Renting Sucks

Complaints about the difficulties of renting in Buenos Aires are commonplace in the local expat community. According to an article in today's Clarín, we are not alone.

Today an organization called the Unión Argentina de Inquilinos (Argentinian Tenants' Union) spoke out against government inaction against what they called an "abusive" and "inhuman" rental situation. While prices in Argentina have been rising across the board, the organization is claiming that rents have increased at triple the inflation rate, prompting some landlords to illegally raise rents by up to 20%.

Oddly enough, the article makes no mention of the extranjero impact on the rental market. The influx of tourists and expats in recent years has certainly done little to positively affect the situation for Argentine renters, as the glut of foreigners armed with dollars and euros has prompted many property owners to raise rents and convert their buildings into tourist rentals. The quirks of Argentinian rental laws further worsen matters, as most people looking to rent in Buenos Aires are required to obtain something called a garantía. A garantía is a document signed by someone who owns property (usually that property also needs to be in Buenos Aires) that guarantees to a landlord that a tenant's rent will be covered. If a tenant fails to pay their rent, the person who signed their garantía can be held liable for the money. As such, garantías can be extremely hard to obtain, even for Argentines. Most locals rely on parents or family members until they can afford to buy property of their own. Property outside of Argentina cannot be used, making it virtually impossible for foreigners to obtain a garantía unless they have extensive connections or some very trusting Argentinian friends. On occasion people can get around the system, but outside of having a personal relationship with a landlord who is willing to rent without a garantía, it usually requires paying anywhere from six months to two years of rent in advance.

With a garantía out of reach for many foreign renters, two options remain - either rent a room in an apartment where the garantía is held by an Argentine or find a so-called "tourist rental". Tourist rentals are furnished apartments where the rental price also includes utilities and often things like cable television, telephone calls, the internet and even a regular cleaning service. Initially designed for tourists looking to rent apartments during their stay in Buenos Aires, many young expats (especially those only planning to stay six months or a year) stay in these tourist rentals for extended periods of time. Tourist rental contracts are legally limited to six months and tenants are usually required to pay for the entire length of stay in advance. On top of that, tourist rental prices are listed in dollars and are usually double or triple what their Argentinian counterparts are paying for comparable apartments, although it should be noted that these prices are still well below what many foreigners would be paying in major cities back home in Europe and the United States.

With the rental situation being somewhat of a hassle, it is not surprising that so many foreigners have bypassed it altogether and simply purchased an apartment of their own. Foreign purchases are driving the current housing boom in Buenos Aires, driving up property values and prompting developers to throw up new apartment towers across the city. While the increased supply should eventually help the rental market, it is worth noting that many Argentinians are not in search of luxury lofts. (One might also notice that the development boom is creating a very dangerous housing bubble that could threaten the entire economy when the supply of foreigners willing to plunk down $100,000+ dries up, but that is a whole different issue.)

In the meantime, renting in Buenos Aires continues to be an undesirable situation for expats and Argentinians alike. As part of their statement in the Clarín article, the UAI noted that many local renters are left in an impossible "take it or leave it" situation when it comes to rising rents. In a city filled with old buildings, the prospect of fighting an illegal rent increase often guarantees landlord neglect when it comes to repairs and renovations. They also lament that rising rents "are expelling people from the formal housing system," as some Argentinians, especially those without garantías, are being forced to accept precarious month-to-month rentals instead of the long-term leases most are accustomed to having.

Good times.