Real Estate News Point by point: there was an agreement on the project to regulate temporary rentals and the verdict of the Senate is awaited - La Nación

[BuySellBA]

Point by point: there was an agreement on the project to regulate temporary rentals and the verdict of the Senate is awaited - La Nación



Source:

Punto por punto: hubo acuerdo en el proyecto para regular los alquileres temporarios y se espera el veredicto del Senado

El proyecto se consagra como el primero de la semana en materia de vivienda en obtener mayoría para ser tratado en la Cámara de Senadores; ni la ley de alquileres ni los cambios a la ley de créditos UVA lograron consenso esta semana

www.lanacion.com.ar

September 01, 2023

The project is enshrined as the first of the week in housing matters to obtain a majority to be dealt with in the Chamber of Senators; neither the rental law nor the changes to the UVA credit law achieved consensus this week​

By: Mercedes Soriano

The project proposes that temporary rental contracts be recorded in a national registry, among other points

More than three years ago, the enactment of the rental law in an inflationary context reduced supply and skyrocketed prices, which today to protect themselves from devaluation are dollarized despite their unconstitutionality. The alternative that many owners saw was to turn their homes to temporary rental , an activity that has no national regulation and that was discussed this Thursday in a plenary session of the Senate's General Legislation and Tourism commissions.​

​

The legislators debated a bill on housing rental contracts for tourism purposes, the result of the unification of the two projects presented individually by the senator of the Frente de Todos, Ana María Ianni, and the senator for Mendoza UCR, Mariana Juri. With the majority of both commissions, it was signed in a single opinion and will be dealt with in the Chamber of Senators . Although the precise date on which he will go to the venue is unknown, " some Senators speak of a tentative session for two weeks from now ," estimated sources close to the Upper House.​

​

Currently, temporary rental contracts are managed through digital platforms such as Airbnb or Booking.com, the agreements are between the parties privately or with professional intermediaries such as specialized real estate agents.​

“The supply of temporary rentals is concentrated 65% in four neighborhoods of CABA. If we compare the number of homes rented with traditional contracts currently in force, there are 650,000 versus the 17,000 temporary ones that are offered, these represent 2.6%”, detailed Daniel Bryn, head of the real estate monitor Invertire. At this point, Bryn compares the apartments occupied for two or three years under his contract versus active temps. However, the argument of other specialists who affirm that the temporary ones took away the market from the traditional ones is based on the comparison of available units. The latter is what leads temporary rentals to match and even exceed the offer of traditional rentals.​

Bryn also pointed out that a temporarily rented 1 bedroom apartment in Buenos Aires yields 7.41%, compared to 3.15% for a traditional rental . The growing interest of the investor's eye for these profit margins pushed many developers to build buildings designed from the beginning so that the apartments can be rented temporarily .​

In Buenos Aires there are developers who design and build their buildings thinking about the necessary amenities for temporary rental

The opinion that will be discussed in Senators is not the only regulation project for temporary rentals. In the session of Deputies that last week gave half a sanction to the rental law, the deputy Paula Pennasa presented a proposal similar to the one debated today in plenary session on temporary rentals, although she did not achieve the two-thirds necessary to continue her treatment. . Said project may be discussed in the debate of committees of the Lower House. That is to say, that in Deputies there are also initiatives to regulate temporary rentals.​

The bases of the project​

For Senator Juri, one of the premises of the project is to give guarantees to tenants and owners involved in the short-term rental contract, support that today they do not have in conflictive situations. He then exemplified two frequent instances that could be covered with the advancement of the regulation law: "Since temporary rental is not included in our Civil and Commercial Code, it can happen that tourists settle with minors in an apartment, do not leave and that this occupation is possible because it is not governed by any contract, only finding Whatsapp messages between the parties that agree to the delivery of the property. On the other hand, security problems have arisen for tourists, such as no one controlling the gas leaks or the electrical installation because they are private properties”.​

​

Likewise, he spoke about the importance of regulating temporary rentals in the traditional rental market. “We cannot be oblivious to the fact that the temporary rental adds another difficulty to the traditional rental of homes that today is in a moment of crisis, because if we have an absolutely regulated standard for three-year contracts and at the same time there are no conditions for the temporary, this also affects tenants and owners who want to put their home up for permanent rent.​

According to the project, temporary rental contracts for tourism purposes can be extended from one night to 90 days.

The term of the contract. The location must be rented between one night and 90 days.​

Who can market the property. The initiative reaches the owners or administrators who have the corresponding power or authorization to market real estate on a temporary basis, guests and any person who markets, advertises or offers through any means temporary rental homes for tourist use.​

Creating a record. The creation of the National Registry of Temporary Tourist Rental Housing is proposed, which would work under the orbit of the Ministry of Tourism and Sports of the Nation. The owners have to register the units, which must have authorization for marketing issued by the competent authorities in their respective jurisdictions and compliance with the corresponding tax and fiscal obligations. "The regulation of the conditions that these homes must have will remain in the hands of the provinces," Juri explained.​

That the registration is shown on the platforms to inform that the rental is formal. The digital platforms that offer, broker, or celebrate temporary rental contracts for tourism purposes must enable a field on the digital platform for the owner to report the registration number before the registry of each unit; and to proceed with the cancellation, withdrawal or suspension of any publication that does not have the registration number in the registry, prior reliable notification to the owner or manager of the rental unit.​

Currently, temporary rentals are published in dollars . The objective is that, from this eventual law, these types of contracts are published as indicated by "the general regulations for Argentina: it has to be in pesos," Juri clarified.​

The measures in CABA and in the world​

In the City of Buenos Aires there are regulations for housing for temporary rental for tourism purposes. Law 6255 sanctioned in 2019 and updated in 2022 establishes that contracts can be extended for up to 90 days and can be published in dollars . In addition, the owners or those who administer, manage, mediate or act as bidders must also register the affected property free of charge. In the event of not doing so and receiving the irregularity complaint from a neighbor, a record is drawn up and sent to the General Directorate of Infringement Administration (DGAI), which continues with the procedure towards the fault controllers for subsequent collection or execution.​

Argentina is not the only country that analyzes the regulation of temporary rental contracts at the national level, but other countries have already taken action on the matter. The last big city to make it known was New York , the city in the United States with a large influx of tourists. As of September 5, the Short-Term Rental Registration Law will come into force there. Owners may not accommodate more than two paying guests in the same period. In turn, the only way in which the hosts will be able to offer rentals for less than a month is by staying with the tenants in the apartment.​

The measure aims to significantly reduce the accommodation options for tourists, as well as lower the prices of traditional rental housing triggered by the shortage of supply.​

For its part, the Government of Portugal prohibited at the beginning of 2023 the authorization of new licenses for housing for temporary rental , a measure that excludes rural projects that allow the sustainability of small populations. "Tourist apartments had many positive effects to revitalize our cities, but they also have negative impacts such as rising prices," explained the Prime Minister, António Costa, in an interview with the TVI television channel.​

The authorities of the city of Milan, in Italy, are also analyzing the application of measures to regulate this type of rental. The objective would be to limit long-term tourist rentals to favor the appearance of more housing for students and workers. In turn, the city of Florence is also in the process of regulating this market in the houses of its historic center.​

The repercussions of the sector​

The idea of a regulation generated friction with the market players. For example, one of the arguments against the ruling is that it harms local initiatives which are easier to regulate than international platforms. “There are a lot of points that the project does not take into account, such as wanting to punish the national temporary rental portals while Airbnb later does what it wants, because it asks the portals to report how many times the home is rented per year, that they have a (registration) number published on the page and then Airbnb does not. They cannot go against them, so the only thing the law does is harm us and the properties will end up going to Airbnb where they cannot be controlled”, said Darío Rizzo, head of the Alternativa Propiedades real estate company specializing in the relocation of businessmen, officials and students for monthly, semester and annual periods.​

As temporary contracts today are not regulated at the national level (only in CABA) and the traditional ones are for three years, some tenants who stay in a city in the country for shorter periods and who do not rent for tourism purposes go to the temporary market . In this sense, the term of up to three months is another point of conflict for Rizzo: “ They do not take into account other types of tenants such as students, family members or digital nomads who come to work, for example, six months, one or two years. Between the three months of the temporary and the three years of the traditional there is nothing legally possible, so these profiles are harmed”.​

Although the legislators raised the law as a way for tourist cities to reinforce the security of their accommodations, they also stressed that in the background the idea is to relieve the traditional rental market from this measure. However, some market specialists disagree. “ The regulations are not going to solve anything and they can even aggravate the situation because it is one more message to restrict the offer. It may be that some owner is against the controls and that is why they go to the traditional rental, although the traditional one has the AFIP registration and the adjustment control, and at this hard-hit moment, the regulation does not seem like a good idea to me ”, analyzed Federico González Rouco, an expert economist in housing matters.​