Our executive director Agustín Etchebarne writes in Clarin about the housing sector in Buenos Aires.
Ana María Ugarte cannot pay the expenses for her one room apartment in Mataderos. A 67-year-old earning a 360 US$ monthly pension she just can´t afford it. Expenses alone cost 70 US$. “Last year, when I had to pay 35 US$, it was already hard for me to pay and I had to consider selling the apartment” Ugarte told Clarin. However, by selling the apartment she would only be able to afford one year on a retirement home.
On average, if a building has 10 apartments, 2 don´t pay expenses.
The number of debtors comes from the most recent surveys from Buenos Aires City´s Association of Building Administrators.
According to this source, over the last year delayed payment of expenses has doubled. The survey estimates that in the city of Buenos Aires there´s an average of 30 units per building over 100 000 consortiums. Since around 20% are debtors, there are 600 000 properties for which expenses are not up to date.
One of the main variables influencing the cost is the increase in salaries, which according to the Association can represent around 80% of costs if you include social benefits. To this you have to add the cost of maintaining elevators and paying for services, parks, parking’s and other communal places.
According to Matías Ruiz, president of the aforementioned association, “this year expenses will increase by 18% during the first trimester, because in December we saw an increase of 12% in the salaries of members of the SUTERH guild, on top of 130 US$ a non-remunerative bond.”
Meanwhile, the increase in expenses is added to the increases in tariffs and taxes and in many cases this translates into a delay in payments. But this can start a vicious circle: whatever a unit doesn´t pay for will have to be paid by others.
“At times when citizens have to adjust their economies, this gains by the building administrators seem one-sided” congresswoman (PRO) Cornelia Schmitt Liermann told Clarin.
“When most employees receive an average salary increase of 33%, building administrators received an increase of 40% on a negotiation that, furthermore, is probably the only one in which apartment owners have not participated” Liermann continued.
Economist Agustín Etchebarne, general director of Fundación Libertad y Progreso, agrees with this point of view. “Last year, the increase in the salaries of building administrators was higher than inflation, if we include Christmas bonuses” Etchebarne claimed.
Being interviewed by Clarin he said that “there was a strong increase in rates for most buildings, especially for water where the increase could be as high as 700%. And we also have to add new norms that increase costs, for example the addition of fire-fighting material or rules on elevators and heating, that mean engineers have to be hired and hence increase costs.”
To stop this there´s a bill in congress that proposes the inclusion of home owners in negotiations, which has been a long standing demand.
As a promoter of the project, Liermann claims that “home owner associations, neighborhood associations and citizens have expressed repeatedly that administrators do not represent them in discussions and want to actively participate in them, something that the Ministry of Labor is now working on”.
The delay in the payment of expenses does not interrupt services and only carries a punitive interest. Hence, expenses are the first thing many stop paying.
However, the administration can begin a procedure so after 3 months without payment this passes to a judicial resolution. From this moment on owners risk losing their apartment.
“The last few months I couldn´t afford the expenses and I feared I would be evicted. Thankfully the neighbors helped me” Elena Garay, a 72-year-old from Flores, told us. “I was very ashamed thinking my grandson would consider me a defaulter, that was the most difficult part of all this” she continued. However, she was able to pay her debt with the help of the neighbors: she covered 55% and other three owners gave money to pay for the rest. Expenses at Garay´s building expenses went up from 40 US$ to 130 US$.