Home ownership, an ideal that for decades was a symbol of success, stability, and social progress in Latin America and the Caribbean, is undergoing a silent crisis. While public policies and family decisions continue to revolve around home ownership as a symbol of stability and progress, reality is beginning to paint a different picture: over the last 20 years, the home ownership rate in many countries in the region has steadily fallen, in some cases by between 15 and 20 percentage points.
The dream of owning a home is not only fading in many cities, but it also forces us to rethink how we think about housing in the 21st century, as the economic, social, and urban transformations of recent years have put this vision under strain.
In a context where average housing prices are growing at a significantly faster rate than median incomes, are we witnessing the end of home ownership as the primary housing option? If so, what possible alternatives are on the horizon?
These questions are especially pertinent because housing can constitute a heritage asset, but it must primarily be understood as a fundamental human right and an essential component of sustainable development. However, declaring the right to housing is not enough: sustainable policies are required, with sufficient resources and an institutional framework capable of implementing them effectively. Above all, greater flexibility is needed in considering home ownership as the only option, framing it within a broader concept of “housing stability.”
Home ownership: an aspiration in jeopardy
From a cultural perspective, the home represents more than a physical refuge: it is a symbol of adulthood, independence and success. In Latin America and the Caribbean, purchasing a home is often perceived as a prerequisite for starting a family or achieving personal stability, a perception reinforced by family mandates and popular culture, which have underscored the idea of home ownership as a desirable goal.
But beyond its cultural dimensions, the economic function of housing is one of its main attractions. Property ownership is seen as a means of accumulating wealth and a way to contribute to people’s economic future. In countries in Latin America and the Caribbean, a large part of the population views it as insurance for their old age or as an income supplement for their fragile pensions in the future.
However, the growing disconnect between housing prices and the average income of Latin Americans and Caribbeans—a phenomenon that also extends beyond our region—is putting this aspiration of home ownership at risk for multiple reasons. Among these is the phenomenon of the financialization of real estate markets, driven by a massive influx of private capital, which has driven up prices and restricted access for the middle and lower income brackets. In markets where housing is treated primarily as an investment—whether for tourist rentals, speculative purchases, or as a safeguard of value—ownership becomes out of reach for those seeking a place to live, reinforcing a paradox: in a system that promotes or takes for granted home ownership as an ideal, fewer and fewer people can achieve it.
Renting as an option
To address this scenario, a broad range of policies is needed, but above all, it is necessary to revalue other ways of living that allow for the inclusion of alternative access models to ensure housing stability—that is, to guarantee a household’s ability to reside safely, predictably, and adequately. From this premise, home ownership can be one of several possible options.
The idea of ownership as the sole tenure alternative is not universal. In several European countries, such as Germany, Austria and Denmark, rental systems are so well developed that ownership is not seen as a necessity, but as one option among many. In these contexts, households find residential security without resorting to purchase, thanks to stable contracts, protection against arbitrary increases, housing quality standards guaranteed by the state, and because affordable and stable rents allow them to allocate savings to more profitable options than home ownership.
There are notable cases that demonstrate how social rental models (those that ensure reasonable rents relative to the income of the target population) or cooperative solutions can offer this stability. In Vienna, for example, almost 50% of residents live in rental housing that is subsidized or regulated by the local authorities. The municipal government owns more than 220,000 units for social rentals, and many other dwellings are managed by non-profit associations. This policy has ensured that access to housing is not determined exclusively by purchasing power, but rather by criteria of inclusion and equity.
There are also notable experiences in Latin America. Mutual-aid housing cooperatives in Uruguay have provided access to housing for hundreds of families under collective ownership, self-management, and solidarity financing schemes. These models offer stability without resorting to individual ownership and promote cohesive and participatory communities.
Increase housing supply and access options
Ensuring access to housing undoubtedly requires increasing the supply of affordable housing, but it also implies recognizing that this option alone does not guarantee adequate solutions for all sectors of society. A clear manifestation of these limitations is the growing concentration in Latin American cities of a significant portion of this new supply in high-value segments, while affordable housing is scarce, poorly located, or informal.
This situation cannot be understood without considering the multiple structural barriers faced by those who could expand the housing supply, both in terms of housing quantity and tenure types: restrictive urban planning regulations, high land costs, lack of incentives for affordable housing, limited financing for long-term rentals, regressive tax policies…
Removing these barriers is a necessary condition for significantly increasing housing production. But without active policies that increase housing tenure alternatives, the outcomes generated by the housing market will continue to become increasingly exclusive.
Instead of considering home ownership as the best way to access housing, we must ask ourselves how to ensure that all households can access stable, decent, and safe housing, regardless of their tenure model. The ongoing transformation does not mean abandoning home ownership, but rather recognizing that it is not the only path to stability. It means imagining a system where different forms of access—social rentals, cooperatives, shared ownership, rent-to-own—coexist within a comprehensive strategy, guided by the principle that living with dignity should not be a privilege, but a guarantee.
This article appeared in partnership with CAF, the Development Bank of Latin America and the Caribbean.
Sign up for our weekly newsletter to get more English-language news coverage from EL PAÍS USA Edition