strategy

Developing housing policy

Synonyms:
Reorganizing shelter policy
Description:
Policy development in relation to housing considers: the preconditions for a functioning housing market; the distribution of responsibilities among different agencies (central administration, local authorities, financial market, building financiers, builders, [etc]); housing production, also in consideration of the regulation of land, land development and the financing of housing; matters relating to housing stock, such as the use of dwellings, rental housing, housing management and renovation; the relationships between housing activities, other economic sectors and the creation of national income; the social effectiveness of housing policy; rent policy in relation to housing production, subsidy systems, housing quality and legislation; and trends in spatial allocation of resources and settlement patterns. Other policies which affect housing relate to the provision of infrastructure, the organization of the construction and materials industry, security of tenure provisions for housing real estate and the ability to use it as an asset in securing long-term financing and family security.
Implementation:
Sound macro-economic policies are a pre-requisite for the health of the shelter sector. Good policies from the macro-economic point of view are those that improve the supply of key inputs to housing (a skilled labour force, a sound and functioning regulatory framework, and the efficient supply of building materials, land and finance at prices that people can afford) and secure their efficient use.

The World Bank has reviewed the evolution of its housing policy during the 1980s and early 1990s and proposes a number of new policy directions for both the Bank and its borrowers. Seven major lessons emerge: (1) Project success has proven largely dependent on the level of overall distortions in the housing sector and economy. (2) The informal sector has an important contribution to make and will most likely benefit from enabling strategies. (3) Typical projects have often been too small to affect the housing sector as a whole. (4) Governments' focus on projects may have diverted them from regulatory reform and appropriate institutional roles. (5) Desirable shifts have bright the focus of Bank lending to concentrate on broad institutional reform both municipal and national, focusing on institutions best suited to make institutional and regulatory change. (6) A variety of approaches to lending for housing by the Bank and other donors has begun to emerge; these need to be further developed and refined in coordination with other donors. (7) The past focus of Bank lending on the poor in the housing sector has been important and should continue.

Five principles are to guide future assistance in Bank lending: (1) It will encourage governments to play and enabling role and (2) will focus on a sectoral rather than a project approach. (3) The Bank will continue to seek counterpart regulatory institutions and will also (4) focus its lending for housing on borrowers willing and able to remove market distortions, supporting innovative lending models. Finally, it will (5) seek government commitment to improved collection and analysis of housing data to assess housing-sector performance and improve the process of policy formulation and implementation.

[World Bank borrower countries (mainly)] Governments have at their disposal seven major enabling instruments for housing markets, three that address demand-side constraints, three that address supply-side constraints, and one that improves the management of the housing sector as a whole.

The three demand-side instruments are: (1) [developing property rights]: ensuring that rights to own and freely exchange housing are established by law and enforced; and administering programmes of land and house registration and regularization of insecure tenure; (2) [developing mortgage finance]: creating healthy and competitive mortgage lending institutions; and fostering innovative arrangements for providing greater access to housing finance by the poor; and (3) [rationalizing subsidies]: ensuring that subsidy programmes are of an appropriate and affordable scale, well-targeted, measurable and transparent, and avoid distorting housing markets.

The three supply-side instruments are: (1) [providing infrastructure for residential land development]: coordinating the agencies responsible for provision of residential infrastructure (roads, drainage, water, sewerage and electricity) to focus on servicing existing and undeveloped urban land for efficient residential development; (2) [regulating land and housing development]: balancing the costs and the benefits of regulations that influence urban land and housing markets, especially land-use and building, and removing regulations which unnecessarily hinder housing supply; and (3) [organizing the building industry]: creating greater competition in the building industry, removing constraints to the development and use of local building materials and reducing trade barriers that apply to housing inputs.

The final enabling package would comprise developing an institutional framework for managing the housing sector; strengthening institutions which can oversee and manage the performance of the sector as a whole; bringing together all the major public agencies, private sector and representatives of NGOs and community-based organizations; and ensuring that policies and programmes benefit the poor and elicit their participation.

Claim:
1. Housing policy-making must thus move away from its previously narrow focus on a limited engagement of government in the direct production of low-cost housing. It must now guide the performance of the housing sector as a whole, including that of the formal and informal private sector, with a stronger emphasis on its overall role in national economic development.

2. Most assessments of global progress towards the goal of adequate housing for all start with a review of the evolution of housing policies during the last decade, or since the adoption of the [Global Strategy for Shelter to the Year 2000]. Most observers agree that the adoption of progressive and enabling policies by many countries which support the market and the informal sector is a very encouraging factor. However, there appears to be a serious and widening gap between policies and actual programmes, between the written word and the practice on the ground, between rhetoric and reality. Also most 'strategies' are not vigorously followed up by plans of action with timetables, resource allocation and monitoring procedures.

Type Classification:
C: Cross-sectoral strategies
Related UN Sustainable Development Goals:
GOAL 1: No PovertyGOAL 2: Zero HungerGOAL 3: Good Health and Well-beingGOAL 4: Quality EducationGOAL 5: Gender EqualityGOAL 6: Clean Water and SanitationGOAL 7: Affordable and Clean EnergyGOAL 8: Decent Work and Economic GrowthGOAL 9: Industry, Innovation and InfrastructureGOAL 10: Reduced InequalityGOAL 11: Sustainable Cities and CommunitiesGOAL 12: Responsible Consumption and ProductionGOAL 13: Climate ActionGOAL 14: Life Below WaterGOAL 15: Life on LandGOAL 16: Peace and Justice Strong InstitutionsGOAL 17: Partnerships to achieve the Goal