Local Housing Solutions and Private Sector Involvement: Korean Experience for LAC Cities KRIHS

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Korean Experience for LAC Cities

Local Housing Solutions and Private laitnediseRSector ehT :leInvolvement: vel lanoitaN tnempoleveD lKorean aicoS ,dnExperience uF gnisaeL for dnuF gnisaeL laLAC itnedCities iseR ehT ,dnuF

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4

Introduction

Korean Experience for LAC Cities

Chapter 1

Resolving the housing problem is a multifaceted and challenging task. Urbanization and economic growth are mutually implicated processes. Since housing units are quantitatively and qualitatively deficient, the housing problem worsens as the population grows. Supplying housing units is expensive and takes time.

Furthermore, adequate housing requires public administration and the provision of education, culture, and various public and private services, as well as physical infrastructures, such as water, electricity, telecommunications, and sanitation.

Introduction

The Latin America and Caribbean (LAC) region is among the most urbanized in the world.

As of 2018, about 80.6% of the population of the LAC region lived in an urban area (World Bank, 2019a). Amid rapid urbanization, these regions face various challenges. In particular, this accelerated urbanization has not been accompanied by adequate access to housing (Bonomo et al. 2015). Widespread informal employment and high vulnerability to poverty have prevented an increasing number of households from accessing the formal housing market and discouraged private investors from investing in the lower-cost housing market (UN Habitat, 2016).

38%

Housing policies in the region that prioritize quantitative deficits have aggravated other urban challenges, such as spatial segregation and urban sprawl. Some LAC countries have implemented housing policies to address these deficits, mainly focused on resolving quantitative deficits, such as demand-side subsidies and supply-side mechanisms, and promoting homeownership over rental housing.

Although these programs have increased housing access, they have exacerbated other challenges like qualitative housing deficits and poor location and limited access to employment opportunities and public services.

31%

Korea has experience in successfully managing a chronic housing deficit. Despite the limitations and controversies related to Korea’s housing policy, its achievements are confirmed by statistics and academic research. Since the 1970s, Korea’s housing inventory has grown to a remarkable level, and the quality of Korean housing has improved significantly. Korea’s experience in housing policy provides insights into how governments can effectively respond to quantitative and qualitative housing deficits amid rapid urbanization and can serve as a model for Latin American countries.

This report summarizes the findings of a technical cooperation project implemented by the IDB’s Housing and Urban Development Division, and funded by the Korea Poverty Reduction Fund (KPR).

of LAC’s households present deficits

qualitative deficit

live in homes that lack either essential services, property titles, building materials or live in overcrowding

7%

quantitative deficit

live in improvised dwellings or cohabitation Source:Blanco, A., Fretes, B., Muñoz, A. 2014.

Korea’s experience in housing policy provides insights into how governments can effectively respond to quantitative and qualitative housing deficits amid rapid urbanization and can serve as a model for Latin American countries.

São Paulo, Brazil

Favelas: Typical slums in the city.

20-30%

* Of them

900,000

of residents live in informal settlements called favelas

are located in the southern part of the city.

Guadalajara, Mexico

One of the most urgent issues

Housing abandonment Inadequate planning

* 35,000

units of home abandonment in the metropolitan area.

Source: Martinez, 2017, pág. 4

5

6 The project aimed to provide housing solutions on well-located service land, and strategies to engage the private sector in four Latin American and the Caribbean (LAC) cities: São Paulo, Brazil; Panama City, Panama; Asuncion, Paraguay; and Guadalajara, Mexico.

The project’s specific objectives were: (i) to draw policy implications for the four targeted areas by reviewing affordable housing and land development experiences in Korea and identifying best practices, and (ii) to design a pilot project proposal and develop implementation plans for the four targeted cities (Asunción, Guadalajara, Panamá City, and São Paulo).

The project aimed to provide housing solutions on well-located service land, and strategies to engage the private sector in four Latin American and the Caribbean (LAC) cities: São Paulo, Brazil; Panama City, Panama; Asuncion, Paraguay; and Guadalajara, Mexico.

Brazil and Mexico, in particular, suffer from informal settlement and abandoned housing units. While in Paraguay and Panama, the provision of adequate housing for vulnerable households living in natural disaster-prone areas is considered a priority.

Though each city has distinctive problems, it is difficult for municipalities in these cities to deliver customized solutions, because, in most cases, housing solutions exclusively rely upon government-funded public programs. To solve the problem, it is vital to explore policy options and financial mechanisms and to diversify housing solutions.

Korean Experience for LAC Cities

7

Chapter 2

Panama city, Panama

Overview of Korea’s Affordable Housing Policy Korea has suffered from drastic housing shortages during its rapid economic growth. At the early stages of this process, the government focused on industrial development and infrastructure construction. This resulted in a chronic housing deficit that lasted from the 1960s until the mid-1980s. To cope with the situation, the government explored stepwise housing solutions to secure affordable housing over several time periods.

Hundreds of informal settlements suffers especially from frequent flooding from the Juan Diaz River.

Asuncion, Paraguay Northern Bañados

Deteriorated residents’ quality of life essential capacity of the lack of proper services for municipality infrastructure the residents.

The 1950s~60s: The Beginning Affordable Housing Policy

of

the

After the Korean War: Damaged housing units

Korean housing policy in the 1950s mainly focused on postwar reconstruction, especially the construction and supply of relief housing.

As of 1956, housing demand was estimated at 1.1 million units. To address the situation, the government implemented several housing construction projects. However, these housing solutions were limited to contingency programs and did not effectively tackle housing affordability.

The Korean Housing Authority was reorganized as the National Housing Corporation (NHC).

Congress enacted and implemented the new National Housing Corporation Act in 1962 to reorganize the NHC, thereby strengthening its legal status and functions and ensuring it had its own capital for the provision of social housing. The Public Housing Act provided the framework for the operation of the public housing system. Both actions contributed to laying the foundation of an institutional framework for housing.

18% lost percentage

3,284,000 housing units

8

Korean Experience for LAC Cities

Milestones of Affordable Housing Policy in Korea Supply Sector Reinforcement

The 2000s: Housing Welfare

Strengthening of Mass Supply Capabilities

Financing Improvements

1950

Housing Administration

1960

National Housing Corporation Act

Public Housing Act

Korea Housing Fund Act

1970

Housing Developer’s Registration Act

Housing Cosntruction Promotion Act

National Housing Fund

1980

Housing Site Development Promotion Act Rental Housing Construction Promotion Act

1990

Two-Million Housing Drive Construction Project

2000

Special Act for National Rental Housing Special Act for the Construction of Bogeumjari Housing

Source: Park, Chungyu et al. (2012)

The 1970s~Early 80s: Laying a Foundation for the Mass Supply of Housing and Residential Land The government development and implemented a 10-year plan for housing construction to expand supply and stabilize housing prices.

Between 1972 and 1981, 2.5 million housing units were constructed with public funds.

To promote housing construction and satisfy the demand for social housing, the government systemically involved the private sector, enacted the Housing Construction Promotion Act in 1972, which provided legal support to manage the development and construction of both public and private housing projects, with support from public funds, and also offered various incentives to induce private construction companies to participate in housing construction. Moreover, this Act administered the planning, construction, and sale of public housing and private development projects, involving the construction of at least 50 units in any one project area.

The Late 1980s~90s: The Two-Million Housing Drive and Permanent Rental Housing Despite the sustained efforts, housing shortages increased and were accompanied by a sharp rise in housing prices and rents.

To expand supply, the government announced the Two-Million Housing Drive (TMHD), a plan to supply 2 million new housing units between 1988 and 1992, including the development of five new towns in the suburbs of Seoul.

The government expanded the supply of land for development through the Korea National Housing Corporation and the Korea Land Development Corporation and increased the provision of housing loans through the National Housing Fund. The TMHD represented a quantum leap in the annual volume of housing construction in Korea and was the first attempt to allocate housing units to target income groups in accordance with their ability to pay. It enabled the public sector to provide permanent public rental housing for the lowest-income group and small housing units for sale to lowand moderate-income groups.

The focus of housing sector policy shifted from housing supply to housing welfare. Despite the quantitative growth in housing, from a qualitative perspective, the living conditions of lower-income households left much to be desired. In 2003, the government drafted a housing welfare road map to supply 1 million public rental units over a 10-year period.

One of the most important affordable housing policies was the National Rental Housing policy. It was initially pursued as part of the 100 National Policy Priorities in the late 1990s.

The plan was amended to respond to the socioeconomic situation of the early 2000s, and consequently, the National Rental Housing scheme was expanded to 1.12 million units.

In 2003, the government drafted a housing welfare road map to supply 1 million public rental units over a 10-year period.

9

The 2010s and Beyond: Addressing New Housing Needs The government started to focus on normalizing the housing market and enhancing housing welfare for different vulnerable groups. To this end, the government implemented several packages, such including deregulation and modification of tax laws, to encourage the supply of new housing and facilitate home purchases.

A new brand of public housing called Haengbok Jutaec (in English, Happy Housing) targeted at the younger generation was introduced, and a law promoting the institutionalized private rental housing sector was promulgated.

Recently, the Housing Welfare Roadmap has become the major policy framework for the housing sector in Korea to address the housing problems faced by citizens, including a lack of regulation in the private housing market, insufficient housing supply for the youth and the elderly, and weak governance arrangements across different levels of government and the public and private sectors. The roadmap is aimed at creating a “housing ladder” to improve social cohesion and facilitate the transition from low- to middle-income households and benefit socially vulnerable groups. It intends to supply housing welfare solutions based on the life cycle and income level of various target groups.

But in 5 years the TMHD surpassed its goal of 2 million housing units

This was because privatesector developers supplied 30% more housing than expected.

10

Korean Experience for LAC Cities 11

Public housing in Korea is mainly supplied by the central government. Local governments played a minor role in supplying public rental housing during the 1980s and 90s. However, they began to play a more significant role in the late 2000s, as they increased their participation in projects that pushed for the supply of public rental housing, such as residential development projects. In their role as suppliers of public housing, local governments are partly involved in identifying demand, planning, zoning, and construction. The heads of the local governments can establish plans to manage the public housing supply in their jurisdictions and play an important role to designate or rezone a small-scale public housing zone as a public housing zone.

Ensuring a stable supply of public rental housing and efficient inventory management may require adaptations to the supply system, including the localization of housing policies and the expansion of private participation.

Box Learning from Korea Selection Standard (subject of support)

No support in the event of loss of qualification for allowance (all or nothing’ problem arises)

Rent Level for public rental housing are defined in the Public Housing Act in consideration of target groups and income levels.

Allowance payment for seven categories including livelihood, housing, medical and education

Permanent public rental housing is aimed at serving the lowest-income group Rent level

30% low of market rate

cannot exceed 40% housing benefit

Comprehensive support according to the single criterion of the minimum living cost

Housing Benefit

(Current) Customized allowance

Conclusion The supply of housing in Korea has been implemented through a series of systematic frameworks encompassing the development of housing sites, financing, construction, and allocation. To build a sustainable housing supply system, the government first installed a public institution to promote the continued supply of housing from a business perspective and enacted the Housing Site Development Promotion Act to provide large areas for housing sites at affordable prices.

Management of Public Rental Housing in Korea

(Previous) Unilateral allowance

The Role of Municipalities

Introduced in

1999

Median income 50% 40-50% 40% Education

30%

Housing Medical Livelihood

Multilayered selection standards for allowances of each sector based on the median income Source: Kim, Hye-seung (2014)

as a component of the general welfare grant for the lowest-income households.

Housing allowances based on the National Basic Livelihood Security system, to improve housing welfare for low-income and working-class households.

The National Housing Fund loans for Jeonse tenants The provision of public rental housing

The government reorganized the existing National Basic Livelihood Security system from an integrated allowance to a customized separate allowance.

However...

Gobernment

Pivotal role in executing a diverse range of housing support programs.

This system did not consider the housing rent burden of the region in which beneficiaries reside and was not able to protect the poorer in society who need housing and educational allowances.

12

Korean Experience for LAC Cities 13

The supply of housing in Korea has been implemented through a series of systematic frameworks encompassing the development of housing sites, financing, construction, and allocation.

Korean housing policy postwar reconstruction, especially the construction and supply of relief housing.

Important legislation, including the Housing Bank Law and Emergency Measures to Deter Real Estate Speculation

The Housing Site Development Promotion Act, established a legal framework to facilitate housing production by public sector developers.

The government began to build the institutional structure to support housing policy and its implementation.

Drafted a housing welfare road map with a plan to supply 1 million public rental units over a 10-year period. The National Rental Housing and Bogeumjari Housing programs were implemented to secure housing stability for low-income households.

The government established a foundation for the mass supply of residential land.

The Housing Construction Promotion Act

The government drafted a 10-year plan for housing construction to expand supply and stabilize housing prices.

The government drafted a housing welfare road map with a plan to supply 1 million public rental units over a 10-year period. The National Rental Housing and Bogeumjari Housing programs were implemented to secure housing stability for low-income households.

The Korea Housing Bank began its operations

New brand of public housing called Haengbok Jutaec targeted at the younger generation was introduced, and a law promoting the institutionalized private rental housing sector was promulgated.

14

Korean Experience for LAC Cities 15

Chapter 3

2010

Analysis of the Housing Sector in Metropolitan Cities in LAC Countries and Policy Recommendations This chapter analyzes the status of the housing sectors in the targeted metropolitan cities and proposes policy recommendations.

1. São Paulo, Brazil Current Status and Major Challenges of the Housing Sector Brazil has suffered from overcrowding in urban areas for the past 20 years. To respond to the urgent housing issues, the federal government has, since 2009, been implementing the My Home, My Life Program (Programa de Minha Casa Minha Vida, hereafter MCMV), aimed at providing millions of new housing units and housing subsidies as part of the Accelerated Growth Program (Programa de Acceleração do Crescimento, PAC). This unprecedented housing program has achieved remarkable success over the past 10 years. Tenure structure of Brazil shows that households are owneroccupied, rented and ceded.

According to a 2018 report issued by Fundação João Pinheiro, the housing deficit in Brazil is categorized into 1) substandard housing, 2) family cohabitation, 3) excessive rent, and 4) excessive density. The most prevalent type of housing deficit changed from family cohabitation in 2010 to excessive rent in 2015 (Fundação João Pinheiro, 2018).

The city:

Figure 3-1 tenure type in Brazil (2010,2015)

Ninety percent of the total deficit is concentrated among families with income levels corresponding to up to 3 minimum wages (USD 723).

The city of São Paulo is the largest city not only in Brazil but also in Latin America. Despite the active socio-economic development of the city, the lowest-income communities, who live in the favelas, experience a constant lack of adequate infrastructure and housing units.

The low-income strata of the population are consolidating a self-built occupation on the periphery of the city, especially in its eastern and southern parts.

There are an estimated 889,808 units of informal settlements in São Paulo. The majority of these are categorized as informal land subdivisions or favelas. Informal land subdivisions refer to informal settlements carved out of privatelyowned land, while favelas tend to be located on public land (Cities Alliance, 2009).

0.3%

2015 0.2% 7.1%

6.7% 21.2%

4 Mlls.

17.9%

71.8%

housing units

74.8%

Owned Ceded Rented Others Source: IBGE (2016)

Housing Policies and Programs 1. Legal and Institutional Framework

3.2

Average number of household members

Between 2001 and 2010:

In Brazil, the federal, state, and municipal governments act independently to establish housing policies, regulations, and programs.

The overall policy stance conforms to the guidelines set by the federal government.

2. Housing Programs The municipality of São Paulo supplied 5,860 affordable housing units in 22 districts, 45% of which were supplied through the federal housing program Minha Casa Minha Vida (MCMV). The rest of the housing units were supplied through municipal housing programs, including Programa de Urbanizacao de Favelas, Renova Centro, and Programa Locacao Social.

Minha Casa Minha Vida was launched in 2009.

It has rental subsidy programs for evicted or relocated residents, which are open to those who are evicted or relocated due to public intervention or because they are living in a slum. The members of a household must earn less than R$ 3,400 (USD 642) per month to be eligible.

3.Housing Finance A range of housing funds has been established by different levels of government in Brazil. At the national level, funds are made available to meet the MCMV program and other forms of housing finance.

Population grew

0.8%

+

Housing units

1.2%

Source: (IBGE, 2010).(pág. 28)

Informal settlements

Are generally located on the periphery of the city, differing slightly from the favelas of other cities in Brazil.

16 The MCMV program is generally financed by four different funds such as the Residential Leasing Fund (Fundo de Arrendamento Residencial, FAR), the Social Development Fund (Fundo de Desenvolvimento Social, FDS), the Service Guarantee Fund (Fundo de Garantia do Tempo de Serviço, FGTS).

Another source of funding for the range of MCMV is from public resources targeted at municipalities of up to 50,000 inhabitants and financed by the national general budget and state or municipal actors, as well as third parties. There is also a provision for rural housing in the MCMV program, which focuses on the construction or remodeling of residential units located in rural areas, and operates under the National Rural Housing Program.

The financing of the programs are not enough to cover the whole price of a property, so it is only accessible to buyers with enough savings to pay for the first payment of total installments. High interest rates are one of the main obstacles to acquiring a house, and they often make it impossible for low- and medium-income families to buy a property.

Korean Experience for LAC Cities 17

The city of São Paulo provides rental assistance for resettlement through programs such as the Favelas Urbanization Program and Urban Operations. These are restricted to families composed of up to four members with a monthly income of up to USD 642 (R$ 2,400)

The municipal government should provide social housing units in the urban center, which would ensure access not only to basic infrastructure but also to job opportunities for residents.

Favelas (slums), irregular subdivisons, and housing complexes of social interest, in which interventions of urban regeneration, lard regularization, construction, and improvement of social housing could be implemented

60% - HIS 1 20% - HIS 2

143

ZEIS 2

Unused or underutilized land, in which housing of social interest, social and cultural equipment, among others, must be produced

60% - HIS 1 20% - HIS 2

13.8

ZEIS 3

Real estate underutilized or encumbered in areas with urban infraestructure, services, and job opportunities (usually in the central region) in which housing for social interest housing must be constructedor renovated, and employment and income generation activities ensured

60% - HIS 1 20% - HIS 2

6.8

ZEIS 4

Unregulated land or vacant land in protected areas for water resources with urban infraestructure, where the production of social housing is allowed, exclusively for population transferred from risk areas and the banks of dams

60% - HIS 1 20% - HIS 2

4.9

ZEIS 5

Unregulated land or vacant land in areas with good urban infrastructure, where social housing and social, cultural and other amenities should be built

40% - HIS 1 20% - HIS 2

3.5

ZEIS 1

Source: Municipality of Sao Paulo. Partially modified by the author

Informal tenements in the center

Korea’s Happy Housing program is a possible policy model, which considered both housing affordability and commuting distance for residents.

Utilizing abandoned housing units and public lands in the urban center to improve the limited financial capacity of the municipal government.

Cortiços

4. Policy Recommendations

The government should prioritize improving access to basic infrastructure and public transport for low-income households.

Surface (m3)

Description

Source: HabitaSampa, 2019.

The city of São Paulo provides rental assistance for resettlement through programs such as the Favelas Urbanization Program and Urban Operations. These are restricted to families composed of up to four members with a monthly income of up to USD 642 (R$ 2,400) (HabitaSampa, 2019).

Considering the current situation of the housing sector in São Paulo, it is highly recommended that the municipal government consider an affordable rental housing program for lowincome households.

What to buil (minimum)

Type

9%

It is recommended that the municipality renovate the existing empty houses. Some rental housing programs in Korea renovate empty houses and rent them to low-income households and vulnerable social groups at half the normal rental price.

of the total number of informal settlements in 2009

Housing deficit in urban areas

5.6mll. units in 2015

=

87.7% of total

=

89.6% low-income households account

A stable financial framework is crucial to secure the sustainability of a housing program, particularly an affordable housing program.

Public authorities can make space for the private sector by deregulating, decreasing interest rates and revitalizing the participation of the private sector in affordable housing programs.

Long-term planning with safe financing can contribute to a sustainable and consolidated housing program. The Koreas housing assistance and voucher system, which is aimed at improving the capacity of residents in social housing to pay rent, may be a positive institutional model.

Improving coherence across different governmental levels is highly recommended.

The lack of consistency across federal, state, and municipal policies leads to political and social blind spots and high administrative costs. It is necessary to formulate systematic policies that apply throughout the government hierarchy.

18

Korean Experience for LAC Cities 19

2. Panamá City, Panama owned rented ceded

Current Status and Major Challenges of the Housing Sector The real estate market in Panamá City has been one of the fastest-growing among the LAC countries for years. Panamá City has attracted foreign investment to the market and sustained stable economic growth. As of 2010, the housing stock in Panamá City was 291,112 units. Even though the majority of housing units in the city are detached houses, the portion of apartment units in Panamá City is significantly higher than in other cities in Panama.

There are no official statistical data on the housing deficit in Panamá City, but the housing deficit has gradually increased. According to the National Strategic Plan 2010-2014 (Plan Estrategico 2010-2014), the housing deficit in Panama as of 2010 was estimated at 136,000 (Government of Panama, 2010). This deficit is mostly concentrated in the mid- and lower price ranges. Following the National Strategic Plan 2015-2019, the government is planning to supply 125,000 housing units by 2019 and expand the incentives for the private sector and public-private partnership (PPP) projects to increase the housing supply (Government of Panama, 2015).

2018

about

1.8 mll. people

lived in the metropolitan area of Panamá City (United Nations, 2018). (pág. 48)

42.8% 63.3% Total population

Urban population

Population: 1.1 million

2015

Housing Policies and Programs 1. Legal and Institutional Framework The housing sector in Panama is mainly managed by the central government. The main institutional body is the Ministry of Housing and Territorial Planning (Ministerio de Vivienda y Ordenamiento Territorial Panama, MIVIOT). As a result, local governments have become highly dependent on the central government in terms of housing, planning, and general investment programs. Most housing programs and public housing projects are implemented by MIVIOT. Municipalities also have a role as housing authorities.

The decentralization law guarantees municipalities’ administrative competencies to establish their own housing projects, investment plans, and land use planning.

Source: Panamá City Municipality, 2019.

The apartment units

98%

of total apartment units

20 They can determine the use of the real estate tax revenue from their land. At the local level, municipalities deal mostly with managing construction designs, issuing permits, collecting taxes and fees, and inspecting ongoing construction projects.

Korean Experience for LAC Cities 21

The average annual housing supply of Panamá City from 2015 to 2018

10,780 units

Housing Programs The housing programs of MIVIOT can be categorized into (a) incentives to increase the housing supply, (b) housing improvement, (c) supply of public housing, (d) improvement of informal settlements.

There are the following programs: Subsidized and Savings Housing Program (Programa de Vivienda con Subsidio y Ahorro, PROVISA), Techo de Esperanza, The Social Interest Housing Program (Interes Social) and The Mensuration and Legalization Program (Programa de Mensura y Legalizacion).

Policy Recommendations More apartment units were supplied than detached houses

60-70%

of annual housing supply

It is expected...

Housing Finance

34.8%

of total households in city

MIVIOT is operating two major housing finance programs. One is Preferential Interest Program (Intereses Prefernciales)is a financing program to discount the mortgage interest of first-time home buyers and Bono Solidario de Vivienda is a housing subsidy program for first-time home buyers.

The two above-mentioned programs account for the majority of the housing supplied by Panama’s housing programs. However, critics point out the following issues: - Many banks are opting out of working with the Preferential Interest Program, as the government has been slow in paying back the difference between the preferential rate and the market rate.

- By stimulating new construction with subsidies, the demand for and value of the existing housing stock is weakened.

- It is considered that all subsidies distort the market and that there are limitations to ensuring that the intended beneficiaries of subsidies will be the ones effectively receiving those benefits.

The government’s role is limited to establishing the programs and mobilizing financial resources. As a result, the private sector determines aspects of housing. Hence, it is necessary for the government to play an active role in housing planning, along with providing financial incentives.

84,298

live in informal settlements Source: According to the research of Espino and Gordon, 2015.

And...

It is recommended that the government expands its role in housing supply.

Panama

Panama city

7% 13%

5% 23%

14% 51%

66%

21%

Owned Rented Mortgaged Etc Source: Instituto Nacional de Estadistica y Censo (2010)

Introduce public rental housing for lowerincome households in the urban area. Rental housing can provide housing solutions for those who work in the informal sector and do not have access to traditional finance.

The government first needs to secure affordable land. The price of land in Panamá City is high.

The government needs to introduce a legal framework that allows the public sector to take the initiative in the whole process of acquiring, developing, supplying, and managing residential land.

The government could consider a joint project with the private sector using incentives and regulations such as the mandatory supply of small-sized housing or rental housing units.

In Korea, public entities such as the Korea Land and Housing Corporation purchase or expropriate undeveloped land and provide it to the private sector at a reasonable price.

41%

The private constructor builds a certain amount of small-sized housing units or rental units so that they can be provided to lower-income households.

are speculated to be constructed in the informal route.

The government is expected to establish a comprehensive land use plan and legal framework for land management for the informal settlements on the outskirts of the urban area.

of the housing units

Figure 3-6 tenure type in Panama and Panama City

Data: The beneficiaries of the program can get a mortgage loan with a 1% to 2% interest rate.

It is possible to provide infrastructure to existing informal settlements, but proper land management should come first to supply affordable rental housing for households in the informal settlements.

Housing policy and programs require greater efficiency and continuity and an integrated strategy. It is necessary for the government to establish a mid- to long-term official housing policy or plan that is not affected by changes in administration.

It is necessary to strengthen the capacity and role of municipal governments and increase their finances, while cultivating their capacity related to the housing sector and deploying the relevant personnel.

The central and municipal governments should establish a comprehensive disaster management plan, investigating and collecting data, through continuous monitoring of disaster-prone areas, to strengthen their disaster-prevention function and relocate refugees to a safer residential environment.

22

Korean Experience for LAC Cities 23

3. Asunción, Paraguay Current Status and Major Challenges of the Housing Sector

owned rented mortgaged etc

2010

The housing sector highly dependent on the private sector favoring the middle-income households The residential segregation among the different income levels has intensified.

Acceleration of the urbanization in the informal sector and increase of the urban sprawl and informal settlements on the periphery No comprehensive disaster management plan.

Preferential Interest Program to support the purchasing of houses by lower-income households Bono Solidario de Vivienda mostly promote low-density single-family housing on the city’s edge.

10, 780 units

3.0 2010

2015-2018

mainly rented 2010

34.8% 2015

The National Land Use Planning Policy contemplates trengthening local governments’ administrative capacities regarding: Territorial governance Land use planning Management of the urban transformation and development process.

Acquisition of capacities for production, access, and management of geospatial information

The representative program for housing supply (PROVISA) is the Subsidized and Savings Housing Program A housing improvement program for informal settlements The Social Interest Housing Program is a public housing supply program for lower-income households The Mensuration and Legalization Program

Compared to other LAC countries, Paraguay is less urbanized country. As of 2018, the GDP per capita in Paraguay was USD 5,821 (World Bank, 2019). Although improving inequality in the country has not been accomplished, poverty has improved significantly, with the poverty headcount ratio decreasing from 44.9% in 2005 to 26.4% in 2017.

Asuncion has been developed as the center of the country since the Spanish colonial period, and it currently leads the national economy.

The city is located on the eastern bank of the Paraguay River, which has traditionally been home to the port, logistics, and industrial activities. As of 2018, the population of Asunción was 523,182 (DGEEC, 2018). For the past 60 years, the Asuncion Metropolitan Area (AMA) has been spreading to the southeastern outskirts at low density. As a result, the residential areas of the outskirts lack basic infrastructure, and the urban sprawl of the center of Asuncion is severe. The major cause of the qualitative housing deficit was the use of poor building materials.

Because of the limited data, the major challenges in Asuncion’s housing sector are analyzed based on the current status of the housing sector at the national level. To identify the important and urgent issues in Paraguay’s housing sector, a survey was conducted and distributed to the government officials of Ministerio de Urbanismo, Vivienda, y Habitat (MUVH, hereafter). A total of 31 responses were collected. The questions were categorized into sectors: affordable housing supply, housing finance, land policy, legal and regulatory framework, institutions and policy, and housing needs and demand. Modified Importance and Performance Analysis (IPA) was applied to identify high priority area.

Paraguay lacks supply of affordable housing.

There are several reasons for this, including:

II (Longer term concetration) (Preventive measure)

III (Low priority)

I (High Priority)

IV (Short term concentration) (Curative measure)

Urgency (High)

2017

291,112

Importance (High)

Urgency (Low)

0.48 million

Figure 3-11 Importance and Urgency Analysis

Importance (Low) Source: by Author

Population of AMA accounts

30%

of total population

As of 2018...

Total number of households living in Asunción was

139,426 According to the OECD (2018):

1/4

of total population

was living in poverty or extreme poverty as of 2015.

24

Korean Experience for LAC Cities 25 Figure 3-23 Policy Axies and Major Objetives of PNVH

Figure 3-10 The Tenure Type in Paraguay and Asunción

Axis Paraguay

Asunción 8%

11% 11%

Governance and Institutional Framework

Promote inter-institutional coordination Facilitate citizen participation in and transparency of the planning, implementation, and evaluation phases of housing development Strengthen capacities in the production of housing and living spaces Adapt legal frameworks by creating new instruments or making improvements

Planning and Design

Promote sustainable territorial development and social cohesion Promote the dvelopment of an integrated information system for the design and development of public housing and habitat policies Promote secure land right for all Promote coordinated action to overcome the qualitative and quantitative housing deficits

25%

78%

67% Owned Rented Others

Economics and Finance

Source: DGEEC (2018)

1) a lack of incentives for the supply of affordable housing, 2) owner-occupation-oriented housing supply, and 3) a lack of participation of the private sector.

Housing Policies and Programs Legal and Institutional Framework Paraguay sets up a national housing plan. In 2018, SENAVITAT, the former housing authority, established the National Policy for Housing and Habitat (Politica Nacional de la Vivienda y el Habitat, PNVH). The plan was prepared in consideration of the rights and guarantees related to the quality of life of the citizens of Paraguay, promoting the citizens’ right to have decent housing and a healthy residential environment. The goal of the plan is to establish guidelines on ensuring an adequate housing and living environment.

Housing Programs In Paraguay, the Ministry of Housing and Urban Planning (Ministerio de Urbanismo, Vivienda y Habitat, MUVH) is the main governing body in the housing sector. Currently, the MUVH operates 10 housing programs, including housing financing programs such as FONAVIS and Créditos Hipotecarios. In general, to be eligible for a housing program administered by the MUVH, a household needs to earn an

amount equivalent to no more than five times the monthly minimum wage, which corresponds to a maximum of USD 1,746. A major challenge regarding eligibility is to design and match the programs to different income groups, ranging from people in extreme poverty to middleincome groups, as no clear guidelines exist for defining the groups within the housing framework.

Housing Finance The major housing finance programs in Paraguay are FONAVIS, Crédito Hipotecario (mortgage loan), and FONCOOP. FONAVIS was established to provide a stable source of funds for the housing program for low-income households. Crédito Hipotecario is a mortgage loan program that provides lines of credit for housing associations, credit unions, trade unions, and their members and FONCOOP is a financing program for housing associations that supports the construction of “cooperative neighborhoods” (barrios cooperativos) with a maximum of 40 housing units per project (MUVH, 2019).

Policy Recommendations The highest priority housing policy issue is the supply of affordable housing and the land required to build it.

Major objetives

Promote the optimization of govertment resources to strengthen public investment in the housing sector Promote the creation and strengthening of alternative financing mechanisms for the development of housing and living spaces Encourage economic efficiency in the production of housing and living spaces Promote financing options for territorial development and increase access to affordable housing

Source: SENAVITAT (2018)

For countries such as Paraguay that are undergoing economic and demographic growth, an institutional foundation for securing housing inventory is essential in addressing the social, demographic, and spatial changes that accompany such growth.

The type of housing to be supplied most urgently is affordable housing. The Paraguayan government will find it challenging to promote the construction of affordable housing.

The government should first strengthen the legal framework for the supply of affordable residential land. Paraguay has limited public funds to use for the housing sector and has no institutional mechanism with which to intervene in housing development. It is therefore necessary for Paraguay to establish a legal and institutional framework to effectively provide serviced land at low cost.

A regulatory framework and incentives for the private sector should be established. As a result, the participation of the private sector is essential for the expansion of affordable housing. Korea has used financial incentives to promote the participation of the private sector, such as a pre-sales system and home builders’ loans.

The accessibility of housing finance programs for low-income households should be enhanced.

The government should simply alter the eligibility requirements to make the support more accessible for low-income households, and alternatives such as public rental housing should be considered. Public rental housing in Korea is evaluated as one of the most effective policy tools for addressing housing for lowincome households.

Efforts to systematically coordinate the housing supply plan with the territorial and urban plans are essential.

A systematic framework for monitoring the housing sector should be established, especially at the municipal level.

Paraguay has a serious lack of official data on the housing sector, and the existing data lack reliability. It is thus necessary to establish a systematic monitoring and evaluation system for policymaking purposes, while also supporting the training of specialized personnel with the skills necessary to operate the system.

26

Korean Experience for LAC Cities 27

4. Guadalajara, Mexico Current Status and Major Challenges of the Housing Sector

owned rented others

0.52 million 2016

5.5

96,582 2012

Housing development depends largely on the private sector, which supplies housing for middle- to high-income households.

Lack of the institutional framework to provide large-scale affordable housing, and cadastral information is not systematically managed.

Lack of effective regulation to control the formal and informal housing markets.

Mismatch between housing need and housing demand: high housing need but low housing demand.

FONAVIS Housing program is divided into four levels (Level 1: middle-income families to

Level 4 representing families living in extreme poverty).

Crédito Hipotecario, a mortgage loan program.

FONCOOP, a financing program for housing associations that supports “cooperative neighborhoods”

139,426 units 2012

2018

mainly owned

31,046 units

2018

2012

The housing sector in Paraguay is mainly led by the central government. The municipalities play minor roles in housing planning and supply.

Sustainable Development Plan (PDS) and the Land Use Plan ASU VIVA Plan is jointly established by IDB and the government: establishes the sustainable urban development program for 10 cities in Metropolitan area.

Programs for the qualitative improvement of housing: Mejoramiento Integral Del Barrio Chacarita Alta Program in terms of quantitative improvement: CHE TAPYI covers the provision of social housing units and basic infrastructure, including health and community centers.

Mexico is the most populous Spanish-speaking country in the world, and is the second most populous country in Latin America after Brazil.

The population of Mexico is estimated at around 126 million as of 2018. GDP per capita is USD 9,673, which is slightly higher than the average GDP per capita of LAC at USD 9,044.

Guadalajara is the second-largest city in Mexico.

The city forms the Guadalajara Metropolitan Area (GMA) with neighboring cities. The housing stock of GMA was around 1.1 million.

GMA has the highest rate of abandoned houses in Mexico. Most of these are affordable houses built outside the city, where public services are insufficient and mobility is inefficient. The major causes of the increase in abandoned houses are: 1) the municipality has indiscriminately given permits to the urban periphery, 2) the lack of social infrastructure, and 3) housing demand and housing finance have soared. The number of abandoned houses continues to rise because of oversupply, insufficient housing financing, and poor infrastructure near the housing construction sites. The lack of job opportunities is another reason for the increase.

The expansion of housing finance is ironically another reason for the rise in abandoned houses, because it causes the hollowing out of city centers and social exclusion.

Housing Policies and Programs Legal and Institutional Framework The housing policy in Guadalajara is executed by the Jalisco state government, guided by the National Housing Program. The Housing Institution of Jalisco (Jalisciense de la Vivienda) supervises the housing supply for lowerincome households.

The federal government formulated the National Housing Policy, aiming to 1) improve inter-institutional coordination, 2) move toward

The ppoverty headcount ratio at USD 5.5 a day

2016

2014

25.7%

33.6%

decreased

The proportion of urban population living in slums

2014 11.1%

improved

2008 14.4%

The quantitative housing deficit 15 million

units

About 7 million units or 28% of the total housing stock, do not meet the basic housing standards.

28 a sustainable and smart urban development model, 3) responsibly address the housing gap, and 4) provide decent housing for all Mexicans. GMA established the Metropolitan Territorial Planning of GMA (POTmet) and GMA Metropolitan development program 2042 (PDM). GMA also implemented the National Housing Program 2014‒2018 with the aims of 1) improving and organizing the urban housing sector, 2) increasing the quality of life, 3) revising financing regulations and programs, and 4) strengthening the coordination between the different levels of government.

Housing Programs The major national housing programs include Esta es Tu Casa (this is your house) and Tu Casa (your house). Esta es Tu Casa is a subsidy program for the purchase and construction of a housing unit. The Tu Casa program also provides lower-income households with a subsidy for housing construction, expansion, and repair.

Additionally, there is a housing redevelopment program called Programa de Desdoblamiento Habitacional. It aims to build two or more levels on individuals’ private property. It redevelops existing houses to change their ownership regime or build up to three houses on the same property. The Municipality of Guadalajara also implements Proyecto de Inversion Social with IMUVI and IPEJAL (Instituto de Pensiones del Estado de Jalisco), aiming to implement rental housing and property schemes for employees who do not own houses. Cooperativa de Vivienda is another project run by IMUVI, with aims to build apartments through housing cooperatives.

The targeted beneficiaries are single mothers or lower-income families that are able to purchase a house. The rental of the houses supplied through this project is restricted to those who are not members of cooperatives.

In 2015 CONAVI established a geostatistical model for updating the urban containment perimeter in order to prevent generating more abandoned houses by differentiating the levels of INFONAIT subsidies.

Korean Experience for LAC Cities 29 Housing Finance The socioeconomic range of national housing financing instruments is very differentiated between public and private, and between workers and the lower-income bracket.

owned rented others

Policy Recommendations Mexico’s housing sector has unique features which differ from the other countries in this study.

INFONAVIT, responsible for financing affordable housing, prefers to construct largescale housing complexes, causing housing development to occur in the suburbs, not in the urban center.

It is recommended that construction and urban planning are formulated simultaneously with a long-term perspective. Traffic networks need to be linked with building construction. In Korea, the central government has strong leadership under the Ministry of Land, Infrastructure and Transport (MOLIT), which implements national territorial development, including in sectors such as transportation, rural and urban development, and land development.

It is strongly recommended that comprehensive urban planning is implemented from a mediumto long-term perspective. Considering housing finance in Mexico, the high price of housing is a major challenge for low-income households.

It is recommended to diversify the institutional mechanisms of housing finance in order to enhance accessibility to housing finance for lower-income families

1.5

1,100,000 2015

3.9

2010

The lack of a systematic urban planning framework has led to chronic urban sprawl The lack of a consolidated institutional system or national institution Guadalajara has the highest rate of abandoned houses and affordable houses Lower-income households in Mexico find it difficult to access the formal market

The Federal Mortgage Society The Institute of the National Housing Fund for Workers (INFONAVIT) The Housing Fund of the Institute for Social Security and Services for State Workers The National Fund of Popular Housing (FONHAPO), a public trust fund for affordable housing.

mainly owned

15 million 2015

2010

52%

2015

2010

The main actors in housing policy: the municipality, the Jalisco branch of INFONAVITAT, CANDEVI, an association of private constructors.

The National Housing Council (Comission Nacional de Vivienda, CONAVI) establishes housing plans, finances resources, and manages subsidies.

The Municipal Housing Institute (IMUVI), is in charge of provision and construction of social housing.

The ‘Tu casa’ (Your house) program provides lower-income households with a subsidy for housing construction, expansion, and repair.

‘Esta es Tu Casa’ (This is your house), a subsidy program for the purchase and construction of a housing unit.

30

Korean Experience for LAC Cities 31

1.2 1.2million million 1.2 million

0.48 0.48million million 0.48 million

0.52million million 0.52 million 0.52

1.5million million 1.5 million 1.5

3,3,573, 573,509 509 3, units 573, units509 units

291, 291,112 112units 291, units112 units

96,582 582units units 96, 582 units 96,

1,100,000 000 1,100, units000 units 1,100, units

owned owned rented rented ceded ceded

owned owned rented rented mortgaged mortgaged etc etc

owned rented ceded

owned rented mortgaged etc

owned owned rented rented others others

owned rented others

owned owned rented rented others others

owned rented others

1.1.Housing Housing 1. deficit Housing deficitfor for deficit lower lowerfor income income lowerfamilies families income families 2.2.Location Location 2. Location ofofaffordable affordable of affordable housing housing housing 3.3.Abandoned Abandoned 3. Abandoned houses housesinin houses urban urbancenter incenter urban center 4.4.Lack Lackofof 4.coherence coherence Lack of coherence across acrossdifferent different across different

1.1.Supply Supply1. ofofSupply affordable affordable of affordable housing housing housing 2.2.Frequent Frequent 2. Frequent natural naturaldisasters disasters natural disasters 3.3.Residential Residential 3. Residential segregation segregation segregation 4.4.Support Support 4.for Support forworkers workers for in workers inthe theinformal informal in the informal

1.1.Supply Supply1. ofofSupply affordable affordable of affordable housing housing housing 2.2.Weak Weakhousing 2. housing Weakdemands housing demands demands 3.3.Lack Lackofof 3.institutional institutional Lack of institutional framework framework framework 4.4.Lack Lackofof 4.financial financial Lack of financial resources resources resources and and and

1.1.Lack Lackofof 1.institutional institutional Lack of institutional framework framework framework 2.2.Increase Increase 2. Increase ininabandoned abandoned in abandoned houses houses houses 3.3.Lack Lackofof 3.affordable affordable Lack of affordable houses houses houses

1.1.Programa Programa 1. Programa de deurbanizacao urbanizacao de urbanizacao de deFavelas Favelas de Favelas 2.2.Renova Renova 2.Centro Centro Renova Centro 3.3.Programa Programa 3. Programa Locacao Locacaosocial Locacao social social

1.1.Techo Techode 1. deTecho Esperanza Esperanza de Esperanza 2.2.The TheSocial Social 2.The Interest Interest SocialHousing Interest HousingProgram Housing ProgramProgram

1.1.Project Project 1.AMA AMA Project AMA 2.2.Comprehensive Comprehensive 2. Comprehensive improvement improvement improvement ofofthe the of the

1.1.Social Socialinvestment 1.investment Social investment programs programs programs 2.2.Cooperativa Cooperativa 2. Cooperativa de devivienda vivienda de vivienda

government government government levels levels levels

sector sector sector

(Interes (InteresSocial) (Interes Social) Social)

3.3.The TheMensuration Mensuration 3. The Mensuration and andLegalization Legalization and Legalization

Program ProgramProgram

capacity capacityof capacity oflocal localgovernments governments of local governments

Chicarita ChicaritaChicarita Alta Altaneighborhood neighborhood Alta neighborhood 3.3.San Sanfrancisco francisco 3. San francisco neighborhood neighborhood neighborhood project project project

32

Korean Experience for LAC Cities 33

Asunción

Chapter 4

Pilot Program Design for the Targeted Project Sites Sao Paulo

Panamá City

Development Strategy An economic development plan will be drawn up to ensure there is balanced development of residential and commercial facilities and diversification of land use. The employment and residential environment will be improved by the activation of commercial facilities and unique residential units. Also, public spaces will be provided for social enterprise and social gatherings, by linking the development to the newly built pedestrian park on Minhocão highway. The project will strive to achieve balanced urban development by revitalizing the commercial areas, improving the residential environment, and building a network that will expand commercial and historical lines.

Development Strategy The objective is to secure the target residential area in order to accommodate its existing residents, providing a safer, more resilient, and better serviced residential environment. First, to minimize the flooding problem, the newly built residential units will utilize pilotis. Green areas and embankments will be created along the waterway to control the water flow and level, functioning as a buffer zone and natural purification method of water resources Second, the project will pursue a selfsustained urban development model through the promotion of community involvement. The green area in the buffer zone can be utilized as a farmland for joint cultivation.

Last, through circular redevelopment of the target area, the project will minimize economic and residential damage to the existing residents and will include a step-by-step relocation plan for them.

Pilot Program Proposal The plan to revitalize Minhocão Highway as a pedestrian thoroughfare will be the main axis of development in the target area. The third floor of Site 1 will be directly connected to the highway, and Site 2 will be the first or last point of the pedestrianized highway. Site 1 will have eight floors above ground. The first to third floors will be used as a commercial area and for F&B, and a total of 29 residential units will be provided. The size of the residential units will be between 28m2 and 34m2, while the type of housing unit provision will vary from affordable to general depending on the household’s income, about 80% of the residential area will comprise affordable housing. The remaining residential units will be sold at market price.

Additionally, 20% of the total construction area will comprise commercial space.

Pilot Program Proposal The project’s main objective is the construction of an apartment complex for the existing households and new residents, commercial buildings, a sports facility, and an elementary school, all of which will provide comprehensive private and public services.

A communal farm and ecological park will be created for the control of flooding. The project sites will be developed consecutively so that the existing residents of the site can migrate in rotation.

Development Strategy The objective of the pilot project is to provide a solution to the flood areas and informal settlements located at the project site, the location presents a potential development that would attract private investment and would finance neighborhoods of social interest.

The master plan for the construction will conform to the existing urban planning carried out by the municipality of Asunción, with a view to maintaining the balanced urban street landscape from the left to the right of the boulevard in the center of the city. The second stage of the Eco Bahia project will maintain the existing plan, and only the site for the third stage will be utilized for social housing.

Pilot Program Proposal The proposed project is a social housing plan in block units conforming to the existing urban planning structure. The apartment complex is composed of seven blocks within four residential buildings. The dip slope at the edge of the project site is planned as a green area separating the high-rise commercial zone from the residential zone. Considering the high temperatures and high humidity in the city, tower-type apartments are planned in order to achieve better ventilation.

The pilot project plan includes community facilities in each block, all of which will nurture interaction among community members.

The buildings boast double-height galleries with community facilities, which allow better ventilation and community activities. The basements will be used as a parking space

Guadalajara Development Strategy The two target sites are located in Abasolo subdistrict of urban district in the Centro region, which is a historical and cultural city center location with highly accessible public transportation.

The implementation model is based on a publicprivate partnership (PPP) and the contracting of a private developer, who will be in charge of constructing, providing, and managing the housing for rent and sales. A vertical housing development model will be implemented to respond to densification and repopulation around the sites. In order to revitalize the economic environment for local young people, the affordable housing on the sites can play a role as an innovative incubator for start-up businesses.

Pilot Program Proposal It is advisable to develop them in the context of urban planning, all at once rather than individually. On the Abasolo 81 site, four-storey housing to comprise a total of 54 households will be constructed, while the Abasolo 227 site will feature a seven-storey residential building that will accommodate 118 households. To improve the living environment, it is proposed to offer high-quality affordable housing through the development of the public space at street level for indoor and outdoor community facilities.

Expanding and utilizing the public spaces will make the community safer and more active in terms of socioeconomics.

In Site 1, the studio-type unit will have an exclusive area of 40m2 and common area of 16.7m2, while the multi-family type will have an exclusive area of 50m2 and a common area of 20.88m2.

In Site 2, the units will have an exclusive area the same size as in Site 1, but the common areas will be larger in some cases.

34

Korean Experience for LAC Cities 35

The project will strive to achieve balanced urban development by: Major public infraestructure Excellent access to public transportation Historical and cultural buildings

Revitalizing the commercial areas Improving the residential environment Building a network that will expand commercial and historical lines.

The project site is located on residential land with some public facilities and commercial buildings in three neighborhoods in Don Bosco.

Residents of the 1st project site move into temporary housing.

Development of temporary housing (130 units).

Heavy traffic Overpass diving the pedestrian street Lack of housing units to meet demand

Residents from the 1st and 2nd project site move into the new residential buildings/ Demolition of the 2nd project site.

The first to third floors: commercial area, 29 residential units total.

Size of the residential units: 28m2 - 34m2

Total cost: 28,105,700.8 USD Revenue from the rent and sale of apartment and commercial units Public subsidy Interest from deposit of Net revenue

Ensure self-sustaining economic activities

217 residential units.

Larger public spaces and commercial areas at the street level.

The construction of an apartment complex for the existing households and new residents that provide comprehensive private and public services To secure the target residential area to accommodate its existing residents, providing a safer, more resilient, and better serviced residential environment.

Improved residential environment in the target area Construction of a socioeconomic hub history & culture Improved public space and activated commercial space Promotion of local community programs & jobs opportunities

It is necessary to secure open public space

Creation of the infraestructure for the 2nd project site. Remodeling of the temporary housing.

It is necessary to secure sustainable jobs for youth

Based on: the construction cost and sale price of the pilot project.

Revenue from the rent and sale of apartments and commercial units government support

It is necessary to set up a system for the effective management of the housing units.

Located in a flood- prone area. Juan Diaz is subject to particularly frequent natural disasters.

Create the infraestructure and ecological park for the 1st project site.

Development Residential and Commercial Buildings on the 2nd Project Site.

Development of the Residential Buildings on the 1st project site.

New Residents move into 2nd site.

Minimize the flooding problem building newly residential units, green areas and embankments Pursue a self-sustained urban development model through the promotion of community involvement.

Minimize economic and residential damage

Improved residential environment in the target area Lowered housing costs for the residents Mitigation for damage caused by natural disasters Consolidated neighborhood recover

It is necessary to mandate a minimum occupancy period for existing residents such as three years or five years

Korean Experience for LAC Cities 37

36

The pilot project site is located on the site for Eco Bahia The potential for elaboration of the business model promoting the mixed use of land.

The land use for the project site is designated as an urbanizing zone.

Provide a solution to the flood areas and informal settlements located at the project site.

The master plan for the construction will conform to the existing urban planning carried out by the municipality of Asunción.

Total cost: 37 million USD Government support (profit from the Eco Bahia II project) The pilot project can be carried out using the revenue from the sale of the housing units

It is necessary to offer adequate community facilities for the residents.

This site is located in the Northern Bañados, it is a flood-prone area featuring informal settlements

A traditional market, historical monument, hospital, and some commercial facilities are located in the vicinity of the sites.

The accessibility of public transportation.

The sites are restricted to development for residential use only.

Analco is more vulnerable to natural disasters.

Speculation in real estate, the high price of land.

Community facilities in each block The dip slope at the edge of the project site: green area separating the high-rise commercial zone from the residential zone.

The buildings boast double-height galleries with community facilities.

The basements: parking space.

The project is expected to provide residents of this flood-prone area with social housing units in a safer and more adequate residential environment.

It is necessary to adapt a similar system vertical Korean village-centered residential culture to the apartment complex

On the Abasolo 81 site, 4-storey housing to comprise a total of 54 households will be constructed On the Abasolo 227 site will accommodate 118 households.

Revenue from rent and sale of apartment units Public subsidy Deposit interest from Net revenue

It is necessary to tackle the security problem at the sites, installing CCTV cameras to prevent crimes in blind spots.

Studio type: economic unit type 40m2 and common area of 16.7m2 Multi-family type: 50m2 and a common area of 20.88m2

Improvement in the living environment on the basis of planning high-quality social housing.

Supply of units for single families, the younger generation and multi-family units.

Improvement of the community environment with roadside landscapes and the planning of public space

It is necessary to implement the Korean program, “Youth Start-up Support House” operates diverse education, consulting, investment support, and start-up programs.

38

Korean Experience for LAC Cities 39

Provide affordable housing units for units for Provide affordable housing lower-income households in the central lower-income households in the central district & district promote revitalization &economic promote economic revitalization and urban-reliance through balanced and urban-reliance through balanced development between residential and development between residential and commercial areas commercial areas

less with thanless than Single or Single small families or smallwith families

three household membersmembers and a lowand a low three household household income, syoung, household income,divorced syoung, divorced or ederlyor families ederly families

affordable housing -housing happy - happy Supply ofSupply of affordable housing, housing, Seoullo 7017 Seoullo 7017

Revenue from rentfrom and sale Revenue rentof and sale of apartment units andunits commercial units, units, apartment and commercial public subsidy, deposits public interest subsidy, from interest from deposits of net revenue of net revenue

ImprovedImproved residential environment in residential environment in the targetthe area, construction of a target area, construction of a socioeconomic hub history & history culture,& culture, socioeconomic hub improvedimproved public space andspace activated public and activated commercial space,promotion of local of local commercial space,promotion

community programsprograms & jobs & jobs community opportunities, supply ofsupply housingofunits opportunities, housing units household for lower-income household for lower-income

To secureTo a residential area to accomodate secure a residential area to accomodate the existing of the target area, theresidents existing residents of the target area, providing providing a safer, more resilient, betterand better a safer, more and resilient, serviced residential environment serviced residential environment

Provide affordable housing units for units for Provide affordable housing lower-income households in the in the lower-income households central district central district

residing in the project 192 households residing in the project 192 households area, nuclear with 3-4 household area,family nuclear family with 3-4 household on a low household income, income, membersmembers on a low household

Single or Single small families less with than less than or smallwith families and a lowand a low three household membersmembers three household

young people from 20 to 45 20 to 45 youngaged people aged from

household income, single families household income, single and families and multi-families and young people multi-families and youngwho people who wish to start business wishato start a business

less with than less than Single orSingle small or families small with families and a lowand a low three household membersmembers three household household income, single families household income, singleand families and who multi-families and youngand people multi-families young people who wish to start business wishato start a business

Eminent Eminent domain, circular circular development domain,development

affordable housing - housing happy - happy Supply ofSupply of affordable center and housing, community center and housing, community facilities facilities for start-up for businesses start-up businesses

affordable housing - housing happy - happy Supply ofSupply of affordable center and housing, community center and housing, community facilities facilities for start-up forbusinesses start-up businesses

Revenue from rentfrom and sale Revenue rentof and sale of

Revenue from rentfrom and sale Revenue rentof and sale of apartment units, public subsidy , subsidy, apartment units, public deposit interest Netfrom revenue depositfrom interest Net revenue

Revenue from rentfrom and sale Revenue rentof and sale of apartment units, public subsidy , subsidy, apartment units, public deposit interest Netfrom revenue depositfrom interest Net revenue

ImprovedImproved residential environment in residential environment in , lowered the targetthe area lowered housing target area, housing costs for costs the residnets, mitigation for the residnets, mitigation for damage natural for caused damagebycaused by natural disasters,disasters, consolidated consolidated neighborhood recover recover neighborhood

Creation of a pleasant Creation of a residential pleasant residential from high-rise complex separate from high-rise complex separate

apartment units andunits commercial apartment and commercial units, Government support support units, Government

commercial district, safe residential commercial district, safe residential complex complex in which pedestrians are in which pedestrians are separatedseparated from vehicular roads, roads, from vehicular creation of community oriented oriented social social creation of community housing housing

Provide affordable housing units for units for Provide affordable housing in the central lower-income households in the central lower-income households

district, promote economiceconomic revitalization district, promote revitalization and improve livingthe environment and the improve living environment

Improvement of the living Improvement of the living environment for residents and the and the environment for residents

creation of a community environment creation of a community environment

through planning of indoorof and through planning indoor and outdoor community facilities.facilities. outdoor community

40

Korean Experience for LAC Cities 41

conclusions What can Latin American cities learn from Korea?

What can Latin American Korea has learned from its cities learn from Korea? historical past, from the analysis of the housing Korea has learned from its situation historical past, from the and has proposed public housing policies that analysis of the housing it to provide affordable situation and hasallow proposed and quality public housing policies that housing to its inhabitants. allow it to provide affordable and quality housing to its inhabitants.

01

Rapid expansion in metropolitan cities Rapid expansion in metropolitan cities

01

02 02

Housing policies in Korea had been planned and Housing policiesimplemented in Korea in a had been planned and cross-cutting and multilevel implemented in manner, a achieving cross-cutting and multilevel comprehensive policies manner, achieving between the different levels comprehensive policies of government. between the different levels of government.

The innovative way of solving the tedious housing problem The innovative way of solving through policies that provide the tedious housing problem affordable and quality housing through policiesthat thatimproves provide the quality of affordable and quality life of housing the population at the that improves the quality level, of national as well as life of the population at the learning from the programs national level, asand well as actions that were learning from the programs in the past. implemented and actions that were implemented in the past.

Informal settlements in disaster-prone areas.

Informal settlements in disaster-prone areas.

Squatting, public security degradation, and empty Squatting, public housing security caused by urban degradation, and sprawl empty in large cities (Brazil housing caused byand urban Mexico) sprawl in large cities (Brazil and Mexico)

03 03

04

Lack of consistency and accessibility to Lack of consistency and housing-related data in the accessibility to targeted cities housing-related data in the targeted cities

04

01 The success of the policies applied in Korea has been The success of the policies based on applied in Korea has beenknowing the problem based on knowing the and having data that allows smart decisions problem and having data to be made to improve the that allows smart decisions sector.the to be made to improve sector.

To work jointly and systematically at the To work jointly and levels of systematically atdifferent the government, so that housing different levels of policies are government, so sector that housing sector policies are complement and strengthen complement andeach strengthen other instead of each other instead of generating conflicts or gaps. generating conflicts or gaps.

01

02 02

03 03

Reorganize the land through Revitalize urban centers and Enhance coordination for data reclamation and embankment Reorganize the land through improve Revitalize urban centers and overall security, construction Enhance coordinationmanagement. for data reclamation and embankment promoting social activities improve overall security, management. construction promoting social activities

04

04

05

05

06

06

Address housing improvement at Establish a comprehensive Relocate the area’s low-income the urban Address housing improvement atlevel in the long term disaster prevention and Establish a comprehensive households to a safer and Relocate the area’s low-income the urban level in the long term migration plan disaster prevention and better-quality residential environment. households to a safer and migration plan better-quality residential environment.

42

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