Between empty boxes, for one moving forced, in a half-packed apartment, Argentine Tomás Sislián spends his last days in the home that saw him become independent from his family home.
The real estate crisis, in a context of 211% of annual inflation and where rents can be set in dollars, plunges tenants into helplessness.
“I lived my whole life in this area and it is horrible because I feel like they are expelling me,” said Sislián, a 28-year-old audiovisual producer who must leave the apartment he rented and now cannot find an affordable alternative.
“It frustrates me because I am a professional, I have two degrees and four jobs. “It can’t be that I have to go live 20 kilometers from where I always lived,” he added.
Despite an intense search that has been going on for more than six months, he cannot find a home that is not five times higher than his current rent or is valued in dollars, a safe haven savings currency in Argentina, but whose fluctuations can also vary the price of a rental in foreign currency.
The real estate problem has been ongoing in Buenos Aires for years. However, the crisis worsened for tenants after a strong devaluation of more than fifty% of the official exchange rate in December, which fueled inflation and consequently reduced the purchasing power of Argentines.
In December alone, prices increased 25.5% in this country mired in economic crisis.
The government of ultra-liberal Javier Milei, who took office on December 10, also repealed laws that regulated the terms of rental contracts, which can now be set in dollars.
In the case of Sislián, the owners of the apartment did not renew the rental contract, alleging, without giving explanations, that “The situation in the country is complicated”he related.
“Desperate people”
The Argentine economic crisis especially affected tenants, with increases accumulated in the last year of 285% to 309% for rentals of homes with one to three bedrooms, according to a survey by the Scalabrini Ortiz Study Center.
“We receive desperate people who tell us that they don’t know where they are going to live tomorrow”says Gervasio Muñoz, president of the organization Inquilinos Agrupados, which protects the rights of tenants in Argentina.
In recent years, different tenant organizations fought for “Rental Law”, sanctioned in July 2020, which provided for a minimum lease period of three years and adjustments with an index that averaged the increase in salaries and inflation.
But, through the ambitious decree of necessity and urgency (DNU) promulgated by Milei and which came into force on December 29, that legislation was repealed. Now, the conditions depend exclusively on the negotiating parties.
“Why should the State get involved in the lives of private individuals?” the libertarian president raised on countless occasions to refer to that and other state regulations.
As a result, nowto “we see that not only is there no offer, but that the conditions for renewing a contract come with increases in the 500% and monthly renewals tied to inflation”says Muñoz.
The Executive thinks that the best way to improve the scarce supply of rental housing is to remove all possible State regulations. Even the one that forced the parties to agree on a price in pesos.
Salary reduction
According to economist Hernán Letcher, director of the Center for Political Economy of Argentina, the impact of the devaluation on the real estate market is indirect and the Argentine problem is part of a global phenomenon.
However, the reduction in the purchasing power of tenants is a particular fact because, in Argentina, “The main transmission pulley of the inflationary process is the exchange rate,” he assured.
“Usually, when there is a devaluation in Argentina there is a direct effect on prices. And salaries tend to update last. “That is why the loss of purchasing power occurs,” he explained.
Grouped Tenants presented an appeal for protection to annul the DNU that eliminates the legislation that mediated between owners and tenants.
Source: Gestion
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