How Santiago's Housing Crisis Became the Election Issue That Won't Go Away

The cramped one-bedroom apartments in La Florida now rent for upwards of 650,000 pesos monthly—a figure that would have been unthinkable just eight years ago. Yet the transformation of Santiago's eastern neighbourhoods tells a broader story about how the city arrived at its current political moment, one where housing affordability has become the dominant issue across every electoral district.

The roots of today's crisis stretch back to 2016, when the municipal government under then-Mayor Ricardo Larraín loosened zoning restrictions across middle-income areas to encourage development. The intention was sound: increase housing supply to meet demand. What followed instead was a wave of speculative investment that transformed entire blocks of Ñuñoa, Providencia, and Macul into construction sites, with developers targeting middle-class buyers rather than affordable units.

By 2020, vacancy rates in central Santiago had climbed to 8.4 percent—properties sitting empty as investment assets while families desperate for affordable housing competed for limited stock. Meanwhile, informal settlements expanded dramatically in Puente Alto and San Bernardo, where residents priced out of the city proper sought any shelter available.

The Metropolitano Transport Authority's decision to raise metro fares by 8 percent in 2023 compounded the problem. For families in outlying neighbourhoods, longer commutes from cheaper rental areas meant higher transport costs on already stretched budgets. A combined rent-and-transport expense that consumed 45 percent of household income became commonplace.

The current municipal administration, elected in 2021 on promises of social inclusion, attempted to reverse course through a 2024 affordable housing initiative targeting 12,000 units. The program faced immediate complications: construction costs had surged, land prices in accessible locations had tripled, and political opposition from developers' associations stalled approvals at the Planning Committee level.

Today's political landscape reflects this accumulated frustration. Left-leaning candidates are emphasizing municipal intervention in housing markets, while center-right contenders argue for streamlining regulatory barriers. Both sides acknowledge the crisis but diverge sharply on solutions—a tension that will define the coming municipal campaign cycle.

What remains constant is the human dimension. Families saving 40 percent of income for down payments that recede further into the future. Young professionals abandoning Santiago for regional cities where housing remains affordable. A city that built prosperity on its cosmopolitan character now risking that identity as residents simply cannot afford to stay.

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