Transcript Slide 1

Low Income Housing Finance:
Brazilian Experience
Júnia Santa Rosa
Institutional Development and Technical
Cooperation Department
Ministry of Cities
Brazil
UDAIPUR, India
January 30, 2010
BRAZILIAN CONTEXT: FEDERALISM AND INEQUALITIES
Brazil
26 States and Federal District
5.564
municipalities
FEATURES:
Diversity and relevant inequalities
spatial, social, economic, political and
administrative among government
spheres
190 million inhabbitants(2008)
30% Metropolitan Regions
Is there any place for them in the city?
Billings Reservoir, São Paulo’s Metropolitan Area – Braço do Cocaia
Is there any place for them in the city?
Cubatão, Baixada Santista-SP: mangrove occupation
SOCIAL EXCLUSION CAUSES
Income profile - Brazil
over 20 mw
100%
7,6
private market
over 10 up to 20 mw
10,9
80%
20,5
over 5 up
to 10 mw
60%
18,4
40%
12,9
16,8
20%
13,0
0%
over 3 up to 5 mw
96% of housin
deficit
over 2 up to 3 mw
over 1 up to 2 mw
90% of
housing
deficit
up 1 mw
1 minimum wage (mw.) = R$ 465 = US$ 260
INCOME BRACKETS:
DIMENSION OF HOUSING PROBLEM
6 a 10 sm
3 a 6 sm
2%
7%
Milhões de
domicílios
Housing Deficit (2007)
Até 3 sm
91%
FOCUS ON SOCIAL
HOUSING:
11% of domiciles
6,3
Future Housing Needs (2008-2023)
25,0
TOTAL HOUSING NEEDS
31,3
Source: Elaborated fromFJP/CEI (2008) based on IBGE/Censo 2000 and MCidades/CEDEPLAR (2007).
DEFICIT FOR SLUM UPGRADING
3,2
Source: Elaborated fromFJP/CEI (2008) based on IBGE/Censo 2000 and MCidades/CEDEPLAR (2007).
HOUSING DEFICIT:
%
0%
0%
0%
Families with access to
credit need for
complementary
subsidies
FUTURE DEMOGRAPHIC NEEDS:
100%
90%
80%
70%
0%
60%
0%
50%
0%
40%
0%
0%
0%
0%
1
Families integrated of
accumulated housing
deficit
Families who couldn’t
afford long term loans,
need for subsidies and
public programs
30%
20%
10%
0%
1
Benchmarks
2001 - Statute of Cities
2002- National Programme Urban Upgrading Slums –
HBB (BID /Federal Level e Local Government)
2003 – Ministry of Cities
2004 – National Cities Council
2004 – National Housing Policy
2005 – National Social Housing System, Fund e Council
2007 – National Housing Plan – PlanHab
2007 – Growth Acceleration Programme – PAC
Focus Upgrading Slums
2009 – My House, My Life Programme
NATIONAL HOUSING PLAN: PLANHAB
Long term planning tool, to face the
housing needs
Strategic axes of PlanHab:
1. Housing subsidies and finance model
2. Urban and land policies
3. Institutional arrangements
4. Civil construction chain
Participatory methodology
• Regional seminars
• Social movements
• Follow-up working group
• Technical workshops
• Debate on Councils
– Council of Cities
– CCFGTS - Council for the FGTS (kind of provident private fund
for unemployment protection, managed by the government)
– CGFNHIS - Council of National Interest Housing Fund.
STRATEGIES
OBJECTIVES
METAS
Eliminate the housing deficit
quantitativo and qualitativo and
face partially the future needs
for housing (demanda futura)
Expand housing finance for low income families,
through:
→ proportional subsidies according to income
→ lower finance costs
→ diversification of housing alternatives
PREMISES – FINANCE AND SUBSIDIES
1) Menu of housing alternatives for different types of municipalities
2) Classification of families (deficit and future housing needs) under
income groups
3) Recognition of different costs for housing alternatives on different
states
4) Finance and subsidies model according to income brackets and
type of municipalities
5) Scenarios of funding sources and possibilities
6) Government must be prepared to attend accumulated deficit and
part of future housing needs
DIVERSITY OF HOUSING ALTERNATIVES
 New units: private and public sector, social movements and
community based organizations
 Requalification of buildings located in consolidated areas
 Sites and services supply
 Construction material kit + technical assistance
 Social rental housing
 Slum upgrading strategies
NEEDS BY INCOME BRACKETS
(Estratificação das Necessidades por Grupo de Atendimento)
INCOME GROUPS:
(grupos de atendimento)
 considering family income per capita,
housing alternatives menu and types of
municipalities
 relates income brackets with
adequate funding sources and
programs, based on credit affordability
INCOME GROUPS AND FUNDINGS
DEFICIT AND FUTURE NEEDS
INCOME GROUPS - families
1 No access to credit
2
Limited affordability for long
term credit
Affordability under special
3 credit conditions
Market based access to
4 housing
CONDIÇÕES DE ACESSO À
MORADIA
Need for subsidies
FONTES DE
RECURSOS
Government budget
Need for partial subsidies to
leverage finance
National Gov budget/ FGTS
Need for special conditions and
regulated market (SFH)
FGTS/ SBPE (regulated
savings and loans system)
Free housing finance markets
Housing finance unregulated
markets, finance by
construction companies and
family own resources
STRATEGIES BASED ON INCOME
(estratégias de atendimento diferenciada por faixa de renda)
In order to expand access to housing for low income families, the
My House, My Life Program, assumes that each income bracket
needs a different strategy.
INCOME GROUPS
STRATEGIES
FGHAB + low cost insurance
US$ 3.000
Up to US$1.800
Up to US$ 900
Subsidy (↑ income ↓ subsidy)
+RET
+FGHAB
+Lower cost insurance
+Lower interest rates
Emphasis on subsidies +RET
+FGHAB
+Reduction/ insurance
exemption + lower interest
rates
NEEDED INVESTMENTS ON HOUSING
SUBSIDIES
Federal Budget: US$ 100 bilhões até 2023 (for 2010 estimated budget of ca
US$ 5,5 bi)
States and Municipal Budgets: US$ 50 billion until 2023
FGTS: US$ 43 billion until 2023 (average US$ 2,8 billion/ year)
FINANCE
FGTS: US$ 265 billion until 2023 (average US$ 18 billion/ year: loans to
individuals + public
SBPE: US$ 43 billion until 2023 (average R$ 13 billion/ year: individual and
corporate loans)
TO REACH THE
OBJECTIVES
It will be needed to attend the needs
of 1 MILLION FAMILIES PER YEAR
(income until US$ 1.800) from 2012
SUBSIDIES PROGRAM
ACTIONS, PROGRAMS AND PROJECTS
Promote slum upgrading
Implement a large scale housing program
(2009-2011) (2012-2015) (2016-2019) (2019-2023)
√
√
Expand federal investments on housing
√
Increase limits and funding for subsidies
√
Implement a broader menu of housing alternatives
√
Housing loans guarantee fund – set up
Expand available FGTS funding for subsidies
Reduce funding costs for middle income brackets
√
√
√
FINANCE AND SUBSIDIES
ACTIONS, PROGRAMS AND PROJECTS
(2009-2011) (2012-2015) (2016-2019) (2019-2023)
Improve legal and institutional framework for the
housing loans guarantee fund
√
Implement measures to develop a mortgage insurance
market
√
Expand private sector housing loans to low income
groups
Expand down market regulated savings and loans
system (SBPE)
Evaluate alternatives and programs already
implemented
Design a social rental housing program
Design a program of sites and services
emphasizing medium and smaller cities
√
√
√
√
MAIN PROGRESSES ON HOUSING POLICY DURING THE
PERIOD 2003-2009
National Housing System and Fund
(SNHIS/ FNHIS):
Integration of funding and actions to face the
housing deficit
Housing Markets (regulated and non
regulated):
Measures on legal framework, trust deed,
inductions for lower income loans, new
guarantee instruments
Growth Acceleration Program (PAC):
Historic benchmark on slum upgrading policies
National Housing Plan (PlanHab):
My House My Life Program (MCMV):
Long term planning for housing, strong civil
society
Incentives for new housing construction, funding
for the new subsidies and finance model for low
income housing
PAC – HOUSING and SLUM UPGRADING
• Opportunity to improve housing sector
diagnosis instruments.
• Opportunity to build institutional capacity in
integrated urban management.
Growth Acceleration Program - PAC
Slum upgrading
•
In an unprecedented way slum upgrading was considered as a
fundamental axis for economic and social development in the
country.
12,4 million people or 3,2 million households on slums.
•
The aim is to allocate US$ 5.7 billion in slum upgrading, sanitation
and housing construction projects in the period 2007 to 2010.
•
Great importance in given to keep population on the land they
already occupy, near facilities and workplaces, but in an effort to
eliminate excessive density or natural disaster risks.
PAC – Investments in infrastructure
Immediate results are needed, so projects were selected based
on following criteria:
• Capacity to generate social and economical development.
• Large projects, with territorial influence in groups of municipalities,
regions and states.
• Articulated and territorially integrated projects.
• Environmental sustainable projects.
• Initiated and non finished upgrading construction works.
PAC – HOUSING and SLUM UPGRADING
Integrated actions:
•
Land tenure regularization
Essential stage, developed in parallel to construction works. All units produced
should reflect commitment to the constitution of land tenure rights in favor of the
slum dwellers.
•
Social equipments
Building of equipment to attend the demands of the benefited population, such as
health, education, leisure and safety, among others.
•
Social Work
Stimulation of community organization, environmental and sanitary education,
creation of job opportunities and post-occupation assessment (2% of
investments).
PAC – HOUSING and SLUM UPGRADING
Integrated actions:
•
House improvement and construction
Construction and acquisition only in case of necessary relocations due to
geological and/or construction risks.
•
Sanitation Infrastructure
Water and sanitation services, rainwater draining, solutions for garbage
disposal, home water and sanitation systems.
•
Environmental recovery
Prior evaluation must be made on environmental impacts, mitigation
measures are taken if necessary. Cases of total slum removal are
associated to preventive measures to discourage new occupations or return
of dwellers.
PAC – MANAGEMENT
Agile management tools were created:
• Management Council – Presidency of the Republic: coordinates and
supervises.
• Sector Executive Groups – Sector Ministries (ex.: Housing PAC –
Ministries of Cities, Planning, Finance, and public financial institutions
operating the program): defines actions, establishes goals and
assesses results.
• Situation Room – Technicians of sector Ministries and program
operators: keeps detailed follow up of the construction works.
PAC – MANAGEMENT
•
Execution is local, taken on by municipalities or state governments. Local
Executive Units were created for each construction project, coordinated
by permanent local staff, and representative of the thematic areas
involved (housing policy, engineering, social workers, etc.).
•
Project assessment, follow up and funding flow is made by a public
financial institution (CAIXA) with great territorial reach and technical
capacity.
•
Video-conferences between federal government, CAIXA and local
executors are held every three months.
•
Presidential priority and leadership.
PAC – SLUM UPGRADING OUTCOMES
• 3,556 actions: in all 26 states and in 1,974 municipalities
– Upgrading of 544 slums
– 1,112 housing construction projects
– Technical assistance to 793 housing construction projects
– Revision or elaboration of 1,107 housing plans
• US$ 5.7 billion for slum upgrading: Annual budget increase of 375%
– National Government transfers + local budget: US$ 4,22 billion and
745 thousand families benefited, -+ 30% local budget.
– Financing for local governments (subsidized interest rate): US$ 1,48
billion and 238 thousand families benefited.
PROGRAMS AND TOOLS OF My House My Life  Program of subsidies and finance with federal government funding: families
with monthly income until US$ 900
 FGTS finance+ subsidy mix : families with monthly income between US$ 900 and
US$ 1.800
 Guarantee Fund: refinance for income (refinanciamento das prestações) and lower
insurance costs (barateamento do seguro)
 PNHR – National Rural Program: family agricultures and rural workers with
annual income until US$ 39.000
 Community Based and Non Governmental Organizations Program: social
movements and organizations, families with monthly income until US$ 900
 Registry costs: lower costs and more agile process
 Environmental licenses: faster and agile procedures
 Finance for infrastructure: investments on infrastructure
 Finance for industry construction chain: BNDES
CHALLENGES
•Strengthening the guarantee fund – legal and regulatory framework
• Include the private banks in the subsidies system
• Improve data base of beneficiaries and demand
• Improve financial services and products for low income brackets
• Expand financial participation at municipal and state levels
• Introduce savings as
criteria and
financial
counterpart
of
beneficiaries
• Improve available products for low income within real estate
markets
• Expand housing markets to fit deficit and housing needs
Rent evolution on housing investments
30,00
Goal: 22,50
US$ bilions
24,20
25,00
19,31
20,00
17,06
15,00
11,49
7,74
10,00
5,00
3,93
4,44
5,12
2002
2003
2004
0,00
2005
2006
2007
2008
- FGTS, FAR, FDS, OGU, CAIXA, FAR, SBPE and FGTS (subsidy) -
*RES. 460/04 - a partir de 01jun05
SBPE - Fonte: ABECIP – Atualização: Outubro/ 2009
Fonte: Quadro Presi Outubro/2009 (não inclui PMCMV)
2009
INVESTMENTS ON HOUSING
- Focus on low income brackets 1 minimum wage (mw.) = US$ 300
OPERATIONS PER INCOME BRACKET (%)
100%
14
90%
80%
33
30
29
43
9
70%
26
50%
25
19
21
64
63
2008
2009
25
41
40%
77
65
30%
20%
16
14
21
60%
17
32
10%
44
46
2004
2005
26
0%
2002
2003
up to 3 mw
2006
over 3 up to 5 mw
Funding Sources: FGTS, FAR, FDS,OGU, FAT
Source: MCIDADES and CAIXA – Update: 30/10/2009
2007
over 5 mw
GLOSSARY
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BNH – National Housing Bank
FGTS – Guarantee Fund for time of employment
FNHIS – National Housing Fund for Social Housing
IBGE – Brazilian Institute for Geography and Statistics
OGU – Federal Budget
PAC – Acceleration Growth Program
PEC – Constitution Amendment Proposal
PIB – GDP
PLANHAB – National Housing Plan
PLHIS – Local Government Plan for Social Housing
PMCMV – My House, My Life Program
PNH – National Housing Policy
PPA – Five years Budget
RM – Metropolitan Region
SBPE – Brazilian Savings and Loans System (regulated)
SFH – Housing Finance System
SM – Minimum Wage
SNH – National Secretary of Housing, Ministry of Cities
SNHIS – National System for Social Housing
SNHM – National System for Housing Markets
Júnia Santa Rosa
Institutional Development and Technical
Cooperation Department
Ministry of Cities
Brazil
Udaipur, India
January 30, 2010