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Rentals and housing deficit: In the City of Buenos Aires there are 228,000 empty homes - Infobae
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Alquileres y déficit habitacional: en la Ciudad de Buenos Aires hay 228.000 viviendas vacías
El número de propiedades desocupadas en CABA creció un 45% en los últimos 5 años. A pesar del incremento en la construcción, el acceso al techo propio sigue siendo esquivo
www.infobae.com
January 1st, 2024
The number of unoccupied properties in CABA grew by 45% in the last 5 years. Despite the increase in construction, access to one's own roof remains elusive
By Jose Luis Cieri
It is estimated that there are currently 228,000 empty homes in the city of Buenos Aires while the crisis of access to one's own roof worsens
With the repeal of the 2020 Rental Law and the implementation of deregulated contracts after DNU 70 sanctioned by President Javier Milei, it is expected that thousands of owners will once again allocate their properties to traditional locations.
In the midst of uncertainty, a report revealed that in the city of Buenos Aires there are 228,000 idle homes. Most of these could be used for rental and thus offer a solution for the growing demand. The shortage of supply has decreased drastically in the last three years: currently, there are around 800 apartments available in pesos in various neighborhoods.
The debate around rents, focused on housing, is influenced by myths generated during the discussion of the now repealed law. From the Center for Studies for Economic, Social and Urban Development (CEDESU), they addressed the problem of empty homes, analyzing international cases and delving into the situation in CABA.
“Our study, with a specific methodology, reveals a 45% increase in unoccupied homes in five years. That's why we set out to study its dynamics. The number of 228,000 empty homes is from February 2023. A year before there were 200,000. That is to say: a growth of 14% in just twelve months. Contrary to common perceptions, the Rental Law does not explain the decrease in the supply of new rentals or the increase in prices, which, according to our analysis, are below the values of five years ago in real terms," the summary reports. of CEDESU's work.
If the housing deficit did not exist, the presence of empty homes would not constitute a problem in itself. Rather, it would be a distortion that real estate dynamics would correct over time, perhaps while waiting for demographic growth or changes in residential trends that favor certain geographic areas. However, the existence of unoccupied homes becomes a common social problem in many cities around the world due to the widespread impossibility of ensuring the right to housing for the population.
Why are there empty homes?
The reasons why a home is unoccupied can vary, from ongoing successions to temporary underoccupancy, repairs, properties for sale, weekend residences, units intended for work or health trips, or simply to appreciate over time. In any case, the forms of measurement are diverse.
Source: Center for Studies for Economic, Social and Urban Development (CEDESU). Here the homes according to housing condition and reasons for vacancy
Professor Bruno Giormenti Moravec, who together with sociologist Pilar Martínez prepared the report, told Infobae that it is crucial to address the housing crisis in general terms: “This crisis is manifested in the absence of mortgage loans to acquire one's own homes, as well as in abusive access conditions and high prices for tenant families who are forced to move. It is also reflected in the growth of popular neighborhoods, which are expanding nationwide. “It affects families who live in overcrowded conditions in precarious housing such as hotels and tenements, as well as people who are homeless.”
It is a transversal situation, which finds different causes, but which can be summarized in two: the macroeconomic crisis and the inability of politics to develop an effective urban and housing policy.
“With an inflation regime like the one we have; it is very difficult to develop a real estate credit market. Mortgage credit purchases have collapsed in recent years. And then we see very little vocation from the national governments and mostly from the provincial and municipal governments to find a way around it, with few exceptions,” he added.
Source: Center for Studies for Economic, Social and Urban Development (CEDESU)
The expert considered that the socio-urban integration policies that were deployed during the Alberto Fernández government were innovative and successful, but with limited resources for the enormous task of integrating the almost 6,000 popular neighborhoods. The Rental Law was left halfway, without control instruments to accompany it. No government knows for sure how many families rent. Much less how many owners there are and how many homes, even though there are tools for this.
Giormenti Moravec added: “In this framework, however, a paradox is observed. Construction has not stopped growing. At least in the big cities. It is a business where the reserve of value or savings acts and continues to be very profitable with the alchemy 'build in pesos and sell in dollars', even in contexts of low rising costs and falling value of the square meter as seen in CABA in recent years. Therein lies the paradox of this crisis: there are houses, but it is increasingly difficult to access them. Resolving this issue is, perhaps, the main challenge for housing policies moving forward.”
The research uses a methodology developed by the City Housing Institute (IVC), which together with different organizations carried out a first measurement of empty homes between 2017-2018. This measurement is based on the electrical consumption of residential units, which is the way in which empty homes are measured in different parts of the world.
Based on information provided by the ENRE (based on data provided to the Entity by Edesur and Edenor), the households that in one year had an average monthly electricity consumption less than the consumption equivalent to a refrigerator (45 kwh) are counted. “That is, those users who are below that consumption are taken as an empty home. This methodology leaves out units that do not have a meter,” explained Giormenti Moravec.
Currently, CEDESU reported that they are working on the 2023 data. They have not yet published the results. But they noticed that between 2018 and 2023 empty homes grew by 66% in CABA, and did so in all the city's communes. They managed to confirm that Commune 1 (Montserrat, San Nicolás, Constitución, Puerto Madero, San Telmo and Retiro) is where the greatest growth in empty homes can be seen. The numbers are very strong: in the period they went from representing 13% of the Commune's homes to 18.3 percent.
Source: Center for Studies for Economic, Social and Urban Development (CEDESU)
Giormenti Moravec highlighted: “In this growth there is a combination of factors, from the removal of offices in the Macrocentro, a process intensified by the pandemic that also pushed many middle class and upper middle-class families to move to the peripheries of the metropolitan region, to the unstoppable construction boom in Puerto Madero, perhaps the best example of construction as a reserve of value. Hundreds of apartments built in beautiful towers without anyone living in them.”
International cases
In various parts of the world, faced with the social problem of empty homes, some jurisdictions developed legislation to register and regulate these properties. This situation is also part of CEDESU's analysis in exploring the regulations applied in cities or countries that addressed the phenomenon, examining its effects and results. However, the research was limited by the limited availability of information.Few cities or countries publicly disclose variations in vacancy rates, complicating the assessment of the impact of the measures adopted. Most of the data comes from national censuses conducted every 10 years. Vancouver, Canada, stands out by publishing annual reports on the evolution of the vacancy rate, providing a more detailed view of the impact of the measures implemented.
Source: Center for Studies for Economic, Social and Urban Development (CEDESU). Here is a snapshot of the problem in other countries
The annual report “Empty Homes Tax Annual Report” (2021) published by the city itself presents a series of data on the tax on empty houses that was implemented in Vancouver in recent times. There it is said that in 2017 a penalty tax was established on empty homes called “Empty Homes Tax” (EHT), considering those properties that are vacant for more than six months. Its objective is to encourage empty and underused homes to enter the rental market.
The program requires owners of Vancouver residential properties to declare their property status each year, indicating their occupancy status (occupied, exempt or vacant). When the tax began to be implemented, the rate was 1%, increasing to 1.25% for 2020, and 3% for 2021. The tax also indicates that if the corresponding payment is not made, interest begins to accrue. The money raised by the EHT is largely allocated to promoting initiatives that promote affordable housing. One of them is the “Incentive Program (CHIP)” which, through subsidies, strengthens the work of local nonprofit organizations that work in the construction and delivery of affordable housing to low-income households.
How to address the housing crisis
To mitigate the housing crisis “it is essential, first of all, that the macroeconomic crisis that the country is going through can be resolved. The decrease in inflation and the recomposition of real wages, which do not depend on a sectoral policy but on a stabilization plan, is a necessary condition for access to housing to have better conditions of possibility,” said Giormenti Moravec.
Source: Center for Studies for Economic, Social and Urban Development (CEDESU)
At the same time, experts maintain that the national, provincial and municipal States must have greater initiative and prominence in regulatory matters to confront the crisis at all levels. In some jurisdictions new legislative tools must be created, in others simply enforced. For this, better state capacities are needed. Giormenti Moravec said: “Unfortunately we see that the course that the new national government is taking is going in the exact opposite direction, so we are skeptical that this crisis can be resolved.”
In relation to idle homes, they note that it is a problem that they seek to regulate in different cities around the world. Some experiences have gone on the penalty side (such as taxes or fines), others on the incentive side (tax deductions, subsidies) and many with a combination of both measures.
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