Reforming Housing Policies in Latin America Learning from Experience

This presentation describes Inter-American Development Bank's (IDB's) experiences through 1950-1980, and identifies some characteristic problems of supply side interventions including:

• Consumption inefficiency;
• Regressive subsidy;
• Land market distortions;
• Financial damage to agency;
• Off budget costs.

The presentation highlights the third generation of microfinance model. It suggests:

• Basic principles including: 
• • No delivery of subsidies through credit;
  • No involvement of government in loan management;
  • Encouraging strong financial markets;
  • Using demand side subsidies;
• Developing private mortgage markets through:
  • Promotion of mortgage insurers and credit unions;
  • Pension reforms.
• Liberalizing land markets by promoting low cost private capital supply;
• Promoting microfinance through:
  • Strengthening regulatory framework;
  • Building on existing private micro lenders.

The author concludes with a number of suggestions on the roles of:

• Government should tighten focus on:
  • Policy design;
  • National land issues;
  • Information and consumer protection;
• Commercial private sector should focus on:
  • Land assembly and development;
  • Supply of mortgage finance / microfinance;
• NGOs should focus on:
  • Support low income households;
  • Facilitate community organization.