Strategic planning for better shelter

The world's shelter needs are formidable. At present, one billion people are homeless or living in homes unfit for human habitation. Their number is likely to increase alarmingly unless urgent steps are taken to deal with the situation.

In the last few decades in particular, an increase in world population from 2.5 billion in 1950 to 5.2 billion in 1991 has caused housing problems to escalate. In addition, increasing rates of urbanization, growing economic problems, and rapidly growing rates of unemployment and underemployment have compounded the problem, especially in developing countries. One third of the population of such countries now has inadequate shelter. Over half the population of some cities in the poorer countries consists of residents of squatter settlements.

A useless quest for a single magic key

Overwhelmed by this exploding population, professionals, researchers and governments have searched for a long time for an effective supply method - a single magic key - to solve the shelter problem, believing that the solution was purely technocratic. Country after country tried to develop various building materials, components and forms of equipment. Comprehensive codes, standards and procedures for construction were assembled. Extensive plans for regional and urban development were carried out, with strict rules for the intensity and the quality of the use of land. Public agencies sought to provide shelter on a massive scale.

Technological innovations alone did not produce more affordable dwellings. Isolated master plans raised the value of the land within city boundaries, stimulating illegal settlements in the periphery. Standards generated extra costs that made houses and flats unaffordable for those most in need. Public agencies were overwhelmed by the huge unmet demand and by the even bigger number of households in desperate need of shelter yet lacking the ability to pay. Informal settlements grew, in some cities accounting for 75 per cent of the new dwellings built. Their inhabitants had to sacrifice education, health, transport and food priorities for shelter.

In the financial dimension, ingenious systems for collection and cost recovery were devised - with fixed, variable or indexed instalments. Intarest rates were subsidized and construction contracts were granted to inefficient developers who were only able to remain in the market because of the hidden subsidies involved. Nevertheless, adequate shelter is still unaffordable for the poorest groups surviving in the informal sector, who have patterns of income and expenditure different from those employed in the formal sector, for whom these reimbursement systems were all designed.

A multidimensional response

Step-by-step, a need for change in approach was gradually perceived by governments. It was understood that the shelter problem has multiple dimensions and that its solution cannot be purely technocratic, simply legal, or merely financial. It was also understood that the State cannot solve the shelter problem alone and that it needs the cooperation of the private sector, formal and informal, of non-governmental organizations (NGOs) and of the communities themselves, with new game rules.

So it was found that there is no single answer to the shelter question, that there is no isolated and magical solution. It was concluded that the key to shelter for all is made up of a cluster of interwoven approaches that form a multidimensional response. Many successful examples all over the world, such as the ones described in this publication, do exist but, unfortunately, are not well-known or have not been replicated widely.

The new rules of the game, the new roles of the government and the private sector, and abundant successful examples led to the creation of a new approach to shelter all: an enabling environment.

The Global Strategy for Shelter to the Year 2000, adopted by the General Assembly of the United Nations in December 1988, pulls together this global experience and displays it in a comprehensive document that provides guidelines to all countries interested in the formulation of new policies to meet their shelter needs. It sets a goal: shelter for all by the year 2000. It determines the actors: the public and private sectors, working jointly. It lays a mode: an enabling system - applied through strategic planning and constant monitoring of the shelter sector to update and readjust policies, programmes and projects.

Strategic planning for better shelter

The Strategy has a global orientation, since shelter problems are universal and warrant global concern. A common set of global principles are set forth - to be applied in individual countries through their national shelter strategies and in line with their national development aspirations and economic plans.

The recommendations of the Global Strategy fall naturally into three areas of concentration:

Political and participatory,
Fiscal and financial,
Physical and spatial.

The key to shelter for all is made up of a cluster of interwoven approaches that form a multidimensional response. The Global Strategy for Shelter calls for action on several fronts; political and participating; fiscal and financial; physical and spatial.

Three areas of concentration

Political and participatory Issues

In this area, the Strategy stresses the need to link the shelter sector to the economy when development plans are formulated, because it plays a more important role in national development than has been recognized.

Participation at both the planning and implementation stages, within the national context of decision-making should also be promoted and sustained.

As laws, decrees, regulations and standards for the shelter sector in themselves can be obstacles to facilitate shelter for all, shelter legislation has to be revised with care. Coordination of the various actors of the shelter sector is a key element of the Strategy: between the public and private sectors, between the various levels of government and their different agencies; between central and local governments, between NGO workers, business people and informal builders.

Decentralization - transferring responsibilities as well as financial and human resources to the local authorities - should be supported, to enable them to perform their new tasks successfully.

Community participation - either individual or collective - is needed not only for the construction of dwellings, installation of infrastructure or provision of services, but for planning and decision-making. However, this should not be imposed on the men and women concerned, but should depend on dialogue between the community and the government.

To facilitate the role of these actors, it is necessary to revise and update standards of infrastructure and construction. Their economic impact should be assessed and, if necessary, more realistic and flexible codes and minimum standards should be established in low-income areas, for gradual improvement later.

Low-income households have constructed a considerable number of dwellings in illegal settlements, in spite of and in many cases in defiance of State regulations, often without legal land tenure. Programmes for legalizing ownership in informal settlements must be implemented, complemented by projects to improve housing and infrastructure. In this way they can be integrated into the formal housing process.

To sustain political decisions, it is necessary to be able to get sufficient information about the state of the housing sector, both formal and informal. It is therefore important to use shelter indicators to assess the performance of the shelter sector.

Fiscal and financial issues

The Strategy makes important recommendations in this field. A key objective should be the mobilization of financial resources for the production, improvement and maintenance of infrastructure and shelter.

The financing of infrastructure must be a public responsibility, because networks of roads, water-distribution, drainage, sewerage, and communications are used by everyone. Therefore, the institutions in charge of providing these public services must have a stable financial base. Basic infrastructure should precede urban development, assuring right-of-way to the networks before the shelters themselves are built.

New measures for recovering the cost of public infrastructure, such as added value taxes which acknowledge the increased land value generated by development need to be put into practice.

The financing of shelter ought to be considered as part of a wide effort to develop the whole finance sector - mobilizing savings, reducing costs, improving the effectiveness of the financial intermediaries and promoting the free movement of capital.

The cost of housing finance should be reduced to a minimum level based on sound financial and economic principles. Official regulations, which can greatly increase these costs, should be reviewed to make credit more accessible to increasingly larger sections of the population.

However, financing should not be directed only towards owner-occupied housing. Rental housing meets an important and rising need in the rapidly expanding cities of the developing world. Rental housing for all income levels must be financed by ensuring that it is sufficiently profitable to attract investors. Ultimately, an increased supply of rental housing is the best way to achieve lower and fairer rental costs for tenants. Rent-control regulations should not only benefit some privileged tenants but rather the majority of those requiring rental housing.

Lines of credit to upgrade housing considered to be "sub-standard" are needed. A moderate investment will restore them, making good use of the investments made previously by their occupants.

To maintain a steady flow of finance for housing development, whether owned or rented, systems for recovery of loans must be improved, and the percentage of debts in arrears reduced substantially. There is also a need to review the performance of collection systems and, in many cases, to carry them to the level of the community itself.

A well-designed system of subsidies for housing has to be compassionate, equitable and efficient. Shelter subsidies should form part of a general strategy for meeting the needs of the Door and the destitute.

Physical and spatial issues

The physical spatial plan has three basic components: land, infrastructure and construction materials. As land is the fundamental resource in any housing programme, security of land ownership is the condition sine qua non for investment in shelter. However land can only be used adequately when infrastructure is present.

The supply of urban land to groups with few resources should be increased either by recognizing the practical importance of informal land markets an removing obstacles impeding their development, or by implementing viable alternatives to the informal process of land supply in the cities, with various types of stimulating public intervention, from "land banks" to free market supply.

The procedures for registering land titles and land sales and purchases should be improved, to obtain an efficient distribution system of this scarce resource. Land acquisition by government is usually a time-consuming and costly process that does not succeed in satisfying demand. It is therefore wise to establish incentives and sanctions both financial and administrative - to increase land supply by the private sector.

Possession of land in illegal settlements should be guaranteed, by means of a gradual process of legalization. This will stimulate the inhabitants of informal settlements to improve their houses and their neighbourhoods.

The high standards for infrastructure and construction - responsible in many countries for informal urban settlements -should be revised since they raise the price of urbanized land so much that it is placed out of the reach of an increasing proportion of the urban population.

Another obstacle to the supply of land is, in many countries, the complex process of approval of urban developments and building. It is necessary to simplify the formalities for building and obtaining subdivision permits, in order to reduce costs and stimulate the supply of land and shelters.

Urban and architectural design must be more efficient, utilizing land rationally but without abusing it. Both low-density and high-density housing may pose vicious land use situations. In the first case, urban dispersion raises the cost of networks and of transport. In the second, the high-rise buildings permitted not only lower the quality of life, but artificially raise the value of land such that it is often placed out of the reach of the poor.

Appropriate technology for shelter and infrastructure in developing countries may be placed between modern imported technology and improved traditional techniques.

Local technology for construction and infrastructure, adapted to the national context, is more appropriate than trying to transfer foreign technology.

These recommendations are listed in the following matrix, together with page references to the Global Strategy for Shelter document, and markers which show when that recommendation has been used in a particular country, as described in the respective case histories. For instance, a reader who is looking for information on land-registration systems will be guided by the matrix to the Bolivia case study. Another, concerned with subsidies, will be guided to the case studies of Chile and Colombia.

The 22 success stories that form the greater part of this publication have been selected because they illustrate the Global Strategy effectively in action in developing countries around the world at the present time. They portray it not as an academic or theoretical document but as a dynamic and responsive approach to generating more and better shelter and infrastructure. The Global Strategy for Shelter is essentially action being applied by and for the people.

GSS in action - success stories