Reforming Housing Policies in Latin America Learning from Experience

How can housing finance policies in Latin America be improved?
Download 15 pages

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.

About this Publication

By Jacobs, M.