Housingforallprogramashokafec 1276780115363-phpapp01


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Housingforallprogramashokafec 1276780115363-phpapp01

  1. 1. Housing for All Ashoka Hybrid Value Chains HOUSING FOR ALL INITIATIVE
  2. 2. Contents ! Goals, Assets and Barriers for Businesses and Citizen Sector Organizations ! Benefits of a Hybrid Value Chain ! The Market for Housing for All ! Hybrid Value Chain Actors and their Roles ! National Overview ! Home Improvements in Brazil, Colombia and Egypt ! New Homes in India ! National Scale and Beyond ! Achieving Global Scale ! Contact Us HOUSING FOR ALL INITIATIVE
  3. 3. “Currently, one-sixth of the world's population — one billion people — live in urban slums in emerging countries. In addition, virtually all net growth of 2.6 billion in world population between now and 2050 is projected to occur in these cities. In effect, relatively poor nations will need to build the equivalent of a city of more than one million people each week for the next 45 years. New market-based approaches to affordable housing are essential to reach the massive scale commensurate with this enormous demand. Modern corporations in the home-supply/building materials sector can create great value for households and capture a large share of these markets through forging “hybrid affordable housing value chains.” Successful affordable housing products package key inputs (e.g. technical assistance in design and construction, housing microcredit, quality building materials, financial planning etc.) to make the process shorter, less expensive, and more efficient. Typically however, corporations have little access to, understanding of, and trust of poor communities. Hence, corporations usually work best in these environments through partnering with local citizen-sector organizations.” — Dr. Bruce W. Ferguson, former Senior Housing and Urban Economist of the World Bank; Advisory Board of Global Urban Development Magazine, author of three books and 40 articles on housing and urban development in emerging countries and the US. HOUSING FOR ALL INITIATIVE
  4. 4. Citizen Sector Business Organizations Barriers ! Inadequate product offering ! Lack of affordable and integrated solutions ! Limited access to financing ! Lack of access to complementary goods at scale (land, infrastructure) ! Inefficient and costly delivery of goods and services Goals Goals ! Access to markets ! Improved products/services ! Greater profitability to communities ! Increased income streams Assets Assets ! Vital goods and services ! Deep knowledge of ! Ability to operate at scale communities and consumers ! Investment Capacity ! Ability to aggregate demand ! Operational Capacity ! Social Networks ! Infrastructure and Logistics ! Behavior change capacity HOUSING FOR ALL INITIATIVE
  5. 5. Citizen Sector Business Organizations Goals Ashoka Hybrid Value Chain Goals ! Enables collaborative ! Access to markets ! Improved products/services entrepreneurship at a country and ! Greater profitability to communities global level ! Increased income streams ! Identifies and engages partners Assets providing complementary Assets competencies ! Vital goods and services ! Demonstrates how to deliver ! Deep knowledge of ! Ability to operate at scale integrated solutions at scale communities and consumers ! Investment Capacity ! Spread knowledge, learning and ! Ability to aggregate demand ! Operational Capacity specific know-how emerging from ! Social Networks ! Infrastructure and Logistics HVC applications ! Behavior change capacity HOUSING FOR ALL INITIATIVE
  6. 6. Citizen Sector Business Organizations Benefits Benefits Benefits ! Access to quality of life enhancing ! Access to markets ! Improved products/services products and services at scale ! Greater profitability to communities ! Increased livelihood opportunities ! Goodwill in the community ! Increased and more diverse at the community level ! Innovation blowback revenue streams, greater ! Scaling up enabled through sustainability ! First-mover advantages partnerships between companies ! Goodwill in the community and CSOs, local and national governments ! Market-based competition delivers quality services at lowest cost to empowered consumers HOUSING FOR ALL INITIATIVE
  7. 7. More Than a Roof Overhead Health Implications Livelihood Implications Social Implications ! Basic health considerations ! A place of work ! A social symbol and source of ! Safety ! A productive asset that can be dignity ! Sanitation leveraged ! Point of connection to community ! Clean water ! An appreciating asset and social fabric ! Secondary impacts on education and productivity A home is more than shelter. Access to housing and better living conditions can transform the lives of individuals, families and communities. HOUSING FOR ALL INITIATIVE
  8. 8. The Market for Housing for All ! The Need ! About 1.1 billion people are living in inadequate housing conditions in urban areas alone (United Nations Centre for Human Settlements) ! An estimated 21 million new housing units are required each year, in developing countries, to accommodate growth in the number of households between 2000 and 2010. ! 14 million additional units would be required each year for the next 20 years if the current housing deficit is to be replaced by 2020 (UNHCS) ! Market size ! Total low income housing market is estimated at $331.8 billion, where low income populations are classified as those with incomes below $3000 in local purchasing power. (World Resources Institute) ! Additional untapped US$ 9.3 trillion in estimated “dead capital” in informal housing, which could be leveraged HOUSING FOR ALL INITIATIVE
  9. 9. The Market for Housing for All ! Key Market Constraints and Opportunities ! Lack of financing options. ! Mortgage Financing as a share of Gross Domestic Product - Brazil — 2 % - India- 4 % - Colombia — 7 % - As opposed to 79.6% in the United States and 54% in Germany ! Custom creation of technical solutions ! Lack of collaborative efforts and hence, integrated and scalable solutions. HOUSING FOR ALL INITIATIVE
  10. 10. Hybrid Value Chain Actors and their Roles Citizen Sector Business Housing for All Organizations Housing Related Products Aggregators ! Construction materials ! Aggregating pools of consumers ! Tools ! Mobilizing sales forces ! Aggregating small producers of housing related products Builders and Technical Assistance Complementary Services ! Architects ! Permits, documentation ! Builders ! Screening ! Real Estate Developers ! Finance and loan products ! Financial literacy Finance Access Enablers ! Microloan products ! Access to water/electricity ! Mortgage products ! Link to municipality HOUSING FOR ALL INITIATIVE
  11. 11. Housing for All Overview Multi- Country, Multi- Dimensional Housing For All ! Goal: Demonstrate the power of business/social alliances to address the housing needs of low income people - through sustainable business models scalable to diverse housing country environments ! Engagement of key partners in the development of Hybrid Value Chain applications ! Pilot Applications of housing HVCs ! Capturing and sharing key learnings of country programs ! Refining and scaling HVC business models ! Houses improved and new homes built ! Lives impacted HOUSING FOR ALL INITIATIVE
  12. 12. Housing for All Overview Multi- Country, Multi- Dimensional Housing For All ! Goal: Demonstrate the power of business/social alliances to address the housing needs of low income people - through sustainable business models scalable to diverse housing country environments Home Improvements ! Brazil ! Colombia ! Egypt New Homes ! India HOUSING FOR ALL INITIATIVE
  13. 13. National Overview Colombia ! Deficit of 1.3 Million India new units ! Low Income Market size: ! 2.5 M homes needing US $62.1 Billion home improvements ! Deficit of 24.7 Million Units Brazil Egypt ! Low Income Market size: US$ ! Deficit of 3.7 Million Units 10 Billion of low income homes ! Deficit of 7.2 Million Units ! Estimated 20 M people ! 10.5 M homes needing leaving in homes needing upgrades to meet minimum upgrades quality standards HOUSING FOR ALL INITIATIVE
  14. 14. Business Home Citizen Sector Organizations Improvements — Brazil State owned Highlights ! Reforma Mais launched on February ‘10 with participation of 3 partners — Banco de Nordeste, ABCP and Cearah Periferia ! Banco do Nordeste — CrediAmigo committed to include Housing Microcredit as part of its products offering to its clients ! ABCP committed to develop tools and standard guides related to technical assistance for home improvements ! Cearah Periferia committed to develop a social business. Reforma mais will become 50% of their business going forward ! IFCE committed to provide TA services during Phase 1 and to develop a training program for construction technician to serve the low- income market. ! Ministerio das Cidades — Financial commitment for Phase 1 of $R268,000 (U$S150,000) to the cost of technical assistance ! 24 businesses/social organizations committed to invest time over a six month period to develop the concept of the Clube da Reforma ! Total Investment by Partners: US$ 1,635,000 HOUSING FOR ALL INITIATIVE
  15. 15. Business Home Citizen Sector Organizations Improvements — Colombia Highlights ! Phase I, Since 2007—2009 ! Over US$ 11.7 million in sales with 28,000 housing solutions delivered profitably (ex. floors, kitchens and bathrooms) ! More than 179 women earned average of US$230 month as sales promoters in 8 Colombian cities. ! CSO’s generated new sources of revenues and more than US$70,000 in funding for community projects. ! Phase II, 2009 to present ! Completed Feasibility study on the creation of new home improvement financial entity (HIFE) with capacity to deliver at scale — over US$100mm — integrated financial and technical assistance solutions ! Development of HIFE business plan in partnership with Affordable Housing Institute, with co-financing of Hilti Foundation and 3 local companies. ! Ashoka leading creation of a national network of CSOs and a scalable system for delivering standardized home improvement solutions HOUSING FOR ALL INITIATIVE
  16. 16. Business Home Citizen Sector Organizations Improvements — Egypt Pre p phase - ilot Corporate partnerships in development Highlights ! Business plan completed in January 2010 for a national program delivering sustainable home improvement financing and technical assistance ! Program to be launched in June ’10 and to be implemented by 4 Ashoka, including two microfinance institutions who will finance themselves the credit component ! HFA Centers will consolidate to form a Cooperative in 5 years and will focus on advocacy to scale up the program beyond the 4 regions ! Micro credit operations will breakeven in 30 months and continue to grow HFA centres ! In five years, HFA will have improved and/or constructed 18,355 housing units and provided 44,600 working construction days HOUSING FOR ALL INITIATIVE
  17. 17. Global Overview of Housing for All: Home Improvements Opportunities ! In most developing countries, self-financed progressive housing represent 50% or more existing housing market. ! Tremendous opportunity cost of not participating negates impact in terms of higher #’s of families to be benefited as well as less disruption for them in terms of social networks and proximity to jobs ! Untapped existing low income asset base of over US$ 9.3 trillion- this "dead capital" is not leveraged or active in the market ! Significant impact and return for relatively small investments per household in the short and medium terms Challenges ! Infrastructural impact is limited ! Achieving scale requires system innovations at multiple levels ! Striving towards quality and standardized solutions ! Achieving scale through standardizing Technical Assistance and upgrade kits Home Improvements: Key Innovations and Successes ! Community based distribution model, resulting in consumers and sales force from the same community. Access to products and livelihood improving opportunities ! Creation of a consortium of diverse players who are committed to participate in HVC ! Greater competition, greater value HOUSING FOR ALL INITIATIVE
  18. 18. Business New Homes — Citizen Sector Organizations India Highlights ! Pioneering a new way of working between mortgage financers, developers, CSOs and the community (informal sector) ! Business plan completed and advisory committee being set up ! First project launched and fully sold within a week of launch ! 12 deals in pipeline — across 5 cities in India ! 2200 new homes to be launched by August 31, 2010 ! Online resource base for Housing sector stakeholders to be launched by June 2010 HOUSING FOR ALL INITIATIVE
  19. 19. Global Overview of Housing for All: New Homes Opportunities ! Ownership, access to title rights ! Infrastructure improving solutions ! Scale-up can be managed through a deployment of new units by real estate developers Challenges ! Context specific factors, particularly available land near sources of income ! Competition with government subsidized programs ! Smaller market share compared to Home Improvements, particularly in terms of numbers of families whose lives can be improved in 10 to 20 years New Homes: Key Innovations and Successes ! 12 deals with developers and mortgage finance companies in the works ! Online Web Application as avenue to scale HVC efforts and connect both sectors ! Preserving social structures through common service areas — new type of affordable community HOUSING FOR ALL INITIATIVE
  20. 20. At a Turning Point — HVC’s Next Endeavors Knowledge and Spread Collaborative Entrepreneurship Creating an Open Network ! Synthesize key insights about housing ! Develop clear incentives for ! Enable a core set of services to business models, barriers to growth competition to trigger collaboration companies and CSOs so that HVC and scale within each country program and models can self-multiply ! Communicate learning and best beyond ! Introduce web-based and social practices ! Refine model to focus on leveraged marketing tools to accelerate HVC ! Engage thought leaders, practitioners points of intervention with the highest mindshift and change negative and stakeholders as part of the potential to accelerate sector perceptions solution transformation (ex. policies, financing ! Mobilize competitive and sustainable at increasingly larger scale) home financing at a global level ! Think and act system change HOUSING FOR ALL INITIATIVE
  21. 21. National Scale Colombia India ! Launch HIFE, a new ! Establish HVC entity to be owned by a application where new consortium of housing solutions to companies, financial informal sector institutions and CSO families are produced players by Real Estate ! Enabling a sustainable developers and and scalable system mortgage institutions capable of delivering in partnership with hundreds of thousands CSOs of integrated services: ! Explore tools to enable TA + building materials the spread of the + financing model beyond the initial 12 pilots Brazil ! Establish Reforma Mais as a profitable model Egypt to deliver HI credit + ! Establish Housing for All Centers TA as profitable models to deliver HI ! Explore Clube da credit + TA Reforma as a national ! Explore partnerships with formal alliance of 30+ financial institutions and large companies and CSOs private companies HOUSING FOR ALL INITIATIVE
  22. 22. Beyond National Scale Opportunities Competencies ! Facilitate private sector investment to expand housing ! Understanding what works and what does not work from related financial services and products to informal sector the informal client credit perspective families ! Catalyze significant private sector investment in ! Ability to translate the social and impact opportunity into companies and financial institutions committed to a commercial investment delivering housing solutions in low income markets ! Close the gap between formal sector and grassroots based ! Engage engineering and design schools product design, technical assistance and construction ! Ability to capture grassroots innovations and transform services into scalable concepts ! Enable system change solutions to secure land tenure and ! Experience in unleashing dead capital in informal housing free-up dead capital in informal housing ! Engage governments — particularly at the local level — as ! Demonstrated experience with policy change in multiple part of the solution and as an ally of organized local settings communities ! Access to organized local groups and/or the ability to mobilize trust-based relationships at the community levels ! Understanding of motivations and pressures of diverse stakeholders Enable a global competitive housing market of product and service providers serving over 500,000 to a million of low-income families annually around the world HOUSING FOR ALL INITIATIVE
  23. 23. Achieving Global Scale Key HVC Innovations ! Integrated, localized solutions ! Large commercial applications in low income markets ! Congruence of wealth creation and social value creation Achieving Global Scale through an Open Network ! Catalyze entrepreneurship by building a global community of peers with the capacity to self- multiply HVC housing applications ! Foster a set of partnerships with key players internationally, combining North-South and South-South alliances ! Incentivize collaborations focused on the development of standardized and scalable solutions for both home improvement and new homes HOUSING FOR ALL INITIATIVE
  24. 24. Markets for Good Foster greater market growth Foster greater economic citizenship HOUSING FOR ALL INITIATIVE
  25. 25. Contact Us ! Valeria Budinich ! Jacques Rajotte Vice-President, Ashoka Senior Legal Consultant, Ashoka Full Economic Citizenship Initiative Housing For All, Brazil vbudinich@ashoka.org jrajotte@ashoka.org ! Shivani Manaktala ! Maria Lucia Roa Senior Advisor, Ashoka Ashoka Country Director, Ashoka Full Economic Citizenship Initiative Housing for All, Colombia SManaktala@ashoka.org maluroa22@gmail.com ! Iman Bibars, PhD ! Vishnu Swaminathan Vice President, Ashoka Director, Ashoka Regional Director, Ashoka Arab World Housing for All, India ibibars@ashoka.org vram@ashoka.org HOUSING FOR ALL INITIATIVE
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