Mobilizing financial resources for shelter

In most developing countries, existing public financial institutions do not fulfil the requirements for financial resources which are needed for critical inputs in construction. The few available financing institutions have had little impact. The normal practice in private sector low-income shelter construction is to depend on the builder's own finances, which are often limited. Public sector low-income shelter construction is often more vulnerable to limitations of cash flow.

Experience in housing finance development the world over demonstrates that broad, market-based systems are the most effective vehicle through which to provide financial resources for shelter development. Enabling shelter strategies imply a shift from a direct government construction effort to the encouragement of indviduals, small-scale enterprises and large contractors. Such operations tend to be more employment-intensive and involve unskilled workers.

1. The importance of shelter to the economy cannot be overlooked. Housing investment typically comprises from 2 to 8 percent of GNP and 10 to 30 percent of gross fixed capital formation. In addition, as economic development proceeds, the first area in which households tend to increase their spending is on housing and related services. In a period of economic recession, the shelter sector is typically regarded as a attractive sector for stimulating economic recovery. The typically low import requirement imply that incremental investments generate a higher domestic multiplier than do investments that are import-intensive.

1. Strengthening shelter sector
2. Soliciting new construction investment
3. Mobilizing financial resources
4. Investing
5. Developing enabling strategies for housing provision

1. Reforming shelter finance systems
2. Reducing financial intermediation margins
3. Increasing land supply by fiscal means
4. Increasing investment in housing infrastructure
5. Funding architectural restoration
6. Financing rental housing
7. Financing housing for the poor
8. Financing development through informal sector resources
9. Developing mortgage finance
10. Developing efficiency housing subsidy systems
11. Acquiring home construction funding

1. Repairing existing resident housing
2. Increasing amount of housing

1. Researching housing needs
2. Recovering housing infrastructure investments
3. Increasing security of land tenure
4. Improving housing loan recovery methods
5. Improving allocation of resources
6. Ensuring full cost recovery for infrastructure services
7. Encouraging private sector management of housing
8. Collecting property taxes
9. Collecting housing user charges

1. Encouraging self-building of houses

1. Shelter
2. Improvement