JavaScript is disabled in your web browser or browser is too old to support JavaScript. Today almost all web pages contain JavaScript, a scripting programming language that runs on visitor's web browser. It makes web pages functional for specific purposes and if disabled for some reason, the content or the functionality of the web page can be limited or unavailable.

Tuesday, July 22, 2025

IDB study: Rentals could help alleviate housing deficit

by

20140409

Gov­ern­ments tra­di­tion­al­ly have pro­mot­ed own­er­ship of new­ly built homes as a so­lu­tion to the hous­ing short­age in Latin Amer­i­ca and the Caribbean. But a re­veal­ing new study high­lights the key role rentals play in ur­ban ar­eas and their po­ten­tial for serv­ing the needs of a broad va­ri­ety of grow­ing pop­u­la­tion groups.

Ac­cord­ing to Rental Hous­ing Want­ed, a new re­port by the In­ter-Amer­i­can De­vel­op­ment Bank (IDB), one in five Latin Amer­i­can house­holds, or rough­ly 30 mil­lion fam­i­lies, are renters. This pro­por­tion has been on the rise since the 1990s in Ar­genti­na, Bo­livia, Brazil, Chile, Colom­bia, Cos­ta Ri­ca, Do­mini­can Re­pub­lic, Mex­i­co, Nicaragua, Pe­ru, and Uruguay. Nev­er­the­less, there is a large stock of un­oc­cu­pied homes that could help ease the re­gion­al hous­ing crunch.

Near­ly 54 mil­lion fam­i­lies, or 37 per cent of the re­gion's house­holds, suf­fer hous­ing prob­lems such as over­crowd­ing, in­suf­fi­cient ac­cess to ba­sic ser­vices, shod­dy con­struc­tion or ma­te­ri­als, or lack­ing a prop­er­ty ti­tle. What is more, some nine mil­lion house­holds are ei­ther home­less al­to­geth­er, or live in sub­stan­dard homes, or ones that are be­yond re­pair.

Colom­bia is the Latin Amer­i­can coun­try where rent­ing is the most com­mon (38 per cent of all house­holds), while in the Do­mini­can Re­pub­lic the ra­tio is one in three house­holds and in Hon­duras, Ecuador, Bo­livia and Ja­maica it is one in four. The five cities with the high­est rates of rent­ed homes are Bo­go­ta, San­to Domin­go, Cali, Medellin and Quito, where it ex­ceeds 35 per cent of all house­holds.

"Un­like in more de­vel­oped re­gions, in Latin Amer­i­ca, rent­ing is not some­thing re­strict­ed to the poor­est peo­ple," said An­dr�s Blan­co Blan­co, IDB se­nior spe­cial­ist and a co-au­thor of the study."In fact, in some coun­tries in our re­gion the trend to­ward rent­ing ris­es as house­hold in­come goes up, and in oth­ers rentals are con­cen­trat­ed among mid­dle-in­come house­holds. The rea­son for this is the high rate of in­for­mal hous­ing, which lets low-in­come fam­i­lies own their hous­es, what­ev­er their qual­i­ty or lo­ca­tion," he added.

Defin­ing renters

The study, which ex­am­ined 19 met­ro­pol­i­tan ar­eas of Ar­genti­na, Brazil, Chile, Colom­bia, El Sal­vador, Ja­maica, Mex­i­co, Pe­ru and Uruguay, de­bunks the myth that on­ly the rich rent to the poor. Land­lords vary wide­ly in their so­cio-eco­nom­ic lev­el, with just a min­i­mal pres­ence of ma­jor re­al es­tate in­vestors and a sup­ply spread out among many small-scale own­ers. For ex­am­ple, in Chile 80 per cent of land­lords own just a sin­gle rental home.

The pref­er­ence for rent­ing is as­so­ci­at­ed with cer­tain so­cial groups: the ones who rent most of­ten are young peo­ple, di­vorced in­di­vid­u­als and im­mi­grants. The kind of house­hold al­so mat­ters. Ex­tend­ed fam­i­lies and wid­ows rent less fre­quent­ly than nu­clear fam­i­lies, while sin­gle-peo­ple and un­mar­ried cou­ples usu­al­ly are renters.

There is a di­rect link be­tween the age of the per­son and the like­li­hood that they rent. De­pend­ing on the coun­try, a per­son be­tween the ages of 25 and 34 is be­tween three and eight times more like­ly to rent their home in com­par­i­son to an old­er per­son. And a young per­son aged 15 to 24 is five to 14 times more like­ly to do so than an old­er per­son.

Rent­ing of­fers ma­jor ad­van­tages over home­own­er­ship for many peo­ple be­cause it tends to be con­cen­trat­ed in ar­eas that are more cen­tral­ly lo­cat­ed, more dense­ly pop­u­lat­ed and more es­tab­lished neigh­bour­hoods. It is al­so bet­ter adapt­ed to the pref­er­ences of cer­tain so­cial groups and works well in a labour mar­ket that de­mands that peo­ple be mo­bile.

In light of these find­ings, the IDB is en­gag­ing in a di­a­logue with coun­tries of the re­gion to ex­plore how a pol­i­cy to pro­mote rental mar­kets could com­ple­ment their broad­er hous­ing poli­cies, es­tab­lish­ing in­cen­tives both for land­lords and renters, up­dat­ing reg­u­la­tions and link­ing hous­ing is­sues with the tools of ur­ban plan­ning.

IDB News


Related articles

Sponsored

Weather

PORT OF SPAIN WEATHER

Sponsored