The BIG IDEA Global Spread of Affordable Housing

2012 The Big Idea: Global Spread of Affordable Housing

Compiled and edited by Scott Anderson for Next Billion and Rochelle Beck for Ashoka Full Economic Citizenship, from blog posts solicited, edited and published on NextBillion.net in 2011.

Published jointly by
Next Billion www.Nextbillion.net and Ashoka Full Economic Citizenship www.fec.ashoka.org

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The material in this ebook is copyright protected. We want it to be used and disseminated widely. All those wishing to quote, copy or reproduce portions of this work are permitted to do so by using the following reference citation:  The BIG IDEA: Global Spread of Affordable Housing. Compiled and edited by Scott Anderson and Rochelle Beck (Next Billion and Ashoka Full Economic Citizenship, 2012). Cover photo: Slum daughter by Martina Wengle for Ashoka.

The BIG IDEA Global Spread of Affordable Housing

compiled and edited by

and

FULL ECONOMIC CITIZENSHIP

Mother and her family in front of their self-built shelter in India. They do not have title to the land under their shelter and could be evicted at any moment. The roof leaks, the walls get moldy and the children frequently get sick. Against many obstacles, this mother is proud to have put a roof over her childrens heads and to provide them with a loving home. She is one of 26 million in India needing affordable housing. Photo : Ross Mytton for Ashoka HFA India.

Contents
FOREWORD Launching the BIG IDEA Special Series by Scott Anderson INTRODUCTION Global Spread of Affordable Housing by Rochelle Beck Sizing Up the Deficit by Olivier Kayser and Lucie Klarsfeld LEADING INNOVATIONS Rights to the Land Beneath Your Home by Andr Albuquerque Building Sustainable Housing by Francesco Piazzesi When Earthquakes and Hurricanes Strike with Elizabeth Hausler Shelter After Disaster by Mario Flores Community Rebuilding in Haiti by Ted Bauman The Power of Collecting Accurate Market Data by Keerthi Kiran Developing Building Standards by Martina Wengle FINANCING: NECESSARY BUT NOT SUFFICIENT Impact Investing in Affordable Housing by Aden Van Noppen The Value of Technical Assistance by Rakhi Mehra & Marco Ferrario Housing Support Services by Steven Weir & Susana Rojas Williams From Loans to Asset Building to Economic Inclusion by Irena Shiba & Patrick Kelley The Race for Home Improvements by Sadna Samaranayake Ashoka HFA Brazil: Hybrid Value Chains in Action a video USING HYBRID STRATEGIES, BUILDING ECOSYSTEMS The Pyramid within the Pyramid by Vishnu Swaminathan Beyond Four Walls by Melissa Scott Discovering the Next Generation of Innovations by Chip Reeves Dow Corning Posts from the Field by Ronda Grosse and Frank DeLano Affordable Housing in our Lifetime? by Valeria Budinich Jane Goodall and Affordable Housing by Rochelle Beck TEDx The City 2.0 by Rochelle Beck THE BIG IDEA AUTHORS AND EDITORS Biographies CONTINUING THE CONVERSATION New Cities Global Summit 110 102 6 9 12 16 19 23 28 32 35 40 45 49 54 61 65 71 73 79 82 84 89 93 100

Foreword
By Scott Anderson

Affordable housing. Its hard to find a topic more complex, and yet more relevant, to the poverty alleviation puzzle. From homeowner financing to land rights, from new home construction to rehabilitation of dilapidated dwellings, to models that ensure sustainable, ethical and profitable development in coordination with low-income customers, affordable housing is confounding in its intricacies. But above all of these seemingly intractable complexities, theres one constant: Where we live is the most personal of economic subjects. It touches every other part of our financial lives: our livelihoods, our families and our communities. To say this issue is wide in scope is a drastic understatement. So to help home in on the true innovations, breakthroughs and leading thinkers/doers in affordable housing through enterprise, we at NextBillion turned to our Content Partner, Ashoka. Specifically, we teamed up Ashokas Full Economic Citizenship (FEC), which brings years of global experience and knowledge through its Housing for All initiative. FEC has managed three intense pilots in India, Brazil and Colombia to demonstrate the effectiveness of its signature business model: the Hybrid Value Chain. Working closely with Rochelle Beck, communications/media director for FEC 6

global initiatives, we identified a diverse cross-section of leaders in low-income housing. The result was a lineup of strong posts from diverse authors both topically and geographically whose cutting-edge information, experience and openness led to a rich online exchange. We put these posts together on The Big Idea page, which concentrates on subjects we know to be important to NextBillions readership. Past series have included innovations in impact investing, improving microfinance and mobile health care applications. But the nearly two dozen posts in this affordable housing series constituted one of the most intensive examinations of an issue in NextBillions history. Indeed, the feedback we received from our readers was equally impressive. Over the six-week period of this series, from October through early December 2011, we saw intense reader traffic and heard from a wide range of experts, both inside and outside of affordable housing. The feedback has been so positive, we decided to compile the entire series into this ebook. Thanks to the ongoing support and hard work of our partners at Ashoka FEC, Im proud to offer you this ebook of The BIG IDEA: Affordable Housing series.

Organized loosely by topic, and with a few more pieces of late-breaking information and videos, we hope this free ebook will serve as a resource for those working in the sector, as well as a touchstone for practitioners, policymakers, students and fellow innovators who found cross-sector relevance of the new ideas, insights, and frameworks presented in these posts.

We hope this compilation serves as reference to share widely in your network and with your colleagues. Please join us in disseminating it to all who might find it useful, and please get back us with comments and suggestions that might advance this multi-disciplinary discussion.

Scott Anderson, Managing Editor, NextBillion

Sprawling slums such as this one in Mumbai, India, are the reality for millions of people worldwide. Virtually no country is immune. The challenge: As the global trends of urban migration and population growth continue, how can we, together, envision, plan, fund, innovate and build affordable housing that is better for people, economies, the planet? Photo: Joel Newell. Used with permission. 8

INTRODUCTION
Global Spread of Affordable Housing
By Rochelle Beck

For those of you working in affordable housing, the statistics are by now familiar: As of 2008, for the first time in the worlds history, more people lived in cities than on rural land.1 One-third of these city-dwellers one billion people or one-sixth of the worlds population live in slums and shantytowns in deplorable conditions, often without access to basic sanitation, safe drinking water, minimal structural integrity, let alone a house built to withstand earthquakes or floods, amid garbage and vermin, with poor quality or faraway schools and health care, where narrow streets and poverty breed not only disease but daily risks of violence and death. Urban slums are the fastest growing human habitat. The UN projects that by 2030, this number will triple: well over three billion people will live in urban slums. A nightmare
These facts disturbing as they are and as important for developing and financing solutions cannot adequately describe the terrible human toll and social and economic loss produced by living in crowded, disease-ridden and unsafe slums. For the best, short visual tour for the feel of our planets slums, see The Places We Live by Jonas Bendiksen (a multimedia exhibition shown at the World Peace Center, produced by Magnum Photos). www.theplaceswelive.com
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for slum-dwellers, a dark cloud over their childrens future, a powder keg for cities management and health, a drain on national productivity and economic growth. From Ashokas entrepreneurial perspective, such a massive social and economic problem must have within it the seeds of large social and economic opportunities. As Ashoka founder Bill Drayton points out: If a billion people are shut out of the formal housing market, what would it mean to your business if you could unlock the potential of that trillion-dollar market? A trillion dollar BoP housing market? Impossible, you say? Not really. If you add up the building materials to be produced, distributed and sold, the loans and interest on mortgages, improvements or construction deals, the jobs and income generated, the land purchased, infrastructure and public services built all the related products and services to meet the affordable housing deficit globally it amounts to a multi-trillion dollar opportunity for multiple areas of employment and economic growth.

So why arent we hearing the sounds of massive housing construction projects under way? As we listen to diverse affordable housing colleagues working around the globe, it seems that the very size and complexity of what is needed to close the affordable housing gap seems too large for any one stakeholder to grab onto and succeed. Some builders and developers see significant potential profits, but they do not have accurate market information about what their new customers slum dwellers need, want, currently spend or can afford for housing. Their traditional marketing and sales forces have little or no experience in slums, nor trusted working relationships with those who do. If a barrier such as ambiguous land title or too few or too expensive home mortgage products are available, the perceived risk often is enough to sink their interest. They leave money on the table and walk away for a deal somewhere else. Local and national governments see the large numbers needing safer housing 26 million in India alone but also know they cannot afford to build or subsidize all that is needed. They become frustrated when they spend funds to build public housing, only to have a tiny fraction of the need met, slum problems continue unabated, and worse, see any potential benefits eroded by poor planning or corruption. Worse, their subsidies can unintentionally undermine market value for affordable housing projects, thereby discouraging more private real estate development. Many well-intentioned charitable investors 10

in affordable housing have lost confidence investing in the sector for similar reasons. Traditional private realtors, government agencies and charities still rely on formal housing to solve the shortage by building new homes in large numbers, without recognizing that almost 80 percent of BoP affordable housing is self-built and selffinanced, a consequence of being ignored by big companies, retail chains and financial institutions. It often represents decades of saving, bit by bit, building or repairing, bit by bit, as time and income allow, and is the only tangible asset the family has. Off the formal economic grid, and largely ignored by housing sector value chains developed for the middle and upper classes, most BoP families rely on their own resourcefulness to put a roof, even if leaky, over their heads. This series gives us all the opportunity to break down this massive problem and the equally massive social and economic opportunity into its various threads. And to hear from many voices, with perspectives from different parts of the world citizens, architects, engineers, urban planning experts, entrepreneurs, business executives and community leaders all of whom care deeply about finding solutions that work at scale. We invite you to share your experiences over the next weeks as you read posts on: What are the tough, persistent barriers preventing commercial solutions from succeeding at the BoP at global scale? Whos tackling them? If we found a way to close the affordable housing gap by 50 percent by 2030, how

many carpenters, electricians, cement mixers, bricklayers, engineers, architects, local hardware stores, etc. would be needed? Who exactly are affordable housing clients? What do we learn when we look more closely at what exactly BoP means for affordable housing? Are there construction materials or designs that build houses better, safer, energy efficient and affordably? Are there earthquake resistant designs that BoP housing can afford? What safety and integrity standards protect residents from poor quality housing, but do not make homes too costly for the market? Are there enough innovative financial products and services for this sector? What do they look like? What should they look like? Is financing enough to ensure affordable housing access and quality? Beyond one project in one place at one time, how can we nourish an affordable housing ecosystem with the interest to accelerate and sustain the level of growth needed? In addition to these questions, as the challenge of closing the affordable housing gap is too big for any one of its major stakeholders to accomplish alone, we have solicited posts about emerging innovative social-business frameworks that are forging alliances among diverse stakeholders, sustaining them over time, to collaborate, each bringing their skills, knowledge and resources to the table.

We explore these experiences in building trusted relationships. What happens to competition, profits, market share, information and innovation when traditional silo walls are broken down and knowledge, expertise, invention and resources are shared? How can we build on these new systems to bring down the traditional walls between business and citizens, governments and entrepreneurs, researchers and pragmatic planners? What are the advantages of working with the citizen organizations to improve housing value chains appropriate to BoP circumstances? What successes can they help achieve, especially in areas of land tenure, family financial literacy and savings, aggregating demand for financial services that reduce banks costs of outreach by qualifying trusted clients credit worthiness? Or working to get an affordable housing community the public services all communities need to thrive: sidewalks and play areas, electricity and paved streets, schools and retail shops, transportation and jobs. Check back here often. Share your questions, experiences and suggestions with your colleagues and our readers. Theres no time to waste. A multi-trillion dollar market is waiting to be tapped, and a billion people needing more than a roof over their heads.

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Sizing Up the Affordable Housing Deficit

By Oliver Kayser and Lucie Klarsfeld

Most of us know that many poor people lack the security and safety of a proper home. What is difficult to comprehend is the magnitude of the challenge. Some numbers may help. To close half of a very conservatively estimated housing deficit in the next ten years, our world would need to: Train for seven million masons; Create and operate housing finance institutions the size of 22 Grameen Banks; Grow the construction businesses to serve a $36 billion annual market! How did we come up with these numbers? With over one billion people currently living in inadequate housing, among them 835 million in urban areas,1 we can conservatively extrapolate a need for close to 167 million housing solutions (both new homes and home improvements) for average families of five people who currently live in slums or equivalent informal urban zones.2

If current population growth and migration, resulting in seven million additional slum dwellers per year, continue at todays rates, they would increase that figure in the next ten years will to a (very conservative) need of 180 million urban housing solutions by 2020. What would it take to address only half of this need, with 50 percent of the 180 million required homes remaining unfit because the residents cannot afford to improve them or buy a new home? We based the following estimates on what already works, i.e., the best practices for new homes and home improvements seen during the course of our joint study with Ashoka on housing for the poor.3 These assumptions are simplified and do not capture the nuances of the affordable housing market. Nevertheless, these basic assumptions are conservative in nature and serve a purpose. They illustrate the enormity of our collective challenge in addressing and capturing this market, before we even begin to address the nuances. Assuming that twice the number of people buying a new home will have the opportunity to improve their existing home, this would translate in the coming ten-year period in the following:

UN Habitat 2010 estimated that in 2010, 828 million people lived in slums, and this number was rising by 7 million per year, or 835 million people living in slums in 2011.
1

As solutions seen in this report only address urban housing issues, the estimations below are only focusing on the size of the urban housing market.
2

See Budinich, V., Kayser, O., and Samaranayake, S., Access to Affordable Housing (Ashoka and Hystra, 2012).
3

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 45 million new homes (25 percent of the 180 million homes needed by 2020) will be built at a price of $6,000 per unit,4 each requiring the equivalent of one full-time construction worker for one year (or a team of four for three months); 90 million home improvement projects will be carried out at an average cost of $1,000 per project,5 each requiring the equivalent of one full-time construction worker for three months. Assuming each home will have benefited from two improvement projects, this would translate into 25 percent of homes being improved. Taken together, these would entail cumulated construction expenditure of US$360 billion. Assuming this construction is spread over ten years, it would create a US$36 billion market for construction and financing services annually. The human resources required are enormous. Building or improving these homes would require training close to seven million masons over ten years.6 Assuming housing microfinance were available to meet these demands, extending finance would require the equivalent of roughly 280,000 loan officers.7 This would be the equivalent of creating 22 Grameen Banks disbursing

US$29 billion in new loans every year!8 These numbers are awe inspiring, despite the very conservative assumptions we have made. We can safely say that succeeding in addressing roughly half of the global urban housing deficit would require infinitely more than the scaling up of all existing programs. And additional models and resources would be needed in rural areas, not included in the estimates proposed here. These data show our task is about building an entire construction industry.9 To achieve this, all actors will need to collaborate, requiring: Construction material companies to find new supply processes that will help more poor dwellers to improve their homes; Real estate developers to find creative ways to lower the cost of their units and collaborate with finance organization who accept to work with the poor; Finance organizations to adapt their processes to provide loans to informal workers; Citizen sector organizations to help the private sector liaise with future BoP clients and to support them along the whole construction/acquisition process, as well as to help select and train BoP housing workers;
Grameen Bank has approximately 13,000 loan officers among its 23,000 staff.
8

4 5 6

This figure includes labor and materials costs. This figure, too, includes labor and materials costs.

These figures assume 4.5 million new homes requiring one man-year to build and 9.0 million home improvements requiring 0.25 man-years to complete. Assuming 30 new home loans (at 80 percent of US$6,000) per loan officer or 70 home improvement loans (at 80 percent of US$1,000) per loan officer, corresponding to an average loan disbursement of US$100,000 per loan officer.
7

The challenge of producing the corresponding building materials appears less formidable: assuming 10 percent of the affordable housing market is spent on cement, this would represent a US$3.6 billion (or 72 metric tons) market opportunity for cement manufacturers, less than half what Lafarge produces alone and approximately 2.5 to 3 percent of the world demand.
9

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Skilled contractor coordinates construction workers on new multi-unit housing in India. Photo: Ashoka HFA India.

Public authorities to implement property rights and create an appropriate legal framework, especially regarding financing solutions for housing; Universities and trade schools to reach into BoP for specialized training and skill certification that will support the huge human resource need for such an industry to emerge.

The magnitude and gravity of the challenge and investments that face the affordable housing community goes far beyond what we can loosely quantify, much beyond any single organizations capabilities. Only increased collaboration and concerted efforts across multiple players, as described above, will allow us to make a dent to the global housing deficit.

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Children etch their names into the eco-friendly, innovative adoblocks which, when sundried, are as strong and hard as concrete bricks. They are made 90 percent from local soil, and the whole community unites to make them at a fraction of the cost of cement bricks. These children will forever remember this community improvement project as they pass their signed bricks placed in the walls of each of their new homes. Photo courtesy of Echale a Tu Casa. 15

LEADING INNOVATIONS
Rights to the Land Under Your Home
By Andr Albuquerque

The process of global urbanization with millions migrating from rural areas to find refuge, a new life and hope for a better future has created disorderly, informal and often chaotic growth. Cities in emerging economies have not been prepared for these influxes of people, who come without financial resources to rent or buy a house or skills to find work. As they realize their plight no place they can afford to live many have occupied public and private areas illegally, usually in areas ringing the outskirts of cities often without any urban or social infrastructure. These squatters may have intended to build temporary shelters until they could get work and rent or build a legal place to live. But as time passes, they begin adding on to their temporary shelter, trying to make it a home for their family. Others join them, and soon squatter communities grow, even though they are built on land that is not legally theirs. These occupations of vacant lands have become a way to compensate for the affordable housing deficit in many countries. While it solves an immediate problem of shelter, it creates other problems: conflicts over land ownership, urban infrastructure 16

and public services, environmental protection and conflicts among various government agencies that impact urban development, but do not coordinate with each other. This is all evidence of problems that go beyond that of housing alone. Informal settlements in Brazil. During the last decades in Brazil, the production of affordable housing has been insufficient. The 2000 Census in Brazil estimated there were 12.4 million people living in substandard housing. The UN Habitat projects this number will reach 55 million people by 2020. Brazils slums, its infamous favelas, are growing fast. Government lags behind the need to solve the integrated problems of affordable housing, especially to resolve issues of rights to the land under the homes new arrivals have built. There have been frequent changes in government policies and programs, conflicting economic and political interests, and just the large amount of resources needed to compensate owners for their land so it can be legally, quickly and fairly transferred to the families and communities that have established homes has become an insurmountable barrier for government to achieve.

http://www.youtube.com/watch?v=FZ9QJfZjBRQ

Solutions built at the grassroots level. Terra Nova Regularizaes Fundirias, which was established in the southern Brazilian state of Paran, marks a new, and we believe, unprecedented perspective to solve the lack of land ownership in favelas. Over the past decade, we carefully evaluated the laws defining property rights, and the governments processes for settling disputes. We found they were overly complex, slow and costly, with the result that slum dwellers rarely used them. We developed a methodology that significantly reduces the bureaucracy involved in the process of regularization (the term the Brazilian government uses to describe the legal and fair transfer of land title from the current private or public land owner to the squatter family or community). This ensures that the conflict related to land ownership is resolved quickly and peacefully,

allowing the occupants, with their own resources, to obtain title to the lot in which they reside. Watch the video to learn more about how the new methodology works. Results surpass home and community improvements. By creating an entrepreneurial process whereby families engage in and pay for the process to acquire land rights, the relationship of that person or family to the land is larger than mere ownership. It is a very different and much stronger relationship than when the government gives this title to the residents for free. Land titling transitions residents from illegal squatters with insecurity about their future and no real asset in the homes they build because they lack title, to being able to participate in the formal economy as legal homeowners and community members, now with a tangible, legal asset 17

as collateral. Not surprisingly, we have seen more home improvements after regularization. From the moment a slum is regularized, the area is recognized by rest of the public (neighbors, public works employees, government agencies) as a legitimate part of the city. Residents begin to enjoy basic services like water, electricity and sewer systems. Residents acquire a formal address. This is more than a detail. It comes to signify a personal responsibility for the area, which encourages them to invest in improving their property, not contaminating or degrading surrounding property, to act jointly to make the community a cleaner, more healthy and attractive place all from a sense of pride that ownership conferred. This gives a common sense of purpose for residents to become active agents of change. The process fosters community organization and strengthens leadership.

Through regularization, slum residents have a different relationship with the environment in which they live. The process of regularization results in social and environmental revitalization. Over the course of a decade we have seen that when we unite a community towards a common objective, residents become agents for change. Their newfound confidence after having been a part of the regularization process, then asking public agencies to build infrastructure, or meeting with other residents to solve larger problems or clean up contiguous land where garbage spilled over in the past were made possible through this process of land regularization. When we enable people to take ownership and do the work of regularization, they become proactive agents of social and community transformation.

Principal avenue in a squatter community in Curitibia before the transfer of land rights. Photo: Association of Residents.

The same principal avenue in a squatter community soon after land title was secured. Photo: Terra Nova.

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Building Sustainable Communities

By Francesco Piazzesi

Humanity is losing the global race to provide safe and sustainable habitat for itself. By 2030, world population is projected to be 9 billion: 3.6 billion will live in precarious housing conditions, with a terrifying 25 percent of them, homeless. If we truly want to solve the affordable housing problem, first we must confront a critical equation in a way that creates wealth for builders and is sustainable for the public and the planet. Right now, the worldwide equation is framed as: More unplanned and shoddy slum urbanization equals more rural and urban impoverishment. Rural communities become receptacles of solid wastes, contaminated water, labor migration, family disruption and lack of income opportunities. Communities are

then abandoned, their residents attracted by a false image of urban wealth and better living conditions. The reality these migrants face in slums is stark: lack of decent housing, sanitation, overcrowded narrow streets with fragile, dangerous structures, insecure tenure, violence, human trafficking, lack of potable water and an endless list of social and health diseases and habitat degradation. And these social ills hurt cities and nations economic prosperity and social and political stability. A Better Equation: Build sustainable human habitats in communities equals better affordable housing, community cohesion, environmental protection jobs, and economic growth. This equation rests on principles of social inclusion, financial education, financing and technical assistance to use construction best practices.

http://www.youtube.com/ watch?v=lNtJHjpXI-M

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Echale a Tu Casa starts by engaging entire communities. We work with 20 to 30 households in the community. First, we meet with them to listen to their needs and gain their trust. We tell them about our work in other communities, the innovative building blocks weve invented that are ecologically friendly and build strong, safe houses. We let them know well help them get credit toward building the home if they agree to save and invest 10 percent of its total cost to start. If they agree to work with us, we begin courses in financial education (to help them manage their family budget, see options for new income, and develop saving patterns), start the process to link them to a microcredit agency to get a mortgage or home improvement loan and technical capacitybuilding in sustainable building materials and practices to build their own new homes.

All photos courtesy of Echale a Tu Casa.

We began Echale a Tu Casa over 25 years ago as a nonprofit to help low-income families improve the safety, health and hygiene conditions of their homes in Mexico. We soon realized that philanthropy would not permit us to have much of an impact on the source problems generating these poor living conditions. So we created a for-profit, social enterprise built on an integrated system of savings, credit and subsidies for families who were not being served either by private home developers or the public housing agencies here in Mexico. In Mexico today there is an 8.9 million deficit of affordable housing , meaning that 49 million people are without safe, adequate housing. Of the 8.9 million households, only 3 million have access to public assistance or credit for housing from Infonavit, Fovissste or a private home finance source. This means that 5.9 million households 32 million people are still excluded. These households are our target population: those with some land but no funds to build a home, or who live in a room whose walls are made of corrugated cartons. 20

Then we introduce them to the innovative, eco-friendly and strong Adoblock a brick engineered to be made 90 percent of local soil, with benefits of being strong, buffering noise and temperature extremes, resistant to water and, best of all, produced

at low cost by the community itself.1

and cost-effective technologies, such as catching and storing rainwater for drinking and cooking, gray-water filtering for recycling waste water, and solar photovoltaic cells to generate electricity. As this work continues, we find that the entire fabric of this community evolves into teamwork, excited to implement these new opportunities and together create new skills and jobs, which then restructures the social fabric of individual families and the entire community. To date, Echale a Tu Casa has helped communities build nearly 26,000 homes, generating over 130,000 jobs and US $65 million of income. Making living conditions better in rural areas to improve lives where communities exist, instead of increasing urban migration, is another track for Echale a Tu Casa. Just one year ago, poor communities were threatening to deforest the natural habitat surrounding their settlements in Calakmul, a town in Campeche. It is one of the largest Mayan cultural sites in Mexico and home to one of the worlds largest and most diverse biosphere.

We bring in machines to manufacture these eco-bricks and teach the community how to use them to generate enough materials for all the houses to be built.2 We help them plan their new home layout, including other eco-friendly, simple
1 Adoblocks result from an engineering innovation by Ital Mexicana and the Institute CRAT of the University of Grenoble in France. This innovation was the first ecological construction system based on earth as a material more resistant than concrete and made by the community that is, the manufacturing of the blocks is done in and by the community, not providing prefabricated building materials as has been done in the past. This adds economic value and appropriate technology benefits to the communities themselves. 2 The machine is a hydraulic press that exerts pressure of more than 40 tons to form each brick. Tests confirm the Adoblock is stronger than one of concrete or clay. Regular tests evaluate brick quality and Adoblock always comes out as strongest.

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In order to stop families from cutting down trees to build low-quality shack shelters and, while there, engaging in clandestine sales of endangered species and archaeological relics, instead of bringing in police forces to stop, Echale a Tu Casa started technical workshops for green housing construction and topics including sustainability. We began an on-site production system of green construction materials. Mortgages through microfinance were offered. After one year, 1,000 strong, sustainable homes have been built, increasing family income from 500 new jobs created, an economic spillover of US $6.5 million and new ways to improve life in Calakmul and communities like it AND protect the environment by the same community. These results provide all involved with Echale a Tu Casa the enthusiasm and energy to share our processes and results with many in the affordable housing sector.

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When Earthquakes and Hurricanes Hit Affordable Housing

A conversation with Elizabeth Hausler and Rochelle Beck

Earthquakes dont kill people, poorly built buildings do, says Elizabeth Hausler, a highly skilled engineer who turned her education into a life-long mission to vanquish a dangerous social problem that kills and maims innocents and causes billions in damages in places all over the world. Her insights over many years in many countries helping adapt sound principles to greatly prevent serious damage to human life during natural disasters are wise, and we wanted her to share them with NextBillions readers. So I asked: RB: What motivated you to become so engaged in this difficult field?

EH: I grew up in a small town outside Chicago, where Id work as a bricklayer during the summers for my fathers masonry construction company. After my college degree (in general engineering) I was working in environmental engineering while I was finishing my PhD in earthquake engineering, when three very important things happened all in the same year. First, an earthquake in Gujarat, India, killed over 20,000 people, mostly because their unreinforced masonry houses collapsed on them. That made me wonder why earthquakes were so deadly in emerging economies. 23

Second, when the twin towers fell on September 11, I took it as a personal mission to use my engineering skills to make the world a better place. And third, I met the co-founder and CEO of KickStart, which had the right model for how to use technology to improve peoples lives. With these clearly imprinted in my mind and on my soul, I finished my dissertation, and with a Fulbright Fellowship, headed to India to be part of the reconstruction efforts following the earthquake. Thus began years of working around the world where earthquakes struck, and learning all she could about the specific challenges that make earthquakes so much more deadly for the poor. Why do earthquakes and hurricanes disproportionately hurt the BoP? The problem, I discovered, is that most affordable housing building practices or even earthquake-proof technologies dont fit the cultural preferences, economies or materials in the communities that need them, Elizabeth says, reflecting on many places shes visited. Most of the populations who suffer today in earthquakes never lived in brick houses with heavy roofs. They adapted to nature, to the traditional building designs of their ancestors, who had empirically adapted housing construction to either withstand or at least not collapse with deadly force upon people inside during an earthquake or a hurricane.

But when they move to cities (either because their lands are depleted or no longer have enough water to farm, or their communities become caught in the midst of civil war or other conflicts, or simply because they need a closer, better school for their children), the houses in slums or outskirts of cities are built the modern way i.e., made with bricks, concrete and other materials not of their experience. Those houses most often are not built with the right standards or enough structural support to protect residents. High density in slums increases the risk factors once structural integrity fails. But it does not need to continue this way, Elizabeth quickly adds. This is something that we can change if we know how to do it correctly, she says, citing how developing the strategies and best practices to build safe and affordable housing became her lifes work and sparked her to found Build Change, an international nonprofit social enterprise that designs earthquakeresistant houses in developing countries and trains builders, homeowners, engineers and government officials to build them. It uses the principles of local skills, local materials and local demand and leaves in place a suite of simple engineering principles which make permanent change in construction that can survive the violence of earthquakes and hurricane-force winds. What made you create Build Change? My approach is a sharp contrast with many modern programs that rebuild communities with disaster-proof homes, such as sturdy geodesic domes, that dont fit in with the aesthetic or culture of the

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local community. As a result, the building technology isnt replicated after the international helpers leave. What has Build Change learned over the years across so many geographies? Elizabeth has formulated her work around a few ordered sets of principles. The first involves the three essential ingredients that build an ecosystem change in affordable housing construction that continues to guide it after the crisis is over. She calls these three principles: Technology, Money and People. Technology includes two things, she says. Clear government standards enforced to define construction project for common structures, and training and skilled technical assistance to get all builders the knowledge and expert advice they need.

Money is critical, not only access to it, but in how it is used. Elizabeth says access to sufficient capital to build a house completely and correctly is a must to ensure safety. She says, Governments can help push quality standards by releasing their funds (or giving incentives to banks or microfinance institutions to approve loans for reconstruction) when proof of good plans meeting best practices for earthquake or hurricane resistant construction are submitted. In some places, where the right materials may be too expensive, governments could give subsidies to offset the costs for example, when cement is an important component. People, she says, are the key to making these changes widely adopted, commonplace and continue overtime. It is critical to motivate residents, builders, government officials and relief agencies to want to rebuilt correctly. 25


House damaged by an earthquake.

House rebuilt using Build Change techniques.

The second C, connections, uses the engineering principle that everything has be connected together to perform well in an earthquake or hurricane, Elizabeth continues. Walls connected to the foundation, roof connected to the walls, etc. The third C, construction quality, is using locally available building materials and qualified labor. This is another example of how doing it right can be simple, but must be learned, she says. Laying bricks so that theres enough mortar in the spaces in between. Or soaking bricks in water before building a wall to improve its strength. If you self-build or follow instructions from someone who has no experience with earthquakes or high winds you may never learn to do construction this way and it does not cost more or require anything special to get it safely done. By working in disaster-prone regions that currently lack the engineering expertise to build sturdy homes with limited funding, Elizabeth through the work of Build Change and others hopes to empower local homeowners and builders to continue implementing the three Cs long after the organization leaves town.

What is the second set of guiding building principles for safe housing? I call them the 3 Cs, she says. Many homes in disaster-prone areas do not know about these, and while they appear simple, they are often key to assuring homes are built to be able to withstand high stress. Elizabeths 3 Cs are: configuration, connections, and construction quality. The first C, configuration, means paying attention to a homes design plan and layout, keeping an eye out for things such as loadbearing walls in each direction of the home to improve durability. In an earthquake, you dont want a heavy roof over your head, Elizabeth says, while a lightweight roof in a hurricane-prone region needs to be tied down so it wont blow away. Good configuration includes the placement of windows and doors. Such openings weaken the structural integrity of a wall that holds up the roof, but in many regions of the world lots of open windows and doors are needed for climate control. Instead of saying only small windows are acceptable, Elizabeth promotes putting reinforcements in place. 26

That is the true test of sustainability, she says. That is our ultimate goal: that people continue to build earthquake resistant houses on their own without us and without any financial subsidy. The best designs in the world will not save lives if they are not built properly, or local engineers remain unsure how to design them. How can we make it easy for local government officials to enforce building codes? Make it affordable, easy to implement, and leverage the window of opportunity that exists right after an earthquake disaster. Create simple building codes, training seminars and inspection systems that work in rural areas with small budgets, little infrastructure, time and personnel. Build Change partners with governments and financing institutions to provide access to capital that is contingent upon meeting minimum standards for construction quality. Any final insight? She is quick to answer. Seeing homeowners building safe houses with their own resources not simply living in houses built for them that is the true test of sustainable, long-term change.

Build Changes Six Strategic Steps to Build Safe Houses

Step 1. First learn: Ask: why did houses collapse in the earthquake? Why did others not collapse? Start with forensic engineering studies after earthquakes and dont make the same mistake twice. Step 2. Design earthquake-resistant houses: Its easier to make minor, low or no-cost changes to existing ways of building than to introduce totally new technology.

Step 3. Build local skills: Ask: How can we disseminate this knowledge to large numbers of engineers and builders?

Step 4. Stimulate local demand: Ask: How to convince poor homeowners to invest more to build a safer house? How can we get government officials to develop and enforce standards? Step 5. Facilitate access to capital: Ask: What is the minimum amount of funding necessary to build a safe house?

Step 6. Measure the change: Ask: Are other people building safe houses now? Will they do so after the emergency or relief crews leave?

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Shelter After Disaster: Temporary Aid Or Pathway to a Better Future?

By Mario Flores

tents, can be incorporated into the next phase after a crisis to get families into better, permanent housing. Based on the local context, hazards, culture, available materials, labor and household needs, actual transitional shelter products will be different from a design perspective, and components will often be used in different ways. But as important as the innovative product for immediate, safe shelter is the process that can lead families after a disaster to a much improved, lasting home. The process, called transitional shelter, guides families on a pathway to durable shelter solutions through an incremental process supporting families themselves to understand their diverse possible housing options and to choose their future. Pathways to Permanence and Transitional Shelter Habitat for Humanity has implemented significant shelter responses after disasters and conflicts based on a core belief that decent and safe shelter, especially after a disaster, is a key moment of opportunity to build a new, participatory platform around housing that leads to improvements in many needs of these families: health care, jobs and livelihoods, protection, education, water and sanitation, community cohesion and continuing improvements.

Jan. 14, 2010, Post-earthquake Port-au-Prince, Haiti. Photo: Habitat for Humanity Haiti.

Shelter after Disaster Over the few past years, the global humanitarian community has been working to develop solutions that offer disaster and conflict-affected families a more durable shelter than the tents traditionally provided. Tents can be appropriate in certain circumstances. Yet they do not last long enough to protect families until longerterm reconstruction options are available. Nor do they represent the best investment of humanitarian funding in the disasteraffected economies to stimulate recovery, economic activity and jobs. The shelter sector has been innovating transitional shelter solutions that, unlike 28

Habitats disaster response shelter strategy, known as Pathways to Permanence, brings affected families along this path to durable, permanent shelter solutions acquired incrementally. The concept is perhaps best described by our response to the devastation following the 2010 earthquake in Haiti. After the earthquake, Habitat initially provided families with Emergency Shelter Kits (ESKs) containing a high quality plastic tarp, tools, fixtures and fittings. This helped address their immediate shelter needs very quickly and with materials generally of higher quality. Instead of discarding these after a while, the same tools and materials were then used along with additional materials and technical assistance provided to upgrade their emergency shelter into a transitional shelter: more durable, with a longer lifespan, as well as more resistant to seismic aftershocks, the heavy rainy season, hurricanes and flooding. Once families were stabilized in safer, transitional shelter, Habitat locals initiated community-based processes to inform families about various types of permanent affordable housing solutions, and continued to provide information and technical assistance as the families and the community considered, discussed and finally chose the right ones for them. Options range from the incremental upgrade of transitional shelters (for example building permanent foundations and floors and installing panelized walls to substitute the plastic sheeting) to the construction of permanent core homes.

http://www.youtube.com/watch?v=H63QaSlGyww

Lessons and Guidelines Following years of innovation and use of transitional shelter in different disasters, a number of shelter organizations, including Habitat, collaboratively developed guidelines that incorporate the lessons and best practices to guide future humanitarian shelter responses: 1. Assess the Situation. A number of different approaches exist for providing shelter in post-disaster or post-conflict situations. Comprehensive assessments should be undertaken to understand the potential strengths, weaknesses, opportunities and threats of all shelter responses prior to selecting the most appropriate. 2. Involve the Community. Invariably, the greatest effort in any response is made by those directly affected. They are also most aware of appropriate, sustainable and rapid routes to recovery. The greater the involvement of the community in implementation, the more efficient and cost effective the response.

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3. Develop a Strategy. Transitional shelter programs should be used for a short period of time, only as part of a comprehensive inter-sector shelter strategy that includes tent camp construction and management (CCCM), early recovery, health, safety and protection and water, sanitation and hygiene (WASH). Other cross-cutting issues must be included that support the entire population, both displaced and non-displaced, until durable shelter solutions are reached. 4. Reduce Vulnerability. Transitional shelter programs must reduce the vulnerability of the affected population. Using appropriate design and construction, site selection and site preparation as well as communicating hazard resilient techniques and best practices will build capacity within the affected population and assist them in the recovery process. 5. Agree on Standards. While there can be no one universal standard (because of the local diversity and natural resources), it still is important to agree with the community served on standards for transitional shelters. Options even for transitional shelters must consider local hazards, climate, available labor and skills, available material, traditional building practices, cultural requirements and social and household activities. 6. Maximize Choice. The design and construction of the shelters themselves should maximize the choice of shelter and settlement options for each household by allowing beneficiaries to upgrade, reuse, resell, recycle and 30

relocate their shelters as necessary and desired. It should also consider the selection of assistance methods provided. 7. Buy Time. Sustainable permanent reconstruction following a major conflict or disaster can take a number of years to complete, much longer than the usual lifespan of plastic sheeting and tents. If solutions are too rushed, they may result in inequality, poor sustainability and greater vulnerability. A process of community participation, securing land tenure and the agreement of standards for permanent housing will add real value to the results, while sustainable reconstruction is taking place. 8. Incremental Process. The process of transitional shelter starts with the first distribution of relief items. Inform and offer opportunities for incremental upgrading, reuse, resale or recycling of materials by beneficiaries at their own pace until durable shelter solutions are achieved. Transitional shelter is not an additional phase of a response: emergency shelter, followed by transitional shelter, followed by reconstruction. Transitional shelter begins as part of the initial response and continues in parallel to reconstruction. 9. Plan the Site. Transitional shelter programs need to be located on land that is safe, legal and appropriate. This may be achieved through site planning involving the integration of hazard risk reduction, zoning and service integration. Site planning should consider the whole community, including displaced and nondisplaced populations.

10.  Reconstruction. Transitional shelters should be designed to complement and contribute to a reconstruction program through the process of being upgraded, reused, recycled or resold. Sheltering people after disasters is a monumental task. Helping those affected onto a pathway to permanent, durable shelter solutions demands a comprehensive approach that focuses in the process itself as a catalyst for recovery. Transitional shelter can contribute significantly to this approach. Not done correctly, it may become the slums of tomorrow. Properly done, transitional shelter is an opportunity to long-term, affordable housing and a springboard for economic and community development.
Mother and infant displaced by the quake await their new home to be completed. Photo: Habitat for Humanity Haiti

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Empowering an Urban Community After Disaster

By Ted Baumann

In a section of Port-au-Prince, Haiti, the community of Simon-Pel and its 23,000 low-income squatter residents had de facto security of tenure and had built a vibrant commercial main street and strong social connections. Its lack of formal municipal and legal recognition meant that despite its residents efforts at improvements, Simon-Pel did not get public services such as water, sanitation, sewers, latrines, solid waste disposal, street lighting and social amenities such as schools and playgrounds. Many streets remain unpaved. Diseases such as cholera spread easily and often. When hit by the 2010 earthquake, like many Haitian neighborhoods, its residents suffered devastation. At least 8,000, over a third of its residents, now live in one of eight camps surrounding their former neighborhood. Communities like Simon-Pel present many challenges, all magnified by the earthquake. Individual plots are small and irregular, and houses are self-built from salvaged materials. This makes it almost impossible to rebuild structures from scratch. High density and narrow streets mean housing and infrastructure work affects groups of households, so it is difficult to help one household at a time. Most importantly, the strong social bonds created by a shared

Housing conditions in Simon-Pel. Photos courtesy of HFHI-Haiti.

history of informal settlement and survival mean it is important to create a process that all residents believe will meet their needs over time. Isolated projects, by contrast, could create jealousy and division. Recognizing these challenges, Habitat for Humanity Haiti decided to use a tool developed by Shack/Slum Dwellers International: a community-based enumeration (survey) process that would help the community take stock of its resources, prioritize its needs and develop plans of action to address them. In so doing, the community would take ownership of the process and have clear priorities to work in partnership with government and NGOs to address its needs. Although the project is still at an early stage, community

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teams have mapped and numbered 4,000 buildings, and surveyed 6,000 households in Simon-Pel. The Simon-Pel enumeration is based on a standardized set of questions developed by a working group of Haitis Inter-ministerial Committee for Territorial Planning (Comit Interministerial dAmenagement Territoire, CIAT.) This ensures that the information gathered is compatible neighborhood surveys. The working group hopes to collect and compile such surveys on a citywide scale for all of Port-au-Prince. The enumeration process involves forming and supporting community-based survey teams; numbering and mapping buildings; surveying every household for information about demographics and economic activity; and focus groups to create community maps and use them to decide which needs are most urgent. Local university architecture students help with training, verifying and compiling the data into a database. The process is punctuated by community mass meetings and celebrations designed to cement broad commitment to the process. Interestingly, the first priority identified by the Simon-Pel enumeration was not housing repair or reconstruction, but safe water. Two community water points are now under construction. Two more projects are expected to start in the next few months to add street lighting especially important to womens groups for safety and solid waste management. Nevertheless, the Simon-Pel project is creating the basis for housing interventions, including upgrading existing houses so

they are earthquake-resistant; repairing and retrofitting earthquake-damaged homes; and building new permanent homes on vacant land. Habitat Haiti also is building transitional shelters in or near Simon-Pel and partnering to clear rubble with the Community Housing Foundation International (CHFI). For Habitat and the community, however, the surveys and focus groups are tools for building more than housing in SimonPel. The enumeration methodology builds community self-confidence, creates a platform for ongoing engagement with the community as a whole, and initiates postearthquake reconstruction in a way that builds on existing community capacities, both physical and social.

Survey takers post their information and coordinate new areas to canvass. Photo courtesy of Habitat for Humanity Haiti.

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Vilaire Syrin, 29, a team leader in the enumeration, has lived in the community for 27 years, and says the survey process is one the best things that Habitat has done. By leading the work, his confidence, organizing and leadership skills increased strongly particularly important in a neighborhood whose residents have long been stigmatized as illegal residents of the city. In addition, the Simon-Pel enumeration has caught the attention of the municipality and other NGOs in a positive way. It has helped attract funding, and strengthens the neighborhoods acceptance as an integral part of the municipality particularly important when it comes to regularizing tenure. From Habitats perspective, the SimonPel enumeration has further benefits. The quality of information about affordable housing is more accurate and richer using an enumeration process because people tend to share more, and exaggerate less, when talking to neighbors. More accurate data and deeper community engagement increases the efficiency and effectiveness of specific housing project design. The resulting pool of trained and committed local residents serves as yeast for future work, both within SimonPel, and for other neighborhoods in need of the enumeration process.

Simon-Pel Survey Enumerator Team

Msina Antoine, 73, a charcoal retailer who lives in the community with her four grandchildren, says shes feeling better about the neighborhood after the earthquakes tough times, and has begun to look forward. Now Im praying for my grandchildren to have a better future in a much better, safer place. Through this community-building process, the area now has a critical mass of aware and empowered residents capable of organizing for change so that Simon-Pel is a better, safer place for all Haitis children.1

For more information, see Build Hope: Housing Cities after a Disaster, Habitat for Humanitys 2012 experiences on urban disaster planning and steps for permanence during rebuilding creates a more solid path to recovery.
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The Power of Collecting Accurate Market Data

By Keerthi Kiran

The Challenge. Entrepreneurs know the toughest part of succeeding in a new market is to prove it actually exists. Need does not always translate into demand, and neither necessarily translate into buying the products offered. Many a company applying their time-tested market surveys (developed for middle- or upper-class consumers) or using official demographic data to evaluate the potential of a new BoP market have failed. Either the data showed too little demand to warrant penetration, or it looked enormously promising according to official aggregate

survey numbers, but when projects based on these numbers were tried, sales proved difficult and ultimately deeply disappointing. These experiences have reinforced notions in private developers that affordable housing projects at the BoP are not as potentially profitable as they seemed. Ashokas India Housing for All initiative faced this same data disconnect. Our hybrid value chain model included both businesses (large builders or real estate developers) and citizen organizations (trusted and knowledgeable after decades 35

working in Indias slums with BoP families). When we asked about market information on new affordable homes, we got two different perspectives that seemed contradictory. One relied on the information from the experienced grassroots citizen organizations (e.g. SEWA and SAATH) across the country and our own staffs firsthand interviews with people living in slums. We were convinced that Indias affordable housing sector was real, underserved, with huge deficits in available homes at prices the BoP could afford and, most important, was ready and willing to be unlocked by private market interest and investment. The other view came from the private builders, developers and housing financial institutions, who were interested in this narrative. But they were not convinced by the data they saw from official demographic, government census and housing information they routinely use to analyze new development risks and opportunities. Data doubts tarnished their enthusiasm to invest. To convert their interest into a good business opportunity, our challenge was to transform the informal sector slum dweller into a formal sector customer. We knew there was a disconnect between the information from our partners in the slum communities and the official data developers used. We set out to find how the disconnect was caused. Either our numbers were wrong, or the official ones were. In any case, we needed to get accurate information about affordable housing demand, preferences, ability to pay, priorities to close 36

the deal. This was imperative to serve our potential customers and to help builders develop, market and successfully sell appropriate affordable housing offerings (size of project, risks vs. rewards). Closing the Data Divide. We designed a two-stage, electronic data-driven solution that was also hybrid to bridge the divide between potential customers and builders: slum dwellers and citizen organization workers make on-site visits to targeted customers to do interviews asking more precise, detailed questions about their housing needs; and cutting-edge technology developed to enable these interviewers to record characteristics and identity accurately and immediately (reducing error), send data electronically to be analyzed and aggregated correctly in one central location by trained staff, who then translate it into reliable and useful information for real estate development planning and evaluation of new affordable housing projects. Heres how it works: Stage 1: Targeted Customer Outreach to Ascertain Demand. We select a representative sample of slum dwellers from different slums to answer a survey questionnaire. The survey was designed to capture 26 demographic, financial and geographic parameters such as the size of the family, occupation, current ownership status, monthly surplus income, proof of identity and savings record.

From the beginning, by comparing our data with those of official or private sources, we confirmed the answers our interviews produced were indeed much more accurate than those given to a government or academic survey done by interviewers unknown to slum dwellers.

Answers to questions are recorded in a tablet to avoid transcription errors during the personal interview. Photo: Ashoka HFA India

We employed slum residents and community workers and trained them to get honest answers and to use their cell phones to photograph the interviewee in front of his current home for accuracy and later identity verification (potential home and loan customer). Immediately upon completing the interview and photos, the worker inputs all information into a hand-held digital tablet with formatting to minimize human error, and sends it to a central data analysis point in Ashoka Housing for All India office (as in photo below).

Such rich and relevant data brings private real estate developers and financial institutions on board to kick-start the new affordable homes project and enables the next step in which the builder sources the land and the developer designs the initial layout. Based on the location and the layout, an estimate of cost and size of the house is calculated. Stage 2: Client Profiles Identify Customers Housing Needs. The level of detail makes all the difference: Data collected on new parameters gave specific guidance to architects and developers about their target market and ideal customers. They then can refine their building plans to include smaller apartments for single family members, ones with more bedrooms for extended or larger families, and ones with parking or other special attributes for those who need to park their rickshaw nightly or accommodate a small home business.

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During this second stage, we publicize information about the new affordable home development planned project across different slums near the projects location. We then do a survey of interested customers to gather the details such as current assets, availability of relevant documents and access to finance. We use this survey to convey their preferences on desired number of rooms and estimated monthly income to builders. Their responses help architects tailor the design and layout to suit customer needs and assist the financial institutions pre-approval of a loan, thereby increasing successful marketing and sales. The information we capture also reduces the cost of business development and customer acquisition to a fraction of what it would be otherwise, making the process financially and operationally viable for the developers and financial institutions.

they identify and target the right customer pool at a nominal cost. Their familiar faces help elicit accurate and sensitive information that often is not shared with government officials or professional survey takers who arrive in slums.

The benefits of training slum dwellers themselves to help gather data gives them new income, develops technical skills and informs them about affordable housing options. Instead of being outsiders or passive recipients of new products appearing on the market, they become purveyors of information to neighbors and family members and active participants shaping the outcomes of the new housing products developed. This has tremendous positive outcomes in their self-esteem and their future willingness to assert their needs and preferences as included economic citizens. We asked them how hard it was to work on the tablets and Android app, and the answer this community surveyor in Madurai gave us was repeated by all those we trained: We all have touch phones, so it is very easy to use this device. Also, we are able to do many more households in a day because of the device. Pen and paper surveys take lot more time. The results of their work convinced microfinance institutions, private companies and realtors to invest in new housing. They

The vital role of including local citizens in data collection. Citizen organizations, with their deep experience, trust and understanding of the community, play a pivotal role in the entire two-stage process of data collection. In slums, where a wide range of income groups live side by side, 38

were able to better plan and make quick decisions for new sites to develop and finance. Technology as an powerful enabler. Traditional pen and paper surveys left too much room for inaccuracies and inefficiencies to creep into the system. Instead, we designed an Android cloud application that was synched automatically to hand-held, tablet devices.

in the form of graphs, tables and photos. The technology made the entire process efficient, accurate and extremely cost effective. Plus, it served to efficiently qualify new customers for microfinance housing loans, as much of the verification was already in our files. Accurate Data Makes a Difference. Data accurately collected and analyzed from the ground up are providing a voice to an otherwise invisible and ignored business segment. The quality of the data also is binding different stakeholders into a Hybrid Value Chain model, providing real value to BoP customers and businesses. A prominent developer in Bangalore reported that: When I saw the profiles and the surplus income of families, it helped me to connect it to the kind of project we wanted to develop. It is this data that gave us confidence to take the first step. The hybrid survey model is not only valuable, but extremely scalable and cost-effective. We have already received inquiries from several countries interested in learning how to use our survey system. For example, we will soon travel to Mexico to train CEMEX (a global building materials company) and the citizen organizations working at the community level, to implement a similar solution for their affordable housing initiatives. Clearly, accurate data can transform the informal housing sector slum dwellers into formal market customers.

We trained community workers and citizen survey takers to carry these tablet devices into the field for collecting the data. Along with the data, they snap photos of the customer and of his/her relevant documents. The tablet devices also record the exact location of the current residence using the GPS technology. This acted as further proof of residence. As the data is instantly synched, it helps Ashoka HFA staff to constantly monitor the quality of data, even from a remote location. The data thus captured is presented to builders, architects and housing finance institutions

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Establishing Quality Standards for Affordable Housing

By Martina Wengle
Buying a home is a lengthy and stressful process for everyone, rich or poor. But BoP customers face a tougher road to ensuring their investment buys the best quality they can afford. Many recent arrivals from rural areas, they have little prior experience buying a new urban home, few relatives to share their home-buying lessons and even fewer who can afford a lawyer or mortgage banker to advise them about contracts or to recommend architects, master contractors or licensed inspectors to evaluate a building plan or construction quality once built. Public information about how to judge home quality and price is rare. Often the only information they see is the marketing publicity by the private builders themselves. enough for a small down payment. There is no margin for error: the loan they get for its purchase stretches the limit of their savings and their credit (if they even can get credit). Once bought, this investment must be a tangible and lasting asset that grows in value for many years. BoP customers are under great pressure to maximize the value of a real estate purchase. In short, they are putting their entire life savings at risk. What advice, technical assistance, standards for materials and building requirements are available to guide them? Who is responsible for developing and enforcing building standards? If customers are sold a home with sub-standard construction or poor quality materials or their next-door neighbor self-builds an unstable structure posing a danger to their home and family what recourse do BoP citizens have? To answer these questions, Ashokas Housing for All India reviewed the laws, regulations and enforcement governing affordable housing. We wanted to be sure that the affordable homes Ashoka HFA was planning indeed met appropriate quality standards. What were the definitions? What did builders, architects, engineers, urban planners and government officials see as minimal required quality benchmarks? How do we protect the

And yet, the investment to buy an affordable house is a greater risk for BoP families proportionate to their income and assets. It represents years of sacrifice to have 40

consumer and the home-builder from unsafe quality? How do they get help enforcing appropriate quality construction? We found a labyrinth of confusing and often contradictory mandates, which were not enforced uniformly or adapted to the needs of BoP communities. There is no official, consistent definition. For example, our partners classify affordable housing as costing below INR 10 lakhs (roughly US$20,000). But we found developers advertising affordable new housing as high as INR 40 lakhs (roughly US$80,000). This price mismatch means that many houses labeled affordable are totally unattainable for BoP households, and what the $80,000 affordable houses offered (size, materials, quality) had no relation to what those seeking $20,000 affordable houses would receive. Instead we found that to be affordable, quality is often sacrificed in exchange for lower costs (for the customer) and higher profit margins (for the builder or developer). Customers may see a model home that looks great, but when they are ready to move into the new homes built in the project, they often encounter poorly designed, cheaply built dwellings, which often needing costly repairs quickly and, therefore, their purchase is ultimately not sustainable. As housing expert architect and chairman of KSA Design Planning Services, Kirtee Shah, notes, A new house is a very big investment for low-income customers; they cannot afford to buy bad quality.1
Statement at AshokaHFA India workshop on Best Practices in Bangalore, July 2011.
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Experienced architect Kirtee Shah on site of new housing being built in India, Photo: Ashoka

A Step Toward Affordable Housing Standards. To remedy this situation, Ashoka HFA India looked for ways to provide both builders and consumers with trustworthy guidelines for quality in affordable housing. The major challenges were: How to provide good standards that are clearly enforceable, ensure safety and protect consumers without adding complex and slow bureaucracy? How to ensure quality without pricing affordable construction above BoP market limits? How to get technical information about standards, and their processes for recourse, widely shared in understandable terms and into the hands of BoP consumers? How to ensure a process that was winwin-win: good for public safety and security, good for BoP households and good for home builders? As our hybrid value chain model meant business-citizen collaboration, we searched for the most respected and experienced expert on standards and certifications 41

processes internationally, and ultimately agreed to partner in collaboration with TV Rheinland to create a set of quality standards, benchmark measures and a rating system to be applied to affordable housing throughout India that reliably balances housing quality and costs and includes home owners as well as builders and government officials in the process. The Certification Process. The certification we are developing is not a one-time stamp of approval. It is a process that starts with pre-building and lasts over time, involving multiple stakeholders: Stage One: Developers at the start of a project apply to accredited certification agencies for a rating. The measures used in the rating system include: adequate site selection, construction processes and materials, design, thermal comfort, energy use, waste disposal, amenities, accessibility to the low-income populations employment and processes to involve consumers in the maintenance of the building. Developers receive an initial rating after a review of documents and construction plans. They can use a favorable rating to market their offers. Consumers looking for better housing options can check the ratings for sound advice about which offers the best quality for the price. Stage Two: Once the first consumers have moved into a new housing development, they begin to provide feedback on aspects of its quality. These will affect the overall final rating for the building project. It becomes a strong incentive for developers to maintain good quality (or suffer bad publicity from 42

a poor overall rating), encouraging them to complete the building process consistently well, not just for the few introductory sales. Stage Three: After final certification is given, the process includes longer-term monitoring and improvement at its core. Multiple affordable housing stakeholders developers, citizen organizations, housing finance institutions, research organizations share their ongoing findings on the accuracy of the ratings, where they are working well, and where they need clarification or improvements. This multistakeholder vigilance ensures transparency and trust in the ratings, and set up processes for solving problems that may arise with an emphasis on collaboration, rather than conflict. Standards Benefit the Affordable Housing Sector. Affordable housing consumers will be able to make informed buying choices using these ratings. Armed with this accurate information, they can balance quality with affordability and gain confidence and power as full economic citizens. It is a large step: instead of remaining victims of fraud, false advertising or few good options, they will move from being underserved informal sector slum dwellers to consumers exercising their choice in the formal market. They establish patterns that will work as they seek increased income, better public infrastructure, health and education services shown impact favorably on their familys future. Private developers will lower their perproject planning and start-up costs, since the standards and measures will already

have been tested and established. They can innovate, but the basic requirements and costs will be predictable for permitting, pricing and marketing purposes. They will also have clear guidelines for their construction workers and foremen to oversee, making it cheaper and easier to enforce quality. Developers with good ratings will quickly gain a competitive advantage in the market, enjoying higher demand for their units, as potential customers will trust (and use word of mouth to spread) the quality of their product. Government agencies will save time, money and people while improving the affordable housing sector by adopting these standards, as stakeholder input for the rating system is key. These savings allow government agencies to focus on enforcing the worst cases of fraud or unscrupulous builders, and on positive public policy for urban planning, infrastructure improvements, etc. Increased collaboration will create more housing options and higher profits overall, as consumers, citizen organizations, finance institutions and builders will all be using the same terms and expectations for quality, options and costs. As this information is co-developed at the project conception stage, it will lower the transaction costs overall for consumers, MFIs and builders, and will speed up the time to move the new project from vision to completion a virtuous investment and cash-flow cycle for developers and potential home owners.

Working Toward A National Standard. Key to these standards becoming respected and widely adopted, of course, is the fundamental role played by government to endorse and enforce them. Following an Ashoka HFA India workshop held in July 2011 to introduce this joint project to develop affordable housing standards, Aruna Sundarajan, Joint Secretary of Indias Ministry of Housing and Urban Poverty Alleviation said, I am very happy to see this initiative. It is very important for the Government of India to incorporate the learning from other players in the field in order to tackle the tremendous poor quality of housing in India. We involved local and national government officials from the beginning of developing the quality standards and certification process. These carefully formulated measures and processes will contribute to a better national policy and government effectiveness in the affordable housing sector, helping it demonstrate how it supports closing the huge affordable housing deficit that grows each year. All these steps and stakeholders are critical as we aim at changing policy, mind-sets and the reality of what gets built, so that ultimately, affordable housing is a good source for business growth of its builders, improves the urban landscape for cities and fulfills the hopes of BoP consumers to attain their dream homes.

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India community organization, SPARC, a citizen organization partner in Ashoka HFA India, convenes clients in need of affordable housing. Above, they explain a private developers plans for new affordable housing. They answer clients questions and elicit their housing needs, and match them with the right housing option. At this meeting, they help clients understand the architectural plans and layouts, costs of buying a new apartment or home, financing options and ways to document their incomes so they can qualify for a home loan. This meeting has multiple results: marketing more effectively than the developer can, SPARC is a key player in the success of new housing developments AND provides multiple services based on the needs of their BoP clients to leverage their assets to purchase housing of their own. Photo by Martina Wengle for Ashoka.

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NECESSARY BUT NOT SUFFICIENT

FINANCING:

Impact Investing in Affordable Housing:

By Aden Van Noppen

Youve read all the figures by now: The majority of people live in cities and over one billion live in slums, a figure that will triple by 2030. Urban areas are growing much faster than can be absorbed and managed, causing demands on services and infrastructure that massively outstrip supply. In many developing world cities, this leaves the majority of residents with little option but to live in slums. It is clear that increasing access to highquality, low-cost housing has a profound impact both for the individual and society at large. Yet housing rarely comes up in conversation among social enterprise circles. We hold panel after panel and write blog after blog about the new innovations in health care, energy and agriculture, but we seldom hear about housing. At Acumen Fund, we believe it is high time for this to change and for the social enterprise sector to recognize the need to catalyze and support affordable housing across emerging markets. But we know there are forces working against us that cause housing to be treated

like the forgotten stepchild of the social enterprise sector: Housing rarely fits neatly into the social enterprise box. As impact investors, we look for investment opportunities with strong entrepreneurs, attractive financials and clear, scalable social impact. Housing projects require many different partners, may not have one clear entrepreneur at the helm, often rely on subsidy to be truly affordable and dont see a finished product on the ground until many months or even years later. Yet does this mean housing isnt worth supporting? Or does it mean that perhaps we should evaluate housing deals differently than we do our energy or water investments? Housing is not sexy, which unfortunately makes it easier to ignore. It is a sector characterized by loud construction sites, massive delays and legal and regulatory messes. In fact, we often make housing even less sexy in order for it to be affordable, taking out the frills and extra design finishings to bring down the price. Unlike new medical devices or agricultural inputs, when someone purchases a home, 45

regardless of their income, they want to put their savings into good old-fashioned bricks and mortar, not shiny new technology that is unfamiliar, or unlike the homes of their middle-class counterparts. Yet this should not mask the need for true innovation in business models, end-user financing and creative methods of reducing costs while maintaining quality. Housing is slow. We tend to be seduced by rapid growth. We want to see large numbers of people reached in short amounts of time, understandable given the scale of poverty and the challenges we are working to address. Housing is often out of line with this emphasis on scaling quickly. Scale looks different in housing, and so does impact. Using our preconceived notions of how scale should happen as a benchmark for success can mask real impact over the long run. The impact of providing a home is deep and profound, but it takes time and each individual project is unlikely to reach the sort of numbers we see in energy, health care or agriculture, sectors that typically require much lower touch models to deliver their services. Truly low-cost housing can rarely succeed alone. It usually requires support, often in the form of partnership with government, subsidies or soft loans. These are things the social enterprise sector tends to shy away from because we may not consider this a truly financially sustainable model. But in reality very few social enterprises work in isolation from public sector support or without some form of subsidized capital. This reliance may be more explicit in low-cost housing because it is so capital 46

intensive and because without some extra incentive, there is a strong pull for both developers and financiers to move upmarket and make a quicker, easier buck. However, this doesnt weaken the need for business models that make financial sense. Entirely government-led housing projects do not benefit from the market as a listening tool to develop more appropriately designed programs. Instead, we too often see governments allocating free housing to slum dwellers, which they promptly rent or resell and move back into the slums. Therefore, increasing the supply of housing in a manner that is in line with the preferences of the poor and their ability to pay requires a foundation in marketbased approaches. It is for precisely these reasons that lowcost housing needs patient capital. In many of the markets where we work there is recognition of huge unmet demand for affordable housing, but little willingness to be the first mover. Creating new categories of housing takes guts and creativity, and few are jumping in without examples at which to look. But once those models are there and working, we are confident that the sector will be catalyzed and many, even traditional, real estate developers will begin moving down-market. This is starting to happen in India, especially following the work by Monitor Inclusive Markets to demonstrate the attractiveness of low-cost housing to developers. Now we are getting to a place where we can actually call affordable housing a sector in India. We have yet to get to this point in most of the other geographies where we work.

In Kenya for example, where I am currently working to build Acumens housing portfolio, the affordable housing deficit is 40 percent, and 60 percent of urban residents live in slums. There is no home on the formal market below $20,000, a level completely unaffordable to low-income populations. Only 8 percent of urban Kenyans have access to housing finance and there are currently only 22,000 active mortgages in all of Kenya. This is not because Kenyans lack the desire to own a home: indeed, home ownership is a central part of the culture here. And it is not because it is impossible to build cheaper homes. Developers and financiers are watching this market carefully because they recognize the huge potential that has yet to be unlocked. But little is happening on the ground because there is nothing to point to as an example of success, to help reduce the perception of risk and allow those waiting and watching in the wings to jump into the market. Therefore, it is imperative that social investors such as Acumen Fund share some of the risk with those few and far between individuals who are working to develop new solutions. In doing so, we are likely to catalyze the supply of a new category of housing. Making game changing investments such as this is the ultimate success for investors like us, perhaps even more so than scaling one individual enterprise. It is for these reasons that Acumen Fund invests in housing enterprises. We believe that the impact of providing a safe, healthy, dignified home is undisputed and the need
Former slum dwellers outside Nairobi create a new town, Kaputei, that will provide safe, affordable and legal housing and opportunities. Led by Acumen Funds Jamii Bora, the fastestgrowing microfinance institution in Kenya, this new eco-town is planned to house 10,000 people. Photo: Acumen Fund.

for patient capital clear. If we are trying to improve the lives of the poor, we cannot ignore housing, especially as the cities where we work expand so rapidly. If we ignore housing, we are mistaking the forest for the trees. Looking closely, we find that housing is at the root of many of the other issues we are working to address: the lack of quality housing options leads people to live in areas with reduced access to clean water, sanitation, reliable and healthy energy sources and increased exposure to disease. Acumen Fund has made seven investments in housing in three geographies. Our focus is two-pronged, investing in the supply side (directly increasing the supply of affordable homes) and the demand side (increasing access to affordable end-user finance). 47

We are also closely watching what is happening with affordable building materials and slum upgrading, as these are important parts of the low-cost housing ecosystem as well. We have invested in three low-cost housing developments, three housing microfinance products, and one enterprise that is enabling the urban poor to secure land rights and titling. Saiban, one of our investments in Pakistan, provides poor urban squatters with access to legal housing and home ownership. One of their developments is now a thriving community of 30,000 people. Saibans model was also the catalyst for Ansaar Management Company, another low-cost housing developer in Pakistan and an Acumen investee, and it sparked the Punjab governments interest in affordable housing. We need more impact investors to join us in the fight for affordable homes. It may not be as sexy as some of the other sectors where we put our money, but if we want to support work that will result in significant impact, yet may not have a proven track

Saiban is a nonprofit housing organization providing urban squatters and low-income groups in Pakistan access to affordable home ownership. Its newest project, Khuda-Ki-Basti-4 (KKB-4), is expected to house 2,000 people. Photo: Acumen Fund.

record, we need to give low-cost housing a serious look. The housing sector is in desperate need of more entrepreneurs and investors with the patience, creativity, and risk appetite needed to increase access to quality, affordable homes.

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Self-Construction: The Value Proposition for Technical Assistance

By Rakhi Mehra and Marco Ferrario

This dwelling, before remodeling, housed a family of six. Photos: mHS.

The megacity of Delhi, India, is home to more than 18 million people, 70 percent of whom earn between US$150-$500 per month and live in low-income settlements (urban villages, resettlement colonies, slums, and unauthorized colonies). Selfconstruction or incremental housing is rampant in these colonies. It is more the

norm than the exception across India: owner-built or improved housing is 67 percent of affordable homes and rentals for millions of urban dwellers. Although these settlements vary in density, size of plots, kind of structure and property documents, they share a common characteristic: the poor structural 49

quality of the units. Those building the most housing in India are those with the least access to finance and professional technical assistance. As a result, these urban households are living in precarious structures, with poor lighting, hygiene and safety conditions. Sadly, the debate on housing in India lacks the larger perspective of creating inclusive cities through the principles of urban design and planning. There is little agreement on the need to bring together interdisciplinary skill sets to address the problem. Highly subsidized government programs are not going to solve the problem and private efforts will only work where land is extremely cheap often on the outskirts of cities and away from livelihoods. The founding story: Passionate to contribute to a better future for these households, we founded micro Home Solutions (mHS) on three parallel principles: community, sustainable design and affordability. Our task began by understanding the large self-construction market and finding or creating the design solutions that could be innovative, viable and scalable. After the first months of field research and studies, we faced an uphill task: how to enable safer and more affordable construction that is both valued by the households and aligned with best construction practices by local technical assistance (TA) providers? The pilot project. mHS conceptualized a housing product and service that would bring customized design solutions and access to finance to households in lowincome settlements. In partnership with 50

BASIX, a large microfinance institution, we developed a home-improvement finance product (US$6,000) and provided access to customized engineering and architectural advice. Our aim was to bring safety to home structure and, through better layout design, improve ventilation and lighting. The client would pay a fee of 3.5 percent per loan to cover the costs. The pilot began in Mangolpuri, a lowincome urban settlement in Delhi where residents are given a 99-year license by government as part of a slum resettlement program. A typical plot is a meager 21 sq. meters with an opening in the front, and with neighbors on all three sides. With ground floor quickly reaching its maximum capacity, many households are adding rooms vertically for family expansion or income from rentals. Is safety a valueproposition? We learned quickly that households have emotional investment in their house that overrides safety issues. The faade and aesthetics are as important as its functionality, or its role in safety or hygiene. For example, many have used ceramic tiling to cover the exterior facade, and marble floors for the kitchen, even at the cost of not finishing the full construction.

When colleagues from Mumbai came to evaluate our work and met the residents structural safety ranked low among their list of priorities. Neighbors were quick to dissuade our clients from shoring up weak infrastructures, pointing to homes that had been standing for the last 20-30 years, asserting (without facts) that the probability of an earthquake is low. In addition, safer structural strength often means Rakhi and Marco explain the value of technical assistance to potential clients. a bigger column that compromises the precious cement concrete frames that in most of the floor space inside the house, a cut that case are completely inadequate to support many residents are unwilling to take. upper floors. These structures may work Even though not a high priority for their well to sustain vertical loads, but have investment, many residents complain of no chance to endure lateral forces, for leaking roofs and continuous and costly example, earthquakes or strong wind. We maintenance efforts. Regardless of their didnt yet have a solution for retro-fitting concerns, their perceived risk or safety existing buildings to make them safer, so concern is not imminent enough to make at first, we only worked with households the investment. building from scratch, or families living in Among the families who participated in the one-floor structures who were ready pilot project, there is now some pride in to demolish it. differentiating their house as safer from The TA package included two initial visits, the others. This was especially true after one to understand the household needs Delhi experienced three tremors in the last and preferences, and a longer meeting to two months (Delhi is located in Earthquake develop a customized solution along with zone 4 out of 5) and an unfortunately input from the clients. Families were shown collapse of a 6 story building in East Delhi 3D images, and actual layouts and plans. that killed over 70 renters. During the pilot, the most intensive part of The TA package. The majority of the units the TA was the monitoring visits. Initially are three and four stories, built on single programmed bi-weekly, it soon became brick masonry walls or with reinforced clear that this was the most challenging 51

part of our project and eventually our visits were almost daily, in particular during the foundation/plinth laying stages. The mason is the driver of the construction process. There was initial resistance on the part of households and local masons to adopt structural safety measures in selfhome-construction. Masons are highly respected in these communities. They also have a large network that has developed over generations. Since the clients select their masons, our team was seen as outsiders and it was difficult and foolish to suggest that the current construction building process was not safe. Bringing innovation to design. Given the initial resistance, we had to make sure the technical solution catered to the poor families need to prioritize space and cost. A large part of the effort was the investment in technical R&D that would lead to the design of a house that is safer, would not require a larger investment, uses local materials (such as bricks, cement) and can be constructed by a local mason. This

did not come easy, even as we consulted more than 18 engineering studios in India and Europe. Eventually, several masons were slowly co-opted into designing the solution. We also initiated community workshops to begin training and increase awareness on construction practices in these neighborhoods. Making TA mandatory. We also pushed BASIX to make the provision of TA mandatory to get a loan for construction finance. This was key, since making finance more affordable without ensuring structural safety would only encourage unsafe housing and put more lives at risks. Given the lack of acceptable building codes and outreach of municipal regulation and enforcement, it was critical the financial providers provided the incentives to make TA mandatory. Scaling up. Making the provision of TA commercially attractive for local architects and engineers on one end and valued by the households on the other continues to be the most challenging part of the business proposition.

Inside view of a home where six people sleep and store everything.

Inside of the same home after TA: more light, order, storage space and privacy.

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Despite the high level of awareness and information we brought to communities about safety, hygiene and good construction, word of mouth by satisfied customers was our best marketing strategy. Referrals by masons and previous customers are key. We also learned that along with advice on safety and construction, the households were interested in other technical services, such as cost estimates, layout designs, and eventually valued the monitoring and problem- solving provided by the team of professionals. We know that the system we developed needs to leverage the economies of scale. The drivers for a viable delivery model would be to centralize the R&D efforts, standardize the technical designs and develop a monitoring plan that comes with checks and balances in place. A more informed clientele and a favorable regulatory environment would go a long way to support scaling these best practices.

Safer bricks and mortar construction for their new home.

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Housing Support Services

By Steven Weir and Susana Rojas Williams

Access to housing finance and secure tenure have been shown to be the most effective catalysts for self-built, incremental housing improvements. But while they are essential, even together, they are not sufficient to improve the living conditions for many of the worlds low-income populations. Consider: Better access to housing finance would not have changed the devastating impact of the recent Haiti earthquake on the poor. Those who invested in heavy concrete roofs to protect their families from hurricanes were crushed by the earthquake. Land rights and secure tenure have proven insufficient to ensure effective housing improvements. Studies suggest that families delay and limit investment in their self-built home improvements when they fear eviction. This has led some in the development community to promote secure tenure as a panacea for catalyzing housing improvements in urban settlements. It has become the new low-cost version of the Sites and Services strategy that was accompanied by secure tenure.1

Nearly half of the population in the developing world lives in an urban context; one-third of them live in informal settlements (830 million). While incremental self-built and improved housing has been the principle strategy used by the urban poor, there is a growing recognition that, without adequate access to better information and support, this self-managed approach is not only more costly and less efficient, but can have devastating consequences with the increasing encroachment and densification in high hazard areas. In Haiti as elsewhere, lack of land use planning, clear and enforced building codes, a tortured building approval process, poor construction material quality and low technical capacity among construction tradesmen all contribute to the perfect storm that results in low-quality construction in high-risk areas that continue to prove devastating for families without adequate access to technical support. Additionally, incremental home improvements are often inefficiently sequenced or constructed using materials that cost the family more to maintain over the lifecycle of their improvement than an equally available material would have cost. Without access to adequate technical information and assistance on how to improve their dwellings, affordable, safe, healthy housing remains only a dream for the worlds poor.

The Site and Services Programs of the late 1960s and 1970s followed self-help building principles and incremental construction process in squatter settlements. Under different modalities of these programs, governments facilitated access to land with secure tenure and basic services to families, who then built their housing incrementally. These programs were supported by many international agencies.
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Note: The Housing Value Chain shows the main components needed for a household to increase access to adequate housing. It is not a linear process and its sequence varies based on local conditions.

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With an estimated 70 to 80 percent of all affordable housing upgrades attributed to self-help improvements, the opportunities to radically impact housing outcomes are enormous. Most reading this blog are protected by regulatory frameworks enforced by local governments. We have income-appropriate housing standards, codes and options. If housing is a human right for all, how do low-income urban families access the information necessary to secure adequate, affordable, safe shelter where these protections do not exist? Housing Support Services (HSS) is an emerging business strategy that can provide families with access to necessary technical and financial information and resources to maximize the impact of their housing investments, that can leverage tenure and financial resources. HSS can be an especially valuable support in the urban incremental housing process. Habitat for Humanity International (Habitat) defines HSS as a demand-driven service or product, designed to enable a household to reach adequate housing quality standards or to make health, safety as well as livelihood-related improvements. These three highlighted points are critical for HSS success: Demand driven means that the families (not an NGO or a government agency) choose the housing improvements they will pay for based on their means, needs and circumstances.

Housing quality standards are industryrecognized building guidelines that ensure health and safety. Standards can help families identify and prioritize improvements that can have the greatest household impact. Habitats standards, for example, include quality indicators for housing design, adequate space, durability, secure tenure, water and sanitation.2 Livelihood-related improvements recognizes that specific housing improvements can have a direct positive impact on household income through an extra room to rent or an adequate space for a home based industry especially in an urban environment. Note: the HSS definition does not specify who delivers these supportive services. HSS and the Housing Value Chain. An analysis of the housing value chain helps to identify gaps where demand-driven HSS can provide the most leverage (see Chart bottom of page 55). HSS can be divided into two main categories: Non-Construction. Services that enable efficient and effective household and community shelter and infrastructure related improvements. These are often in the pre-construction phase or prior to a new incremental improvement Construction. Services directly associated with shelter and infrastructure construction. A detailed summary is included in the box at top of page 55.
HFHI Housing Quality Standards and their quality indicators have been drawn from a variety of globally recognized housing standards including the International Residential Building codes, UN-HABITAT, and SPHERE Guidelines.
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HSS can provide advice on the most effective sequencing of multiple incremental improvements that provides the highest return for the investment eliminating waste in future upgrading. It also enables a family to prioritize improvements, deciding between disaster resilient construction or an additional space. This advice can also better expose families to the impacts of health-related improvements: for example, water and sanitation improvements alone can provide 75 percent of the impact of providing all five Housing Quality Standards in some environments. In Mexico and El Salvador, state government-promoted slab and roof campaign eliminates some of the greatest insect borne health risks such as Chagas disease transmitted by Reduviid or kissing bugs that live in dirt floors and thatch roofs. Window, door and breezeway screenings can reduce malaria while smokeless cookers reduce the incidence of lung diseases and safety concerns for women forced to gather wood in pre-dawn conditions. All of these options can all be explained in a pre-construction consultation with links to additional resources as families decide how to prioritize their shelter investments. We believe that the private, public and civil society sectors each have a valuable role to play. These services can be offered as stand-alone or bundled; and offered through a subsidized or fee-for-service model.

The Relationship of Finance to HSS Studies suggest that between 20 to 30 percent of microfinance institution (MFI) clients use portions of their small business start-up or production loans for housing improvements. While MFIs see this as leakage for non-productive activities, productive housing should be viewed as both a livelihood strategy as well as asset creation, especially in urban settlements. Home-based industries and small businesses are often run from a familys home and in many cases a spare room for rent is itself a livelihood strategy for the family. Deferred maintenance can also impact health and have a negative impact on productive work days outside of the home. Families prioritize home improvements for a variety of reasons, providing a cost effective opportunity for low-income financial institutions (LIFIs) MFIs, credit unions and cooperatives, village savings and loans, etc. to provide value-added bundled services. Distribution channel at scale LIFIs have the distribution capacity at scale to connect households to the HSS information, knowledge and construction technical assistance needed to improve incremental housing improvements in health and safety. In Nepal, for example, action literacy programs have reached over 100,000 clients in village savings groups and cooperatives. By adding an additional home improvement reader to their current literacy series, accelerated impact has been achieved. 57

Habitat Resource Centers link communitybased HSS resources. In many countries Habitat has partnered with LIFIs to provide disaster resilient construction and financial education as a part of a bundled housing finance package; often delivered through Habitat Resource Centers (HRC).

Other services that HRCs can bundle with housing finance providers include: market information on local material suppliers and service providers links among vendors and suppliers to potential clients information on integrated service providers, for example, masons act as architect, engineer and materials supplier home improvements demonstrations to showcase cost-effective technologies leveraging small business and livelihood development into a provider network. Examples include small family businesses training and certification of masons and skilled workers, linking them to housing finance clients Web-based HSS knowledge strategies. Based on demand from LIFI networks, Habitat will pilot e-services through web-based beehive centers across India that will build on existing financial education modules. New e-knowledge products include tech sheets with basic construction information previously provided through the local HRC network model, and now digitized for an e-knowledge platform. Global peer learning program. Based on these early successes, Habitat has recently launched a three-year, multicountry global learning initiative to identify best practices and develop sustainable business models for demand-led HSS. This initiative kicked off with a global workshop in Nicaragua to learn from PRODEL, a housing NGO globally recognized for their high quality HSS. PRODELs financial

Members of a savings group in rural Haryana, India, meet to repay loans and discuss more community projects including housing microfinance options. Photo: Habitat for Humanity International.

These technical support service centers are demand-driven local networks supported by Habitat and provide HSS at regional and community locations, as well as in disasters, through mobile training units and temporary facilities. A full range of nonconstruction services can also be provided. In Chile, for example, Habitat provided legal assistance for land tenure and permit processing, enabling households to access government housing subsidies. 58

partners charge client-level fees tied to their housing finance products for construction technical assistance. Their research shows that HSS divide into three categories, each with different HSS options, service providers and cost structures: Level 1 Non-skilled maintenance and repair requires basic written and graphic handout materials on topics such as how a homeowner can hire and oversee a contractor, access to HSS information in the community or over the web, and disaster resilient construction tips where appropriate. Level 2 Skilled support services require a trained mason or carpenter, electrician or plumber, but are not technically or structurally complicated projects. Level 3 Complex projects require structural work that should be planned, executed and overseen by trained technical experts, such as adding an additional floor or house extension in a high hazard zone. Interestingly, PRODEL found: Level 1 represented nearly 80 percent of their loans and that non-skilled HSS were sufficient to produce higher quality affordable improvements. Level 2 represented 18 percent of loans. Level 3 represented only 2 percent of loans requiring complex technical HSS.3

If these prove representative globally, LIFIs should be able to distribute basic shelter information to borrowers at each level at very low costs, while developing a fee schedule for Level 2 or 3 loans, which are far fewer in number. Limiting services to information distribution reduces costs, reaches all clients regardless of construction complexity and overcomes LIFIs reluctance to enter what they perceive as a non-core new business. By bundling HSS with housing finance, Habitat has achieved an added community benefit of making a market for quality housing service providers. As market demand for their services increases, a full range of local small businesses and feefor-service providers develops, increasing the need for skilled labor, wholesale and retail suppliers and construction specialists, providing income for community-based

www.habitat.org/TheForum/english/support/Kelley_ Grant.aspx
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Concrete pillars are loaded for transportation from a Bangladesh Habitat Resource Center to nearby home sites for rebuilding after Cyclone Sidr, 2007, Photo: Habitat for Humanity.

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organizations who provide HSS to lowincome constituents. The Payoff Housing Support Services, especially when bundled with access to housing finance, can provide families with the necessary technical and financial information and resources to maximize the impact of housing investments that reduce their risk, improve their health, livelihoods and financial assets. The lack of safe water and sanitation, high density conditions, poor construction practices and increasing climate change impacts, threaten millions of the most vulnerable urban citizens. Without HSS, the problem of poor construction choices is greater than efficiency or effectiveness. It is now life threatening, as informal settlements around the world become more overcrowded, forcing families to settle in high hazard zones, exacerbating the range of deplorable living conditions. While some assert that the poor do not appreciate nor pay for housing support services, the experience of PRODEL in Nicaragua, Habitat and others suggest that this is not the case when these services are appropriately aligned with varying levels of construction complexity as well as with families demands, who understand the financial, health and safety impacts. If we are to work effectively in an increasingly urbanizing world and have influence at scale, we will need to develop effective sustainable housing support services. Financial institutions are focused on providing financial products. Housing NGOs are focused on providing quality housing. Housing Support Services may be the way that these sectors meet in the middle, providing access to information to 80 percent of the households globally who improve their own homes each year.

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From Loans, to Asset Building, to Economic Inclusion

By Irena Shiba and Patrick Kelley

For more than two decades, the partnership between the CitiFoundation and Habitat for Humanity International (Habitat) relied heavily on a one house, one family, volunteer house-building model. As a result, more than 500 Citi-sponsored Habitat homes were built with the help of Citi volunteers. While this is no small feat, we know this it is simply not enough, nor is it a sustainable solution. The need among the worlds poor far exceeds what can be achieved through house-building programs alone. A shift to a strategy that increases the supply of financial products and services that accelerate financial inclusion is urgently needed. Our two organizations have already started working together to make this shift. With increasing demand for both access to affordable housing and appropriate financial products across the globe, both Habitat and Citi have realized that an enormous opportunity exists: one that provides products that help low-income households build assets that can be used to improve living conditions and, more importantly, to join the financial mainstream and accelerate financial inclusion. The growth of microfinance now provides savings, credit, insurance, and remittance services to nearly 200 million of the worlds poor, and it has created a platform of varied institutional types that we believe are ready to begin taking on new strategies to help

Edwardo Pereira, a copper miner in Los Andes, Chile, works outside his familys home. The addition he will build onto a Habitat house will mean an extra bedroom and a slightly larger kitchen. Photo: Steffan Hacker

clients build assets that improve their living conditions. In fact, expanding the range of products offered to the base of the pyramid was rated as the second highest priority by financial inclusion industry participants in the Center for Financial Inclusions recent publication Opportunities and Obstacles to Financial Inclusion.1 This, coupled with research well-documented in Portfolios of the Poor, affirms that property and housing were the first or second investment priorities for low-income individuals surveyed in Bangladesh, India and South Africa.2
Garveda, Anita and Rhyne, Elisabeth. Opportunities and Obstacles to Financial Inclusion(Accion International Center for Financial Inclusion, Publication 12, July 2011) p. 39.
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Collins, D. et al. The Portfolios of the Poor (Princeton University Press, 2009) p. 108.
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Even more compelling is the fact that already we see up to 30 percent of microenterprise lending is used for clients shelter-related needs.3 This is not surprising, as a home often plays a prominent role in household livelihoods, frequently serving as a warehouse, production site, rental rooms for tenants or as a sales windows. Armed with this knowledge, we conclude that to make a catalytic shift, we must focus on creating the next generation of microfinance products.

can have significant relevance in the housing sector. Property, housing and infrastructure can be useful and a form of savings. The poors ability to save, and their desire to do so, is increasingly documented in research and practice. In fact, the outrageously high costs they incur indicates the value households place on the ability to save. Citi Foundations experience that savings is a critical element to establish longterm financial security and a way for the poor to participate in the economy gave us an opportunity to link savings closely with household plans to build assets and improve living conditions. Habitats focus on moving beyond microenterprise credit and designing new housing microfinance products started with the Citi Foundations support in Latin America. This innovative asset-building approach is now advancing our work in Asia Pacific. Here is how we are seeking to test this new approach in these regions.

Guatemala City, Guatemala Juanita Alvarado and Habitats Center for Innovation in Shelter her grandson Javier stand in front of their home. and Finance. Habitat launched the Center Photo: Ezra Millstein.

We must take into account the demand for new products and the need to innovate to reach scale. We already know that savings has a special role in improving ones living condition in other sectors, and it likewise
This is noted repeatedly by those working in affordable housing and microfinance: see posts in this book by Steven Weir and Susana Rojas Williams, Sadna Samaranayake, Ashokas video about its housing work in Brazil highlighting low-income families need of appropriate housing for small business development, and their few housing finance options to build it.
3

for Innovation in Shelter and Finance (CISF) to work collaboratively with a wide variety of actors in the public, private and the philanthropic third sector, many of whom have not yet focused their strengths on shelter and affordable housing. In the financial service sector, many actors such as MFIs, cooperatives, banks, microfinance networks, development finance institutions, impact investors and consulting firms will be needed to take affordable housing solutions to meaningful scale.

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The CISF provides advisory services and knowledge management of promising practices around shelter finance, starting with the experiences obtained in recent years with Citi Foundation funding. In the next five years, Habitat will work with 60 institutions to develop the financial services that could potentially benefit more than 40,000 households creating an estimated Cabaret, Haiti, 2010: Islande Isnardin, 32, lives with her husband and $40 million funding two small children in a transitional shelter. Photo: Steffan Hacker stream for shelter asset building with US$8 Citi-Habitat Home Improvement million coming from household savings. Microsavings Program. Our most recent We are already moving forward by piloting the Housing Microfinance Toolkit that presents a methodology to help financial service providers design demand-driven housing finance products and housing support services for home improvements.4 The toolkit was designed and tested in collaboration with Latin American MFI partners ADEMI, ADOPEM, ASPIRE, FIME and MUDE in the Dominican Republic and ProMujer-Argentina and Vision Banco in Paraguay. It will be available for a global audience in 2012. joint initiative further advances Habitats new approach to catalyze innovation within the microfinance sector. With a US$1 million commitment from the Citi Foundation, Habitat is launching an innovative three-year, multi-country micro savings and financial education initiative. The Citi-Habitat Home Improvement Micro savings Program will target communities living in substandard housing in the Philippines, Thailand and Vietnam which are especially vulnerable to frequent natural disasters such as flooding and typhoons.

For copies of this Toolkit in Spanish and English, request Housing Microfinance Toolkit: A guide to market-based products and services (Habitat for Humanity International: Center for Innovation in Shelter and Finance, June 2011).
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By providing savings products, financial education and construction technical assistance, the program will help 3,000 lowincome homeowners save a total of US$2 million to strengthen their homes against these devastating natural disasters.5 This initiative demonstrates Citis commitment to financial inclusion by developing a scalable savings model. It also expands Habitats ability to provide housing support through new product design for the benefit of low-income families to improve their homes. Indeed, based on the experience of our two organizations, the consensus of numerous researchers and the responses of our clients, we believe a multi-stakeholder approach represents a new model for growing the assets of the poor, while reducing the 1.6 billion living in below-standard housing around the world.

Aldea Los Regadillos, Chiantla, Guatemala (2006) Alfonso Rodriguez helps to build a house his daughter Ofelia will own and occupy with her family. Photo credit: Steffan Hacker.

Building safe housing need not be beyond local populations means. See post by Rochelle Beck on page 23 of this book on engineer Elizabeth Hauslers global experience through her organization, Build Change, teaching people in low-income communities how to build safer, stronger hurricane and earthquake resistant homes using local materials with better design.
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In the Race for Affordable Housing, Who Has the Head Start?
By Sadna Samaranayake

In the race for affordable housing, is there a clear leader? Is government the biggest player in BoP affordable housing? Are NGOs? Private construction companies? The answer might surprise you. Far ahead of the pack in resources mobilized, progress made and sheer numbers of BoP housing solutions implemented...are the BoP households themselves. Largely invisible to the public or private sectors, piecing together cash informally (for income and purchases), this citizen sector relies on itself to build basic shelters and then, little by little, improve them as they can. More than 70 percent of all affordable housing worldwide is built this way, referred to as self-building, housing upgrades, incremental construction, progressive housing or home improvements. Costing anywhere from a few hundred US dollars to roughly US$7,500, housing upgrades take place over years or even decades, as families with sporadic, tiny savings buy small amounts of building materials until there is enough to proceed with the upgrade project

enduring years before completing it.1 Homeless families roaming crowded streets or finding shelter in tents may get noticed by local government agencies or charities; if lucky, a few are helped to live in a subsidized shelter. But for the millions of families who find a plot of land (not theirs) and put up four walls and a ramshackle roof, the options for improving their homes are few, outside what they can cobble together from meager savings and the skills of their own hands. The terms used to describe this process often resonate with middle income households, who also make home improvements and do-it-yourself remodeling at times. But the difference is vast. For affordable housing, these terms mean the difference between children crawling on dirt or dusty concrete floors endangering their health, having a toilet instead of a hole in the ground, a roof that doesnt blow away or flood the indoors in a storm, walls that are not mold-ridden, or a window for light and ventilation.

Many working on housing upgrades worldwide report these themes, which have been well-documented in a report by Habitat for Humanity, presented at Housing Finance for the BoP Conference. Miami, 28-29, June 2011.
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For the BoP, home improvements are not going from plain to middle-class comfort or even luxury. They mean getting to what the rest of us consider as basic health, hygiene and secure shelter standards in which to raise their families. A Head Start with Handicaps. BoP communities addressing their own housing needs in these ways would seem like good news, as well it could be if incremental home improvements were not the inefficient, protracted and financially wasteful experience they are for the majority of BoP households. Citizens initiatives to self-build give them a head start, but not without handicaps: 1. BoP incremental home improvement is inefficient and costly. Imagine paying for cement, sand and concrete blocks or bricks required to build a room, one bag or a few cubic feet at a time. Imagine those things lying outside on the ground for months (or years) until enough materials accumulate to finally build. Imagine buying so little at a time that no competitive or discounted prices are available and no retailer delivers them, so add transportation costs. Imagine buying materials you think you need with no experienced expert to help plan the project to be built properly. The alternative is to find financing for the entire improvement. Now imagine the only legal loan available is at 30 percent interest (or as high as 300 percent or more if the source is a local illegal moneylender). Now, add up the higher per unit costs of buying in small quantities, transportation to get purchases home, loss through theft or exposure to weather, or buying the 66

Nairobis Mathare slum: Photo: Meena Kadri, Random Specific

wrong materials and needing to replace them with others. In the end, what most consider cheap housing for the poor often costs more than if a home improvement loan financed the project with technical assistance and wholesale or bulk prices for materials and labor. 2. Incremental home improvement is often unsafe. While the sheer quantity of housing solutions implemented this way is astounding, the same is not true of their quality. Unskilled and often unsafe self-construction practices result in structural additions to already crowded and precariously built slums. If located in earthquake or flood zones, informal construction often means loss of life and serious injuries. 3. Incremental home improvement does not solve infrastructure deficiencies. Self-construction does not address in fact it often compounds the absence of urban planning and public services. Zoning ambiguities, high density, unpaved roads, few sidewalks, no adequate sewage systems, lack of access in each home

of potable water or electricity none of these are addressed by self-built home improvements. Still off the formal grid for retailers and government, these improved houses exist in neighborhoods with little public transportation, fire or law enforcement, poor or distant schools or clinics or places for children to play for the growing community. Their community and real estate value is not enhanced, even if their home is. 4. Incremental home improvement does not enhance the tangible asset of home ownership so households can leverage it to climb out of poverty and move out of slums. Even for households who manage to save and invest in good home improvements, if they do not have clear title to their land, or if they paid cash for all and still have no records of steady income or responsible repayment of loans to establish credit worthiness all that labor, time and money has NOT built collateral for banks or financial institutions. 5. Incremental home improvements result in keeping this potential BoP market invisible: to retailers, architects, master contractors, building materials suppliers and related product or service distributors. Few market studies accurately inform realtors or developers how many households now actively spend on improving their homes, where there are, how much materials they consume, and what the potential value of this market could mean if the financing, technical assistance and urban infrastructure were integrated into citizens self-building practices. To complicate matters further, most organized activity around affordable

housing, whether led by private companies or local governments, tends to overlook these traditional self-construction practices and, instead, offer contractor-built new home projects for BoP households. With this emphasis, there have been few solutions from the private or government sectors to get competitive credit terms to buy materials in bulk, find better distribution systems and link it to comprehensive building support services so that the vast free labor and energy of household members can turn their investment into something of real and lasting value. Opportunity for market-based solutions. Given the inefficiencies and barriers I describe above, imagine how resolving unsafe living conditions for hundreds of millions of slum dwellers could be accelerated? Further imagine doing so in ways that create profits for companies in BoP markets, while allowing government to focus its efforts on the poorest segment (who may not even be able even to self build), and on improving the urban public infrastructure, building safety standards and public services. It is beginning to be more than just a dream. Various stakeholders are working together with BoP communities across the globe to innovate new, inclusive and market-based strategies to raise quality, lower costs and time, add financing bundled with technical assistance, obtain land tenure and title, and do so within legal and commercial frameworks that leave citizens not only with a sturdier roof overhead, but with increased confidence, skills and a good credit track

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As a result, Patrimonio Hoy offers CEMEX cement bags along with products manufactured by other companies through leveraging distributor relationships for which Patrimonio Hoy receives a margin of the sale price. This integrated offering of cement and everything required for the desired home improvement, including financing, results in huge time and cost savings for families: home improvements happen in one-third of the time it would normally take, and at 33 percent lower costs. Ten years in, Patrimonio Hoy is a profitable business unit of CEMEX.3 In Colombia, new national-level affordable housing, finance and economic policies have increased the diversity and quantity of financial products and services for longerterm home improvement loans (up to five years) to those who earn above 1.5 to 2 times the minimum salary. The increase in competition has lowered housing loan rates and created incentives for banks and community organizations to find good matches between clients and the right services a far cry from the scarcity of options and inadequate capital just five years ago.4 2. Bundle technical assistance along with finance to increase the quality, and decrease the costs and time to self-build. The most ambitious and forward-thinking finance providers are partnering with citizen organizations to infuse skilled technical assistance at key points in the
More about the Patrimonio Hoy case is found in Access to Affordable Housing report from Ashoka cited above.
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record to build on for the future.2 If implemented more widely, these strategies can add value to the incremental improvement head start that citizens now have and enable them to cross the finish line faster, cheaper, better and more safely. Below are some of the best strategies we have found to date: 1. Increase the incentives for home improvement loans to have longer repayment periods at competitive interest rates. CEMEX, for example, through its Patrimonio Hoy program learned that its low-income clients needed not cheaper cement, but integrated solutions, such as materials for a new bathroom or an entirely new room.
For more information on selected global innovative home improvement projects, see case studies in the upcoming report, Access to Affordable Housing, co-published by Ashoka and Hystra. Contact fec@ashoka.org and request this free report.
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See case on Colombias Housing For All alliance with Colceramica in Ashoka FECs report, Access to Affordable Housing, cited above.
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building process. They are effectively financing the cost and linking the services of qualified architects, technicians or master contractors to provide construction guidance to BoP families in conjunction with financing the purchase of materials for a home improvement. Organizations such as Reforma Mais in Brazil, in partnership with Banco do Nordeste, microHome Solutions, in partnership with BASIX, a microfinance institution in India, and Alianza por Vivienda Digna, in partnership with Corona (a tile manufacturer and financier of home improvement projects) in Colombia, lead the way in these efforts.5 3. Companies, NGOs and governments design streamlined, fair and peaceful resolution of land title conflicts for privately-owned or public lands to secure land title to homeowners. Unless title is transferred legally to homeowners, they will never receive the full benefits of their investment and effort to build safer, better homes. Without clear title, banks may not consider a loan, municipalities will not recognize them for public services and their willingness to improve their communities is limited by the legal risk they will have to leave at any moment.
This concept has been demonstrated by Ashoka Housing for Alls home improvement strategies in Colombia and Brazil, and also by Habitat for Humanity, whose experiences with finance and support services are presented in posts by Steven Weir and Susana Rojas Williams, and Patrick Kelley and Irena Shiba in this book.
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Home improvement construction with expert TA: Ashoka HFA: Colombia. Photo credit: Aprodefa.

To address these issues, the Community Organizations Development Institutes Baan Mankong program, affiliated with the Thai government, lends money for home improvements to organized groups of slum dwellers. As slum dwellers acquire financing in groups, they can negotiate a long-term lease or purchase their plots of land. This process often results in the transfer of title and ownership of property to slum dwellers, which then triggers the provision of infrastructure and public utilities from the Thai government.6 Social businesses such as Terra Nova in Brazil have developed improved, cheaper and less bureaucratic processes to enable illegal slum dwellers to negotiate with land owners to purchase their plots more quickly. The purchase includes financing
See www.codi.or.th/housing/aboutBaanmankong.html for more information, as well as its case in Access to Affordable Housing by Ashoka cited above
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over a period that the family can afford, so they then pay landowners outright for title, an incentive for lowering the asking cost of the land and speeding up the legal certainties. Once they become owners of the land, Terra Nova has documented that residents improve their homes even more than before. The resulting process, sanctioned by local governments, ensures that infrastructure and utilities are extended to previously off-the-grid areas.7 4. Develop standards for home improvements to ensure structural integrity, earthquake or flood resistant materials and designs, provide clear economic incentives their use and ensure enforcement by local government. The world recently saw the difference in death and injury resulting from housing codes and enforcement when severe earthquakes hit Haiti and Chile in the same year. While destruction abounded in both places, the difference in the loss of

human life was directly related to Chiles stricter, implemented and enforced building standards, versus the informal and unenforced situation in Haiti. The trick, of course, is to have standards strong enough to guarantee safety, while not so costly as to make building affordable housing impossible for the BoP. Nascent attempts are emerging, pushed by the citizen sector. Elizabeth Hauslers work with Build Change has numerous examples of how local, renewable and inexpensive materials, together with self-build practices and local cultural and aesthetic features, can ensure that affordable, self-built housing carries sound engineering and innovative methods to retain local style but be built to high safety standards.8 Today, any affordable housing strategy that does not take self-construction practices into account risks missing out on significant and growing market and fails to leverage the best head start we have in the race for affordable housing for all.

Girl in slum at Gulbai Tekra, Ahmedabad. Photo: Meena Kadri, Random Specific.

See Andre Albuquerques post in this book for more

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information, as well as his case study in Access to Affordable Housing by Ashoka.

For more details, see the post by Rochelle Beck on Elizabeths work on page 23 of this book.
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Ashoka Housing for All in Brazil

A video produced by Ashoka FEC

Several authors in our affordable housing series have written about the multiplied return on investment when financing for home improvements is delivered with technical assistance. Habitat for Humanity calls this bundling of finance and technical assistance: Housing Support Services. Others such as the initiatives of Acumen, Citi Foundation, Terra Nova, Build Change and Echale a Tu Casa may use other words to define it, but the idea is shared: lowincome households maximize the results of their labor, time and investments to improve affordable housing with access to local experts, retailers and materials manufacturer suppliers who not only sell them exactly what they need, when they need it, in the right amount to do the job, at a fair price and also help them rethink

their original building plans, suggest better ways of achieving the results they want, teach them better building techniques and, together, build stronger, safer structures. Ashoka FECs work in Housing for All in Brazil documents this in the video above. Our work in a favela in Brazil with microfinance institutions, citizen organizations, architects, master contractors and the residents themselves not only built an extra room or fixed a leaky roof. The process leaves slum dwellers with a sense of hope that they are not stuck living in misery, that with the right assistance, they can take a large step to make incomeand life-changing improvements for themselves and their children.

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USING HYBRID STRATEGIES, BUILDING ECOSYSTEMS

Ashokas Hybrid Value Chain framework recognizes the strengths of each stakeholder in a sectors value chain. It convenes them to find solutions where the chain is broken, forging long-term, collaborative and sustained alliances, which over time, gain trust and work together to tear down silos and walls impeding their communication and co-creation. They soon realize that each has a piece of the larger puzzle and, by continuing to work together, they unlock the wealth of new markets and increase prosperity and economic inclusion. The challenge: to build ecosystems which support the knowledge, legal, policy and financial infrastructures to encourage and accelerate these hybrid alliances, creating new cycles of social and business success, enabling good solutions to grow to scale. 72

The Pyramid Within the Pyramid Segmenting the BoP to Match the Right Solutions
ByVishnu Swaminathan

As practitioners creating solutions at the BoP, we are faced with many challenges. The traditional business models we all grew up with, which have worked well for decades in middle- and upper-level income levels, do not work at the BoP, at least not for long or at scale. It is clear that new frameworks are needed for BoP success. Is the BoP one very large uniform market, albeit different from its more affluent cousins? We soon learned that in a country as large, varied and filled with poverty as India, BoP populations varied tremendously. Solutions aimed at them without understanding exactly the level of their assets, needs, preferences and abilities were doomed to fail. A new arrival to a slum and a rickshaw driver living in a slum both are defined as BoP. But the differences between them are as vast as night and day. How can they all be treated the same when it comes to delivering products and services? Mapping the landscape of Indias Affordable Housing Sector. When Ashoka launched Housing for All in India in 2008, the need was clear: The 2001 India Government Census confirmed the lack of housing at 24.7 million, with 99 percent of gap at the BoP. Many past attempts to close

the gap between need and supply had failed miserably. The gap remained, and it was growing larger each year (by 2010, it had reached 26 million). We investigated, first, our potential partners and clients: Who were the major players in the Indian housing market? What was not working properly in the housing sector value chain (otherwise we would already have seen many more affordable housing projects under way)? Could we innovate solutions to fix the value chain where broken? Could we apply different frameworks to overcome the barriers clients faced as they wished to improve their housing conditions? Who, precisely, needed housing? How much did they actually earn, even if that income went unreported? Did they have assets? Did they have jobs or small businesses, even if in the informal sector? What were they already spending on housing? Could they be assisted to qualify for mortgage or housing loan? 73

Figure 1: HFA India targets the Top of the BoP for market-based affordable housing solutions

Could we help develop loans at rates and with terms they could afford to repay? What did they need to learn or to access to accomplish this? Hybrid Value Chain: A new framework for market forces to develop and sustain solutions. We used Ashokas Hybrid Value Chain (HVC) framework to address where the traditional housing value chain was broken. HVC involves building strong alliances with all the stakeholders in a sector, to co-create solutions that are good for business (increased revenues and market share) and good for citizens (improved, affordable products and services, increased income, and movement from informal to formal market participation). Whatever strategy we arrived at, ultimately 74

it had to rely on market forces to keep it going so that the solutions we developed could be scaled up and sustained over time without our continued intervention. We came to a few initial conclusions: One: There were several large, private home building and real estate development companies interested in BoP housing, but had not yet found the right way to succeed in it. Two: There were several microfinance institutions that wanted to branch out beyond their loans for micro-enterprises. They expressed interest in affordable housing as an added product and service for their BoP clients and to help them attract new ones.

Three: Two large, experienced and respected citizen organizations SAATH and SEWA worked with over 150,000 BoP citizens and had deep, trusted relationships and knowledge of their communities. Both agreed that the lack of affordable housing was critical and wanted to be part of an HVC alliance. The three sturdy legs of an HVC affordable housing stool were now in place. We also explored governments role in provide affordable housing. We visited several subsidized government housing developments and saw that, in addition to being too few to solve the problem (the governments ambitious plan to construct 12 million houses by 2014 would address less than 50 percent of the gap), the conditions in them were truly miserable.

The Pyramid within the BoP: segment the market and match the right solutions to each client segment. After working closely with our partners in BoP communities, we identified three types of solutions for three groups, based upon their income level, employment and capacity to establish themselves in new, urban environments. We developed a model based largely on household income (see figure 1 at head of this post), and adding indicators such as whether income was occasional and insecure, or steady but informal and undocumented; whether there were savings; family size and health; etc. Then, we developed categories to help us match products to segments of the BoP. This confirmed our strong conviction: each of these groups needs different types of housing solutions: 1. Transitional or Rental Housing for the BBoP: We call the first segment Bottom of the Base of the Pyramid, or BBoP, and it includes migrants newly arrived to urban slums with no savings or tangible assets, no jobs, few skills suitable for urban employment options. It also includes widows, single parents with several small children, the handicapped, squatters, beggars and occasional day laborers who cannot earn enough to afford to pay for even minimal housing. People in this segment earn less than Rs. 5000 (US$100) a month, and are in Extreme Poverty. 2010 estimates show the BBoP has approximately 44.5 million households needing affordable housing, or 22 percent of the BoP population in India. 75

Photos courtesy of Ashoka HFA India.

There were other government policies such as subsidies for new apartments or small homes for sale. But real estate agents or the middle class often purchased these properties and either flip them for profit or rent them to the poor at inflated prices.

practices, where houses are built illegally. In such cases, it is impossible to use the home as collateral to qualify for a loan to finance a new home. These households earn between Rs. 5000 to Rs. 12000 (US$ 100 to US$ 250) a month. 2010 estimates show the MBoP has 11.7 million households, or 49 percent of Indias BoP population. For these families, the most appropriate strategy is to help them get land tenure, so they can use their home as collateral for small loans to improve them. Another is to work with organizations like SEWA and SAATH to help them document their income, and vouch for them as responsible and able to get small home improvement loans, while at the same time helping microfinance institutions develop new loan products for home improvements (a strategy that Ashoka Housing for All is advancing in Brazil and Colombia, for example). Many slums across India have what is called a NoEviction Guarantee- these are prime venues for fostering home improvement. This process involves providing financial planning, starting microsavings accounts, and helping households obtain microloans to improve their dwellings what is called Progressive Housing or Home Improvements. 3. New Homes for the TBoP: Those at the Top of the Base of the Pyramid, or TBoP still within the BoP are households earning between Rs 12000 and Rs 25000 (US$250 to US$500) a month, who may have several wage-earners, steady jobs (e.g. rickshaw owners) or stable small businesses (neighborhood grocers). They can save and pay a mortgage for a home. 76

As we look at housing provision, it is evident that market-based solutions are not appropriate. A subsidy-supported model, either from the government or a charity, is the most plausible solution for those at the BBoP. Specifically needed are subsidized transitional housing or rental models of Housing, as long-term ownership for this segment is not possible at present market rates in cities. 2. Progressive Housing or Home Improvements for the MBoP: We call this segment the Middle of the Base of the Pyramid (MBoP), and it is step up from the BBoP. Here, slum dwellers live in houses ranging from Kutcha (raw) to Pucca (fully finished). They often lack clear title or tenure rights to the land on which their homes are built, resulting from squatting

According to 2010 estimates, there were 60.5 million households in the TBoP, or 29 percent of Indias BoP population. So why are they still in the slums? Because although they financially could qualify by income, they live and work in the informal economy, with no pay stubs, tax returns, receipts or other formal ways of proving income and credit-worthiness. If a family cannot prove their income sources they are essentially locked out of the formal banking economy. They rely on local moneylenders, whose high interest rates make it impossible to finance a home over many years. These families live in slums but have improved their housing to a full fledged one or two-floor concrete house, have a television, own a vehicle (typically a two-wheeler) and can afford to send their children to private schools. If new homes were available for less than Rs 10,000,000 (US$20,000), these families could afford a monthly mortgage payment (40 percent of

their incomes), which would allow them to own their home outright in 15 years. A fully market-based model can essentially serve TBoP families. In developing the HVC alliance, we have focused on demonstrating that for the TBoP in India, affordable housing can be delivered with quality, matched to customers needs, and give developers decades of work and profits. Our thinking was that if we proved our model worked, the market itself would adapt and grow to meet these needs. From One City in 2009 to Fifteen by 2015: Once we decided to focus on providing new home solutions for the TBoP segment, we began to unleash the power of the HVC and leverage the expertise of each of our stakeholders. We developed new assessment tools, and employed slum dwellers to use them to collect and analyze more accurate information about TBoP housing needs where we worked so builders and innovators could assess their potential profits and design the most appropriate products. (See post by Kirthee Kiran in this ebook for more details.) Our market data model has proven very useful to private developers, many of whom relied on inaccurate government data in the past. Now they know in relevant detail the demand, size, design, structure and costs they need to meet to be successful. Their caution has turned into momentum to get shovels in the ground and buildings built.

A rickshaw driver and his family before HFA India assisted him to get better housing for his family. Photo: John Michael Maas for Ashoka

From our start in Ahmedabad, we are now in 4 more cities, and growing to 15 more, which we estimate will enable companies 77

to build and sell 18,000 homes by 2015 (and financial institutions to gain 18,000 new clients and earn interest from their loans). Three lessons are clear from our work thus far: First, identifying and segmenting the BoP when designing appropriate housing solutions is critical to sustainable success;

Second, good financing models are essential for the those in the MBoP and the TBoP (together accounting for 78 percent of the total BoP population); and Third, new frameworks such as HVC, which include the citizen sector in collaboration with for-profit corporations, are the best economic engines to close the affordable housing deficit in India.

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Beyond Four Walls

By Melissa Scott

A house is more than a roof overhead: it gives a sense of security, empowerment and hope. This is one of the core beliefs that drives Ashokas Housing for All (HFA), along with the principle that the affordable housing market is ripe for market-based solutions. I learned this message at the start of my summer 2011 internship with HFAs India team. Yet the meaning of it didnt really sink in until my visit to a potential housing site in an impoverished area of Patna, Bihar. The time I spent there deepened my understanding of the tremendous importance decent, affordable housing has in the lives and possible futures for those I met, who in turn stand for many millions more throughout India. Finding potential clients ready for a decent new home. Market-based affordable housing targets the top segments of the bottom of the pyramid in India, where there is still no common definition of poverty. Nor is there reliable government data to help citizen organizations or private real estate developers target where to build or what kinds of housing would fit families needs. Without such planning tools, HFA developed its own surveys of BoP consumers to more clearly understand affordable housing demand. As I accompanied the HFA survey takers trained to do interviews with

Potential customers living in public housing seeking better housing with Ashoka HFA India work in Patna. All photos: Melissa Scott.

slum dwellers, I saw a striking common thread among diverse families: Their total financial exclusion from the formal market opportunities in housing. Lack of income statements means no access to banking services, let alone credit. Without credit, there was little chance they could ever improve their living conditions. It was of great importance to work with a trusted, grassroots community sector organization to reach these potential housing clients, and getting honest answers to our survey questions, such as: Where do they currently live? Why do they want to move? How many are in their family? How many could earn an income? What is the ability of the household to pay for a home? 79

Do they need a space for a home business? What would their dream home look like? From the moment we stepped into Patnas slums, all eyes were on us. Who were these outsiders? What did they want to know? Mostly children gathered in front of us, with adults standing back hesitantly. Some had looks of skepticism, others curiosity, others excitement.

In contrast, when we spoke to the women of the household, immediately they showed an emotional spark when asked about housing. Often while holding or feeding their children, they did not merely report the socioeconomic data of their family, but were passionately inquisitive. They wanted to know what they needed to do to own a home. Teach me! Help me! and Show me! were their common pleas. Moreover, housing was only one piece of the puzzle for them: How can they get access to more work? What can they do to get their kids a better education? How do they break this cycle of exclusion and poverty to ensure a brighter future for their children? My experience was that women were ready to take any possible steps necessary to create a better life for their families. Perhaps they spend more time at home, worrying about where the next meal would come from. Perhaps women are more natural storytellers than their male counterparts. Whatever the reason, their energy and hope drove home the importance of getting these women involved in creating the solutions to their housing needs, to get them to share the information embedded in their stories directly to the private sector to architects and building materials producers and distributors, contractors and designers, who would then do a better job of developing new housing. Experiencing their skepticism, or their frustration over not knowing how to find solutions to their families problems, made

We walked from house to house, neighborhood by neighborhood, gaining insights. What first struck me was the love of telling stories: each and every person wanted us to understand their familys dynamic and history regardless of if they were speaking of a high-paying government job or a struggle of four family members selling eggs from a street side cart. Housing and the Gender Divide. What caught my attention most during our interviews was the gender divide. When we spoke to the men of a household, they stuck strictly to the facts answering each question thoughtfully, keeping the kids quietly to the side while they dealt with business.

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me realize how much these potential customers needed an ongoing range of services. For instance, understanding what it means to be a homeowner and how to save regularly, how to get the confidence to speak up in meetings with businessmen and officials, to feel involved in home design or urban planning process, and to continue their journey to economic empowerment. In my opinion, women are the key drivers to the success of these value-added services beyond access to housing.
Skeptical at first, this woman quickly opened up about her needs in addition to better housing, where to find more work to feed her family of ten.

One such citizen sector organization partner of Ashokas HFA program in India is Shelter Associates in Pune, which champions community-designed solutions to problems such as housing and sanitation. Another partner in Pune, the Mann Deshi Foundation provides a variety of nonfinancial services to their women clients aimed at improving the quality of life. Supported by the Mann Deshi Corporative Bank, a bank run for and by women with over 100,000 customers, the foundation is tracking success. An assessment of their financial literacy course showed that clients who completed the course increased their weekly savings, took out more frequent, larger loans for more productive purposes, and repaid them on time more consistently. Covenant Centre of Development (CCD) in Madurai provides financial literacy to BoP families, with training and materials about family budgeting through a simple ledger system, among other tips. These tools allow banks to track the expenditure patterns of families, while also creating a greater understanding of financial management of the consumers, hopefully reducing defaults and allowing them to increase the number of good housing loans they can make, thereby spurring the private development of better homes. Market-based solutions such as Ashokas HFA have begun to put a dent in the demand for 26 million affordable homes in India. To go beyond just the four walls of affordable homes, however, to create long-lasting economic empowerment, families (and in my experience, particularly women) must be given the tools to answer the bigger questions about work, education, and an overall brighter future. 81

Homes as assets: the road to financial inclusion. Citizen sector organizations also are critical to help families understand that a better future for their children lies in their slowly but surely changing their patterns from surviving off the grid, in the informal economy, and entering the formal market. There, they can show their level of responsibility, for working hard and having income, to be credit-worthy and to save in banks, which then know their capacity to repay a loan. A house isnt just any asset, but an asset that can lead to greater financial security.

Why Dow Corning Sends Employees to Serve BoP Projects around the World
By Chip Reeves

What would happen if major global companies sent their employees to work with people in emerging economies for weeks at a time to get to know their cultures, needs and daily patterns of life? Not as poverty tourism, but rather part of a strategy to have them see with the openness of a child all that is different, all that is happening, and all that is needed in their lives. And then to think how that translates to product innovations. For two years now, Dow Corning has operated a program called our Citizen Service Corps. Employees volunteer their time, but we pay their expenses, to go to countries where help is needed, and where new markets exist. Our mission: to DISCOVER, SERVE and INNOVATE. We partner with CDC Development Solutions to handle the logistics of our program, while we prepare our teams for the innovation part of the project: enhancing their abilities to capture insights that may lead to new business opportunities. Its based on the simple idea of sensitizing EYES, EARS and MINDS. Building on the experience of major design firms, we have learned how to have the EYES of a beginner how to put aside our biases and observe how people address 82

problems and issues in everyday life. The EARS session practices how to ask effective questions to draw out key insights, information and priorities. In the final session, MIND, we modeled how to think about new business opportunities through the lens of a micro-entrepreneur: Is there a compelling need that we can answer in a way that creates value for us and for others to sustain a new business? Last year we sent ten Dow Corning employees from around the world to India for a month to act as consultants for different organizations serving the poor. We did not have any prior relationship or specific interest in the organizations we wanted to help and to learn. One of the organizations we collaborated with in the field was Ashoka, which identifies and sponsors leading social entrepreneurs around the globe. Our team specifically worked on a project called Housing for All, supported by the Hilti Foundation. We helped a diverse alliance of affordable housing stakeholders, including citizens, builders, architects and engineers, community organizers and entrepreneurs to draft renewable energy integration standards into targeted low-cost, high value housing. Apart from specific product development, as we worked in Housing for All, we

experienced Ashokas concept of a Hybrid Value Chain, a new social business framework premised on the creativity and refinement of ideas that emerge when different skills and perspectives (citizens, corporations, investors, innovators) work together to analyze problems and create together what good solutions would look like. Effective solutions must be good for citizens and profitable for business to make them sustainable. We are now exploring how to embrace this concept more fully in Dow Cornings business development activities. The Citizen Service Corps program is a fantastic kick-start to the innovation process. The program alumni have brought back and shared so much from their work with entrepreneurs in the field, and the results continue to pay dividends. The organizations and their clients report tangible benefits from our teams contributions. The employees have become stronger leaders, their new skills and insights not wearing off over time.

And our company has sharper focus on areas of need and opportunity in new markets. This is a scenario for spurring economic development, deeper human connections and a better future. Dow Corning is not the first company to send employees on service projects. However, our intent goes beyond Corporate Social Responsibility and helping people in need (although altruism definitely is part of what motivates employees to go). By actively capturing insights on the context of life and needs in areas we have not understood, we expand our knowledge, broaden our perspectives and create valuable processes to shape innovation. This turns a program that could be viewed as a cost into an investment. It also expands the potential benefits and impacts for all involved. Since corporate volunteerism integrating innovation is not yet widespread, maybe our experience can offer ideas that encourage other companies to try similar efforts.

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Reflections From Two Dow Corning Leading Innovators On Understanding the BoP Market
By Ronda Grosse and Frank DeLano

Editors Note: Dow Corning has incentives and skill-building opportunities for staff to be creative and innovative product developers for new markets. Two of Chip Reeves senior team members, Ronda Grosse and Frank Delano, participated in its Citizen Service Corps, volunteering in India with Ashoka Housing for All as part of this program. Here are their reflections on their experience, and posts and photos from the field sent back and published internally at Dow Corning to share with colleagues worldwide. Ronda Grosse: What did I learn about Housing for All in India? In Dow Cornings Business & Technology Incubator, we focus on research and development and new business opportunities in areas such as renewable energy, building materials, electronics and lighting as we explore sustainable ways that our company can create positive change in the world. My work and my personal passion to make a difference led me to participate in Dow Cornings Citizen Service Corps, to work with the Housing for All pilot project initiated by Ashoka in Bangalore, India. We were part of a team tasked with drafting new energy requirements for affordable housing that will be set forth for people living in slums so national standards can guide better, safer construction practices. 84

We interviewed urban planners, developers, architects, engineers, citizen sector organizations and university scholars in order to gain insight into affordable housing needs in India. And we spent time talking with families living in slums and other lowincome communities in Bangalore, allowing us to gain deeper insights into their daily lives and challenges. These personal interactions encouraged us to remain steadfast in our attempts to develop innovative solutions that would be a step forward toward improving the quality of their lives. This experience reinforced my belief that in order to gain true understanding and develop worthwhile innovations, it is important to experience firsthand the challenges faced by those we are seeking to help. My outlook was broadened and my ideas about finding impactful solutions to problems changed as a result. While the challenges are immense, I was inspired to witness the resolve of the human spirit, where joy was evident amidst great poverty, and creativity was brought to bear in so many ways as each person provided for his or her family and those in their community. I am grateful for those who work tirelessly to achieve better living conditions, and for the partnerships that are being established across the globe to shape solutions together.

Below are excerpts and photos my colleagues and I sent back from India:

Posted by Ronda Grosse 09/15/2010 at 02:08:01 PM:

Managing Director of Alchemy Urban Systems. He is also executive director of DBS affordable home strategy limited. He wears multiple hats as urban developer, property developer and architect. Mr. Bala has in-depth knowledge on the subject of urban development and he was kind enough to spare 3 long hours to explain the problem and answering to our questions. At the end, we got quite a good insight into the problem. Here are some of the important points after hearing Mr. Bala: Currently government regulations dont allow dwellings less than 24 square meters. But the people are living in illegal colonies in the size less than 24 square meters for rent which are by and large controlled by slum thugs. If government allows the market to build homes of size less than 24 square meters and with common toilet, people can buy and live in those houses. It becomes sustainable model for them instead of living in a rental house forever. This will really elevate the standard of living of the people in incremental way.

Contrasts: While walking in a different part of the city today, we came across significant variety in the type of houses on the same street:

First round of interviews: We spent the majority of today talking to various people about the current living conditions of the Indian families we came here to help. This included Ashoka fellow, Alphonse Jemonie, pictured in Franks blog, who has done so much for the citizens of Bangalore over the past 25 years. I am thankful to have a great team in Sylvie, ARV and Frank, who are each bringing different perspectives and approaches to our project. ARVs background in civil/structural engineering coupled with his knowledge of India are an immense help. Today he was able to take the lead with questioning in the proper language thanks ARV!
Posted by ARV 09/28/2010 at 03:02:00 AM:

Good Insight in to Urban Housing Problem. Monday we met Mr. B.R. Balachadran,

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 The floor space index (FSI) should be governed by the infrastructure available or expected. So naturally there cant be a single FSI which holds good for the entire city. Ahmadabad and Hyderabad are the two cities following this strategy. FSI relaxations should not be made special for affordable homes ignoring the infrastructure. The building regulations should consider design (like how good ventilation is achieved) than just insisting on flat rules on clearance, offset etc. The current official machinery may not be equipped to evaluate the performance of designs submitted. They need to adapt the model to get proper auditors for the task. Rules should be relaxed on elevators usage. No special concessions are needed for the affordable home sector, whereas the whole regulation process for the building industry should be clear. This will create a healthy market for many players to come in. Delays in getting building permits are a big burden on developer due to the interest on the money borrowed and price escalations. The big ticket items in affordable homes are Stamp Duty, Cement, Steel, Aggregate, and Energy apart from the land cost. The affordable home customers are focused on delivery date and quality. Bringing new technology to accelerate the housing construction and modular techniques will be very useful. They are important to fight escalation of prices, quality flaws and delay in delivery. 86

When developing the Tata Nano (worlds economical car) the instruction given to the team was do not strip down to make it economical but RE-ENGINEER the whole car to make it economical. The same approach should be made in achieving the affordable homes also.

Talking with local residents about housing.

Our team with Ashoka Fellow Alphonse Jemonie. Photo: Frank Delano.

By Frank DeLano: Retraining myself to see, give thanks and be a changemaker! I have traveled to many different countries for my work at Dow Corning, so I felt prepared for what I would experience during my Global Citizen Service Corps trip to work with Ashokas Housing for

All program in Bangalore, India. I quickly realized that my past travel, the quality hotels, the transportation we took to work and the beautiful office buildings at Dow Corning sites around the world, had raised expectations that would not hold in India. From the first day in Bangalore, I realized how careful I need to be not be bound by my past, and limited, experiences. I need to be in the present : Limitless. Our hotel in Bangalore The Haven and our first excursion into the local areas convinced me this was going to be a lifechanging experience. When I wake up each morning (at home or in a Dow Corning trip), I expect a hot shower, breakfast, and a simple (no traffic congestion) trip to work in my well maintained automobile. Never did this occur during my month in Bangalore! Having water in the morning for a shower was not a given, breakfast was an adventure of foods Id never had at that hour in the morning. We walked to work through streets congested diverse vehicles: cars, rickshaws, motorbikes, pedal bicycles and cows. I learned to appreciate what was provided to me and to feel: Gratitude. Over the years Ive been the sort of person and employee who always tries to make a difference in everything I attempted. In Bangalore, attempting to make a difference in how to achieve affordable housing for millions of people living in poverty, what I realized was that my world was very small. My attempts were to make a difference at Dow Corning, in Bay City, Michigan, in my family. All good and worthy. But the professionals we worked with at Ashoka, India were trying to make a difference to all of India and eventually other countries

in the world. I learned that each person has a purpose, whether large or small, and that everyone can make a difference. Through this work, I learned that I, like those around me who will continue on in India, could learn to be a skilled: Changemaker.

Below are some of the blog posts I sent home:

Posted by Frank DeLano 09/27/2010 at 10:09:17 AM:

Reform or Subsidize? Affordable Housing for the Masses?... How do you make affordable housing available to the masses? Do you provide subsidies or do you reform the system? Or, is it a delicate balance of both? That was the question that remained in my head today after meeting with B. R. Balachandran, an Urban Planner, Architect, and Developer. On our walk from The Haven, I learned what must be considered when approaching a developer to build affordable housing:

On our walk from The Haven to our meetings...

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Government built and subsidized public housing in Bangalore.

New construction in Bangalore

1.  What are the ongoing maintenance costs of the home for the customer? 2.  What are the necessary construction costs to provide a safe/comfortable living space?

3.  For new technology to be implemented, it must address these two points: lower maintenance and construction costs. And can the technology shorten the construction cycle? More to think on this one...

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Affordable Housing for All: In Our Lifetime?

ByValeria Budinich

In the coming decade, the affordable housing market could grow to trillions of U.S. dollars if families simply double their current level of annual consumption of housing products and services. This is a conservative estimate based on the present gap between need and supply, and the increasing migrations and population growth in the worlds urban slums. In the process of unleashing this significant market opportunity, hundreds of millions of people would have access to dignified homes, healthier places to raise their families, and more valuable assets they could leverage to transform and improve their lives. Unfortunately, we will not accomplish this in the next 30 years unless we stop thinking of solutions based on one business deal, one company or one client at a time. We need to build a new affordable housing ecosystem, one with the capacity to continue to sustain the processes and systemic changes needed for the housing industry to offer appropriate products for low-income populations, for enough financing and technical assistance to become available and for the right standards and quality to be in place and incentivized to enable a billion of the worlds population to participate in the housing market as full economic citizens.

New home construction resulting from Ashoka Housing For All India coalescing community and builders. Photo by Ashoka.

Ashoka Housing for All. Over the last five years, the global Ashoka community and its partners have been building the basis for this transformation in the affordable housing sector. The journey started with a handful of private companies, financial institutions and citizen sector organizations in India, Brazil and Colombia. We recognized that if they collaborated, they could accelerate the emergence of a vibrant and sustainable market for new homes and incremental housing. To fix broken housing value chains, each player needed to move from a mindset where they were competing for a limited wallet share, to one in which multiple

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players each with different assets to make the contents of the wallet actually expand in size came together in significant and increasing numbers to overcome major obstacles (such as land rights or insufficient capital for mortgages), to co-create innovative solutions (such as bundling financial literacy and self-building technical assistance with new home equity microcredit loans), and to enable millions of new clients to have the capacity to act in the formal market as empowered consumers of affordable housing products and services. Many in the formal housing industry know that clients need a combination of all these services to satisfy their housing needs. But these services separately or combined do not exist for most BoP clients, even for the large numbers of them who have regular (if undocumented) incomes and savings to be able to repay a mortgage or home equity loan. For the most part, the housing industry has failed to serve these clients either because their needs are invisible to them or because companies have not figured out how to successfully market housing products to BoP populations. Meanwhile, governments, multi- and bilateral development organizations and private philanthropy continue their work apart from business and market forces, even though they know that the relatively small amounts of money they have to spend on affordable housing would take over a hundred years at their current pace to address the existing affordable housing deficits. Citizen sector organizations play the role of advocates for housing rights and enable communities to organize around their 90

common and individual needs, but their resources are also very limited. Rarely they can reach a scale that is consistent with the extent of their clients affordable housing needs. While all these different stakeholders continue to fail to solve the problem in significant or strategic ways, low-income families continue to self-build and selffinance often sub-standard, unhygienic and dangerous dwellings at a significant cost and physical risk to themselves and their neighbors. Affordable housing value chains are indeed broken. What Breaks This Cycle of Failure? Most of the basic technology and know-how to serve these clients already exists. The challenge is to mobilize all these stakeholders around a vision of collaborative entrepreneurship within the industry and across sectors. Through its Housing for All initiative, Ashoka accomplishes this by building a common vision for the development of the affordable housing industry: one centered on a new interpretation of client needs and resources and their inclusion in various value-added steps along the affordable housing value chain. Operationalizing this vision is about the using a new framework, a hybrid value chain (HVC), where corporations and citizen sector organizations (and local governments, policymakers, other experts) collaborate to develop the market and build an ecosystem where a new type of affordable housing industry is possible and profitable.

First meeting of all stakeholders in Ashoka HFA India. Photo: Rajendra Joshi for Ashoka.

Ashokas Housing for All work is anchored on trust-based relationships that BoP populations have with citizen sector organizations working for years with families on maternal and child health, financial education and microcredit programs, or small business development and have a long-term and extensive presence in the community. Thus, they can play useful roles to help BoP potential consumers to increase their tangible assets and savings, and validate their informal wages as regular and sufficient to qualify for housing credit or loans, resolving an often long, costly and unsuccessful process when undertaken by banks. We have experienced citizen sector organizations mobilize the community to talk frankly about their housing needs and costs to make the deal worthwhile for private real estate companies. At the same time, these organizations work diligently to capture rich market data needed for companies and financial institutions to better assess the opportunity/risk ratio, design more

appropriate products and services, and make the right links to financing institutions, marketing and delivery infrastructure. Most of our work leverages local actors to aggregate demand in cost-effective ways and, even more importantly, to make visible the client and community resources (such as dynamic local promoters, clients with successful track records borrowing from and repaying on time microcredit programs, skilled construction workers, good relationships with the local municipalities and so on). By seeing clients as part of the solution, new possibilities emerge and the market forces start gaining momentum. Hybrid Value Chains and Collaborative Entrepreneurship. Ashokas experience in enabling cross-sector collaborations has taught us the importance of a shared (and hybrid) language from the start, one that speaks with equal emphasis about wealth creation and social impact through marketbased approaches. 91

It has also taught us that, in the initial stages, hybrid value chains are challenging to build because in the very short-term, benefits are less tangible. One needs to carefully choose corporations that value long-term gains and investments, not only short-term profits. Collaboration requires mutual trust and open communication among partners. And it only makes sense if partners achieve significantly more by sharing their learning and resources. This mutual trust and mindset of sharing is not common among private companies (where most traditional relationships have primarily been competitive and knowledge seen as proprietary). Nor is it alive and well in many citizen sector organizations, which have a distrust of businesses who value profits over people, and which have experienced corporations using them to access clients (often to sell substandard products) with little substantive engagement to learn more about their needs as potential as long-term consumers. It tends at the start (or without careful facilitation) to be an unequal relationship, where a business behaves like the citizen organization is a temporary outsourcing partner to get necessary client information or a short-term subcontractor to market products to BoP clients. This in turn can lead to mutual mistrust and misunderstanding. And for their part, many citizen organizations do not have the management team, business familiarity or experience to negotiate solid, mutually beneficial working agreements for long-term benefits. Lessons from our work in India, Brazil and Colombia have taught us that if we persevere, HVC frameworks can overcome these obstacles and produce vibrant and mutually valuable collaboration. 92

We have learned, too, that building an affordable housing ecosystem requires a relentless entrepreneur at the helm of this process. Having the vision is not enough. Succeeding requires someone with the capacity to identify the right partners, help them to build a mutual, value-added proposition and support them through the process of refining the hybrid business framework. Until now, this role has been played by Ashoka teams financed through seed capital made possible by the Hilti Foundation. In the next phase of our work, Ashokas efforts will focus on identifying and supporting local entrepreneurs who can tailor hybrid value chain applications to specific conditions in their city and region. Our Vision for the Future. The affordable housing ecosystem ultimately requires partners structuring their work as a team of teams, all of them operating with an agreed-upon set of goals and the hybrid value chain inclusive framework as its engine. This type of work is only possible when all participants commit themselves to tear down the walls that historically have separated those working on wealth creation from those addressing social impact. At Ashoka, we believe that in order for affordable housing to surpass the trillion dollar annual market level, all actors involved builders and housing materials corporations, bankers and investors, policymakers and government officials, and trusted citizen organizations working in local communities linking potential consumers to the formal market need to see themselves as changemakers who, together, will make possible the global transformation of the affordable housing industry in our lifetime.

Jane Goodall and Affordable Housing

By Rochelle Beck

I recently joined some 200 business executives, social entrepreneurs and investors from Canada to the tip of Chile attending the Americas Business Council (abc*) Foundations 2011 Continuity Forum. The abc* Foundation is a thinkdo tank, whose co-founders are some of the most successful corporate leaders from Latin America, heading companies playing major roles in business, media, agriculture, food sciences and health, energy, banking and finance. They have a strong sense of purpose, and use their leadership, resources and networks to help further peace, prosperity and sustainability by supporting impactdriven, tangible enterprise solutions. This Forum called attention to major economic and social challenges and opportunities in the Americas, and it showcased 34 innovative solutions developed by Ashoka Fellows in the region. Three of these finalists would win a year of support, business and media mentoring and connections to grow their innovations to scale. I spotted Francesco Piazzesi, founder of Echale a Tu Casa, one of the authors featured in this series on affordable housing just a few weeks earlier. He was among many other finalists whose passion, creativity and dedication would solve serious economic and
Finalist Francesco Piazzesi showcases hopes for Echale a Tu Casa at the 2011 abc* Continuity Forum.

social issues facing the region. Together we awaited the keynote speaker, Jane Goodall, one of my lifelong heroes, to take the stage. As excited as I was to hear her latest news, I pondered: How is the work of an icon known for saving chimpanzees from extinction in Africa relevant to the goals of the global business leaders gathered here? When she took the stage, she summarized her decades of up-close study of chimpanzees in the wild, and inevitably focused on the growing threats to their survival: habitats destroyed by careless exploration for oil and minerals; clear-cut for timber or burned for farming or cattle-grazing; ruined as 93

civil wars raged; and increasingly invaded by poachers who shoot chimpanzees to sell bush meat to hungry people whose depleted parcels of land didnt produce enough to eat. But instead of simply urging more environmental conservation, Goodalls major message took a turn. Over the past few years, she said, shed engaged with the people destroying the chimpanzees habitat, and found they were themselves abysmally poor. The destruction theyd wrought didnt even sustain their families for a year before more habitat had to be destroyed to provide the most meager survival. She worried governments had no proactive public policies for urban growth or incentives for smart private real estate development planning to help this growing population have decent housing, functioning communities and nutrition. Left to their own devices, their unchecked sprawl was killing their chances for a good life, just as it was killing the forests, the soil and the chimpanzees. This realization, she said, has changed her principal focus: Now over 80 percent of her time is spent traveling the world to raise awareness that all of us are interconnected in sustainable solutions to the most important problems plaguing us, and to urge public and private leaders to see that their efforts to save chimpanzee habitat must include significantly improving human habitats so both could survive and thrive. In her talk that first morning, she cited the worlds population was 6.9 billion. Day Two of the Forum. Many other experts echoed Goodalls principal message: Human population growth was accelerating 94

and sustainable solutions for our well-being or the planets were not keeping pace. In steady succession, other experts confirmed: The seventh billion baby on earth was born on day two of the Forum. UN global population data predict by 2050, nine to ten billion people will inhabit earth, with about five to six billion of them in Asia and India. Climate change, hunger and violence already have pushed over 51 percent of all the worlds population off the land and into cities. The rate is accelerating: Slums around cities from now on will receive an average of 200,000 newcomers each day. The world will need to build the equivalent of a city of one million people in developing countries every five days. Today in developed countries 70 percent live in urban areas. By 2050, fully 90 percent of the worlds population will live in or a maximum of a days drive from a city. Aha. Theres the direct connection between Goodalls insights about the causes of chimpanzees habitat destruction and why those same causes also affect the quality of life, work, income, health, and nutrition of humans everywhere. It was no accident, then, that Mexicos Piazzesi was a finalist at this event for his innovations in affordable housing. Urban sprawl and slum growth are happening all over the world, not just

in Africa. Unless we find ways to build human shelters in communities that do not randomly convert outlying land to slums, that use new, affordable means to cook, heat, cool and bring light into their homes, that dont deforest, pollute or jeopardize their health, and plan integral communities that address income generation, nutrition, education and health care, no master plan for survival for chimpanzees or our own will succeed for any length of time. Our Affordable Housing Series: The ills and broken housing value chains that sparked the work reported in this

NextBillion series are the proverbial tip of the iceberg. Never has it been so important to view the human habitat from a systems perspective think ecology, or envision the IT metaphor of the interconnected and interactive neural systems in the brain, where many separate pathways communicate with and reciprocally affect each other. To transform the affordable housing sector, we cannot ignore the interactive matrices of social, economic, environmental and political inputs and impacts. If we do, we will not create affordable, profitable or sustainable solutions.

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It is clear that past patterns of providing urban shelter cannot continue as government action, public policy or business as usual. A new, integrated, cross-sector set of solutions and an enabling environment that supports business, government and citizen sectors together to address the housing gap in collaborative and innovative ways is what will empower each of those sectors to become the positive and successful changemakers of the future.

Innovation is Key The blog posts published here show that innovation is a powerful, positive economic force for change. Piazzesis pressureproduced building blocks made of earth, Mario Flores inventive disaster relief shelters that become foundations for permanent housing, new kinds of microfinance products and services1 that for the first time make a mortgage or a home equity loan for improvements accessible to BoP populations and many others are necessary. Long-term planning and sufficient capital to finance affordable housing (either publicly or privately built) are critically important. New home developments no longer should be built far away from jobs or transportation, schools and other public services. The whole of affordable housing water, sanitation systems, roads, electricity, schools, clinics, public transportation, parks, retail and service employment opportunities is best built into an integrated package, with responsibility appropriately shared by municipal, private and consumer resources. Necessary but Not Sufficient For many of this series authors, each of these essential ingredients still is not as powerful as combining them for leveraged impact. For example, all agree
For innovation and experience in new financial products and services that will help transform the affordable housing sector and facilitate loans for BoP clients and major interest from private sector builders our posts by Aden Van Noppen (p.45), Irena Shiba and Patrick Kelley (p. 61), and Steven Weir and Susana Rojas Williams (p.54) are filled with sound data, experience and suggestions to consider taking to scale.
1

Photo courtesy of Ashoka HFA India.

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that diverse and competitive financing for BoP homes and improvements is absolutely essential. Bundling financing with housing support services increases the return on investment, as posts by Sadna Samaranayake, Steve Weir and Susana Rojas Williams and Rakhi Mehra and Marco Ferrario all demonstrate. Similarly, Andr Albuquerque showed multiple environmental, income and community improvements following quick and successful land tenure negotiations. As the video of Ashokas Housing for All work in Brazils favelas demonstrated the value-added results of technical assistance and microfinance, when delivered together to improve health and safety, also increased families incomes and savings, as well as their confidence and skills to lead their families to a better future. Overarching themes that cross frontiers Without planning it, two major themes recurred over many of the posts: First: All these individual and necessary innovations will not solve the affordable housing gap quickly enough to end its ill effects in our lifetime, nor even keep pace with the demographic rising tide of newcomers to cities. A new frame is needed for looking at affordable housing obstacles and opportunities one that shifts the focus from narrow to wide from an individual stakeholder (of land, or building materials, toilets, roofs, electricity, mortgages, public assistance, citizen clients) to the crosssector collaborations that include them all.

Authors wrote that even as they remain dedicated to growing innovative solutions, they need to be working together, across borders and across sectors, to create affordable housing ecosystems that will accelerate their positive models and results to proportions that are large enough to make a large dent in the sector i.e. large enough to create disruptive and systemchanging patterns to take hold, and to sustain this momentum over time. As Valeria Budinich posted, this means using a new social-business framework, the Hybrid Value Chain (HVC), that forges alliances among diverse stakeholders that will work together to make affordable housing development successful. From Ashokas HVC pilot applications in the affordable housing sector in Colombia, Brazil and India, the lessons learned are that when BoP citizens and their advocates are included in business planning and execution, together they actually increase the size of the market pie with new, more appropriate products, distribution channels and marketing efforts, and with new allies to tackle old problems like land rights or purchase which have often scared off private real estate ventures to move forward. Budinich reports that HVC also ends up expanding the mindsets for both businesses (collaboration edging out competition as the framework for future long-term success) and for the citizen sector (mistrust of business exploiting the poor replaced by enabling citizens to participate as vital partners in market-driven opportunities). And indeed these new ways of looking at problem-solving through collaboration is 97

one of the long-term, value-added benefits HVC frameworks provide, and a theme repeated in many posts in this series. These affordable housing ecosystems include business pioneers such as Chip Reeves and his senior staff at Dow Corning; others at LaFarge, Holcim and Cemex, who invest in their people to innovate new building materials, develop new manufacturing processes to reduce their environmental footprint, and forge new, more inclusive collaborations between business, the social sector and the BoP client base to improve their product designs, marketing, costs, distribution and financing models. Ecosystems need the courage and dedication of savvy public officials stepping up when standards and enforcement are needed, as in Martina Wengles post. Government officials are critical to build the ecosystems legal, policy and incentive infrastructure. By being mindful to evaluate their use of subsidies and incentives, policymakers and public officials can alter their policies so their spending supports rather than undercuts the private sector from entering and profiting from this new housing market. The private sector has the capacity to build sufficient affordable housing for the segments of the BoP who can afford mortgage payments the pyramid within the pyramid as clearly articulated in the post by Vishnu Swaminathan, and by supporting standards and funding the right kind of incentives, public officials can play a major positive role in matching the right solutions to each segment of the BoP. 98

Second: Communities and citizens themselves must be integral in the process of planning housing development, gathering market data, defining useful products and services, pricing and financing options to ensure that business and/or government gets great innovation right. As engineer Elizabeth Hausler concludes after years of developing detailed ways to build earthquake or hurricane resistant housing, while technology and money are important, sharing knowledge with and learning from the people who live in these homes are essential. People, said Hausler, the founder of Build Change, are the key to making these changes widely adopted, commonplace and continue over time. It is critical to motivate residents, builders, government officials and relief agencies to want to rebuilt correctly. A lesson echoed in the majority of the posts from Brazil to India, Indonesia to Haiti. Collaborations To Tear Down the Walls These collaborations to build multistakeholder ecosystems are not static, nor should they be. Bill Drayton, founder of Ashoka, writes of the future resiliency and success of public and private sector ventures being built by fluid teams of teams, regrouping as needed to tackle specific problems and sharing knowledge and skills, and then joining other teams working on other challenges important to them. What is constant amid all the changemaking and regrouping is a new mindset for collaboration, one that leads to co-creation of value by all the stakeholders.

And it definitely includes tearing down the walls of silos of knowledge and talent, information and experience, and building bridges across divides between sectors of professionals, between business and citizens, between governments and the private sector, so that the power of their combined skills and knowledge unleashes untapped potential. The Future? We hope the posts published here served to inspire you to reach out to the authors, to experiment with and learn more about solutions. We want you to share your own successes and questions with Next Billion and its readership, to continue online to exchange ideas and opportunities in global collaborative entrepreneurship in affordable housing. In the face of environmental destruction, Goodall said there were three major things that renewed her hope to continue her work: 1.  Evidence of the remarkable resilience of nature to rebound once the damaging actions ceased; 2.  The transformational difference made by engaging communities to be co-creators of solutions; and 3.  Young peoples eagerness to think outside the box to find solutions, who see themselves as determined changemakers who can make the world a better place.

The ideas that emerged from this series struck me similarly. Its clear that we have the ingenuity and tools to close the gap in nobly built affordable housing in our lifetime. We lack only the political will to so do. But this is changing due to our authors and others work locally and globally. Examples of collaborative and smart urban planning, successful increases in quality affordable housing that actually reduces cities environmental footprint, and visionary municipal-business-citizen partnerships that are boldly building vibrant cities of the future now showcase the results of integrated and innovative partnerships. Although this series formally ends with this post keep more examples of this coming! It is a local and global conversation we hope will help fuel reaching affordable housing for all in our lifetime.

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TEDx: The City 2.0 Prize: A Collective Wish Big Enough to Change the World
By Rochelle Beck

Something strange is going on. December usually is a time of bonuses and awards for individual achievement. Magazine covers announce the 100 richest, the 20 most influential, the 30 most innovative or the 10 sexiest, or THE person of the year. But this year, things are different. TIME magazine today announced its PERSON OF THE YEAR: The Protester, the personification of all who participated in 2011 movements Arab Spring, Occupy Wall Street, Greece, Spain and most recently Russia honored for the seismic changes they inspired, which TIME sees continuing to trend in 2012. TEDx, too, broke its tradition this year. Instead of a competition with one winner to get $100,000, for the first time ever, TEDx chose not a person, but a concept: THE CITY 2.0. The TED Prize extends an invitation to the general public to craft a wish . . . capable of igniting a massive collaborative project among the members of the global TED community, and indeed all who care about our planets future. TEDx wants us together to dream up a wish big enough to change the world. 100

Learn more about how TEDx framed its 2012 competition, view the inspiring documentary video trailer entitled Urbanized, (above) setting its framework and share with colleagues to read, watch and contribute to the best collaborative ideas for great city housing built in the 21st century. Want to enter your wish or influence the discussion? Click HERE to find out how. To follow all the wishes entered thus far and to join the discussion to formulate the finalized wish, click HERE.

discussion of The City 2.0. There is an online platform aptly named www.thecity2.org, sponsored by the John S. and James L. Knight Foundation, where you can see more about how that prize will be shared by the best ideas submitted.

Authors note: Since this post was filed, TEDx did indeed award a winner of its competition $100,000 to continue the local and global

Read more about it here. While it has only just launched, its opening statement of The City 2.0 is definitely worth a look:

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The BIG IDEA: Affordable Housing Authors and Editors

(alphabetically by first name) Aden Van Noppen is a Housing Portfolio Consultant in East Africa for Acumen Fund, a nonprofit global venture fund investing in social enterprises. She has worked on urban development and low-income housing in India at micro Home Solutions (mHS) to build socially inclusive cities by creating housing solutions for the poor. Before going to India, Aden focused on market-based approaches to poverty: she was a Portfolio Associate New York for Acumen Fund in and worked at Dalberg Global Development Advisors, an international development consulting firm. Aden has a B.A. in international development from Brown University. Andr Albuquerque is founder of Terra Nova, a for-profit social enterprise, the first Brazilian firm specializing in peaceful and streamlined processes to secure land tenure of privately held urban areas for slum dwellers. He is a lawyer with a degree in Urban and Environmental Planning from Pontifcia Universidade Catlica do Paran. He presided over the Housing Company of Pinhais in the metropolitan region of Curitiba, and has consulted on housing issues for the World Bank. In 2008, he was selected as an Ashoka fellow and chosen by Schwab Foundation and the Folha de So Paulo as Social Entrepreneur of the Year. He is member of Folhas Socio-Environmental Entrepreneurs Network. Chip Reeves is Director of Discovery at Dow Corning, leading its Business & Technology Incubator. His global teams explore megatrends and geographic priorities to inspire next generation new products. He has engaged the design community to inject new thinking into Dow Cornings product development and commercial efforts, and helps the team incorporate new learning after engaging with low-income communities through Dow Cornings Citizen Service Corps. Chip spent nearly a third of his career working across Asia, based in Tokyo, Japan. Chip has a Bachelor of Science degree in marketing from Indiana University and a MBA from Michigan State University.

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Francesco Piazzesi, founder and Director of Echale a Tu Casa, is a leading social entrepreneur solving major housing challenges using innovations and community-based solutions that aid the poor and protect the environment. His work with communities has resulted in nearly 26,000 homes built in Mexicos poorest communities, generating 130,000 jobs and US$6.5 million of income. He has a doctorate in development policy, with a focus on sustainable housing microfinance mortgages. In 2010, Francesco was elected as an Ashoka Fellow to scale his innovative work in Echale a Tu Casa. That same year he was awarded the Schwab Foundation Entrepreneur of the Year award. Frank DeLano is a project leader at Dow Corning, where he has worked for 23 years. His major responsibilities are leading projects that improve supply chain processes. The inspiration for his Next Billion post was his experience working with Ashoka Housing for All in India during his time in Dow Cornings Citizen Service Corps. He was part of a team there working to develop affordable housing building standards, as well as gaining insights for new products and services. When not at work, his adventures are shared his wife of 25 years and their four children. Irena Shiba is the Program Officer making and managing philanthropic investments for Microfinance and Enterprise Development at Citi Foundation, with portfolios comprising investments in new consumer financial products and support for small businesses. She directs the Citi Microentrepreneurship Awards, a $2 million program recognizing extraordinary microentrepreneurs in 28 countries. Prior to Citi, Irena worked on immigration affairs for Senator Hillary Clinton and on the International Year of Microcredit, a UN initiative to promote inclusive financial sectors. She graduated from McGill University with a BA in International Development Studies and Political Science, and has an MPA in international development from NYU Wagner Graduate School of Public Service. Keerthi Kiran is a consultant with Ashoka HFA India. Before joining Ashoka, he was the founding director of Grassroutes, a fellowship program for Indian youth to discover opportunities in citizen sector. Keerthi studied at BITS Pilani, graduating with a degree in Electronics and Instrumentation.

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Lucie Klarsfeld joined Hystra in 2009, where she works on developing hybrid strategies in the energy, housing and ICT sectors. Her previous experiences included strategy consulting at Bain & Company, assignments for the United Nations and several social-sector organizations in the US. A theater-lover and actress, she also initiated, organized and taught theatre classes for disadvantaged Parisian youth. Lucie completed graduate studies at Columbia University. Marco Ferrario, co-founder of micro Home Solutions in Delhi, India, favors minimalist, functional architecture to bring good design where it has never been and where it is needed the most: low-income settlements. He works with other professionals to promote a multidisciplinary approach in urban planning. Marco graduated from the Politecnico Di Milano, Italy, where he worked for years as an architect. After an internship at the Grameen Bank, he returned to practice architecture with niche firms in India, Singapore and USA. New Yorks Cooper Hewitt Museum selected two of his works a modular shelter for the homeless and the design solution for low-income new homes to be part of their 2011 exhibition, Designing With The Other 90 percent. Mario Flores is the Director of Disaster Response Field Operations at Habitat for Humanity with over 20 years experience in disaster management and international development focused on shelter, housing, settlements and community development. Mario has a Bachelor of Science degree in civil engineering from the Jesuit University of Central America in San Salvador and post-graduate studies in urban planning, housing and infrastructure at the Institute for Housing and Urban Development Studies, Erasmus University, Rotterdam, Netherlands. He graduates from the Disaster Risk Management Program at the Asian Disaster Preparedness Center (ADPC) at the Asia Institute of Technology, Bangkok, Thailand. Martina Wengle is the program coordinator for affordable housing quality standards and certification at Ashoka Housing For All India. Before joining Ashoka, she worked with the Economic Cooperation and Development Division at the Swiss State Secretariat for Economic Affairs (SECO) on economic and trade policy measures. She holds a Master of International Relations of the Graduate Institute, Geneva.

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Melissa Scott is a consultant focused on sustainability and marketbased solutions. Prior to her intern experience with Ashoka Housing for All, India, Melissa was a program manager for CF Insights, a division of FSG Social Impact Consultants, working on community foundation sustainability. Her post in this series shows Melissas talent behind the camera; her photos illustrate women and childrens lives in Indias communities, and in many of Ashokas HFA Platform newsletters and materials. Melissa earned her BS and Masters of Marketing Analytics from Bentley University. She is completing her MBA at ESADE Business School, Barcelona. Olivier Kayser is Founder and Managing Director of Hystra, a private consulting firm focusing on hybrid social-business strategy solutions to advance prosperity at the BoP. Prior to creating Hystra, Olivier was VP of Ashoka, launching its France and UK operations, creating the global Ashoka Support Network and advising its Full Economic Citizenship Initiative. He was senior partner at McKinsey for 18 years leading multinationals in Europe, the US and Asia. He founded TER in 1980 serving French public sector clients, and is a board member of several for- and nonprofits, including the global nutrition network, GAIN. Patrick Kelley is Director of International Housing Finance for Habitat for Humanity Internationals work in more than 80 countries. He directs global strategy for sustainable housing finance, developing shelterrelated products and services with local financial service providers through its Center for Innovation in Shelter and Finance, sourcing capital to bring housing solutions to scale. Prior to Habitat for Humanity, Patrick worked in Africa supporting microfinance institutions, savings groups and national microfinance networks. He served as executive director of the largest MFI in Rwanda, and initiated the start-up of Turame in Burundi, and Hekima Cooperative in the DRC. Both these were awarded Best MFI in Country by the UN Year of Microcredit Campaign. Patrick has previous housing experience in Latin America.

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Rakhi Mehra co-founded micro Home Solutions to build inclusive cities based on the interdisciplinary principles of community, affordability and design. She has led a portfolio of housing solutions from dormitory shelters, upgrades and rentals to ownership models that are viable and scalable. She was an intern at the Grameen Bank in Bangladesh and worked with Ashoka Fellows in microfinance before joining CARE India as a Program Associate. She led the program design team for tsunami rehabilitation program in Andaman and Nicobar Islands; consulted with Rabo Bank, India, in agribusiness and microfinance. She earned her MBA from Harvard Business School, and was awarded the HBS Social Enterprise Fellowship in 2010. Rochelle Beck is communications director at Ashoka Full Economic Citizenship, where she leads brand, messaging, multimedia materials and strategies to share its knowledge through Ashoka global networks, partners, business media and integrated online and social media campaigns. Before joining Ashoka, she was founder and CEO of a profitable social enterprise empowering thousands in Latin America and Africa to build their small business success linked to the global marketplace. Based on this work, she won the World Banks Development Marketplace competition. She was Director of Public Affairs for Childrens Defense Fund, and chair of the Harvard Education Review. She has published full-length books, video scripts and numerous articles on economic development, business and social justice. Her doctorate is in education and social policy analysis from Harvards Graduate School of Education and Kennedy School of Government. Ronda Grosse is currently a Science & Technology leader in Dow Cornings Business and Technology Incubator, where she provides technical direction and leadership to develop and launch innovative technologies and siliconbased products. She has been employed at Dow Corning Corporation since 1992. Prior to joining Dow Corning, Ronda earned her Ph.D. in chemistry from the Ohio State University and conducted research at the Kanagawa Academy of Science & Technology in Japan.

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Sadna Samaranayake is founder and managing partner of InSiteLogic, Inc., a consulting firm whose work focuses on applying private sector efficiencies and market principles to affect sustainable progress in the developing world. She is a blogger for Next Billion, writing about social enterprise, the BoP and new alliances between business and the social sector. She won the Catherine Reynolds Fellowship for Social Entrepreneurs, and received her degree from New York University.

Scott Anderson is a writer, editor, blogger and social media practitioner with more than 15 years in media. He has been managing editor of the NextBillion Network of sites since October 2010, supervising its outreach, staff of volunteer senior writers, covering news and events of professionals working through enterprise at the BoP, as well as updating the site and engaging with its content partners and founding organizations. Joining NextBillion is very much a full circle experience for Scott, who interviewed CK Prahalad soon after the publication of Fortune At the Bottom of the Pyramid gained worldwide acclaim while at the Ann Arbor News. Scott is based at the William Davidson Institute at the University of Michigan. Steven Weir is Vice President of Habitat for Humanity International responsible for global program development and support in over 90 countries, where it has served over 500,000 to construct, rehabilitate or preserve homes; advocating fair and just housing policies; and providing training and access to resources to help families improve their shelter conditions. Steven was a founding board member for local Habitat affiliate in California in 1986, and in 1993, moved to Sri Lanka to start the country Habitat program, rising to the role of Vice President for Habitat operations in Asia and the Pacific. Weir is a registered architect, with degrees in architecture and engineering. Prior to his work with Habitat, he spent 16 years in private practice with an architecture and real estate development firmed based in San Francisco with projects throughout the Pacific rim.

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Susana Rojas Williams is Director of global International Shelter Initiatives for Habitat for Humanity International. She is an urban planner and architect with extensive experience in technical, program and policy aspects of sustainable urban and housing development, with particular focus on pro-poor and community-based approaches. She has professional experience in Latin America, Asia and Northern Africa, as well as the US. Prior to joining Habitat, Susana worked with UNHABITAT, the World Bank Institute, the Inter-American Development Bank, the Center for Reflective Community Practice and the Special Interest Group in Urban Settlement (SIGUS) at MIT. Susana has Masters degrees in city planning and architecture studies. Ted Baumann is Director for International Housing Programs for Habitat for Humanity International, leading strategic housing and human settlement programs outside the United States and Canada. Prior to joining Habitat, Ted lived in Cape Town, South Africa, for 25 years, where he completed several degrees at the University of Capetown, and later managed the revolving housing finance program of the Peoples Dialogue on Land and Shelter, an NGO supporting the South African Homeless Peoples Federation. He has consulted for the World Bank on small and medium enterprise microcredit. In the U.S. Ted established Bay Research and Consultancy Services, targeting community-based housing and microfinance programs, working with clients including UN-Habitat, the International Labour Organisation, the South African government, among others.

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Valeria Budinich is Chief Entrepreneur of Ashokas Full Economic Citizenship (FEC) global initiatives, a pillar of Ashokas vision to create an Everyone a Changemaker world in which all have the skills and experience to participate fully in the formal economy and effectively exercise choice, build assets and use changemaking skills to improve their lives. FEC supports new social-business frameworks, such as the Hybrid Value Chain, to bring multiple stakeholders together to cocreate solutions to the worlds most pressing problems. Prior to joining Ashoka, Valeria worked as a social entrepreneur for over 25 years in 22 countries to create and expand new businesses with social impact. She was the COO at Appropriate Technology International, a founding VP for Latin America at Endeavor, and VP for New Initiatives at BDA, a global consulting firm in business process redesign and technology innovations for private sector clients. She was born in Chile, educated as an industrial engineer. Vishnu Swaminathan is Ashokas Director for Housing For All in India, responsible for developing the strategy, the demonstration and now the scaling and spread of closing the deficits in Indias affordable housing sector, and spread it to surrounding countries in the region. He joined Ashoka with more than 14 years experience as entrepreneur and innovator. He started two IT companies in Singapore in financial transactions and animation technology. He moved to India to head a leadership school based in Pune, and worked on large government projects to donate surplus funding to citizen sector organizations. He has developed initiatives with the National Innovation Foundation, working on grassroots innovation at national level in India. He holds a MBA from University of Southern Queensland.

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