A Growing Housing Crisis
Costa Rica, a country known for its environmental beauty and stable democracy, is now facing an alarming housing crisis. According to the recent “Balance and Trends in the Housing Sector 2023” report, presented by the Costa Rican Association of Engineers and Architects (CFIA) in partnership with the University of Costa Rica (UCR), there is a shocking disparity between housing prices and the needs of the majority of Costa Rican households. The report reveals that nearly 90% of housing solutions on the market are designed for just 30% of households, leaving the majority of the population struggling to find affordable homes.
The Stark Reality: Who Can Afford a Home?
The housing crisis in Costa Rica isn’t just about the number of houses available—it’s about who can actually afford them. The report highlights that the majority of new housing projects are aimed at the upper-middle class and wealthy buyers, leaving lower-income families with few, if any, options. Specifically, 54% of the housing projects analyzed fall within the $100,000 to $200,000 price range, while a mere 3% offer homes priced under $75,000. The most affordable apartment listed in the report is in Alajuela, costing $71,000 for a modest 52 m² unit.
This pricing structure creates a significant barrier for the vast majority of Costa Ricans. According to the UCR, nearly 70% of households are effectively shut out of the housing market because they cannot afford the homes being built. This disconnect between housing supply and demand has resulted in a growing number of families being left without the possibility of owning their own homes.
The Impact on Low-Income Families
Low-income households are the hardest hit by this housing crisis. The report points out a significant decline in the distribution of housing vouchers, which are critical for helping low-income families secure affordable housing. In 2021, 11,428 housing vouchers were issued, but by 2022, that number had dropped to 8,369, and it fell even further to 8,222 in 2023. This represents a 36% decrease compared to 2021, meaning over 7,000 families have lost out on the opportunity for adequate housing in just two years.
The decline in housing vouchers is particularly concerning given the current economic climate. With the cost of living rising and wages stagnating, many families depend on these vouchers to afford even the most basic housing. The sharp decrease in voucher distribution is leaving a growing number of Costa Ricans without a roof over their heads.
The Greater Metropolitan Area (GAM) Housing Shortage
The housing crisis is especially severe in Costa Rica’s Greater Metropolitan Area (GAM), which includes San José and the surrounding cities. According to CFIA President Olman Vargas Z., the GAM faces a shortage of more than 148,000 homes. This shortage is particularly urgent because the GAM is not only the most populous region of the country but also the area with the highest demand for housing.
Despite this pressing need, the GAM has not received its fair share of housing vouchers. The Central Region, which encompasses the GAM, is home to 62% of Costa Rica’s population but has received only 20% of the total family housing vouchers distributed over the past decade. This disparity has left many low-income families in the region struggling to find affordable housing, even as the area becomes more crowded and less accessible.
The Growing Informal Settlements
As the formal housing market becomes increasingly out of reach, more and more Costa Ricans are being forced into informal settlements. The report identifies 314 precarious communities in the Central Region, sheltering over 120,000 people. These informal settlements often lack basic services such as clean water, electricity, and sanitation, creating dire living conditions for those who have no other options.
The Central Region’s high concentration of informal settlements underscores the failure of the housing market to meet the needs of Costa Rica’s most vulnerable citizens. While the region has the highest population density and the greatest need for housing support, it continues to receive the least assistance, further exacerbating the housing crisis.
Why the Housing Market Favors the Wealthy
The report also sheds light on why the housing market is so skewed towards wealthier households. Developers tend to focus on building homes for the higher end of the market because these projects are more profitable. As a result, nearly 90% of the market’s housing solutions cater to just 30% of households—those who can afford homes priced at $100,000 or more.
This market dynamic leaves a huge gap in the availability of affordable housing. While there is some development at lower price points, it is woefully inadequate to meet the needs of the majority of Costa Rican families. The lack of affordable housing options forces many families into overcrowded conditions, substandard housing, or, in the worst cases, homelessness.
The Need for Policy Reform
Given the findings of the report, it’s clear that Costa Rica’s housing market needs serious reform. CFIA President Olman Vargas Z. emphasized the importance of the report for guiding authorities in crafting policies that genuinely address the housing needs of the population. “Housing is a major concern for citizens, whether owned, rented, or through social interest bonds. This report is crucial for guiding authorities in creating policies that genuinely address this fundamental need,” Vargas said.
To address the housing crisis, the government must prioritize increasing the availability of affordable housing and ensure that housing vouchers are distributed more equitably. Investments in infrastructure, especially in the GAM, are essential to close the housing gap and improve living conditions for all Costa Ricans.
A Call to Action
Costa Rica’s housing crisis is a stark reminder that economic growth and development must benefit everyone, not just the wealthy. The findings of the “Balance and Trends in the Housing Sector 2023” report highlight the urgent need for policy changes that will make affordable housing accessible to the majority of Costa Rican families. Without swift and decisive action, the housing crisis will continue to deepen, leaving thousands of families without the security of a home.
The time for action is now. The government, developers, and civil society must work together to ensure that every Costa Rican has a place to call home.
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