Hey there!
Something fascinating happened in Argentina’s housing market.
What happened illustrates why the U.S. housing market is at such a critical turning point … and why the solutions proposed in the U.S. Presidential election might be missing the mark entirely.
As the election and the housing market dominate headlines, Argentina’s story offers a glimpse into how policy choices ripple through real estate and affordability.
In Buenos Aires, the supply of rental properties surged by 211.9 percent, while rental prices (adjusted for inflation) fell by 26.6 percent, between December 2023 and today.
“Wait, what? How is that even possible?”
Here’s the thing:
One in seven housing units in Buenos Aires was sitting vacant. When the government relaxed certain rental restrictions (like caps on deposits and lease terms), these units flooded the market overnight.
Imagine discovering that while everyone struggled to find housing, your neighbors were hoarding empty apartments as inflation hedges. Oucchhh.
The U.S. Context: Why Our Housing Market Can’t Pivot Quickly
Here’s where it gets interesting:
The U.S. doesn’t have this massive stash of vacant units. Our occupancy rates are sky-high, and we can’t fix our shortage overnight.
Here’s why:
In the housing market, demand is like a jet ski – it can turn quickly based on interest rates, employment, migration patterns.
But supply is like an ocean liner – changes in direction happen very, very slowly.
Unless, of course, you have one of two scenarios:
A huge stash of vacant housing being held off the market (like Buenos Aires), or a massive economic shock that forces many properties onto the market (like 2008 – but that was unique).
We have neither. Instead, we’re dealing with structural supply constraints that started 38 years ago.
The Origin of Our Supply Crisis
The Tax Reform Act of 1986 completely reshaped how we build housing in America.
The Act made several changes that specifically targeted real estate development:
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It lengthened depreciation schedules for apartment buildings to 27.5 years
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It eliminated “declining balance depreciation,” meaning builders could no longer take larger deductions in the first year
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It limited tax deductions for passive losses
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It raised capital gains taxes on real estate sales
In plain English? The government made it much harder for developers to recover their costs when building apartments.
The result was dramatic: Multi-family construction plummeted from 515,000 units in 1985 to just 140,000 by 1991.
That’s not a typo. Multi-family construction dropped by nearly 75 percent in just six years because building apartments suddenly became far less financially viable.
And we’re still feeling the effects today.
This single piece of legislation, which passed 38 years ago, fundamentally altered how much multi-family housing gets built in America. It’s also central to any conversation about the election and the housing market, since tax reform remains one of the few levers federal policymakers can pull.
What Argentina’s Housing Market Teaches Us About the U.S. Election and the Housing Market
Argentina could solve their housing crisis quickly by relaxing regulations (the jet ski solution).
The U.S., on the other hand, has a long, slow slog ahead (the ocean liner).
Which brings us to the election and the housing market conversation in 2025: Both candidates are proposing solutions to our housing crisis.
Interestingly, they actually agree on two major proposals:
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Opening up certain federal lands for housing development
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Streamlining regulations to make home construction easier
But here’s what’s fascinating:
When we look at what just happened in Argentina, we can see why these proposals, while well-intentioned, might miss the mark.
Local vs. Federal Power
Location matters enormously, and neither candidate has been specific about exactly which lands, where. If these lands aren’t where people actually want to live (think: job centers, good schools), we’re not solving the real problem.
Building apartments in Boise won’t help affordability in Dallas, and vice versa.
Most of the red tape isn’t federal — it’s local. City and county zoning laws, density restrictions, and permit delays matter far more.
So when you hear debates about the election and the housing market, remember that meaningful reform will likely depend on local leaders, not just the White House.
What This Means for You
Here’s how to navigate this reality if you’re thinking about buying a home:
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Consider house hacking with a duplex, triplex, or 4-plex.
If you have – or want – a single-family home, look into building an ADU (guesthouse, casita, or in-law suite). You’ll reduce living costs and expand housing supply. -
Look for properties that could benefit from future zoning changes.
If there’s talk that a neighborhood might allow more duplexes, that’s an opportunity. -
Don’t wait for a magical supply surge — it’s not coming. Prices will probably keep climbing.
And please don’t fall for the argument that “prices have to come down because they’re too high.”
As homes become unaffordable for individuals, private equity and foreign investors will step in — just as they did in inflation-ravaged Argentina.
The Bottom Line
The Argentina story shows us something crucial: Housing supply can change quickly – but only under very specific circumstances that don’t exist in the U.S.
Real change will require fundamental policy shifts — most at the local level.
As you head into conversations about the election and the housing market, remember: federal policy shapes incentives, but local zoning decisions shape reality.
And when it comes to your own homebuying and investing plans, one truth remains — housing scarcity means prices will likely keep rising.
Do with that information what you will.
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