New law would draw a promising future for the housing market in the medium and long term, benefiting both tenants and investors
The bill that would regulate the rental housing market, which the president of the Chamber of Deputies has said would resume in August after expiring, would boost investment in rental housing, which for decades was discouraged by overprotection of tenants, which often made it difficult to the point of being impossible for the owner of the property to recover its possession.
This overprotection was detrimental to anyone who went to the market looking for a rental home, faced with a restricted supply that was expressed in lower quality homes at high prices.
The bill would correct that situation by creating a specialized jurisdiction that would allow evictions of non-paying tenants to be carried out within a maximum period of two months.
At the same time, the tenant would receive fair protection as the bill establishes that legal costs would be shared between the parties and by limiting the deposit required for the contract to the equivalent of only two months’ rent.
Although it would come late, after the lack of fair regulation having done much damage for decades to the development of a rental housing market, with its aftermath in terms of accessibility to good quality housing at competitive prices, the approval of the law, if the pending procedures in Congress are completed, would draw a promising future for this market in the medium and long term, to the benefit of both tenants and real estate investors.
The changes taking place in the housing market in Latin America and the Caribbean require the adoption of such regulations.
Both in the region and in the DR, for a long time there was a predominance of home ownership, unlike other regions of the world, especially in advanced countries.
But that reality is changing. For many young people today, owning a home is no longer the main goal of accumulating wealth. In addition, many people no longer know where they will end up living and, consequently, prefer to rent a home rather than buy or build one.
The change in trend has been such that it has led the Inter-American Development Bank (IDB) to propose a return to social rental housing, leading the State to promote this type of housing.
Figures from a study by ECLAC confirm this change in trend: in 2002, in Latin America there were on average 73.1% of owners and 16.4% of tenants; in 2022, the figure was 66% and 20.9%, respectively.
And the approval of the aforementioned bill would help the country respond to the needs that this change in trend would create in the real estate sector.
