2000s
Summary
Legislative & Subsidy Changes.
Countries adopt frameworks that are more favorable to joint public, private and financial sector involvement in mortgage finance. Governmetns focus subsidies on individuals to ensure that benefits reach those most in need.
Influences
- Remittances from the U.S. and E.U. are increasingly used for housing.
- Three quarters of housing is financed informally.
- Latin America is the most urbanized region in the developing world, with 85% of the population projected to be living in urban areas by 2025.
- Mortgage credit is more dollarized than any other form of credit in the region.
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Policies and Programs
- Brazil issues the Statute on Cities in 2001 to establish urban property, including housing, as a common good.
- In 2003, Argentina implements a federal emergency housing program aimed at low-income families.
- Colombia reforms the code of civil procedures for renting.
- Chile convenes the National Council for Urban Reform. The pension system is privatized, with funds used for housing.
- Ecuador adopts the U.S. dollar and reactivates the issuing of mortgage credits.
- Panama passes new legislation to stimulate public housing finance.
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Institutional Roles
- The National Bank of Ecuador becomes a secondary mortgage lender and supports builders of low- and middle-income housing.
- El Salvador’s Social Fund for Housing is a primary institution for development of the housing sector, but no longer receives contributions from workers or the state.
- Mexico places high priority on housing--housing finance is permitted through the creation of new credit instruments and securitization schemes.
- Argentina’s national mortgage bank is country’s largest housing mortgage lender.
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Methods, Tools, and Practices
- Microfinance is not used for housing, due to high costs of housing loans.
- A secondary mortgage market develops in Colombia through securitization.
- The National Bank of Costa Rica embarks on a new housing program based on the “Development Unit”— a unit of constant purchasing power.
- Beginning in 2000, Peru aggressively promotes development of the housing sector and fosters synergies between private sector financial institutions and the state.
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Lessons and Outcomes
- People are better housed than they were in the 1960s, but quality housing remains out of reach of lower income people.
- Subsidy programs are directed at individuals to increase transparency and maintain the focus on those most in need.
- Female heads of households benefit from positive housing trends.
- In Panama, public housing banks fund a third of new housing.
- In Argentina and Venezuela, formal private banks finance only one-fifth of housing.
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