I cannot add to this article by Fran Ivens in the Telegraph: “How Argentina’s ‘chainsaw man’ Javier Milei slashed rents by 20pc”
Rents in Argentina have fallen 20pc since President Javier Milei scrapped a “destructive” cap for landlords in December.
Under four-year rent controls, landlords fled the market in their thousands and rents increased 286pc, fuelling an even deeper housing crisis.
Since the legislation was scrapped, rents have fallen and the number of properties that are available for rent has increased significantly, according to industry body the Argentine Real Estate Chamber.
The drastic change in outlook for the country’s rental market adds further weight to arguments that even with the aim of reducing the burden on renters, rent caps often have the opposite effect.
The rules, introduced in 2020 by then-president Alberto Fernández, included a mandatory lease term of three years and a limit on rent to an average growth rate of the consumer price index and the wage index. This cap was set by the central bank.
Even before the new legislation came into force, the effect was significant. Unsure of how much and when they would be able to increase rents, landlords hiked their pieces to try and avoid being caught out.
Worsening the situation, 45pc of landlords decided to sell their properties in the wake of the announcement significantly reducing the amount of accommodation on offer and further pushing up prices.
In the 12 months to February 2024, rents increased 286.7pc in Buenos Aires, according to rental platform Zonaprop. There was also a currency aggravation. While many use dollars in Argentina as a hedge against the peso that has been losing value, the law mandated that rental payment must be in the local currency.
Over the past five years, the Argentinian peso’s value against the dollar has decreased by around 95pc.
Landlords similarly left the market in the UK when tenants were made virtually unevictable. There was a suggestion at the time that the government motive was that all renters should be council tenants.
Does giving people “rights” they are unable to sign away ever work?
I would replace “often” with “always”.
An issue very like the one caused by rent control is happening right now in the UK. Landlords are exiting the market, or hiking up rents, because it seems that legislation will shortly be enacted that requires them to insulate their properties so that they can achieve an EPC (energy performance certificate) rating of “C” or above. This is also linked with legislation that will scrap “no-fault” evictions (section 21 evictions) so that landlords cannot evict the tenant when they want to recover their property, unless the tenant has ceased paying rent (at which point, section 8 evictions are used and courts loathe to make people homeless give tenants years to pay back the arrears e.g. at 31p per week). Unsurprisingly, landlords faced with the prospect of being unable to recover their properties should the government decide to enact legislation that forces them to refit old housing stock that’s virtually impossible to insulate to the requisite standard, are choosing to enact section 21 evictions now in their droves.
Unfortunately it’s all very polarized. So-called Conservative MPs are writing articles attacking landlords for using section 21 evictions without actually considering why they are doing it, that it’s the actions of the so-called Conservative government that has in fact created the economic conditions so worrisome to landlords, both in the misguided meddling in the energy market and in the rental market.
The matter of it being impossible to evict unwanted tenants has reminded me of the Tom Sharpe book The Throwback.
Sadly, as Alex points out above, we are going in the opposite direction in Britain – where the new edict going through Parliament will regulate renting even more than it is already, breaking the back of private renting.
True Mr Gove (the minister “in charge”) did not invent this insanity, he is obeying the instructions of officials and “experts”, but he could resign. Sadly I suspect he really does agree with the statism – just as he agreed with the insane Covid locdowns.
I wish the people of Argentina, who have suffered so much from collectivism since the Progressive regime of General Peron took power, a better future – they have a chance of one.
As for the United Kingdom – sadly it is hard to see any grounds for hope for the future.
What i find intriguing about Milei, and Argentina, is how quickly Milei seems to turn things around.
Is that because the Deep State has shallower roots in Buenos Aires than in DC, Brussels, and London?
Perhaps we have a solution to the long dispute with Argentina over the “Malvinas” in sight ? Maybe the Falklanders will choose to ditch the authoritarian regime for the liberal one.
@Lee Moore
Perhaps we have a solution to the long dispute with Argentina over the “Malvinas” in sight ? Maybe the Falklanders will choose to ditch the authoritarian regime for the liberal one.
That made me laugh. I have also hear “just joking, right” comments that one day Mexico is going to build a wall to keep out all those Californians trying to escape Newsom’s tyranny.
However, I did want to make a recommendation for people interested in this subject. David Friedman, a renowned economist and anarcho capitalist wrote a really interesting book that discusses legal systems that are very different than ours. He is known for his work on the Viking era Icelandic legal systems, but he also studies many others, such as that of the Jewish law, Comanche law, Romani law etc. I particularly liked the section on Pirate law, principally because it is a type of law that arises naturally out of the compact of humans working together rather than artificial post facto justifications like “the social contract”. Law among the outlaws tells you a lot about the nature of law and human interaction. It is worth a read to broaden the perspective on this subject and is available at his web site here for free. Or of course at Amazon and similar fine retailers.
That book is fascinating, thanks for the recommendation Fraser.
Snorri – it is indeed astonishing that the President of Argentina has managed to achieve as much as he has, although it may not be enough (we shall have to see).
It may because the state in Argentina is so utterly discredited – so even the agents of the “Deep State” no longer believe in it, and will not obey orders “rig the election” – “NO – I will not do this” or just saying “Yes I will rig the ballot” and then going to a local bar (having done nothing to rig the vote).
The CIA (the CIA is now controlled by the sort of doctrines it was created to fight – it has turned 180 degrees) and co found lots of willing helpers in Brazil in their campaign to remove the “Reactionary” President – but in Argentina they were, basically, told to go away.
Indeed someone told me the other day…..
“Only one Argentine still really believes in Peronism – and he lives in Rome”.
🙂
Although that deserves more+better smileys.