Buenos Aires Real Estate

The fire that resulted in the loss of lives within an inappropriate occupation in the neighborhood of La Boca, and the growth that Villa 31, in the northeastern zone of the city, has seen, draw light in recent days to the precariousness of existing housing, and the growing insecurity in the city of Buenos Aires; both of which ware a matter of much debate and media coverage, but are also poorly addressed in terms of solving the problems.

Beyond the debate in the media, no citizen unfamiliar with these current and temporary political disputes will go without noticing that at least in the last 10 years the precarious and “temporary” housing in the city has obviously advanced in the form of seized and inappropriate property, more slums, growth of existing density, height and length, illegal rentals, extensions of buildings without permission, and other such makeshift solutions.

One way to understand a city (and all that that implies) is to geographically reference the property values of it. The prices at which property is sold and rented convey the condition of the environment where they are located and of their inhabitants. Following where the lowest prices are in the market can help find the least secure areas, which may also have unsanitary conditions, lack of infrastructure, poor transport, lack of equipment, cultural traditions, and a variety of other physical, social and economic issues.

This rule applies georeferencing for the formal property market for both sales and rentals in the territories occupied by slums. But paradoxically, although it is difficult to admit, it is in the slums or within illegally occupied buildings where the highest returns on rent in all of Argentina can be found.

It is known through statements provided by these very residents that to gain access to a room in these poor living conditions, which are also overcrowded, can cost between $300 and $500. Taking into account that the land is free, and common expenses, non-existent taxes and construction costs below the minimum adequate standard in the rest of the city, the monthly income for those renting out these rooms yield between 50 and 60% annually. These rates are around 10 times higher than what is obtained in the formal rental market, but they are the reality for those investing in the villa real estate “market”.

Meanwhile, across the street, formal and legal property owners of those that live surrounding the slums (except in the case of Villa 31 and Rodrigo Bueno) suffer the consequences of losing property value. In the areas immediately adjacent to the villas, and going out with a radius of 200 – 300 meters, properties are valued at 30 to 40% lower than the average price within that neighborhood outside of that radius.

Despite this significant discount, in most cases it ends up attracting only a few investors, who then end up renting out the property to immigrant families, feeding the cycle of insecurity caused by an overcrowded environment, lack of maintenance, and over-saturation of health services.

It is put forth that the Buenos Aires real estate market can be held responsible for generating the occupational marginality and growth of slums. However, the reality of the situation if taken objectively, shows that the villas are the physical materialization of today’s socioeconomic issues, which are not only experienced by those in the slums, but which can run the gamut of various levels and manifestations, including for those living in close proximity to the slums.

Thus, the growth of this phenomenon generates further polarization and further widens the gap between classes, especially in terms of real estate in Buenos Aires. Indeed, for the sake of everyone, for the city to advance above this marginality, it must face these problems legally and formally.