Is renting possible?

Seven million people rent in Argentina. A normative framework for rent regulation and public policies that impact supply and guarantee the right to proper housing are necessary. Renters are often exposed to abusive practices by the real estate market and families are pushed toward informal rental markets and overcrowding.

The “acceptable expense” a family should allocate to housing, according to different estimates, should not exceed 30% of their income, because otherwise it must be taken from other basic needs. According to data from the Ongoing Home Survey (EPH, according to its initials in Spanish), in the City of Buenos Aires the lowest income segment of the population is unable to cover the cost of an average rental even with the entirety of their income, on top of the fact that this is not the focus of housing policies. The population in the 2-5 decile segment can pay rent, but exceeds the aforementioned 30%, whereby the impact of keeping a home is disproportionate and creates an imbalance in the rest of their family expenses. Half of the city’s population, therefore, suffers the consequences of high rent and the lack of public policies to regulate it.

This scenario, compounded by the abusive practices of the real estate market, high prices and lack of policies to make housing affordable, pushes families toward the informal rental market, overcrowding or the cohabitation of two or more family groups under one roof.

Between 2001-2010, the number of rental properties in the country increased from 11 to 16%; in some cities it surpassed 25%. According to the Housing Survey, in the second quarter of 2016, some 7 million people were renting in Argentina. In the city of Buenos Aires, rentals are increasingly becoming the strongest option when it comes to access to housing. According to the latest city statistics, more than 35% of households rent the homes they live in.

The only norm regulating the rental market is the Civil and Commercial Code through regulation of contracts. But this assumes the landlord and tenant are equal parties, when in fact their relationship is asymmetrical in that one needs access to housing. That contractual regulation also does not account for compliance with the right to housing. Nor is there a state institutional structure to monitor compliance with the aspects that are regulated, which in fact leads to abusive practices.

The Senate passed a bill in November to regulate rent, but it has been held up in the Chamber of Deputies, which is alarming in this context. Lawsuits have managed to generate better conditions of access to rentals through the courts. In December, the Administrative-Contentious Affairs and Tax Appeals Chamber ratified the decision of first instance, through an amparo petition filed by the ACIJ (Asociación Civil por la Igualdad y la Justicia) and Inquilinos Agrupados against the CUCICBA (City of Buenos Aires Realtors Association), prohibiting realtors from charging more than one month’s rent in commission per contract.

These two instances were in response to the growing rental demand and the implications with regard to fulfilling the right to adequate housing and decent habitat. This can only be resolved through two types of intervention into the conditions perpetuated in an ever more aggressive and exclusive market: by instating a normative framework that reinforces the protection of renters and by intervening in the market to promote an affordable rental supply in accordance with the homogeneity in the demand.