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Mass Housing Requires Mass Housing Finance - Marja Hoek Smit


Marja C Hoek-Smit is the Director of the International Housing Finance Program of the Wharton School Zell/Lurie Real Estate Center, and an Adjunct Professor in the Wharton Real Estate Department of the University of Pennsylvania. Her work focuses on housing markets, urban and housing policy and subsidy systems, and the deepening of housing finance systems, particularly in developing and emerging market economies. She is also the founder and Executive Director of the Housing Finance Information Network—HOFINET—a global web portal that consolidates international housing finance information and statistical data for public use. She has worked in more than 40 countries in Sub-Saharan Africa, the Middle East, South and East Asia, and Latin America. She currently works on housing/ finance policies in Egypt, South Africa, Mexico, The Philippines and Myanmar.


In this lecture Marja Hoek Smit argues that housing finance is critical to solve the housing problem, increasing, as it does, the number of households that can afford to acquire a house in the formal market, which in turn will make large scale development of middle and lower middle income housing possible. Access to housing finance is described as equally important for investors in rental housing of all types. The lecture discusses the positive characteristics of mortgage lending compared to alternative housing finance options, as well as the reasons for mortgage systems to remain small in many urbanizing emerging market countries. It calls for changes in policy to address these constraints.  

The Mass Housing Finance approach draws on housing finance system-, macro-economic- and urbanization data collected by the Housing Finance Information Network (HOFINET: for more than 130 countries and on country case studies of successful approaches to expand access to housing finance. Rapid urbanization is unavoidable in countries of Africa and South and East Asia, yet formal housing construction is a fraction of new urban household formation, resulting in the relentless growth of informal housing. Alleviating this pressure in the housing market by increasing access to mortgage and rental housing finance Hoek means will stimulate formal sector housing development by the private sector and will free up government funds to deal with the housing problems of the lowest income groups.  While the size of mortgage markets is positively related to GDP per capita and financial sector development, policies make a major difference. The lecture also highlights the link between policies to open up new urban land with titles and the need to develop housing finance systems.

Propositions for addressing the issue:

Enforceable pledge/lien on real property systems

Legal infrastructure that supports housing finance and alternative pledge structures

Regulatory infrastructure related to conduct-of-business and safety-and-soundness, including risk mitigation systems, payment systems

Effective methods to establish property value

Competitive financial markets

Efficient non-distorting taxation and subsidy systems that support housing finance expansion


About Marja Hoek-Smit

Housing Finance Information Network website