!!!

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!