Santiago's Mixed-Use Development Plan Advances: City Council Approves Lastarria Corridor Zoning Changes

Santiago's city council voted 28-15 on Wednesday to approve sweeping zoning modifications for the Lastarria corridor, a decision that will reshape one of the capital's most architecturally significant districts and signal the government's willingness to prioritise housing density over preservation concerns.

The changes permit developers to construct residential units up to 25 storeys on select blocks along Merced, Cienfuegos, and Rosal streets—areas previously capped at eight storeys under regulations enacted in 2003. City planners project the amendments could yield approximately 3,200 new housing units within five years, addressing a persistent shortage that has pushed median property values in central Santiago to 8.2 million pesos per square metre, up 34 percent since 2022.

"We face a structural housing crisis," said the Municipal Development Department in a statement this week, noting that demand for centrally-located apartments among young professionals and families has outpaced supply by an estimated 47,000 units annually. The Lastarria decision reflects broader pressure to densify established neighbourhoods rather than expand further into the periférico zones.

However, the vote triggered immediate backlash from heritage groups and cultural organisations. The Fundación Patrimonio Cultural warned that the new heights could obstruct sightlines to the Iglesia de San Francisco and compromise the district's character as a creative hub. Several galleries and independent bookshops along Rosal—establishments that have anchored the neighbourhood's identity for decades—expressed concerns about rising rents and displacement.

The council also greenlit a companion initiative to establish mixed-income quotas: developers securing height bonuses must allocate 15 percent of units as affordable housing, priced at or below 5 million pesos per square metre. Critics argue the threshold remains inaccessible for middle and lower-income households, while developers countered that steeper affordability requirements would render projects financially unviable.

Planning officials indicated this week that similar zoning reviews for Ñuñoa and Providencia are under active consideration, suggesting the Lastarria precedent may accelerate densification citywide. A separate transport study released Tuesday flagged that public transit capacity on the Metro Line 3 corridor—which serves Lastarria—will require expansion by 2028 to accommodate projected population increases.

The council has scheduled a 90-day public consultation period beginning next Monday, during which residents and businesses can submit formal objections. A final determination on implementation timelines is expected by late September.

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