1. ACCESS TO LAND AND HOUSING FINANCE FOR THE URBAN POOR
International Conference on Growth with Stability in Affordable Housing Markets 
ACCESS TO LAND AND HOUSING FINANCE FOR THE URBAN POOR
Technical Session IV: Urban Planning imperative for Affordable Housing 
Michael Slingsby – Urban Poverty Consultant
And don’t forget my sister and I

2. Discussion on three topics
Improving the management of land and
assets already owned by government
The provision of rental accommodation in urban areas
Financial instruments for incremental and new housing for the urban poor

3. CURRENT SCENARIO Urban growth and urban poverty
One third to half of urban growth is increase in population already living in the city
In Indian cities, urban poor represent 35% of the population and live on 5% of the land
Slum dwellers are very efficient users of urban land
Focus on improvement of existing slums through upgrading or redevelopment
Little attention to access to land and housing for the urban poor in the future
Range of appropriate interventions that bring about mobility in the housing market for the urban poor
Affordable interventions including rental housing

4. 1. Improving the management of land and assets already owned by government
Large areas of land in government ownership – state, ULB and central government agencies
In UK land owned by railways redeveloped and raised huge funds in both income and capital
Land for housing (marshalling yards) and stations for commercial development
Government land used to raise capital and to provide land for housing and plotted development
Move from urban administration (implementation of schemes) to urban management (setting strategic objectives for management of resources and targets for measuring success)

5. UK local governments now have estates and assets management departments
Reviews not only land and buildings in government ownership but also land and buildings rented or leased from others
Questions?
Is it fit for purpose to deliver the services required
If property no longer required for operational or investment purposes it is sold according to government guidelines
Challenge the basis for holding or acquiring property in the traditional way, exploring partnerships and new ways of working (PPP)
Efficiency in use of property, i.e. space per person
Publicising analysis of land a property holdings to create comparison and competition between urban local bodies

6. Old ideas that still work for provision of land for urban poor
Sites and services schemes
Seen as unsuccessful because not large enough, captured by better off because of high security of tenure
World Bank Madras (Chennai) delivered 30,000 plots for EWS and made impact on local market
Very poor did not benefit due to construction of core houses
Captured by better off later on because of lack of supply
City Improvement Trusts delivered serviced plots of land
Incremental development scheme in Hyderabad, Sind supported organised squatting

7. Arunmbakkam Chennai sites and services scheme

8. Mogappair sites and services scheme Chennai

10. Provision of rental accommodation in urban areas
A large percentage of urban poor families live in rented accommodation both within slums and outside slums
NSSO survey about 35%
Figures for Surat, 36% and Bangalore, 55% renters
Traditional response was Mumbai chawls

11. Rental Housing
Many Asian cities have private sector financed and constructed purpose built rental room blocks
Largely absent in India
Often serviced single rooms suitable for single migrants
High percentage of rooms/houses rented in slum
Rented rooms in houses are large source of cheap accommodation
a safety net against uncertain employment
meeting household expenditure
funding housing improvements
a regular source of income when moving from waged employment to business
pension after retirement.

12. Constraints to increase in rental accommodation
Negative government legislation
Property tax and rent control
Planning and building regulations
Incentives to
Encourage renting of rooms in existing houses
Adding rooms with access to separate kitchens/bathrooms
Encouraging construction of rental room blocks with common or individual sanitation facilities

13. Financial instruments for incremental and new housing for the urban poor
Majority of urban poor families build houses incrementally and raise funds from their own resources
They do not have access to formal finance
Increase ability to pay by renting part of house and more family members working
Sell family assets such as gold to raise capital
Majority of households with incomes below Rs 8,000
per month are daily wage labourers or self employed
Incomes are largely undocumented and maybe subject
to seasonal fluctuations
Little penetration of financial services on an individual
basis except for short-term productive or non productive
purposes
High transaction costs discourage entry into this sector of the market

14. Least cost affordable home in the market
Labour and self employed constitute a large part of the excluded households
25% of
households
50% of
households
75% of
households
Least cost affordable home in the market
~ Rs 4 Lakhs
Data Source: NSSO Expenditure Survey, 2010, NCAER How India Earns, Spends and Saves, 2007

15. as well as in this case and pay
Many urban poor families building incrementally
They use savings and money from relatives and friends
as well as
in this case
Borrow from a money lender at 10% PER MONTH
and pay
Rs 1,000 bribe to policeman to “allow” the construction
This man wanted to improve his family’s living conditions by adding another floor. He couldn’t get a regular loan and had to borrow from a money lender at 10% per month. He also had to pay Rs1,000 to a policeman to be allowed to carry out the construction. He was doing the construction work himself.

17. People take enormous risks in investing in permanent construction as evictions can take place at any time. Most have a temporary roof so it can be carried away at the time of demolition
People take enormous risks in investing in permanent construction as evictions can take place at any time. Most have a temporary roof so it can be carried away at the time of eviction

18. In South and South East Asia a number of models have been developed based on wholesaling loans to organised and registered communities, who then retail the loans to members.
These include
Thailand’s Community Organisation Development Institute fund
The Philippines Community Mortgage Programme
Cambodia’s Urban Poor Development Fund
Community savings and loans programmes have been established in a number of countries in the region
Some mature enough to lend to communities for housing and land purchase.

19. THAILAND’S COMMUNITY ORGANISATION DEVELOPMENT INSTITUTE (CODI)
Gives loans and grants to organised member communities for housing, land purchase, slum upgrading, group businesses and community revolving funds
Rate of interest depends on purpose of loan
Housing 2% (subsidised) , business 4%; revolving funds 6%
End user pays 6-8% for housing loans
Ceiling for land and housing loans put together is $9,000 (Rs 4,00,000) per family.
Average loan in about US$ 6,000 (Rs 2,70,000). All loans are made collectively to the community cooperative, not to individual families.

20. Klong Lat Paa Chi Community, Thonburi
Number of houses : 90
Tenure terms : Cooperative land ownership
CODI land loan : US$328,570
Infrastructure subsidy : US$128,570
CODI housing loans : $262,900
Klong Lat Paa Chi Community, Thonburi

21. 3,400 households in 13 communities
Klong Bang Bua
3,400 households in 13 communities
1 m. govt
2 m people

22. Number of units : Total of 3,400 households (in 13 communities)
Land owner : Treasury Department
Tenure terms : 30 year renewable lease to the Bang Bua community cooperative.
Land rental rate: $2-3 per month, per unit (depending on unit size).
Infrastructure costs : US$ 377,150
CODI housing loans : US$ 2.14 m
(2007 figures)
Welfare houses for the destitute
Rental rooms for existing renters

23. THE PHILIPPINES COMMUNITY MORTGAGE PROGRAMME
Beneficiaries organised into a community association with minimum of 30 and maximum of 250 members
Average amount per community was US$440,000 (Rs 198,00,000)
Community Mortgage Programme funds informal settlers, slum dwellers or tenants of blighted areas or areas for priority development to buy land that they are living on, or where they will be relocated.

24. A maximum amount of USD 2,890 (Rs 1,30,000) for the three stages is for individual beneficiaries residing in highly urbanised areas.
The loans are given to the Community Association.
The loan is payable in equal monthly amortisations for a maximum of 25 years at a fixed interest rate of 6 percent per annum.
The same land, which is subject of purchase, serves as the collateral for the loan.

25. URBAN POOR DEVELOPMENT FUND (UPDF), CAMBODIA
Total capital in fund : US$ 1.92 million
Source of capital : Contribution from savings group members, grant from Municipality of Phnom Penh, Prime Minister’s monthly contribution, Cambodian Red Cross, donors (Selavip, Homeless International, Misereor, ACHR-TAP)
Purpose of loans : Housing, land purchase, livelihood, environmental improvement, food production, emergencies
Interest charged : 8% annually (for housing and land loans); 4% annually (for bulk income generation loans to communities and networks, which on-lend at %).
How it works : UPDF makes housing, land purchase, food production and income generation loans directly to communities with active savings groups (not to individuals), which manage collection and repayment of loans.

26. Mittapheap community, Phnom Penh
137 houses in Khan Toulkork
Upgrading project, people straightened and paved the settlement’s main lane, laid
an underground drainage system and improved houses using an upgrading
grant of $6,587.
56 families who had to break parts of their houses to “re-block” and make room for the straightened road
took housing improvement loans totalling $23,500.

27. COMMUNITY SAVINGS Country Coverage Members Savings Thailand
3,000 urban communities in 225 cities
1.5 million members
US$ 44 million
Cambodia
319 communities in Phnom Penh and 12 provincial towns
15,460 members
US$240,000
Philippines
26 cities
47,930 members
US$ 1.4 million
Nepal
287 communities
6,710 members
US$600,000
Vietnam
1,670 communities in
8 cities
29,600 members
US$ 974,000
Sri Lanka
(Women’s’
Bank)
22 cities
50,000 members
US$9.09 million
Source: Asian Coalition for Housing Rights
“Savings + Funds” ACHR Newsletter, November 2007

28. ISSUES
What are appropriate “financial services” for the urban poor that support their needs for incremental housing, new housing, upgrading, productive and non productive purposes and emergencies?
Community savings groups have demonstrated their “bankability”?
Financial instruments need to build on and compliment traditional ways of raising finance – individual or group savings, loans or grants from friends and relatives, renting rooms etc.
Many community funds are multi-purpose with a mixture of short-term loans (for business) and long term loans (for land and housing) with different interest rates which can offset risks
City level urban poor development funds bring together money from communities, local government, NGOs and donors

30. We hope to look like this, soon
THE ENDING