The government launched a new social housing program in August this year, a new version of the Promoted Law that has been in force since 2011, but with a limit for its commercialization. In search for Argentine investorsa delegation from the Ministry of Housing and Territorial Planning (MVOT) traveled to the neighboring country last week.
“The promoted housing law was very successful and continues to be. In its 11 years of validity, 30,000 homes have already been built and this year we broke a record of 5,000 apartments. But prices, due to high demand, skyrocketedwhich made us think of a new tool to solve the housing deficit,” explained Jorge Ceretta, MVOT’s national housing director, during a press conference.
Uruguay has 3.5 million inhabitants and a housing deficit of 60,000 families. The new program seeks to solve this problem with the help of the State and private companies.
“A large part of the investors who bet on the promoted homes are Argentineans. A public that was attracted by the tax exemption,” Ceretta explained. For this reason, the delegation now seeks to attract real estate entrepreneurs from that country.
What is the social program about?
Under the name of “Among all, dreams in work”, the new program has the objective of facilitate access to housing for low and middle socioeconomic sectorsand encourage construction throughout the country.
Specific, the new program generated the mechanism for direct financing to companies by the MVOT through participation in the capital of which you can reach up to 80% of the total cost of the project including land, in projects of up to eight homes.
“It will have the same benefits around the tax exemption than the current promoted housing. But the main difference is that, in these cases, there are subsidies from the government and there is a limit when it comes to marketing the real estate,” said the hierarch.
The experience of Law No. 18,795, promoted in 2011, showed a more than significant rise in prices since its launch. “The offer was concentrated in Montevideo and the marketing prices range between US$150,000 and US$200,000 for a three-room apartment,” he exemplified.
A studio apartment will have a ceiling of US$53,500, a two-room apartment US$68,500, a three-room apartment US$84,000 and a four-room apartment US$98,000.
The search for investors
From the portfolio, they explained that there are already 25 projects presented about to be approved, while four already have authorization. The main characteristic of this social program is that it seeks to encourage small developers in the interior of the country.
“We came to Argentina to meet with businessmen and also to look for alternative forms of construction. Because by having a price cap on sales, constructions must be more efficient,” Ceretta remarked.
In that sense, larger projects may be mixed-use. In other words, it will have homes “among all” but also with the already “Promoted” system. “This allows the developer to be able to enter more expensive areas, due to the incidence of the land,” he said.
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