Reducing Mexico's Housing Deficit

Q: What are the challenges involved in creating a quality housing market for all socioeconomic classes?

A: In Mexico, the housing deficit impacts 8.9 million families and this is increasing each year by 500,000. CONAVI has developed a platform of specific housing solutions that fit different needs, from a house expansion to full-scale remodeling, and this includes rural, urban and rental housing. CONAVI created the National Information System of Housing Indicators (SNIIV) to efficiently diagnose the country’s housing situation. CONAVI has developed solutions in coordination with these institutes and it supports the programs though subsidies that allow families to acquire housing through mortgages, improve their current house with programs such as MEJORAVIT or rent through ARRENDAVIT.

Mexico’s housing challenge can be divided into four different factors. The first element is the large deficit, which is tied to the expected population increase in the coming years. The second element is that a large percentage of the housing deficit is caused by non-affiliates. To reduce this percentage, programs have been created to incorporate non-affiliates and facilitate access to financing. Once a person is affiliated, that person becomes a candidate to receive subsidies through a variety of programs. The third element is that a large percentage of this deficit earns less than MX$5,000 (US$263) a month. Lastly, many of these families live in semi-urban and urban areas.

Q: What support does CONAVI offer to non-affiliated families who want to buy a home?

A: Non-affiliates are placed into different categories depending on whether they are eligible to gain support from commercial banks or receive mortgage loans without having a housing subaccount. Families that earn less than MX$10,000 (US$526) a month can receive support from various entities. CONAVI has a program called SelfAssisted Living that allows families living in rural settings to construct houses based on their customs and everyday needs. We also are working with rental housing managers and designing a Fibras program for the rental market because families wishing to live in interurban areas are unable to purchase a home. It is by tackling the needs of the urban areas first that we are able to address housing problems in other market segments.

Q: How does the housing sector stand in comparison to other sectors and how does CONAVI finance its projects?

A: The housing sector represents 14.41 percent of national GDP and indirectly or directly employs over 3 million people, which is equivalent to 7.3 percent of the total remunerated population. The sector is larger than the agricultural and mining segments combined and it competes with other industries such as automotive and tourism. CONAVI has developed alliances with commercial banks, especially with ABM, which provides investment and retirement funds. The funds of the national resources are insufficient because the housing sector requires long-term investments. Through our collaboration with multilateral organisms we have negotiated loans of US$2.5 billion with the IDB, which is the largest housing creditor worldwide. We have also negotiated a US$1 billion loan with the World Bank and with German development bank KfW.

Q: What have been the results of the new National Housing Policy and the programs found within it?

A: The National Housing Policy has decreased the number of abandoned houses and has begun repopulating the houses by adding educational, health and other important facilities to the surroundings. Containing the cities’ growth is also a priority, since compact cities are easier to manage and it is extremely expensive to create the proper infrastructure for cities of extensive length. Intelligently redistributing urban centers will provide families with decent housing conditions. The ultimate goal is for these families to live in neighborhoods where they can create strong social bonds. Two years ago the housing sector was limited to a few players and its growth rate was around -6 percent. At the time we had only 300 developers and today we have 1,800. We have become a trigger for economic and employment growth in Mexico.