Why proper housing for the poor makes economic sense

The right to housing is guaranteed in many national constitutions, as well as in the Universal Declaration of Human Rights, and yet 1.6 billion people around the world — one-fifth of the global population — still lack adequate shelter.

The fifth Asia-Pacific Housing Forum, to be held Sept. 1-4 in Hong Kong and hosted by Habitat for Humanity International, will bring together stakeholders and key players from government, development, civil society and the private sector to strengthen cooperation, drive policy change and produce scalable, innovative solutions to low-cost housing issues that affect many of the region’s 1 billion people still living in extreme poverty.

“Many times we talk about the need for health care, proper education and jobs, and those are all important,” Rick Hathaway, HFHI’s vice president for Asia-Pacific, said at a press forum in Manila attended by Devex. “But we all know that that only helps a family to be successful if they’re living in a decent house.”

The Hong Kong forum, themed “Building Impact,” will host talks, workshops and roundtable discussions led by some of the world’s top experts in the field, as well as a housing finance course designed by HFHI in cooperation with the Wharton School of the University of Pennsylvania. The short seminar will cover an overview and comparative analysis of the Asia-Pacific mortgage finance market, as well as explore alternative financing innovations for housing in lower-income market segments.

Occurring simultaneously with the main housing conference in Hong Kong are two satellite events in Delhi, India, and Manila, Philippines. The outcome of the regional forum will play into the larger 2016 U.N. Conference on Housing and Sustainable Urban Development, also known as Habitat III, which will discuss and implement a new international urban agenda and reinvigorate U.N. member states’ commitment to sustainable urbanization.

Strengthening political commitment

For some countries, like the Philippines, the regional forum mirrors recent national efforts to strengthen poverty housing systems, especially for urban slum dwellers. With the rapid rate of urbanization — almost 70 percent of the global population is expected to be living in cities by 2050 — political commitment and action is not only welcome, but imperative.

“[The satellite housing event in Manila] is part of a longer process and that process will have a very high point — I don’t say culminate — in February next year in the National Housing and Urban Development Summit,” HFHI Philippines CEO and Managing Director Charlie Ayco said at the press forum, which discussed how the upcoming regional housing summit would fit into the country’s revitalized low-cost housing plans and programs.

A Philippine housing summit launched in May this year aims to produce a policy framework that will serve as the foundation for a more inclusive, sustainable and comprehensive national housing strategy, which will be presented at the conference’s apex in February 2016. The outcome will greatly affect the future of the 40 million Filipinos already living in slums.

Supported by the World Bank through funding and technical assistance, the summit involves a series of consultations between four thematic working groups focusing on land, finance, governance and urban development.

“The idea is to get everybody on the table and make sure that the debate on housing is focused on a national level,” said Philippine Rep. Alfredo Benitez, who also chairs the House of Representatives’ Committee on Housing and Urban Development. “We will not be producing just a piece of paper. We want some tangible, concrete results so that we can at least have a prototype or a model [that will guide] the way we should solve the housing problem.”

Working with what’s there

Previous initiatives of the Philippine government to relocate urban slum dwellers to low-cost housing communities just outside metropolitan areas — where cost of land is lower — have failed, due in large part to the country’s lack of a proper mass transit system. The urban poor, whose sources of livelihood are in the city, were forced to instead spend thousands of pesos just on transportation.

Despite rising land prices, there is a way to provide informal settlers with low-cost housing inside Metro Manila and other urbanized areas. While the legislation is in place, what the Philippines needs now is political will and proper implementation.

“We actually have existing laws that mandate that idle [government] lands that have not been used for about 10 years be provided for socialized housing,” Benitez said.

The law also covers a section on balanced housing development, wherein property developers are required to allocate 20 percent of a project’s total area for socialized housing. However, because of leniency in manner of compliance, many of these low-cost housing projects are located outside urban areas, where cost of land is less prohibitive.

Benitez shared that the summit’s thematic group on land is currently creating an inventory of all lands owned by the Philippine government to identify which ones may be used for urban housing projects. Private developers can then build urban housing structures, since cost of land will no longer be a concern.

The most important stakeholders

The regional forum will also focus on innovating financing for housing to make these settlements more affordable for the poor. Ayco mentioned a payment scheme for low-cost housing in use in Brazil as a possible model that can be replicated in the Philippines. Under this scheme, residents will pay “according to [their] capacity to pay.”

Many housing and urban development leaders also agree that solving the urban slum problem requires the active participation of the most important stakeholders — the poor communities and families themselves.

“That’s why in U.N. Habitat, we really advocate for the people’s process,” said Chris Rollo, country program manager of U.N. Habitat Philippines. “This is really [about] harnessing the inherent resources, inherent time and talent and energies of communities and families to provide their own housing.”

Benitez explained that the site of the National Housing Summit launch, the AMVACA Housing Project in Valenzuela City, was chosen because of the success story behind it.

The project was made possible by the work of the AMVACA cooperative, whose members lived in informal settlements that fell in the designated danger zones along the Tullahan River. The cooperative worked to locate a piece of land and negotiate a price, and then asked the government to finance the acquisition and the construction of the dwellings.

“If [these informal settlers] have built all of this housing in the areas where they live right now without any government support, what more [can they achieve] when government comes in and supports them?” Benitez said.

The upcoming regional housing forum and Habitat III, as well as the ongoing National Housing Summit, will hopefully compel the Philippine government, which is plagued by corruption and inefficiency, to finally prioritize housing for the poor.

The business case for poverty housing

Unfortunately, efforts to push for decent socialized housing on the basis of it being a human right have not fared so well in many Asia-Pacific countries. Stakeholders believe it is now time to advocate for housing as an economic investment.

According to HFHI, every job created in the housing sector generates two more jobs elsewhere in the economy. Decent homes provide a base for small business owners and empower female heads of households, and they are also associated with improved labor productivity among employees and better learning outcomes for children.

“Let’s remember and let’s consider that housing is not just a result of development,” Ayco of HFHI Philippines said. “It is an input to development.”

As proof, he cited Singapore’s successful public housing model, which was developed and implemented before — not after — the country acquired its current wealth.

“For many of us, we look at solving the housing problem in an indirect way,” Ayco said.

In the past, governments and development leaders have focused on sectors such as education, employment and rural development in their efforts to create a way out of poverty. The common belief was that the shelter problem would eventually solve itself.

“[But this is] not consistent with the logic when we say that housing is a basic right,” Ayco said. “Because if it’s a basic right, it should not be the result of anything. It should be provided from the outset.”

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