Safe as houses

Argentina announces new affordable housing programme, but will this one work?

In Argentina, plans to scale up the construction of affordable housing plans are being developed under the 29 billion Argentina Construye (Argentina Builds) ARS programme being funded by the federal government. The programme aims to build 5,500 new homes, added to the 30,000 homes the government is already financing and the reform of 42,000 homes.

A political scientist and social development consultant in Buenos Aires provided some context, “Argentina has had a significant housing deficit for a long time. Unfortunately, the construction of houses is a political football so there is no planning and it never becomes a state policy. Another problem is that the focus is on quantity, rather than quality, so there are many homes still to be finished or fixed. This is why the housing deficit in Argentina has doubled over the past 15 years.” 

“Argentina has had a significant housing deficit for a long time. Unfortunately, the construction of houses is a political football so there is no planning and it never becomes a state policy.”

Political scientist, Argentina

This plan has a two-fold objective. Firstly, it ambitions to reactivate the national economy badly hit by the COVID-19 pandemic outbreak. Secondly, it ambitions to reduce the affordable housing deficit that the Argentina has been suffering for years. As of September 2020, the government estimated the housing deficit at 3.8 million homes. The analysis took into consideration both quantitative (need for space) and qualitative (hygiene, construction materials and basic services among others) variables.

An executive at an Argentinian construction company complained, “This government, as well as previous ones, have established many different plans to create affordable housing. The problem is that there are so many programmes that no one has any idea which ones are active or have been replaced or extended.”

“The problem is that there are so many programmes that no one has any idea which ones are active or have been replaced or extended.”

Executive, construction company, Argentina

One of these plans that seems to have been a success, according to our sources is the Procrear Plan, “In general, Procrear went well, it survived different governments and is almost like a brand. Disused state land was used and the developments were funded by the pension system.”

The pandemic has aggravated the housing problem although the government adopted measures to restrict evictions for rent default while it froze quotas on mortgage loans. The political scientist explained that the economic situation was causing the problem to spread, “The issue is not so much about the housing policy, but rather the drop in income, the inability of people – even the middle classes – to buy a home, and the loss of currency due to structural inflation. Wages increasingly lose their purchasing power so it is impossible to have a serious housing policy. Furthermore, there is practically no mortgage credit, despite the efforts of the previous government.”

What actions could be taken to solve the problem? A former public official had some ideas, “Public policies should be focused on creating incentives for investors to target the construction of affordable housing for low and middle income families.” Wishful thinking!

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