By Melchor Alcántara Damir
Special for El Inmobiliario
The construction industry is going through one of its most challenging periods in recent years. The recent project closures ordered by the Ministry of Housing and Building (MIVED) have set off alarm bells throughout the sector. In just a few days, 15 construction projects have been summarily halted, often by the unilateral decision of an inspector, without granting companies the fundamental right to rectify the error, present their defense, or appeal the measure.
This practice is worrying because it leaves companies completely defenseless and creates a climate of legal uncertainty incompatible with investment. No productive sector can survive when it is deprived of clear mechanisms for redress and exposed to the risk of construction projects, with all the investment and jobs they entail, being halted without warning.
This regulatory environment is compounded by a financial situation that is crippling the industry. The government has already made two large disbursements of funds from the legal reserve requirement, the most recent for 81 billion pesos. However, these resources have not translated into relief for the sector, as mortgage and project finance interest rates remain close to 20%.
How can it be explained that funds given to private banks at no financial cost end up becoming almost prohibitively expensive loans for families and developers? The answer is clear: there is no proper channeling system. If the goal is to stimulate construction and expand access to housing, these resources should be channeled directly through state-owned banks, with truly affordable, single-digit interest rates. Now that would be a real change.
But the problem goes beyond credit. The raw material of construction is macroeconomic stability, and in this area, the reality is increasingly worrisome. The national currency has devalued rapidly, going from 58 to 64 pesos per dollar in just a few months. The fiscal deficit is growing unchecked, while the public budget is being consumed by current spending. A possible tax reform is being proposed as a solution, which is a recessionary measure, at least in its initial phase. This combination erodes confidence, drives up the cost of construction materials, and limits the planning of new projects.
Added to this is an international challenge that often goes unnoticed: competition with other real estate markets. For years, a high percentage of Dominican real estate sales have been conducted in foreign markets. However, we have fewer and fewer tools to compete with high-impact destinations that have adopted modern policies to attract investors.
A clear example is the state of Florida, where Governor Ron DeSantis eliminated property taxes and rental income taxes, creating a highly competitive environment. Similarly, other international markets offer extremely low interest rates for those wishing to invest in real estate. According to statistics, a significant portion of this market has a natural inclination to invest in the Dominican Republic, but ends up choosing these destinations due to their comparative advantages.
Construction is one of the main drivers of the Dominican economy. Nothing stimulates the economy more than this sector. It generates employment, boosts housing, energizes multiple production chains, and provides infrastructure for the country's development. In recent times, it has even become a generator of foreign exchange. However, no industry can survive in an environment of arbitrary regulations, inaccessible financing, macroeconomic instability, and a loss of competitiveness compared to markets that operate with more strategic policies.
From the National Observatory of the Construction Industry (ONIC), we call on the authorities to reflect and correct course. A fair and predictable regulatory framework, a truly functional financing system, and economic policies capable of maintaining stability and international competitiveness are needed. Only in this way can we sustain the sector that, more than bricks and rebar, builds progress for the Dominican Republic.
The author is president of the National Observatory of the Construction Industry (ONIC).
The opinions expressed in this article are the sole responsibility of the author.
