“Cities Post Coronavirus: Challenges and trends in a time of change”, with Ivan Poduje

Webinar online / 9-10-2020
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The architect, an expert in urban planning, participated in the webinar “Cities Post Coronavirus: Challenges and trends in a time of change”, organized by Frontal Trust, where he referred to emerging poles of development and to the upcoming challenges with regards to security and land-take. To move forward, he said, “real estate developers must innovate and connect with people’s needs.”

With his particular style, direct and realistic, the architect Ivan Poduje, who was a guest in the seventh webinar of Frontal Trust, said that the real estate sector needs to change its mindset, to innovate and to take a look inwards rather than to global trends. He toppled several myths around post-coronavirus cities and invited the audience, formed mainly by developers and real estate investors, to innovate in designs, locations and offers, involving communities to build a more connected Chile. He warned that “the cost of housing is not going to decrease, but people need more accessible housing and we cannot stand by.”

Poduje, who this week released his book “Siete Kabezas,” said that with the social outbreak “the elite fell into a placebo and is knocked out. The fantasy that my colleagues have created, such as the 15-minute city or that the offices are going to be emptied, is an unrealistic futurism, characteristic of changes as deep as this. I see little connection between the elite and the real needs of people. Chile has become a country where violence is installed and remains a threat.”

He also referred to the return of land takeovers. “As a result of the Coronavirus, we have seen low-income people who previously leased that are now in land takeovers. They decided to go to the periphery and not to the urban centers.” He used the occasion to send a message to the Housing minister, urging him to take action before it is too late. The cost of housing is worrying. If we stand idly by, that will be the next major crisis, owing to regulatory and space constraints,” he said.

To address future scenarios, he proposed a three-pillar strategy. The first is a cable to earth, less futurism, more land, more contact with people. The second is the horizontality in relationships, and the third, to move quick. “We have to build projects like those of Villa Frei, which was built by the private sector with the State in 1965, in a sector that was peripheral and with houses in different heights, with parks, children’s games, services and grocery stores. A nice, connected and friendly environment is essential for these houses to rise in price over time.”

The second strategy is to share value, as is the case in the Ochagavía nucleus project, where the former Pedro Aguirre Cerda Hospital was located. “During the social outbreak I toured 22 communes, I saw terrible things. But I was surprised that nothing had happened at this place. For several reasons, because the company worked and approached the neighbors by making a contribution. The company had the good wisdom of hiring guards who were from the neighborhood.”

The third strategy is to innovate in location and price. “Real estate companies, developers, cannot continue to make projects that are only profitable. There are several factors to be combined. And to this end talking to people, asking them what they want, what they need, is essential. Only such kind of projects will be successful in the future.”

In his presentation, Andrés Echeverría, president of Frontal Trust, said that “there is a misconception about the potential benefits that construction companies enjoy as they are affected by a special VAT regime.” He added that “housing is by definition a non-tradable good. Moreover, the housing market in Chile – and particularly Santiago – is highly competitive.” Echeverría said that in competitive markets and with non-tradable goods, all cost impacts are transferred to prices. As a result, tax franchises result in lower end-customer prices, and new taxes (or franchise cancelations) increase them. “The evidence shows that the VAT effect of tax reform 2015 was paid in full by home buyers after that date.”