CARACAS, Venezuela – Diego Maldonado checks the classified section of the Venezuelan dailies every morning, with one hope: to find a decent home for his family.
After living in a three-bedroom, two-bathroom apartment in El Paraíso, a quiet residential area southwest of Caracas, he shares a 64-square foot room with his wife, Marisa, and his two toddlers.
“A year ago I had to leave the apartment where I had lived for more than 10 years,” he said. “Since then, I have been looking for a decent place to live. But so far, there’s been nothing.”
The rent for the room, which is in a dilapidated house in western Caracas, is $2,500 bolívares (US$582) a month, the same amount he paid for the apartment.
“It was this or being homeless,” Maldonado, a 35-year-old elementary school teacher, said. “People don’t want to rent, as they are afraid of losing their rental properties. They rather have them sit empty.”
Maldonado’s ordeal is quite common in Venezuela.
Since its inception in November 2011, the Law of Regularization and Control of Home Leases has brought the rental market in this nation of 28 million to a halt.
The law allows tenants to remain in rental units even if they stop paying rent. It also allows them to buy the property – even if they’ve been delinquent on rent – after 20 years of leasing.
The law also sets rental prices at 3% to 5% of the value of the home, as it only takes into account the size and age of the unit – not its location.
As a result, the price to rent a home in the most luxurious area of Caracas costs the same as it would to rent a unit of the same size and age in a low-income neighborhood.
“I believe the owner [of the apartment he rented] got scared,” Maldonado said. “I was never late with the rent, but since the government approved the laws, she started asking us to leave.”
Rental property owners said that rather than solving the country’s housing crisis problems, the new law has worsened Venezuela’s gargantuan housing deficit – estimated by the government at two million units. It dismantled the rental market and increased real estate prices.
“The property owners’ rights have been totally violated,” said Roberto Orta, president of the Association of Urban Property Owners (APIUR). “The possibility of obtaining a fair return on one’s investment is much lower than what you would receive interest on your savings account. People don’t want to rent and they’re right not to. With so little supply and such a high demand, prices have gone up.”
A burgeoning “black market” of leases, created out of desperation of the more than eight million Venezuelans who don’t own a home, has emerged as a result of the law, with hundreds of thousands of unregistered rental agreements, verbal contracts and illegal occupations.
“After eight months under the Leasing Law, nobody in Venezuela is complying with it,” said Aquiles Martini, the president of the Real Estate Chamber of Venezuela. “This law has destroyed the housing market.”
Rental property owners have also criticized the creation of the Superintendence of Leasing, a government body who oversees all rental contracts, negotiations and owner-tenant relations.
“This will generate more red tape and will delay and increase the steps to set up a rental agreement,” said Zayda Hernández, a real estate lawyer in Caracas.
The government countered by launching a nationwide housing program dubbed the “Great Housing Mission of Venezuela” in 2011 to eliminate the housing deficit.
The government claims it will fund the construction of about 200,000 houses nationwide during the next 13 months, but opposition lawmaker Julio Borges is incredulous.
“Those numbers don’t check,” he said. “There are housing projects being built but just a small number of what was promised. And those that actually are sold have structural problems, cracks in floors and walls, and in many cases they don’t have basic services such as water and electricity.”
Meantime, Venezuelans who saved for years to become landlords at the properties they’ve purchased are being forced to evict delinquent tenants.
Eloísa Álvarez, 51, leased her apartment to a family when she had to return home to live with her ailing parents in 2002. But when Álvarez and her 24-year-old daughter Macarena returned to the apartment, which the tenants had leased yearly, they refused to move out when the contract expired in 2010. The tenants refused to pay rent before claiming they were protected under the Law of Regularization and Control of Home Leases once it became effective the following year.
Álvarez and her daughter spent “six months living in one friend or relative’s house and three months in another” before she and Macarena started residing in the hallway leading to the entrance to her apartment.
“We spent 23 days sleeping on a mat in the hallway,” said Álvarez, who works as a logistics manager for a law firm.
Her sacrifice, coupled with the media coverage she received, paid off when the family living in the apartment left a year ago.
Carlos Salazar, a lawyer from Caracas, is pondering taking similar steps to recover his family’s property.
“Ten years ago, my mother rented an apartment to one of her close friends for $700 bolívares (US$162) a month,” he said. “But she hasn’t paid rent since 2008.”
Salazar said negotiations with the tenant have been fruitless.
“I explained to them that I need to sell the apartment because my parents are ill,” he said. “I even offered to give them 10% of the sale price, but they say that with the new law, there is nothing to discuss or negotiate.”