83% of the projects framed within the Promoted Housing Law in Uruguay were destined for the real estate investment, while only the remaining 17% was directed towards the purchase of one’s own home for personal use.
Law 18,795, better known as the Promoted Housing Law, has as its main objective to promote the private investment in construction, renovation or expansion of homes both for personal use and for the search for profits through renting or selling them. It has been in force since 2011, and has had modifications in several years; among them, in 2020, at the beginning of the administration of Luis Lacalle Pouwhich incorporated changes in the construction of new buildings under this promotion regime.
Based on these modifications, the portal Infocasas carried out a report on the role of the Promoted Housing Law and the impact that the changes had on it. In that sense, he pointed out that the housing offer increased by 70% since 2020, mainly thanks to the “tax benefits” that were incorporated into the regulations.
However, it is notable that “83% of the funds used to purchase units covered by the Promoted Housing Law were used as real estate investments”; while only 17% was aimed at purchasing one’s own home for personal use. Although both uses are enabled in the legal text, the disparity is striking, especially if one considers that the main objective of the norm—as indicated by the National Housing Agency (ANV)— is “to facilitate access to housing for middle-income sectors.”
In this regard, the Broad Front leader of the Popular Participation Movement (MPP) and former vice president, Lucia Topolansky: “The regulations for promoted housing were changed twice, the truth is that it was aimed at middle and lower middle quintiles, with the change construction skyrocketed, but the issue has not been solved for the middle layer,” he said in dialogue with Radio M24.
The Infocasas report also points out that the majority of investors prefer to place their funds in projects that are just beginning or “in the pipeline,” and that neighborhoods such as Cord, Pocitos and The Bleached They are the most sought after. “The majority of payments are made in cash and the property acquired will mainly be used as income,” the report explains.
When the investment is outside the promotion scheme, a higher percentage of interest appears in housing for own use, 31%, while real estate investment is 69%.
Record in 2023
The construction system promoted housing set, in 2023, a new record with the presentation before the National Housing Agency (ANV) of 205 new projects.
This is the third consecutive annual increase in the number of initiatives presented to construct buildings under this regime. The 205 projects presented will allow the creation of 6,000 new homes throughout the country, reported on radio carve. As usually happens, the department with the largest number of proposals in Montevideo.
In the capital, the progress in the construction of housing solutions in neighborhoods such as Malvin, Cord and Meadow. It is worth remembering that, some time ago, the Municipality of Montevideo It freed up height on 18 de Octubre Avenue for the construction of new towers.
According to ANV data as of last November, the program has already accumulated 1,270 promoted projects covering 33,812 homes. Thus, a supply of almost 38,000 homes would already be reached since its beginning. Of that total, more than half have already been marketed.
Source: Ambito
