Thailand’s new National Housing Action Thailand’s new National Housing Action Achieving Land Tenure Security and Upgrading Of urban Poor Communities At City-Wide Scale Through Community-Driven and City Partnership Approach Of urban Poor Communities Thailand’s new National Housing Action Thailand’s new National Housing Action Achieving Land Tenure Security and Upgrading Of urban Poor Communities At City-Wide Scale Through Community-Driven and City Partnership Approach Thailand’s new National Housing Action Thailand’s new National Housing Action Achieving Land Tenure Security and Upgrading Of urban Poor Communities At City-Wide Scale Through Community-Driven and City Partnership Approach Achieving Land Tenure Security and Upgrading Of Urban Poor Communities At City-Wide Scale Through Community-Driven and City Partnership Approach

COMMUNITY ORGANIZATIONS DEVELOPMENT INSTITUTE (CODI) THAILAND

History In 1992, the Thai Government established the Urban Community Development Office (UCDO) to address the problem of urban poor communities. UCDO was set up as a unit attached to the National Housing Authority of Thailand. In 1992, the Thai Government established the Urban Community Development Office (UCDO) to address the problem of urban poor communities. UCDO was set up as a unit attached to the National Housing Authority of Thailand. The Government also granted THB 1250 mln.as Community Development Fund to support urban community development activities and provide low- interest loans to community organizations. The Government also granted THB 1250 mln.as Community Development Fund to support urban community development activities and provide low- interest loans to community organizations.

In 2000,a Royal Decree was enacted to merge UCDO with Rural Development Fund (a fund managed by the National Economic and Social Development Board) to create a new organization called the Community Organizations Development Institute or CODI. In 2000,a Royal Decree was enacted to merge UCDO with Rural Development Fund (a fund managed by the National Economic and Social Development Board) to create a new organization called the Community Organizations Development Institute or CODI.

CREATION OF CODI URBAN COMMUNITY DEVELOPMENT OFFICE (UCDO) USD m. (THB2, m.) RURAL DEVELOPMENT FUND (RDF) USD m. (THB m.) CODI USD82.85 m. (THB2, m.)

In 2004 Thai Government announced new policy of one million houses for urban poor all over Thai cities in 5 years with 2 approaches : In 2004 Thai Government announced new policy of one million houses for urban poor all over Thai cities in 5 years with 2 approaches : 1. Constructing of new low- income housing by NHA low- income housing by NHA 2. Slum upgrading by CODI Thailand City-Wide Slum Upgrading

CODI set 5-year target for slum upgrading in 200 Thai cities covering 2,000 slum communities. CODI set 5-year target for slum upgrading in 200 Thai cities covering 2,000 slum communities. CODI receives budget from central government then passes the budget directly to communities according to the consent of city development partners especially Local Authority and community network in each city.

The new paradigm shift For housing development by people in action 1. Community organizations are the owners of projects / main actors (surveying, planning, designing, savings / management) 2.Change from supply driven to “ Demand Driven by communities ” 2. Change from supply driven to “ Demand Driven by communities ” 3.Change the approach from construction management to flexible financial management allowing community and local partners to work together 4.Urban land reform for urban poor housing by land survey and community negotiation 5.holistic upgrading process to build strong and secured community organization and managerial capacity as a collective group for integrated physical, economic and social improvement 6. City-wide development process covering all communities in the city

City-wide upgrading involving many possible city development actors and find various secured housing solutions for all communities in the city City-widesurvey / joint planning, search forsolutions together Find various solutions suitable for all communities in city Community Municipality Community Other dev.agencies On-site Upgrading Land-sharing& reconstruction Reblocking & readjustment Resettlements ่ Row-house Flat Detach house Row-housing Flat Mixed approach

Process of Baan Mankong

Baan Mankong City-Wide Planning Identify stakeholders Identify stakeholders Community members, local politicians and bureaucrats, NGOs, academics, and community organizers Community members, local politicians and bureaucrats, NGOs, academics, and community organizers Organize network meetings, as well as meetings in individual communities Organize network meetings, as well as meetings in individual communities Begin brainstorming and planning process of pro-poor solutions for housing and land issues Begin brainstorming and planning process of pro-poor solutions for housing and land issues Establish joint committee to oversee implementation Establish joint committee to oversee implementation

Survey all communities Survey all communities Identify problems in individual areas and create holistic plan that allows communities to work together to overcome collective challenges Identify problems in individual areas and create holistic plan that allows communities to work together to overcome collective challenges Develop housing, land tenure and policy plan for whole city Develop housing, land tenure and policy plan for whole city Negotiate with local or government landowners through collective bargaining Negotiate with local or government landowners through collective bargaining Begin work with individual communities on concrete plans Begin work with individual communities on concrete plans

Slums and Squatter Settlements in Nakornsawan

Select Community Working Team Select Community Working Team 7-10 representatives from the community to manage each aspect of the upgrading process 7-10 representatives from the community to manage each aspect of the upgrading process Survey Community Survey Community Leadership team manages survey process Leadership team manages survey process Collect information about land, housing, physical infrastructure, income, employment, problems, and existing development initiatives Collect information about land, housing, physical infrastructure, income, employment, problems, and existing development initiatives The survey allows the community members to meet, learn about each other’s problems and establish links The survey allows the community members to meet, learn about each other’s problems and establish links

Planning Phase Recheck all Information Recheck all Information Community members and CODI work together to go through all information and begin planning solutions Community members and CODI work together to go through all information and begin planning solutions Conceptualize housing and development goals (i.e. will it involve reblocking or relocation? Will they purchase or rent?) Conceptualize housing and development goals (i.e. will it involve reblocking or relocation? Will they purchase or rent?) Identify land owner and begin negotiation process for long term lease or purchase Identify land owner and begin negotiation process for long term lease or purchase

Formulate Budget Formulate Budget Estimate budget for all land, housing and construction costs Estimate budget for all land, housing and construction costs Resolve conflicts resulting from wealth disparities between community members Resolve conflicts resulting from wealth disparities between community members Create financing plan. Decide if community members will take on loan from CODI or self-finance the project Create financing plan. Decide if community members will take on loan from CODI or self-finance the project Meet with all Stakeholders Meet with all Stakeholders Organize meeting with all stakeholders to discuss plans Organize meeting with all stakeholders to discuss plans Involve local government unit, academics, NGOs, etc Involve local government unit, academics, NGOs, etc

Implementation Phase Detailed Development Plan Detailed Development Plan Work with engineers and architects to design housing and infrastructure Work with engineers and architects to design housing and infrastructure Include options for house size and cost in order to accommodate wealth discrepancies between community members Include options for house size and cost in order to accommodate wealth discrepancies between community members Identify ways to mitigate costs, including recycling old building materials and hiring local community members for construction, instead of hiring contractors Identify ways to mitigate costs, including recycling old building materials and hiring local community members for construction, instead of hiring contractors Present plan to CODI for approval Present plan to CODI for approval

Disburse Loan and Subsidy Disburse Loan and Subsidy Loan Loan Loan must be approved by local committee before being sent to CODI Loan must be approved by local committee before being sent to CODI CODI loan committee approves loans individually on a monthly basis CODI loan committee approves loans individually on a monthly basis Subsidy Subsidy CODI passes on government subsidies for infrastructure development and administrative costs CODI passes on government subsidies for infrastructure development and administrative costs Infrastructure subsidy ranges from 25,000 – 45,000 THB Infrastructure subsidy ranges from 25,000 – 45,000 THB Begin Construction Begin Construction Loan installments are disbursed based on completion of construction phases Loan installments are disbursed based on completion of construction phases

Community Survey all communities in districts and city Community survey of all households In the community and all communities in the city carried out by community people การ

Participatory planning process

Baan Mankong: Financial Aspect

Providing Flexible Financial Support for City-wide Upgrading by Communities Grant 1)Upgrading of infrastructure and social facilities 2) Local management cost 3) Support for exchange visits, capacity building, seminars, coordinator Loans From CODI Revolving Fund Communities Government Subsidy Banks Interest 4 % Members

Source of Financing Three components of BMK financing: Local communities’ own savings (10% of project cost) Local communities’ own savings (10% of project cost) Government subsidy-THB80,000(~USD2,460) per family Government subsidy-THB80,000(~USD2,460) per family Housing loan from CODI Housing loan from CODI

CODI loan Loan type:Term loan Loan type:Term loan Maturity:Up to 15 years Maturity:Up to 15 years Interest rate:Fixed at 4% p.a. Interest rate:Fixed at 4% p.a. Maximum loan amount:not exceeding THB 300,000 (~USD9,230) per household Maximum loan amount:not exceeding THB 300,000 (~USD9,230) per household Loan portion: CODI will finance up to 90% of the project cost. Loan portion: CODI will finance up to 90% of the project cost.

Loan Security: 1)Land and buildings are mortgaged with CODI Loan Security: 1)Land and buildings are mortgaged with CODI 2)Bank deposit of 5-10% of project cost (optional) 2)Bank deposit of 5-10% of project cost (optional) 3)A guarantee agreement signed by chairman, committee and all members of the community organization. 3)A guarantee agreement signed by chairman, committee and all members of the community organization.

Re-lending to members The borrower will on-lend the fund to individual household by adding a margin of 2-3% to the interest cost. The borrower will on-lend the fund to individual household by adding a margin of 2-3% to the interest cost. The margin is set aside for the purpose of loan administration, community welfare and serves as a cushion for loan repayment in case any member fails to meet his or her obligation in any particular month. The margin is set aside for the purpose of loan administration, community welfare and serves as a cushion for loan repayment in case any member fails to meet his or her obligation in any particular month.

Baan Mankong Housing Loans (as of Mar 2010) THBmm. (USDmm.) THBmm. (USDmm.) Total approval3,244 (99) Total approval3,244 (99) Disbursement2,197 (67) Disbursement2,197 (67) Repayment 382 (12) Repayment 382 (12) Outstanding1,815 (56) Outstanding1,815 (56) Beneficiaries Beneficiaries No. of communities758 No. of communities758 No. of households20,478 No. of households20,478

Sample Case: Narai-pitak Mankong Housing Co-op Phase I

In 2005, Sakolnakorn Municipality and CODI jointly conducted city-wide slum survey. Upgrading plan was consequently agreed by all stakeholders. The 1 st phase targeted the most urgent cases of about 91 families. In 2005, Sakolnakorn Municipality and CODI jointly conducted city-wide slum survey. Upgrading plan was consequently agreed by all stakeholders. The 1 st phase targeted the most urgent cases of about 91 families. Savings group was formed in 2006 and in 2007 was transformed into a housing cooperative. CODI granted loans in 2007 totaling USD 527,118. Savings group was formed in 2006 and in 2007 was transformed into a housing cooperative. CODI granted loans in 2007 totaling USD 527,118.

Community savings: USD 85,925 Community savings: USD 85,925 Government subsidy: USD 190,400 Government subsidy: USD 190,400 CODI loan: USD 527,118, about one-third of which was for land purchase and remaining for housing construction. CODI loan: USD 527,118, about one-third of which was for land purchase and remaining for housing construction. Loan tenure: 15 years Loan tenure: 15 years Interest rate payable to CODI: 4% p.a. Interest rate payable to CODI: 4% p.a. Interest rate charged by co-op: 6% p.a. Interest rate charged by co-op: 6% p.a.

Project progress Of 91 houses, 87 are CODI- financed, construction has been completed; 4 are self- financed, one is completed.

Monthly family income: USD Monthly family income: USD Monthly repayment per family: USD Monthly repayment per family: USD As of now, USD 61,015 of CODI loan has been repaid. As of now, USD 61,015 of CODI loan has been repaid. Community also has a plan for community welfare. Each family is required to contribute about USD 0.03 a day for welfare such as healthcare, childbirth, elderly support, funerals etc. Community also has a plan for community welfare. Each family is required to contribute about USD 0.03 a day for welfare such as healthcare, childbirth, elderly support, funerals etc. In March 2010, CODI approved another loan of USD 804,215 for the 2 nd phase to build houses for 120 families. In March 2010, CODI approved another loan of USD 804,215 for the 2 nd phase to build houses for 120 families.

Bang Bua Community From canal-side slum to pleasant community

SAMAKKI RUAMJAI COMMUNITY BANGBUA : BANGKHEN BEFOREAFTER

Baan Mankong Performance

Project Progress : From Jan to Feb Project Progress Number 1.Total number of projects approved 811 projects 2.Total number of cities/districts operated operated 268 cities/districts 76 province 3.Covering no.of communities 1,475 communities 4.Total number of families 88,392 families 5.Total budget approved : - Grant for Upgrading - Loans for Housing 3,856 mil. Baht (USD 118.6) 3,156 mil. Baht (USD 97)

Type of upgrading Nearby Relocation 9,468 families (10.71%) Relocation 21,170 families (23.95%) Upgrading/Reconstruction 57,481 families (65.03%) Shelter House for Homeless 273 families (0.31%)

Status of Land Tenure Security Improvement Cooperative ownership (31,366 families) Permission to use land (11,220 families) Short – term lease (7,660 families) Long – term lease (38,146 families)