This was a complicated year for the real estate sector due to corruption scandals, such as that of MarkaGroup, as well as investment delays due to municipal ordinances. For José Espantoso, president of the the fight against land trafficking and the drive to reduce the housing deficit must be raised in the CADE Executives 2023 to seek sustainable solutions in favor of the sector.

– 2023 has been a year of ups and downs for real estate investment, how would you describe it?

Private real estate investment is the second most important after mining within formal private investment. In 2022, a tough year, the real estate sector grew by 22%. In that context, we entered 2023 with all the political ups and downs, the change of government, it was a tough year, but with respect to traditional sales, a growth of 10% is expected in terms of units sold. However, in the Techo Propio and MiVivienda programs a drop is expected mainly due to the restructuring that has been important and has been well led by the Ministry of Housing. This as a result of the high-profile cases in Techo Propio, such as that of MarkaGroup, which have in fact paralyzed the disbursement of Techo Propio’s mortgage loans. In July, anchoring was removed from section 5, which was part of the MiVivienda program. So between these two programs, a drop in disbursements of 10% is expected, but if we speak in general terms we calculate that it will be a year without much growth, even in terms of sales.

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– What things should have been improved in 2023 to have more dynamism in investment?

We find ourselves in a context faced with current legislation that promoted social housing projects, called affordable housing, (but) there are certain municipalities that have placed restrictions and paralyzed works. They have paralyzed works that were already under construction and are no longer receiving files. Entrepreneurs who with all their rights bought, with current regulations that gave security to their investment, (and now their investments) are paralyzed. So when the entrepreneur feels this lack of predictability and confidence is lost, there is a delay in investments and that will take its toll in the coming months.

– How many real estate companies linked to ASEI were affected by this in 2023?

Some 30 real estate companies are aggrieved in projects where they have already made the investment. Among those that are already in execution, the projects that were about to request a license and the projects that were about to be approved, we estimate that there could be 300 or 400 projects. If this is paralyzed and we do not reach a solution, that could represent an investment halt of US$1.2 billion and a loss of 70 thousand jobs.

There is still a large housing deficit in Lima. (Photo: USI)

– Not to mention that we would have a lower supply in the medium and long term.

It is important to emphasize this because, as a result of these obstacles, we cannot find any support to create these ordinances where they arbitrarily cancel construction permits. What we are doing is working with the 1,800 localities that do want to work on the housing issue. We have already held working groups with the community of Lima Norte, we are working a lot with the Regional Governments. Housing cannot stop, it is a fundamental right of people.

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– Could the way of coordinating this type of investments be centralized?

Yes. First, the three unions that are in the world, Capeco, ADI and ASEI, formed an inter-union committee. The three unions made a call to the community of Lima Norte. There we worked with the mayors of Independencia, Puente Piedra, Comas, of all the municipalities. We established a working group and are giving them technical support so that they can develop their urban plans for the development of housing and social interest. We are scaling this to Lima Sur and we are also looking to reach and contact different regions.

About the regionssomething positive about 2023 has been the canon bonus. The canon bond has existed since 2018, that is, in 2018 a law was approved so that regions that have a canon can use it for the benefit of their population and give them subsidies in housing programs. I want to make a call, because we are in Cusco and Cusco has a housing deficit of approximately 40 thousand or 50 thousand families. It would be a nice legacy of this CADE to be able to say that the governor of Cusco, Governor Salcedo, has believed in the idea of ​​the Ministry of Housing and joins this initiative. With S/30 thousand that they can make available from the canon, at least a thousand families can be served.

When these programs appear, families immediately access them. We have talked in other interviews about subsidies. The subsidies that the State provides each year are immediately executed, because there is such an appetite to buy new housing that it is immediately spent, executed. For example, in Peru we allocate US$320 million in housing subsidies. In Chile the budget is US$4.5 billion. We have demonstrated together with the Ministry of Housing that, in addition, the subsidies return to the State. For every sun that sets in Techo Propio and MiVivienda, it returns to the State via income tax, alcabala or VAT, in Nuevo Crédito MiVivienda it returns 4.5 times more and in Techo Propio once again.

The executive hopes that in Cusco they can also adhere to the canon bonus as a legacy of the dialogue at CADE Executives 2023. Photo: shutterstock

The executive hopes that in Cusco they can also adhere to the canon bonus as a legacy of the dialogue at CADE Executives 2023. Photo: shutterstock

– There is a multiplier effect.

Apart from the fact that it collects more than what it put into subsidies, the multiplier effect on the economy is 14 times more in Crédito MiVivienda. Furthermore, we must combat an issue, We have talked about the housing deficit of 1,800,000 households that do not have access to housing. This amount must be divided. 1,300,000 are homes that do not meet the minimum conditions to be considered adequate housing and there are 500,000 families that cannot access any. As long as we have no impact there, the winners are the land mafias.

– What specific approaches will you give in the CADE Executives 2023 panel in which you will participate?

We have to change this perverse model that exists of land trafficking where they are winning the battle. There is an invasion, a land trade, and the most vulnerable families who cannot access credit or have no savings are taken away and left in a precarious state for years. Formal housing brings with it water from day one. So the first action that Specifically, we ask is to go jointly with the Ministry of Housing to the Ministry of the Interior and request that there be a specialized division in the police to combat illegal land trafficking. It is the third most important mafia in the country behind illegal mining and human trafficking.

The second concrete proposal is, if we have to set a goal to reduce the housing deficit and say that in 10 years we were able to reduce that deficit, we have to go from building 40,000 homes to 190,000 homes a year. This is not possible next year, it is gradual. We are supporting the Ministry of Housing’s initiative for a long-term sustainable subsidy law. In 2024 we must, at least, go from S/1,000 million in the BFH of Own Roof and at least double it to be able to feel that we can reduce the housing deficit.

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– Can these bonds be considered an investment and not subsidies?

This makes it a little more complicated, but we do make them consider it within the chip of the officials, who see it as an investment. But that’s part of the conversations we always have.

We need a State that puts the land available for private investment into action. The Ministry of Housing is already doing it, but also making it habitable, with sanitation, electricity, with urban equipment. In this way, formal private real estate investment will appear to reduce the housing deficit.

– What awaits us in 2024?

While it is true, there will be some impact from what we were talking about, it is also true that real estate companies go to the municipalities and areas where their investments will clearly be protected, where they see predictability and have confidence to invest. We believe that there are solid foundations.

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