GLOBAL HOUSING

Habitat International

Volume 31, Issue 1, March 2007, Pages 1-11

The rise of housing in international development: The effects of economic discourse

Author links open overlay panelRichardHarrisaGodwinArkub

https://doi.org/10.1016/j.habitatint.2005.10.004 Get rights and content

Abstract

Since 1945, a growing number of housing experts and development agencies have come to understand that housing investments have a significant impact on economic development. The shift in opinion has been slow and fairly steady, occurring with greatest rapidity in the late 1960s and early 1970s. It was not prompted by an accumulation of new evidence but by shifts in prevailing economic discourse. New theorisations of human capital made it possible to recognise the full social and economic consequences of housing. New theories of flexible production, including the use of subcontracting, led to a revaluation of the house building industry, a key vehicle of housing policy. The higher policy profile of housing still rests on a weak empirical foundation and is vulnerable to shifts in intellectual fashion.

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Under the Agency for International Development's (AID's) Housing Investment Guaranty Program (HIG), U.S. private lenders provide long-term financing at commercial interest rates for housing projects undertaken by developing countries with AID assistance. The U.S. Government provides a "full faith and credit" guaranty of repayment of principal and interest. Since its inception in 1976, the HIG program has made more than $1 billion available to finance housing activities in 37 countries. AID has sought to introduce new, low-cost approaches to providing shelter and to finance the construction of housing affordable to groups at or below the median income of the recipient country.

Income levels of expected program beneficiaries generally range from the 15th to the 50th income percentiles. The very poorest income levels and those groups outside the income economy altogether can generally be reached only with direct humanitarian assistance. AID's accomplishments in the institution-building area have been primarily to help developing countries establish housing policies geared to serving low-income housing needs and local institutions capable of administering these policies. AID has not, however, been able to contribute to the development of housing finance systems to the point of assuring their ability to continue low-income housing efforts without the long-term, low-interest loans provided by AID. The HIG program has had a generally positive short-term impact on economic activity in recipient countries and a positive social impact in terms of satisfying the demand of low-income families for home ownership. Successful program management requires a separate field organization in addition to the centralized Washington staff.

GLOBAL HOUSING

Habitat International

The rise of housing in international development: The effects of economic discourse

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Agency for International Development's Housing Investment Guaranty Program

ID-78-44: Published: Sep 6, 1978. Publicly Released: Sep 6, 1978.

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