strategy

Mobilizing financial resources for shelter

Synonyms:
Allocating monetary resources for housing
Aiding residential improvement funding
Financing housing
Investing in houses
Leveraging investment in shelter
Context:
In most developing countries, existing public financial institutions do not fulfil the requirements for financial resources which are needed for critical inputs in construction. The few available financing institutions have had little impact. The normal practice in private sector low-income shelter construction is to depend on the builder's own finances, which are often limited. Public sector low-income shelter construction is often more vulnerable to limitations of cash flow.
Implementation:
Experience in housing finance development the world over demonstrates that broad, market-based systems are the most effective vehicle through which to provide financial resources for shelter development. Enabling shelter strategies imply a shift from a direct government construction effort to the encouragement of indviduals, small-scale enterprises and large contractors. Such operations tend to be more employment-intensive and involve unskilled workers.
Claim:
The importance of shelter to the economy cannot be overlooked. Housing investment typically comprises from 2 to 8 percent of GNP and 10 to 30 percent of gross fixed capital formation. In addition, as economic development proceeds, the first area in which households tend to increase their spending is on housing and related services. In a period of economic recession, the shelter sector is typically regarded as a attractive sector for stimulating economic recovery. The typically low import requirement imply that incremental investments generate a higher domestic multiplier than do investments that are import-intensive.
Subjects:
Resources
Housing, tenants
Finance
Investment
Money
Military
Reform
Type Classification:
D: Detailed strategies