Barcelona, 15 December 2014 - 30 international experts attended the Expert Group Meeting "Ways Forward to Achieving Affordable and Inclusive Housing Finance for all”, which took place at the Contemporary Culture Centre of Barcelona, organised by UN-Habitat in collaboration with the Barcelona City Council. The meeting was held to review current practices, innovations and gaps to explore ways for UN-Habitat to enhance its impact on promoting housing sector, finance development and housing finance inclusion. In addition, this session offered the opportunity to review and assess elements and practices that need to be promoted, instituted and avoided by countries while elaborating their national housing policies, strategies and programmes.
In particular, the EGM will offer the opportunity to inquire and redefine the role of governments beyond enablement, and what is needed to enhance or ‘rebuild’ the capacity of the state to ensure viability to the markets while also being responsive to the housing needs of the poor majority. Executive Director of UN-Habitat, Dr Joan Clos, said that the meeting should be a discussion forum that highlighted "new models of affordable housing finance…[moving away from]…the most common solution: the construction of mass housing," which is linked to a number of difficult issues to address in the long term.
In the opening of the meeting, Deputy Mayor for Urban Habitat of the Barcelona City Council, Antoni Vives, said out "in Barcelona, the City Council, as local government, plays a very important role and social housing policies have set as one of our top priorities". "We invest about 100 million euros to build a public housing stock in order to respond to the needs of the people most in need", said Mr Vives. "Our goal is to increase the existing fleet of subsidized rental flats in over a thousand new affordable houses, to join the already 10,000 existing homes, and we do this through different formulas: collection of empty houses, rehabilitation and purchase of existing houses and building new homes".
Localised solutions to housing finance
The past decade has witnessed notable improvements in the reach and depth of housing finance in developing countries. However, the vast majority of households do not yet have access to formal finance, whether through mortgages, housing micro-loans or cooperative finance. In housing provision, states have had important overall roles in policy-making, but left the provision of shelter to the market, NGOs, CBOs and household self-help in various forms of partnership.
The consequences are that access to credit is limited, expensive, and housing markets have failed to adequately respond to the demands of the most poor and those living in slums. But there are also compelling arguments that decentralisation and strengthened local roles have contributed in many ways to enhancing participation and citizens’ engagement in locally designed and delivered services. In addition, local and national governments in their role of facilitators have faced challenges to influence private entrepreneurs and mortgage companies to lend to the poor, to finance slum upgrading as well as to promote community-approaches and self-management.
However, the question of how to move from small-scale initiatives and innovations to whole systems change remains. Various housing financing mechanisms, such as microfinance are still at an experimental status, context specific, expensive and vulnerable to economic shocks. In the absence of affordable formal financing options, the majority of the urban poor continue to address their housing needs informally.