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!!!
AUHF!2015!Garden!Court,!Marine!Parade,!Durban!(South!Africa)!
October!26!–!28,!2015!
HOUSING!MARKET!DYNAMICS!IN!AFRICA!!
Issa!FAYE!AfDBM!Research!Department!
!!
Africa’s!rapid!urbanization!and!increasing!population!growth!has!sharply!increased!the!demand!for!affordable!housing!across!the!continent…!
2
Source: Hofinet
! Urbanization*processes*and*housing*dynamics*are*inter5related*
! Urban*population*growth*and*urbanization*put*pressure*on*institutional*and*resource*capacities*of*urban*authorities*
! Twin*development*process—‘formal’*and*‘informal’*settlements*developing*in*parallel*
! Cities*being*built*‘back*to*front—*building*@irst*and*servicing*afterwards,*required*infrastructure*retro@itting*
Source: The Economist
…resulting!in!widespread!shortage!of!affordable!housing!supply!!in!Africa!
Kenya!(pop.!44.4mn)!Housing*backlog*of*2mn*units;*estimated*annual*de@icit*of*200K*units*
Cameroon!(pop.!25mn)!Housing*backlog*of*over*700k*units*
Angola!(pop.!21.5mn)!Housing*de@icit*of*over*1.9mn;*estimated*annual*shortage*of*100K*
Ivory!Coast!(pop.!20.3mn)!!Housing*backlog*of*over*700k*units*
Ethiopia!(pop.!94.1mn)!Estimated*de@icit*of*1mn*units;*100k*annual*shortage*
Nigeria!!(pop.!173.6mn)!Housing*backlog*of*17mn;*annual*shortage*of*700k*units*
South!Africa!(pop.!53mn)!Housing*de@icit*of*2.1mn*units;*an*estimated*1.5mn*households*live*in*slums*
Morocco!(pop.!33.01mn)!Housing*de@icit*of*800k*units,*growing*178K*p.a.*
Uganda!(pop.!37.6mn)!Estimated*annual*housing*de@icit*of*233k*units*
Source:(CAHF,(UN0Habitat,(National(Sources(!
This!lack!of!affordable!supply!has!translated!to!the!growth!of!informal!settlements!
4
• Over*200*million*Africans*live*in*slums*• Cities*accommodate*72%*of*slum*dwellers*across*Africa*The!housing!issues!should!be!looked!at!under!the!broader!perspective!of!urbanization!Data(sources:(UN0Habitat(
Four!main!issues!to!deal!with!to!address!the!shortage!of!affordable!housing!^inance!on!the!continent!!
5
Major*constraints*to*providing*affordable*housing*at*scale:*
Lack!of!access!to!^inance!for*poor*and*lower5middle5income*families,*as*well*as*real*estate*developers*
Unsecured!land!tenure!and!weak!land!governance!inhibits*the*active*participation*of*the*private*sector*
Rising!cost!of!construction!makes*it*dif@icult*to*build*homes*at*an*affordable*price*for*the*majority*of*households*
Inability!to!provide!infrastructure!and!lack!of!human!and!institutional!capacity!across*the*housing*delivery*value*chain*
CHALLENGES!&!OPPORTUNITIES!
HOUSING!FINANCE!
Underdeveloped!^inancial!markets!(1)!
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
CEMAC* WAEMU** Angola bostwana Zambia Nigeria Tanzania Namibia Uganda Ghana Kenya South Africa
Morocco
African!Bond!Market!size!as!%!of!GDP!
Low!Level!of!Intermediation!! Credit*to*the*economy*/*GDP*still*low:*18%*!Lack!of!LongMterm!Finance!and!Inadequate!Instruments!! Lack*of*equity*for*developers*! Untapped*contractual*savings*industry–*Pension*Funds*and*insurance**companies,*etc.*! Inadequate*instruments*:lack*of*secondary*markets;*few*mortgage*re@inancing*facilities*(WAEMU,*Tanzania,*Nigeria,*Algeria,*Egypt),*shallow*capital*markets*including*bond*markets*(highly*driven*by*treasury*bills)*
Source:(African(Market(Initiative(*(CONSUMAF((cumulative(issues(200702001)(**CREPMEF((market(capitalization)(
Underdeveloped!^inancial!markets!(2):!Mortgage!markets!quasiMinexistent!
Underdeveloped!^inancial!markets!(3):!!Low!mortgage!penetration!rates!
9
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Namibia RSA 0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
Residential!Mortgage!Loans!outstanding!as!%!GDP**
Source:(AfDB,(World(Bank!
Unmet!Demand!of!Residential!Real!Estate!Loans!in!SSA!
Source:!IIF!
35
40
45
50
55
60
65
11Q4 12Q2 12Q4 13Q2 13Q4 14Q2 14Q4
Supply of Residential Credit Demand for Residential Loans
Diffusion index (50=neutral)
Affordability!Issue:!double!digits!interest!rates!deter!borrowers!
Source:!Author’s observation, BCEAO, CAHF, Numbeo !
18.80% 15.80%
19.50% 7.46%
9.13% 14.80%
13% 11%
19% 9.24%
20.60% 12.50%
11% 18%
18.89% 9.10%
10.50% 20.50%
5.83% 8.40% 8.75%
42.33% 18.50%
6.88% 13.49%
11.50% 15.71%
9.18% 24.83%
20% 14%
9.50% 18%
10.02% 11%
7.30% 19.75%
15% 5%
15% 5%
8.50% 10.33%
6.73% 10.88%
8.47% 11.75%
4.58%
Zimbabwe
Uganda
Togo
Swaziland
South Sudan
Sierra Leone
Senegal
Nigeria
Namibia
Morocco
Mali
Madagascar
Liberia
Kenya
Ghana
Gabon
Equatorial Guinea
Djibouti
Congo-Kinshasa
Chad
Cape Verde
Burundi
Botswana
Angola
Average!mortgage!interest!rates!in!Africa,!2015!
Most!of!African!Large!Cities!are!unaffordable:!high!risk!&!information!asymmetries,!inadequate!legal!framework;!high!costMto!service!customers;!high!interest!rates,!in^lation!
0
10
20
30
40
50
60
70
80
90
Alg
eria
Egyp
t
Mor
occo
Tuni
sia
Cam
eroo
n
Cen
tral A
fric
a Re
p.
Cha
d
Con
go-B
razz
avill
e
Mal
i
Beni
n
Nig
er
Burk
ina
Faso
Gam
bia
Sene
gal
Gui
nea
Gha
na
Nig
eria
Cot
e d’
Ivoi
re
Keny
a
Ethi
opia
Buru
ndi
Djib
outi
Com
oros
Tanz
ania
Mal
awi
Moz
ambi
que
Zam
bia
North Africa Central Africa West Africa East Africa Southern Africa
40 sq m hse
80 sq m hse
House!Price!to!Income!Ratio!in!Africa,!2015!
Opportunities!for!Developing!Housing!Finance!Markets!(1):!A!different!way!of!Doing!Business!
• Prior*savings*(credit*history,*income*proxy)*
• Independent*check*of*stated*income,*e.g.*periodic*surveys*
• KYC*rule,*lending*to*existing*customers*• Lower*Loan5To5Values*&*Debt5To5Incomes*limits,*some*repayment*@lexibility**
• Credit*Information*systems*
Reducing!Risk!&!uncertainties:!
!Prudent!lending!practices
• Develop*capital*markets • Develop*Mortgage*Re@inancing*Facilities*(CRRH5UEOMA,*Nigeria,*Algeria,*Egypt,*Tanzania,*Ghana*mortgage*re@inancing*schemes)
• Linkage*with*the*opening*of*pension*systems*to*the*informal*sector*(Kenya,*Côte*d’Ivoire)*
• Equity*for*developers*• Building/strengthening*capacity*of*local*developers*
Missing!Links
Opportunities!for!Developing!Housing!Finance!Markets!(1):!how!to!go!down!market!while!covering!the!informal!sector!(i.e.!irregular!incomes!and!unstable!cash!^lows)?!!
" Alternative!Security:!!# Equitable*mortgage,*deposit*of*title*certi@icate*with*the*lender,**# promissory*mortgage*liens*# lien*on*pension*fund*accounts,*within*limits*(Kenya,*RSA)*# Personal*guarantees,*pledged*savings,*salaries*payroll*deduction*
" Mortgage!Insurance!&!Guarantee!Schemes:!rare!cases!# RSA,*Kenya*(self5insurance)*–*Failure*ex.*(Mali),*or*pilots*with*no*follow5ups*(*Caisses*Populaire*du*Burkina)**
# Best*practice:*Moroccco*Damane*Assakane*# Many*markets*still*not*mature*enough**
*
Opportunities!for!Developing!Housing!Finance!Markets!(2):!How!to!go!down!market!while!covering!the!informal!sector!(i.e.!irregular!incomes!and!unstable!cash!^lows)?!!!
Lowering!the!frontier:!some!promising!models!!" Combination!of!housing!cooperatives!/!banks!
# Tripartite*arrangements*Banque*de*l’Habitat*du*Sénégal*/cooperatives*/land*or*building*developer**
# Kenya*NACHU:*savings*&*credit*mobilization*for*cooperatives**" Financing!the!Informal:!Some!Feasibility!evidence!experiences!
# India:*several*specialized*lenders*active*in*this*segment*–*best*practice:*GRUH*Finance,*very*performant*(NPLs:*1,5%)*
# Morocco*FOGARIM*guarantee*scheme*5*10*year*experience,*20%*market*share*# Colombia:*Fondo*Nacional*de*Garantia*–*provident*fund*and*housing*lender,*open*to*informal*HH*since*2007**
" Support!the!development!of!housing!micro^inance!products!# Support*development*of*savings5linked*HMF*products*(Indonesia)*# Provide*technical*assistance*to*lenders*and*borrowers*such*as*CEMEX’s*Patrimonio*
Hoy*in*Mexico,*Lafarge’s*HMF*program*(e.g.*capacity*building*for*MFI*staff,*design*speci@ications,*bills*of*quantities,*etc.)*
# Home*improvement*subsidies*for*self5construction;*improved*targeting*mechanism*needed
Opportunities!for!Developing!Housing!Finance!Markets!(3):!Complementarity!of!public!and!private!actions!needed!!
" Develop!municipal!bond!markets!# Develop*cities*as*credit*worthy*borrowers*(Dakar)*# Expand*skill*sets,*training*and*capacity*building*to*local*governments*# Credit*enhancement*critical*as*it*increases*lenders*perceived*security**
" Fiscal!decentralization!for!local!governments!to!help!fund!urbanization!e.g.!collection!of!!certain!taxes!(licensing!fees,!property!taxes,!etc.)!
" Land!Value!Capture!as!a!Funding!Source!For!Urban!Investments!!" Promote!contractual!savings!industry!as!well!as!private!equity!investments!for!longMterm!infrastructure!^inance!
" Diaspora!savings!and!remittances!remain!an!untapped!resource!!" Support!construction!^inance!facilities!for!small!scale!developers!and!contractors!e.g.!NURCHA!in!South!Africa,!IFCMCITIC!investment!platform,!etc.!
Leverage REIT!structure!to!attract!private!sector!capital!for!Rental!Housing!(For!illustrative!purposes!only)!
SHAREHOLDERS(Pension funds, insurance firms, IFIs, DFIs, private
investors)
AFFORDABLE HOUSING REIT LTD
Distribution in the form of dividend
Investment for an equity stake in residential assets
SPONSOR (AfDB, IFC,
etc.)
REIT MANAGER
Wholly or partly owned
Management services
Management fees
TRUSTEE
Trustee fees
Acts on behalf of shareholders
RESIDENTIAL PROPERTIES
Ownership of residential assetNet property income
Construction of 4,000-units housing development
Acquisition of 120-units multifamily housing
Purchase of affordable mortgage portfolios
CHALLENGES!&!OPPORTUNITIES!
LAND!&!INFRASTRUCTURE!
Financing!Land!&!Infrastructure!for!Housing:!a!challenge!
Estimated Infrastructure needs as % of GDP
Infrastructure spending as % of GDP
!
M!Urban!infrastructure!competes!with!huge!global!infrastructure!needs!in!SSA!(15%!GDP/!year,!only!half!of!which!is!satis^ied)!M!Financing!land!and!its!equipment!is!challenging!!
(Source:(World(Bank(
*
Low!density!urban!expansion!comes!at!a!cost!for!urbanization!
$ Implications!of!urban!sprawl!include:!!! High*cost*of*“retro@itting”*infrastructure*and*services**
! Poor*transport*connections*between*residential*areas*and*city*centers/places*of*employment*
! Environmental*damage*! Accelerated*loss*of*agricultural*land*
Much!of!Africa’s!urban!expansion!is!occurring!through!unplanned!and!lowMdensity!consumption!of!rural!land!at!a!rapid!pace!
Divided!Cities:!Multiple!land!tenure!regimes!
" A*majority*of*urban*residents*are*unable*to*access*or*afford*land*or*housing*in*the*formal*sector*
" On*average,*only*around*10%*of*land*is*formally*registered*to*individuals*as*private*property**
% Diminishes*security*of*land*rights*of*housing*consumers*due*to*lack*of*clear*land*rights*% Crowd*out*private*investors*from*housing*% Complicates*land*assembly*for*new*housing*projects.*Clear*challenge*for*urbanization*% Contributes*to*rising*housing*prices,*as*formal*land*supply*is*constrained**
1 2 3 4 5 6 7 8 9 10
Full*security**
Degree!of!tenure!security**
No*security**
Zero*legality** Degree!of!legality** Full*legality**
Pavement*dweller**
Squatter*regularized*and*unregularized**
Tenant*with*contract**
Leaseholder**
Freeholder**
Distinguish!de(jure(and!de(facto(tenure:!there!is!more!than!1!legally!acceptable!system!!
Source:*Geoffrey!Payne,!2001*
The!land!titling!debate:!Which!tenure!regime!to!support?!(1)!
Continuum!of!Tenure!Categories!!
Source:(UN0Habitat,(2012(*
The!land!titling!debate:!Which!tenure!regime!to!support?!(2)!
Continuum!of!Tenure!Categories!!
Registered individual freehold may not be necessary to provide adequate security
The!land!titling!debate:!Which!tenure!regime!to!support?!(3)!
Formal!land!titles!are!an!absolute!preMcondition!if!
largeMscale!housing!provision!is!to!
occur!!!
There!are!alternatives!to!formal!land!titles!that!are!cheaper!and!easier!to!implement!
Are!formal!(i.e.!registered)!and!individual!land!titles!needed!as!a!preMcondition!for!largeMscale!housing!provision?!
Making!the!Legal!and!Regulatory!Framework!related!to!Land!Issues!right:!Strong!Governments!and!Institutions!needed!
$ Three!main!priorities!related!land!supply!for!housing:!!!% Reforming!the!land!administration!and!allocation!systems!*******Improving*land*rights*delivery*system,*including*land*formalization*and**********making*land*available*to*buyers*or*allottees*at*scale********!!!!!!!!!!% !!Resolve!the!contradictions!between!customary!and!statutory!tenure!forms:!!Traditional*systems*of*land*delivery*are*now*generally*being*integrated*into*land*markets**Most*common*state*response*to*customary*authorities*is*a*progressive*integration*and*subordination*of*customary*systems*within*the*statutory*land*market*structure***
% Making!land!and!property!rights!enforceable!!
Land!Policy!reforms!should!be!part!of!a!broader!urbanization!plan!
$ Decentralization:!Link!urban!planning!to!regional!and!local!plans!% Mapping*of*available*land*at*municipal*level*(well*functioning*cadaster)*% Acquisition*of*land*for*relocation*of*existing*populations,*reservation*of*easements*and*development*of*the*physical*infrastructure*necessary*for*faster*development*in*these*areas*(AUC5ECA5AfDB*2010).*
% Putting*the*necessary*conditions*to*foster*Land*value*capture**
$ Liberating!land!for!housing!and!infrastructure:!% Vacant/idle*land*tax*% Pre5emption*rights/right*of*@irst*refusal*with*land*sales*% Land*readjustment*
$ Guided!Land!Development!(GLD)!% Planning*of*peri5urban*areas*through*the*installation*of*physical*infrastructure*in!advance!of!settlement*development,*followed*by*servicing**
% GLD,*a*@lexible*planning*approach*and*a*way*to*create*new*land*for*housing,*involving*multiple*stakeholders—including*also*customary*landowners,*where*needed.**
*
CHALLENGES!&!OPPORTUNITIES!
CONSTRUCTION!COST!
The!Cost!of!Construction!Doubled!within!8!Years
Source:(AECOM,(AFRICA(PROPERTY(AND(CONSTRUCTION(HANDBOOK(2013(
Rising!cost!per!square!meter!for!an!average!detached!!house!(brick,!block,!or!timber!frame)!signi^icantly!impacts!housing!affordability!for!lowMincome!families
Source:(AfDB,(World(Bank((
0.00
100.00
200.00
300.00
400.00
500.00
600.00
700.00
800.00
900.00
1000.00
Price!/!sq!m!for!an!average!detached!house!(Brick,!block,!or!timber!frame)!
Due!to!rising!construction!cost,!only!an!estimated!15.7!million!households,!or!6.7!percent!of!all!African!households!can!afford!an!entryMlevel!home!supplied!by!the!formal!market!with!prices!usually!starting!at!USD!28,000
Source:(AfDB,(World(Bank((
0*
5000*
10000*
15000*
20000*
25000*
30000*
35000*
40000*
Price!of!40!m2!house!(USD)!
Formal!Housing!Construction!Costs:!The!case!of!Kenya!–!Construction!materials!and!Infrastructure!are!driving!the!costs!
*****
• Infrastructure*cost*can*account*for*over*20%*of*the*construction*costs*for*affordable*housing*projects**
*• 40%*of*the*cost*of*a*housing*project*relies*on*the*cost*of*construction*materials*
*
Contingences!5%!!!
Finance!charges!5%!
!Professional!
fees!10%!
Land!10%!
Infrastructure!10%!
Direct!Building!cost!
60%!
Labour!!30%!!
*Material!70%!
***
Source:(AfDB(
A!GovernmentMled!Site!&!Service!Scheme!to!Reduce!Construction!Costs:!LEM!Project!in!Ivory!Coast!(!illustration!on!how!to!leverage!PPPs)!
• Subscribers*to*the*program*to*build*60,000*affordable*housing:*60%*are*not*"bankable"*(informal*job*or*income*too*low)*
• "Plan*B"*had*to*be*designed*by*the*Ministry*of*Construction*to*present*a*suitable*housing*product**
• Sale*of*land*with*basic*services**at*subsidized*cost*• Pre5approved*architectural*design*• De@ined*urban*project,*providing*necessary*infrastructures*and*amenities*• Ability*to*carry*out*self5build*project*• Supervision*of*works*by*a*contractor**• Obligation*to*ful@ill*the*the*project*in*a*limited*time*(2*years)*
Encourage!the!Use!of!Local!Materials!and!Alternative!Building!Technologies!(ABTs)!
% Use!of!ABTs!is!one!way!to!address!the!conventional!brick!and!mortar!process!of!housing!construction,!especially!cost!and!time!
% High!constructions!costs:!Imports!of!materials,!especially!of!^inishing!products.!
!
• The!use!of!expanded!polystyrene!panels!in!prefabricated!homes!in!Kenya!
• Starting!price!is!US$14,000!(KES!1.25mn)!
• Example!of!“red!brick”!project!in!Abuja,!Nigeria!
• 2!bedroom!apartment!starting!from12mn!Naira!(US$!62,000)!
!!Source:(Urban(Shelter(
Local!Production!of!Alternative/Building!Materials:!How!to!make!it!sustainable?!
% Sustainable!local!production!of!building!materials:!Industrialization*approach*
% Harnessing!economies!of!scale!through!regional!integration.!Need*common*policies,*standardized*building*codes*and*methods*adapted*to*local*circumstances*and*realities.**
% Scale!Production:!lower!cost!of!alternative/!building!materials!
% Financing!Mechanism:!PPP*approach*with*Government*to*provide*the*right*incentives*for*private*sector*to*invest*in*new*industries*
!
Local!Production!of!Alternative/Building!Materials:!how!to!make!it!sustainable?!Crowding!in!the!Private!Sector!
% The!Ethiopian!case:!% Construction!materials,!including!cement!should!be!produced!locally,!wherever!possible.!In*the*past,*only*government*factories*could*produce*cement*% Estimated*production*capacity*2*million*tons/yr*insuf@icient*to*meet*demand*(~7*million*tons/yr)*
% Price*of*cement*US$*249*5*299*per*ton**% Following!privatization:**
% 11*cement*factories*operate*in*the*country*today,*with*a*combined*capacity*of*over*13*million*tons*
% Led*to*a*sharp*decline*in*cement*prices*by*over*50%*(today,*a*ton*of*cement*cost*between*US$*110*and*124)*
% As*a*result*of*lower*cement*cost,*the*overall*cost*of*construction*has*reduced*by*about*5%!
!
SOME!KEY!MESSAGES!
ROLE!OF!DEVELOPMENT!FINANCE!INSTITUTIONS/MDBs!
Key!Messages:!Challenges!
% Housing!Financing!Problem:!Not*only*a*@inancial*engineering*issue.*The*value*chain*dimension*is*key:*% Multiple*tenure*regime/*Insecurity*of*tenure*% Lots*of*pressure*on*available*@inancing*for*infrastructure*% Inappropriate*legal*and*regulatory*framework*% Inadequate*urbanization*plan/Weak*institutions/*Lack*of*capacity*&*skills*% High*construction*costs:*Imports*of*building*materials,*infrastructure*costs*very*high*
% Financial!systems!are!underdeveloped!or!shallow!% Low*level*of*@inancial*intermediation*% Lack*of*long5term*@inancing*and*adequate*instruments*% Lack*of*adequate*underwriting*processes*% Lack*of*equity*for*developers*% Lack*of*primary*and*secondary*mortgage*markets*% Inexistent*capital*markets*and*untapped*contractual*savings*industry*
% Housing!in!most!of!African!large!cities!is!unaffordable!% High*interest*rates*(double*digit)*% High*price*to*income*ratios*% Collateral*request*
% Housing!Markets!is!segmented:!Housing*issue*more*acute*for*Low5income*group*and*the*informal*sector.**% Signi@icant*gap*market/affordable*market*underserved*% Bottom*of*the*pyramid*non*served*
% Widespread!shortage!of!affordable!housing!supply
Key!Messages!(1):!Opportunities!
% Banks!need!a!new!way!of!doing!business:!prudent*lending*practices*and*innovative*instruments*to*derisk*transactions*required.*Adapting*the*@inancial*infrastructure*and*engineering*to*respond*to*a*risky*environment*
% Financial!sector!development!agenda!to!be!promoted:!go*beyond*the*banking*sector*to*develop*NBFI*(capital*markets,*HFCs,*MFIs*for*incremental*housing*and*slum*upgrading,*Housing*Re@inancing*Facilities,*guarantee*schemes,*dedicated*private*Equity,*REIT,*etc);*attract*the*contractual*savings*industry*(pension*funds,*SWFs,*insurance)*
% Mechanisms!to!^inance!affordable!housing:!Go*down*market*for*a*greater*developmental*impacts:*PPP*approach*would*be*most*valuable*with*an*activist**Government*providing*subsidies*and*right*incentives*to*attract*the*private*sector*facilitate*its*ability*to*derisk*the*transactions.*For*the*poorest*of*the*poor,*some*public*social*housing*programs*would*be*more*appropriate*
% Getting!the!land!Tenure!issues!right!% Improving*land*Governance*and*security*of*tenure*% Streamline*property*registration*procedures*and*processes*for*resolution*of*contract*disputes**% Making*land*and*property*rights*enforceable*% Reconcile*customary*and*statutory*tenure*regimes:*Traditional*systems*of*land*delivery*are*now*
generally*being*integrated*into*land*markets**
Key!Messages!(2):!Opportunities!
% Land!reforms!should!be!part!of!broader!urbanization!plan!% Planning*of*peri5urban*areas*through*the*installation*of*physical*infrastructure*in*
advance*of*settlement*development,*followed*by*servicing**% Fiscal*decentralization*to*mobilize*resources*to*@inance*infrastructure*% Promote*land*value*capture*for*the*bene@it*of*urbanization*and*housing*infrastructure*% Liberating/reserving*land*for*housing/infrastructure.*Going*back*to*Sites*and*services*
% Densi^ication!will!reduce!urban!sprawl!and!the!costs!of!urban!infrastructure!% Development*of*rental*market*
% Promotion!of!local!production!of!alternative/building!materials:!bring*construction*costs*down*
% Local!production!of!building!materials:!a*source*of*industrialization*and*jobs*creation.*Possibility*to*crowd*in*private*sector*
% Regional!integration!to!be!harnessed!for!a!sustainable!production!of!alternative/building!materials!at!scale!
% PPPs!throughout!the!housing!value!chain!are!necessary!for!massive!housing!production!
% Any!program!in!support!of!the!housing!value!chain!should!involve:!% all!stakeholders!% Financing!and!nonM^inancing!elements!(technical*assistance*and*advisory*services*in*capacity*building,*skills*upgrading,*institution*building,*governance,*etc)
Development!Finance!Institutions!Roles!(1)!
" Development!Policy!Operations/programs!(concessional!lending)!to!support!Governments!Reforms!and!actions!in!Housing!delivery:!
! Reforming!land!tenure!systems!including!legal!and!regulatory!frameworks!! Promote!good!governance!and!digitized!land!registration!systems!! Resource!mobilization!at!central!and!local!level!to!^inance!infrastructure!and!
urbanization!! Putting!housing!at!the!center!of!urbanization!strategies!and!plan!! Infrastructure!development!! Promote!Industrialization!through!local!production!of!alternative/building!
materials!(tax!exemptions,!seed!provision!of!capital,!set!up!incubators,!etc.)!! Improvement!of!the!investment!climate,!including!enforcing!property!rights!!! Ensure!competition!in!the!industries!supplying!building!materials!(e.g!
privatization)!! Social!housing!programs!!! Fiscal!Decentralization!and!empowering!municipalities!and!local!governments!
for!better!land!administration!and!infrastructure!building!!
Development!Finance!Institutions!Roles!(2)!
" Catalytic!Role!to!Crowd!in!Private!Sector:!A!Housing!Finance!Facility!to!be!put!in!place!! Credit!enhancement/guarantee!schemes!to*derisk*transactions*involving*individual*
in*the*informal*sector*or*without*regular*incomes*! Equity!and!longMterm!debt!to*support*the*development*of*the*mortgage*market*
through*Banks,*HFCs,*HMFs,*Re@inancing*facilities*! Equity!for!Developers!and!Industries!supplying*local*building*materials*! Issuance!of!housing!bonds!to*develop*capital*markets*and*attract*the*contractual*
savings*industry*" Technical!Assistance!and!Advisory!Services:!
! Build!capacity!and!skills!for!developers!to!enable!them!to!build!at!scale!! Build!capacities!at!central!and!municipality!level!(tax!administration,!cadaster,!
land!governance,!building!codes!and!standards,!etc)!! Build!institutions!(modernize!administrative!systems,!computerize/digitize!land!
registration!systems,!provide!necessary!tools!and!equipment!for!a!better!management!of!land!and!infrastructure)!
! Revamp!Urbanization!strategies!and!planning!! Create!housing!related!databases!and!indices!to!provide!information!on!the!
housing!market!to!bene^it!of!customers!and!investors!! Financial!literacy!programs!for!housing!customers!
Thank!You!!!
i.faye@afdb.org!www.afdb.org!
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