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New Scheme to Boost Access to Housing

Jorge Wolpert - National Housing Comission (CONAVI)
Director General

STORY INLINE POST

Wed, 11/01/2017 - 11:35

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Q: Which segments of the population have the greatest housing needs?

A: The country’s informal housing is occupied by the segment of the population that does not have access to the social security system but that also has the constitutional right to a dignified home. The formal housing sector drew in approximately MX$450 billion in investment in 2016, and this does not account for the more than 500,000 homes that were built independently. This year, we are not only focusing on low-income families. We are also developing a new financial scheme that will allow Mexicans who are not part of the Social Security system, or do not have a savings account, access to financing for a home. At the moment, more than half of families living in informal housing, which equates to approximately 4-5 million families, do not have access to social security. This is an important sector for us but an even bigger market for those who decide to become a part of this formula.

This scheme is being developed and will most likely not be ready for 2017, but we are adjusting the way we deliver solutions so it can be completed for 2018. To make this work, we have started a dialogue with the many companies involved in building social housing and have asked them to work together as an organized community of social-housing constructors. They all have different views and perspectives on how to build better homes.

We are also working with development banks and have begun creating pilot schemes in the state of Oaxaca and in two other states. The Mexican Bank Association has shown great interest in these new markets too.

Q: Which states will see the highest housing demand in the coming years and which of CONAVI’s policies have been the most successful within the sector?

A: Nuevo Leon and Jalisco’s housing demand continues to grow due to the many working families who are in need of a new home and who already have access to credit. In the coming years, we will see a boom of workers in the south. Oaxaca, Yucatan, Campeche, Tabasco and Veracruz have experienced high demand for new homes and because Infonavit has created loans for all salary brackets, more families will have access.

The integration of sustainable solutions into social housing has been one of the most successful policies adopted by the industry, both in the public and private sectors. At the moment, we offer different programs in various institutions that promote sustainable construction. The commission is developing a set of standards and criteria that will come into effect in 2018. It is important that these standards are created in order to incentivize investment. At the moment, there are various standards depending on the different institutions, and although they are similar, we are convinced that they need to be homologous throughout all institutions.

Q: How will the rules of the game change with the New Human Settlements Law and Housing Law in Mexico City?

A: The city has announced that it will build more than 200,000 social homes in 2017 alone. We are extremely happy to hear these types of commitments and we will help make them a reality, especially since there had not been a plan for formal social housing in the city for many years. Congress has approved the new Human Settlements and Urban Development Law, meaning that each state will now have to create its own law as well. Another large challenge is that the federal law will be scrutinized and it is important to also turn the housing law into a general law.

Social housing in Mexico has been drastically expanded in the last few years and there have been many changes made since the last presidential term. All social homes now have at least two bedrooms and institutions like Infonavit are providing loans for more than MX$500,000 to MX$1.7 million. More than one-quarter of the total credits approved by Infonavit have been delivered in the last three years. Because the social housing policy falls under the Human Settlements Law, all the subsidies provided by CONAVI must be within the contention perimeters that will prevent inefficient urban growth.

Q: What must the private sector do to boost the development of the social-housing sector?

A: We want to make sure that the public policy is successful and that it is backed up by a robust system and platform so that we can ensure continuity across different political terms. The regional and global economy is not growing at the expected rate. As for the domestic economy, the housing and construction sectors will drive growth in 2017. We are entering a new era of social housing in Mexico. Housing for non-affiliates of the Social Security system is a segment that has never been addressed. It is a new market that needs a new approach that will guarantee the people’s constitutional right to a decent home.

We must work together as one industry. We are on the right track. With more than 800 companies building formal social homes. We need the industry to become more engaged and to step out of its comfort zone and cater to a niche that does not have many opportunities. Companies must work with their financers to create proper access to finance. It is important that they take the risks, but feel safe that they have the support of both the government and the banking system.

Q: What do you hope will be your legacy as Director General of CONAVI?

A: Particularly because I have been working in the housing sector for many years now, I see the opportunity to drive change and cater to these new sectors, and ultimately to create a sustainable system that works for everybody. I look forward to engaging the industry and other levels of government to follow the same public policy for housing, as well as working with Congress to create the first General Housing Law in Mexico. Although it is not generally discussed because it is not as popular as the Energy Reform or the Education Reform, the Human Settlements and Urban Development Law addresses some of the most important issues the country faces.

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