It is revenge by real estate.
The FIFA World Cup kicks off in Brazil in less than a month, and apparently the entire population of Rio is going to be sleeping on one guy’s couch: Everyone else is renting out their apartments to tourists.
Penthouses in tony Leblon, studios in scrappy Lapa, sprawling old apartments in Copacabana: They are all for rent, at prices that sound breathtaking – unless, that is, you are used to Rio’s real-estate market.
The average rental cost in Rio has risen 144 per cent in five years – driven in part by the allure and influx of people fuelled by the World Cup and the Olympics, which are slated to be held here in 2016. Frustrated citizens have seized on the Cup as a way to make back some cash.
“I never thought about renting out my apartment, but I’m losing so much money because of the World Cup I have no choice – I had to gain something,” said Bolivar Torres, 32, an author and book critic. “The prices are so completely absurd here.” He has rented out the bedrooms in his Copacabana apartment to French visitors; he will stay in the tiny “maid’s room” at the back. The $3,900 he will pocket will pay his living costs for a few months, he said.
“It’s quite a symbolic problem, isn’t it?” said Alonso Zerbinato. “Renting your own house and staying at some friend or family member’s place just so you can make money to pay for the apartment you live in. It’s strange.”
Mr. Zerbinato and his partner, who are both actors in their mid-20s, listed the second bedroom in their apartment on the accommodation-matching website Airbnb, for $180 a day.
He estimated that the cost of living in Rio has risen 200 per cent since he moved here from Sao Paulo seven years ago (the World Bank says it’s more like 60 per cent), and he says it’s “absurd” trying to survive here, let alone live well.
“I can’t live without thinking about it – every single day, in every moment. All my decisions, all my choices,” he said. “Everything I want to do, first I think, ‘God, I have a lot of things to pay for.’… When you look around, everyone is despairing. I have loads of friends who haven’t found a place to live yet, who had to leave their apartments because they put the rent up so high.”
Like much else, a planned expansion in hotel capacity remains unfinished – and that has been a boon with those trying to rent out their homes. Hotel occupancy for the Cup is booked at 87 per cent and rising, the city says – but half as many rooms again have been rented through Airbnb, for which Rio is the hottest market in Latin America.
Rio has gone from 800 listings two years ago to 9,000 today, said Christian Gessner, the company’s manager for Brazil. “For the World Cup we expect a minimum four-digit increase in the market for booking,” he said. “Already more than 40,000 guests are booked to stay with Airbnb and the number is increasing very fast.”
Elisa Souza Pinto, 72, is turning over her 102-square-metre apartment to a young real-estate agent she knows for $9,000 for the month. He, in turn, will fill it with tourists (she will stash her crystal in the maid’s room). “I don’t know how much he is charging. For sure, much more.”
But Ms. Pinto gently disputes the idea that there is gouging underway. “Brazilian people aren’t vindictive. I think it’s more of an opportunity: Everything has become more expensive, so people are seeing this as an opportunity to get a little break.”
Mr. Zerbinato, who is in the last stages of negotiating a contract for the month of the Cup, said he and his partner chose their price after checking out listings in their neighbourhood – where, he said, a bed in a seven-person dormitory is renting for $2,000 a week.
But he, too, thinks that all is fair in love and real estate. He saw an article about a family getting $50,000 for their house, and reckons they see it as compensation for living in a giant building site. “The people who are renting this house have the money to pay for it,” he said.
Theresa Williamson, 38, the director of a favela advocacy organization called Catalytic Communities, has rented out her five-bedroom apartment in Ipanema at “a very good price” for the Cup, and used the cash to help finance the purchase of a new house in a less chic area of the city. (And rented out a couple rooms in the new place, too.)
She’s lucky, she says. “But if you’re in this city that has no regulation on its real-estate market, it’s a free-for-all. People in the middle class are recouping some of that, but what do you do if you’re low income? You get nothing, you’re being priced out.”
A few low-income residents are doing their best to recoup: The favela of Vidigal faces the sea in near Ipanema and has perhaps Rio’s most successful “pacification” program to drive out drug gangs and bring in community policing. Here some residents have signed up to a new program called Community Inn, which connects them with visitors looking for a place to stay.
They are renting out a bedroom, or even their whole hillside house, and piling in with family, said founder Sara Junger. A typical double-occupancy room rents for $125 a day.
“We started to help people through this gentrification process, so they can keep living here and support themselves with tourism,” Ms. Junger said.
“Investors are buying everything they can” in Vidigal and some residents of the favela resent it, but others have sublet or even sold their homes, seizing on a chance to profit, anticipating that demand and the improved public security that drives it will both fall away after the Olympics.
Mr. Gessner, of Airbnb, said press reports of people renting their apartments for $50,000 for the Cup created a gold rush mentality, and many people posted their homes “with a Rio price.” But some of the most astronomical rents are being reduced as the kickoff draws closer. “In the London Olympics some hosts put the price way up and in the end didn’t have a booking at all – we caution against it,” he said.
Mr. Zerbinato hopes to cover his rent for the next half of the year with his Cup rental, but in the long-term, he wonders how he will stay here. “At the end of last year, with this World Cup thing, with the all the mess in the city, I started thinking, ‘Why don’t I move somewhere else?’ Before, I really wanted to live in Rio, and when I came it made sense. But now I would have to want it three times more, but Rio is not three times better.… Our families help us out as much as they can. But we are trying to survive as actors. Maybe it doesn’t make sense for us to live here.”