The Chilean Ministry of Housing and Urbanism (Minvu) has unveiled a series of amendments to the General Ordinance of Urbanism and Construction designed to reduce the cost of new housing by 10% to 15%. The proposal seeks to stimulate a stagnant construction industry, address a national deficit of 500,000 homes, and clear a surplus of 100,000 unsold units.
Government data indicates that real housing prices have surged 126% since 2008, while wages have grown by only 42%. Officials attribute this imbalance to excessive regulation, which has driven up the cost of urban land and created bottlenecks in the permitting process.
A Five-Point Plan for Construction
The ministry’s strategy centers on five regulatory shifts. First, it will extend the validity of building permits from three to six years and pause the clock on these permits when state-level authorizations are pending.
Second, the government intends to increase housing density by modifying the conversion factor from inhabitants per hectare to housing units per hectare. Third, the plan reduces parking requirements for projects located near public transit hubs, such as Metro or train stations.
Fourth, the proposal simplifies the "harmonious ensemble" classification, offering developers more flexibility in building height and density. Finally, the measure allows projects already approved but not yet received to adopt these new rules, preventing them from being sidelined by future zoning changes.
In addition to these nationwide changes, the Ministry introduced special provisions for disaster-stricken areas. These include streamlined technical reports from the Housing and Urbanization Service (Serviu) to expedite infrastructure mitigation and project authorization.
Industry leaders have reacted with cautious optimism. Alfredo Echavarría, executive director of the Chilean Chamber of Construction (CChC), stated that while the measures address the sector's current crisis, their success depends on the final text of the regulations and their practical application.
"All measures oriented to improve access to housing are welcome and necessary," Echavarría said.
Jaime Ugarte, executive director of Colliers, highlighted the role of land costs in the current crisis. "In the last 10 years, the value of land has more than doubled," Ugarte noted.
Rodrigo Aravena of AGS Visión Inmobiliaria urged the government to prioritize implementation over announcements. He warned that the market needs swift action to reduce uncertainty and avoid further paralysis in the development pipeline.
