In response to the uncontrolled growth of rural plots of land in Chile, the government introduced a bill for the Protection of Territory and Rural Life in the Chamber of Deputies. This proposal seeks to address the agricultural, environmental, land planning and regulatory problems arising from the use of housing in rural areas, where agricultural, livestock or forestry purposes were originally established. Below, we explore the details of this ambitious initiative.
Why is this Law Necessary?
The exponential increase in the number of rural plots destined for housing uses has compromised extensive areas of rural land. It is estimated that current plots cover between 175,000 and 300,000 hectares, a figure comparable to the 208,688 urban hectares existing in Chile as a whole. This phenomenon is developing without planning, with poor levels of control and minimal legal requirements, generating:
- Loss of highly productive agricultural soils.
- Unmitigated negative externalities.
- Environmental and social conflicts due to lack of regulation.
In addition, this type of land development represents an opportunity to capture land value gains in favor of real estate developers, affecting equitable and sustainable territorial development.
Current Legal Framework
In Chile, rural regulations allow the subdivision of land into minimum lots of 0.5 hectares under Decree Law No. 3,516, intended exclusively for agricultural, livestock or forestry activities. Exceptional housing for homeowners, agricultural workers or social housing is also authorized. However, some developers have used legal loopholes to promote residential subdivisions, which has led the Comptroller General of the Republic to qualify these practices as fraud against the law.
What does the Bill propose?
The initiative seeks to distinguish between subdivisions for forestry and livestock purposes and those for housing uses, providing them with treatments in accordance with their nature. Among the main measures are:What does the Bill propose?
1. Strengthening of auditing:
The restrictions for silvicultural land subdivisions are reinforced, maintaining the minimum area of 0.5 hectares and prohibiting their residential use.
2. Creation of Rural Residential Complexes:
A new mechanism is established for housing subdivisions with clear requirements, such as:
- Formal water, sewage, electricity and waste collection systems.
- Access to public roads.
- Fire prevention measures and coexistence rules.
- Partial use of the area for forestry and livestock or environmental conservation activities.
3. Warranties for buyers:
Purchasing promoters must sign contracts secured by insurance policies or bank slips, guaranteeing the security of the transactions.
4. Transition for current owners:
Those who acquired plots of land before the new law will have three years to apply for authorization to build a single-family home, complying with the new standards.
Impacts of Inorganic Growth
The unregulated growth of rural plots has profound consequences in several areas:
1. Agricultura
- Reduction of highly productive agricultural soils.
- Conflicts between residential settlements and agricultural activities (e.g., domestic fauna attacks on livestock).
Environment
- Loss of biodiversity and key ecosystems.
- Urbanization in sensitive areas in the midst of a climate crisis.
Territorial Management
- Increased costs for municipalities and public services.
- Extension of urbanization without adequate infrastructure, making waste collection, transportation, and basic services difficult.
4. Urban Planning
- Territorial fragmentation that fosters socio-spatial segregation.
- Housing developments intended mainly for high-income sectors or low-quality informal housing.
Legislative Stage and Regulatory Modifications
The bill was formally introduced on July 30, 2024 and is currently in the first constitutional procedure in the Committee on Agriculture, Forestry and Rural Development. Among the regulations it proposes to modify are:
- General Law of Urbanism and Construction: To create and regulate rural housing developments.
- Decree Law No. 3.516: Reinforcement of restrictions for agricultural subdivisions.
- Law No. 18.755: Adjustments in the role of the Agriculture and Livestock Service (SAG) to supervise subdivisions.
Towards a Sustainable Development of Rural Territory
The Land and Rural Life Protection Bill seeks to curb the lack of control in rural subdivisions, guaranteeing a planned and sustainable use of rural land. By clearly differentiating between housing and forestry purposes and establishing clear standards for each type of subdivision, it seeks to protect agricultural land, reduce negative externalities and improve the quality of life in rural areas.
Its success will depend on the consensus achieved in the legislative debate and the effective implementation of the proposed measures. Undoubtedly, this is a key step to face the challenges posed by the exponential growth of rural land parcels in Chile.
When to expect the Promulgation of the New Law of Parcels in Chile?
The enactment of the new Parcel Law in Chile does not yet have a definite date, as the legislative process depends on multiple factors, such as the complexity of the law, the necessary political agreements and the priorities of the legislative agenda of the Congress.
The bill is currently under discussion in the Agriculture Committee of the Chamber of Deputies, and its progress will depend on parliamentary consensus. It is recommended to follow the official updates to know the progress and eventual entry into force of this new legislation.
At Produncan Lands we support sustainable projects.
At Produncan Lands, we understand that the future of real estate and territorial development must be sustainable, responsible and in harmony with the environment. Our commitment is focused on being strategic allies of those who seek to transform spaces, respecting the environment and promoting practices that generate a positive impact on local communities and ecosystems.
At Produncan Lands, we want to be a reliable partner for those who share our vision of sustainable and conscious territorial development. Whether in the creation of rural communities, real estate projects or environmental conservation, our priority is to build together a future that values both people and planet.
If you have an idea or project and are looking to give it a sustainable approach, let’s talk! At Produncan Lands we are ready to help you make it a reality.
Contact us here: https://produncan.cl/en/contact/
