Affordable Housing: A Universal Right and Universal Problem
Whilst living and housing standards can vary greatly between Australia and Latin America, when it comes to affordable housing the problems faced in both regions are indeed, closer than you think.
Difficulty buying into the private housing market, lack of affordable and social housing, inadequate rental laws, gentrification of cities, the rise of holiday accommodation and the lingering effects of the COVID-19 pandemic are just some of the common issues faced by both regions.
Australia
In Australia housing affordability is a popular talking point with a view that many younger people cannot afford to buy their own home. According to one survey 63 percent of Australians believe owning a home is out of reach for Generation X/Y. However it is not just young people affected as there are not enough homes to support those in need of government provided or low-income housing.
This lack of social housing leaves behind a growing cohort of the population who cannot realistically afford private rentals where rents have grown exponentially in the cities due to high demand. A problem worsened by properties that would otherwise be available to rent used for holiday letting. This puts people at a risk of homelessness and puts a burden on public services.
For many that do manage to secure a private rental they may be pushed into hardship by paying too great a portion of their income on rent and/or rental laws that fail to recognise that people need to rent for longer and need security of housing.
Each State and Territory in Australia has their own legal framework to deal with residential tenancies and these vary greatly. In 2020, each State did recognise the special circumstances the pandemic caused and enacted emergency laws including temporarily banning most evictions and rent increases, however with these provisions now ceasing or winding back across the country, concerns remain.
In Victoria, recent permanent legislative changes have started to reflect the reality of tenants renting long-term by limiting the reasons a homeowner can end a tenancy, however Australia as a whole is far behind the standards of Europe in recognising the needs of long-term tenants.
Image: Bogota, Colombia
Latin America
In Argentina, a growing percentage of the population, particularly younger people, who do not live in social housing or are unable to own their own homes need to rent privately.
The Government there enacted changes to rental laws in June 2020 to ‘freeze’ rents and fix prices at the beginning of a lease whereby they can only be adjusted annually according to salaries and inflation. This might seem positive at first glance but in reality high inflation in Argentina combined with stagnant wage growth hurts renters. It also leads to the situation where landlords are setting rents increasingly high at the beginning of tenancies making it difficult to enter the market without contributing a significant part of income to rent. Landlords may also attempt to get around these laws by renting for “temporary” purposes for 3 months or less meaning they do not have to comply with the new laws and taking secure long-term housing options away.
In massive Latin American cities like Buenos Aires, Rio de Janeiro and Bogota, affordable options are pushed further and further away from the city as factors like urbanisation, gentrification and use of premises for holiday letting have contributed to inequality. Rent control laws, which are more common in Latin/North America and Europe than Australia, to regulate rent increases in cities are generally in place however their effectiveness is unclear.
The pandemic has been harsh in Latin America, exposing issues with homelessness, as well as inadequate and over-crowded informal housing. Government responses have been mixed. Whilst Colombia and Argentina acted quickly in banning evictions and rent increases, media reporting has suggested many landlords in cities like Bogota are simply ignoring these laws. This leaves vulnerable people, including those whose income has been cut-off due to lockdowns, who cannot make rent repayments forced into homelessness.
Solutions Moving Forward
There are of course no easy solutions to these problems and many facets of the community need to advocate and collaborate together to achieve improved housing outcomes. However, ultimately it comes down to all levels of Government across both regions to develop policies and legislate changes that will create more affordable and social housing. This will take the squeeze off those on lower incomes by allowing them greater access to homes. This then needs to be supported by greater protections for renters and stricter regulation on holiday accommodation, which will involve setting limits on the number of days per year properties can be listed for holiday letting, when tourism picks up following the pandemic.
Both Australia and Latin America need to recognise affordable housing issues in their respective regions as a priority as the world starts its post pandemic recovery.
Content Disclaimer
The views expressed in this article are those of the author and do not necessarily represent the views or opinions of the Australia-Latam Emerging Leaders Dialogue.
