Argentina’s “Chainsaw 2.0” Plan Reshapes Housing Policy with Major Cuts

On February 11, 2025, Argentina’s President Javier Milei dissolved the Secretariat of Territorial Development, Habitat, and Housing as part of his “Chainsaw 2.0” austerity plan.

This move, announced by Federico Sturzenegger, Minister of Deregulation and State Transformation, marks a significant step in Milei’s broader effort to downsize government operations and reduce public spending.

The eliminated Secretariat had overseen more than ten housing programs, including the popular PROCREAR initiative, which provided affordable mortgages and housing development.

Its closure leaves thousands of projects unfinished and shifts limited responsibilities, such as socio-urban integration, to the Ministry of Public Works.

Sturzenegger justified the decision by arguing that Argentina’s housing crisis requires macroeconomic stability rather than state-led construction efforts. He emphasized that freeing resources for private credit markets could better address housing needs.

Critics warn that decentralizing housing responsibilities to provinces and municipalities risks widening regional inequalities. Wealthier areas may adapt, but poorer regions could struggle without federal support.

Economic Reforms and Social Impact in Argentina

The decision also comes at a time when rental prices in Buenos Aires have surged. While deregulation has increased rental listings by 200%, affordability remains a challenge as landlords price contracts in dollars to hedge against inflation.

Milei’s administration has already cut government spending by 30%, eliminated 250 agencies, and laid off over 40,000 public employees. These measures have achieved Argentina’s first fiscal surplus in over a decade.

However, they have sparked social unrest due to rising poverty and reduced public services. The “Chainsaw 2.0” plan reflects Milei’s libertarian vision of a smaller state but raises concerns about its social impact.

As Argentina grapples with economic instability, the long-term effects of these reforms on housing access and inequality remain uncertain. However, they are critical for policymakers and investors to monitor.