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Cornell Real Estate Review

Abstract

This article examines the rental housing market in Bogotá, Colombia and the challenges in developing multifamily rental properties. A description of the factors that affect the development of this asset class is followed by recommendations to overcome the existing problems. Even though more than half of the population live in rental housing, there is almost no supply of rental housing projects at a large scale in Bogotá. Four reasons explain why this type of property has not been developed: (1) lack of financing; (2) laws that protect the tenants, making eviction a long and complex process; (3) market rents do not cover the cost of development; and (4) lack of firms capable of designing and operating rental housing projects. On the other hand, for sale housing projects have easier access to financing, can justify the high value of land, and gain the advantage of the mortgage system with governmental subsidies for mid to low-income segments.

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