Vatican Raises the Rent, Marketplace, September 5, 2007

Vatican Raises the Rent

Marketplace
September 5, 2007

http://marketplace.publicradio.org/shows/2007/09/05/PM200709055.html

Beyond St. Peter's Basilica, the Vatican owns a lot of pricey real estate in Rome. Many of its tenants had come to believe they were protected from rising rents. But, as Megan Williams reports, their faith was misplaced.
Photo by iStockPhoto

Kai Ryssdal: Looking for an apartment's never easy. But here's a hint if you promise not to tell anybody else: the Vatican's got some good deals. Seriously. Even beyond St. Peters, the Catholic Church owns a lot of pricey real estate in Rome.

For years, many of its tenants paid quite reasonable amounts, and they came to believe they were protected from rising rents. But Megan Williams reports now from Rome, their faith was misplaced.

Megan Williams: It may be the last summer 65-year-old Franco Lattughi welcomes a guest into his spacious, sunlit apartment in the historic center of Rome.

Lattughi, a tour guide, remembers 12 years ago when a priest at the Vatican office first told him this apartment was available.

Lattughi: And he called us, he said, "We have a flat." It was this flat, and it was very big. And . . . later on, I found out nobody wanted it, because it was a wreck of a flat. And . . . if you restore the flat, you can have a good rent, in the center of city, and you can have it the whole of your life, just the increase of . . . according to the inflation, yes.

Lattughi and his wife spent their life savings of about $150,000 to fix up the rental unit. They signed an eight-year lease, but, says Lattughi, with a verbal promise from the Vatican that the apartment was theirs for good — a standard practice at the time. The rent of almost $1,000 a month was pegged to Lattughi's modest income.

Then recently, Lattughi and a host of other Vatican apartment renters got the shock of their lives: a notice from the Vatican to start paying market rate — about $3,000 a month — or get out.

Lattughi: I say, well, if I knew that you are going to put up the price after eight years, I wouldn't have taken it. Because I took it for these conditions.

Lattughi says the Vatican has a moral obligation to repay his investment if he leaves — something the Vatican so far has refused to do, he says.

Michele Annesi is a Roman architect and real estate agent:

Michele Annesi: The Vatican basically owns all the best apartments in Rome, in the historical parts...

He says real estate prices and rents have doubled in Rome since 2000, and that the Vatican is really just catching up with the times.

Annesi: For a while, it was very not-organized market, because it was a kind of a... the parish that took care of the rentals. And now, things are completely changed, and they have a very efficient, very central office.

The Vatican didn't respond to a request for an interview, but Annesi says it's understandable that it wants to get the most out of its rents, which go to fund missionary work abroad.

He says a big culprit in rising prices isn't the Vatican, but the hundreds of apartments people leave empty until their kids are old enough to move in.

Annesi: I think that's a typical Roman attitude that that is not in the rest of the world. Because if you buy a property, you put on the market, you want some incomes from that. Instead in Rome, they don't care, they just leave it like that for, even for 10 years.

For renters like Franco Lattughi, who thought they'd found a safe haven with the Vatican, there's little consolation.

Lattughi: I'm a victim of the shift of the system, you see. Before, they were maybe too tolerant, and now they are going to turn the screw, and I'm caught in the middle.

And like so many other renters in Rome who haven't been blessed with Vatican apartments, he's now feeling the squeeze.

In Rome, I'm Megan Williams for Marketplace.