget participation, the aim is to address the comprehensive social crisis.
“In the midst of the current scenario of inflation and stagnation, with millions of people facing rents of up to $200,000 per month, on average, a solution is proposed. If these people can make an advance, whether of USD 8,000, USD 10,000, or USD 12,000, and access a loan of USD 40,000, they would have the possibility of building a top-quality home. The necessary savings are already available, for example, in Anses or in insurance companies. But currently there is no effective mechanism to channel it, it has to be created,” added Alpert.
The next government aspires in the first year of administration to extend the invitation to professionals from various sectors, such as doctors, teachers, bus drivers, firefighters, police, health personnel, programmers, among others, to join if they wish to acquire, build or expand their home and do not have access to credit.
Neighborhood improvements
In Argentina, around 50% of the approximately 10 million families face unmet wants and needs in terms of housing, infrastructure and improvements in their urban environment.“The option of paying in installments for construction materials, expansions, improvements, urban infrastructure and new homes is a natural practice for working families,” said Alpert.
The idea is to generate mortgage loans but tied to the Salary Variation Coefficient
The approach will be based on the premise that housing and habitat finance and pay for each other, avoiding fiscal costs and generating wealth. This will be achieved by promoting the massive development of private works, allowing families and communities to organize, manage and decide on projects with savings or payments in installments.
Ricardo Inti Alpert said: “We talk about quality in the sense of guaranteeing access to services for those who lack them. We seek to regularize the legal situation of households that have not yet done so and offer the opportunity to purchase or build for those who do not own a home. The goal is for them to be able to start a small investment project in their home and pay for it in easy installments.”
Different systems
Not only will the aim be to promote brick work through the traditional scheme, the intention is to promote dry construction, with wood, paneling, steel frame, among other building systems.Libertarian leaders maintain that there is an opportunity to develop the country completely and that all systems will be considered.
The steel frame can boost the housing sector in the future incoming government
Procreate
During the week Alpert and part of the new structure will meet together with Santiago Maggiotti and his team. There you will learn about the Procrear plan.As Infobae learned, in the 10 years since this scheme has been in operation, more than 500,000 housing solutions have been provided with a budget of more than USD 1,000 million invested.
Today, through the Procrear II Plan, there are nearly 34,000 houses under construction, to which we must add the option of those who can access finished units that are delivered turnkey in the 59 Urban Developments that are being carried out in different parts of the country, which total another 16,000 homes.
Throughout the country there are 59 Urban Developments that are under construction, it is not known with certainty what future they will have.
Locations
As reported by Infobae , the Rental Law , in force since June 2020 and recently reformed by the national Congress, is expected to be repealed.If finalized, the rental contracts would once again be governed by the Civil and Commercial Code of 2015, with free adjustment periods, which could be agreed between the quarterly or semi-annual parts, as stipulated.
Milei's announcement generated a certain paralysis in those who were about to sign contracts and provoked the approval of real estate agents and owners, while it was not well received by groups that defend tenants.
Tenants who must update their price or look for a home to sign a new contract face constant challenges due to sharp price increases and lack of supply
In the city of Buenos Aires, a three-room apartment has an average cost of $300,000 per month. There is an increase in dollar proposals and informal agreements between landlords and tenants across the country.
Given the shortage of options in pesos, tenants should start their search three or four months before their contract ends.
Mortgaged
More than thirty years after the devastating hyperinflation of 1989, Argentina revives critical debates. State intervention in the rental regime and in the mortgage system (UVA), through indexation systems, caused a collapse in both markets.President-elect Javier Milei announced that he is not going to review the UVA debt updating system. This caused an unexpected reaction in the beneficiaries of these credits.
Surely the protests of the UVA mortgage holders will continue once Milei takes office, who implied in public statements that this is a problem that the State should not solve (Photo: Luciano Ingaramo/Senate Communication)
“To illustrate the implications of these credits, we can consider the case of a teacher in Tierra del Fuego, who, since he did not qualify for conventional credits, was assigned a UVA Credit. Although at first the fee-income ratio of 22%/25% seemed viable, in just over three years the fee exceeded his total income, dragging him into a situation of insolvency," Cristian Rubio, lawyer representing Tierra's mortgage holders, told Infobae. of fire.
The self-convened people will probably continue their claim, since currently more than 90,000 families are paying their loans that they took out between 2016 and 2019. Although the delinquency is not significant, these families face installments that average $200,000 per month, and with high inflation, it will continue to increase.
