Housing deficit and residential micro development in Chile: a “development capacity” analysis

Abstract

In Chile, as the housing shortage grows, developing mid-height, mid-density housing in inner areas of the city seems a feasible measure to reduce the housing shortage, although few studies assess the planning feasibility and financial revenue of these developments. The present study simulates mid-rise developments in four vacant land plots across the inner Santiago area, selected for their proximity to services and restrictive building codes. The study comprises volumetric pre-designs and simple financial calculations, including actual variables of land and building costs, sales prices, taxes, and planning codes. The results suggest that the current urban guidelines allow mid-height, mid-density housing developments, with economic returns of 10% or above, a rate that a policy of state support for land acquisition and tax incentives could increase. The conclusions suggest no need to upzone the inner land. However a state policy of financial support of mid-rise developers seems advisable.