The housing problem in Argentina is a complex phenomenon


The housing problem in Argentina is a complex phenomenon. It
manifests itself in diverse ways and responds to diverse causes. Standing out
among them are: the difficulty of access to housing for the most neglected
sectors of the population and a large portion of the middle class, the serious
problems of lot access, the expulsion of working class and poor people from the
cities, the lack of basic infrastructure in neighborhoods, squats, and
shantytowns, and the need for improvements in housing. Reflecting this
situation is the fact that in that last few years in the midst of intense
economic growth, improvements in social indicators, and even a boost in state
programs, the conflict around access to urban land and housing has worsened.
Specialists in the subject agree that there is one factor that in general is
not covered and that explains an important part of this problem: the
deregulation of urban land markets.

“The occupations
of land and housing in recent history have represented the most common form of
access to land and housing for working class and poor people”, Raquel Rolnik,
Special Rapporteur for the United Nations on housing, stressed in her last
visit to the country in April of this year. Raúl Fernández Wagner, of the
organization “Habitar Argentina” (House Argentina), told Cash that “for every
10 people in the Metropolitan Region [of Buenos Aires] that obtain housing, 60
percent buy a lot or rent a room in the informal market. This translates to a
boom in in land grabs and in the expansion of rooms in shantytowns”.

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According to
official figures, in the province of Buenos Aires there are around 850,000
families that suffer from problems related to housing and access to land title.
The NGO, “Un Techo para mi País” (A Roof for my Country), published a report
which indicated that in Greater Buenos Aires there are 864 shantytowns and
squats, which are home to 508,144 families. 24.3 percent of these are between 6
and 14 years old and during the last decade squats grew 16.7 percent, an
important increase in historical terms. The cases of land grabs in different
parts of the country are manifestations of these difficulties. The Institute of
Higher Studies of the Administration of Caracas (IESA) performed a study that
indicates that to overcome the housing deficit in Argentina 65 houses are
needed for every thousand people, above Chile (35 for every 1000), Colombia (41
for every 1000), and Mexico (60 for every thousand). This panorama takes place
in a period of improvements in social indicators. In the last few years, the
state has shown dynamism in housing policy. According to the latest data of the
undersecretary of Urban Development and Housing, the housing solutions built
since 2003 exceed 622,000, impacting 2.8 million people. There are 221,000
solutions in progress, evidence of strong state participation in housing


undersecretary of planning in the City of Buenos Aires recently performed a study
on urban land prices in the Metropolitan Region. Without taking into account
gated communities and land inside of the city limits, the price of land today
is 2.7 times what it was in July 2004. In the western sections, land prices
have risen 235 percent; 360.3 percent in the southern sections; and 78.8
percent in the northern sections. In the City of Buenos Aires, since 2004,
[land] prices have risen 271 percent, and 34.5 percent only in the last year.

Strong economic
growth encourages the demand for land, and with fixed supply, the price
increases. It happens that this demand, in many cases, does not come from those
who intend to live on that property. “The price of land generates a phenomenon
of speculation. Speculators buy land and hope that it increases in value. And
fundamentally, value increases because of state action, which provides public
services, improves connectivity through transport, roads, and makes schools or
hospitals. In any areal photograph of Greater Buenos Aires, even in the City of
Buenos Aires, one can find great expanses of empty land. This land has owners
that enrich themselves through speculation”, stressed Eduardo Reese, assistant
administrator at the Institute of Housing of the Province of Buenos Aires.

The net rate of
appreciation (not including the effects of inflation) of a vacant lot in the
province of Buenos Aires hovers around 3 to 4 percent per year, while the real
estate tax is 1.2 percent above the appraisal price, which is below the market
value. Speculation is good business but also restrains the supply of land and
causes the price increases. According to the calculations of Miguel Pato,
regional director of EY Real Estate for Latin America, the strong price
increases on urban land increased their incidence in the costs of construction,
from 10 to 40 percent since the introduction of convertibility.

Besides the
severe increase in land values, there is a notable disparity between prices in
the most accessible areas with the best basic services, and the more neglected
areas. “The City of Buenos Aires sets the prices of the entire Metropolitan
Region. Elevated prices correlate with a shorter distances to downtown, and
with the proximity to trains and highways”, explained Fernando Alvarez de
Celis, Director General of City Planning.

This situation
describes a peculiar means of social exclusion. “The price of land continually
displaces working class people and

public housing to more remote areas. The
city–understood as a place with adequate transportation and infrastructure,
cultural activity, schools, and hospitals, among other services—presents the
possibility of accessing job opportunities and the most specialized education,
health, and recreation resources; together with complex and indivisible
attributes which cannot be bought or sold, even though they are reflected in
the price of urban residential properties”, explained Andrea Catenazzi and
Eduardo Reese in their recent work “Derecho a la ciudad” (Right to the City),
realized by the Institute of the Suburbs of the University of General

The current
deregulatory legislation reflects urban land policy. In the City of Buenos
Aires, it closely follows the Urban Code sanctioned in 1971, under the de facto
government, and in the province of Buenos Aires, the Urban Code of 1977.


“It is necessary
to transform the speculative logic of the market. Property is seen only for its
exchange value. Reform is fundamental so that urban planning can promote the
democratization of the processes of access to land and housing”, Edesio
Fernández, professor of the Planning for Development unit of University College
of London, pointed out in “La ley y la producción de la ilegalidad urbana” (The
Law and the Production of Urban Illegality).

The draft of the
law for the “Promotion of Popular Habitat,” elaborated by the Ministry of
Infrastructure of the province of Buenos Aires, suggests alternatives to
regulating the production of urban land through the broadening of supply. It
proposes, among many other things, to punish empty real estate through fines,
in such a way to discourage speculation. “According to the latest official
data, there are 2.5 million units of uninhabited housing in the country. In the
city of Buenos Aires, the unoccupied units reach 341,000 units, equivalent to
25 percent of the total” specialist Miguel Pato pointed out.

The law also
proposes that private developments, like country clubs, gated communities,
private cemeteries, and commercial centers of more than 5,000 square meters,
turn over to the municipality at no cost, land equivalent to 10 percent of the
net surface of the premises. According to an analysis of the portfolio of
provincial infrastructure, the cost to the buyers of the lots in gates
communities would be only one percent of the lot price. “In Great Brittan,
every private development must apportion 30 percent of the surface of the land
for low income people; in France, they apportion 20 percent. In Manhattan,
almost half of the rents are regulated. Spain and the Netherlands also have
land management laws”, explained Raquel Rolnik.

The regulation
provides for the recuperation of the bonus value generated by public works
above the property price. “The great investment in infrastructure being
realized is what values land, the state should recuperate that value. Also the
expropriation tool should be used adequately, so that [land] is not used late
and poorly as happened in Ledesma, Jujuy”, Fernández Wagner stressed.
“Definitely, the problem will not be solved only by building more houses
without controlling the land market, but by controlling the market so that
working class people can return to building on their lots, and making streets,
transportation, sewage facilities, schools, gendarme, in short, everything that
is the city. Two thirds of the housing deficit are explained not by the need
for a new house, but are connected to additions and repairs to the house where
a family already lives, and the urbanization of neighborhoods”, added Reese.








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