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tortillaconsal punto/dot com
By Karla Jacobs,
September 3rd 2010
People in Nicaragua know all too well that the housing situation is one of the problems most felt by impoverished families in the country. At times it seems like the population is made up of families without houses, families who do not own the land their houses are built on and families whose houses are so deteriorated they may fall down at any moment. The statistics confirm this is not too much of an exaggeration.
The IV Housing Census, carried out in 2005 during Enrique Bolaños' administration, established a total of 978,335 occupied houses in the country. Taking into account cases of severe overcrowding and of houses built in high risk areas, the same census identified a housing deficit of approximately 400,000.
At the time NGOs specializing in housing issues in Nicaragua questioned the census results and methodology claiming the extent of housing related problems in the country had been underestimated given that, among other things, houses in need of major infrastructural repairs and improvements (for example houses made from inadequate construction materials like plastic sheeting and bamboo), were included within the number of existing houses rather than being taken into account when calculating the housing deficit.
Nicaragua has only one third of the houses it needs
In 2008, Judith Silva, the current President of the Public Housing Institute, INVUR, estimated the national housing deficit at a little over 900,000. That figure, she says, is made up of over 400,000 new housing units and roughly 500,000 existing housing units which require major infrastructural improvements to be considered apt for human occupation.
In other words, of the just under one million houses identified by the IV Housing Census in 2005, a little over half are unfit for human occupation. Taking into account the need for a further 400,000 new houses, one can conclude that Nicaragua only has a little over one third of the houses actually required by its population.
On top of all this, the Chamber of Urban Developers of Nicaragua, CADUR, estimates that each year Nicaraguan society produces another 15,000 to 20,000 new families unable to access their own home.
Keeping in mind the possibility of methodological flaws, let's take a look at some of the most relevant and revealing statistics to have come out of that 2005 IV Housing Census:
%
of
homes
with
different legal ownership status
source: IV
Housing
Census
| National |
Urban |
Rural |
|
| ownership legally
registered |
51% |
58% |
41% |
| ownership not
legally registered |
33% |
26% |
49% |
| rented / borrowed /
mortgaged |
14% |
14% |
14% |
There are certain departments and sectors of the country where the percentage of houses legally registered in the owners' name is reduced drastically. In rural Chinandega, for example, the census found that only 30% of houses were occupied by families whose ownership was adequately registered.
% of houses with exterior walls made of
different construction materials
Source: IV
Housing
Census
| National Total |
Dept. Managua |
Rural Total |
Rural RAAN |
Rural Chinandega |
|
| concrete / plycem,
etc. |
40.4% |
63.8% |
18.3% |
6.8% |
32.8% |
| half concrete, half
wood |
8% |
17.5% |
6.3% |
4.2% |
2.8% |
| adobe / mud |
18% |
0.8% |
22.6% |
0.5% |
26.5% |
| wood |
24% |
8.8% |
40% |
74.5% |
15.3% |
| corrugated iron |
3% |
6.8% |
1.7% |
0.4% |
2.6% |
| bamboo / palm
leaves, etc. |
3% |
0.2% |
6.5% |
11.8% |
9.8% |
| scrap material /
garbage |
1.8% |
1.5% |
2.3% |
0.7% |
6% |
FSLN government demonstrates commitment to improving housing situation
During the first three and a half years of the FSLN's Government of Reconciliation and National Unity, several initiatives have emerged demonstrating the government's commitment to providing solutions to housing related issues. These initiatives have taken three different forms:
Firstly, cooperation funds, mainly from the Bolivarian Alliance for the People of Our America (ALBA), have been used in large quantities for different housing construction, repair and extension programs for impoverished families.
Secondly, the government has made impressive progress in terms of the legal registration of properties in the hands of Nicaraguan families.
Thirdly, public institutions have overseen administrative efforts to create and implement an alliance between public and private sectors which makes possible the prospect of mass construction of social housing available to Nicaraguan workers via long term, low interest rate mortgages.
"Houses for the People," "A Better House," "Roof Plan"
According to a recent report published by the government in the context of the celebrations marking the 31st Anniversary of the Popular Sandinista Revolution, a total of 6,496 new houses have been built for the same number of impoverished families in urban areas, while 3,585 houses, also in urban areas, have been repaired or extended as part of the government programs "Houses for the People" and "A Better House." Both these programs are funded mainly by ALBA.
In rural areas the government's "Roof Plan," also financed by ALBA, has benefited thousands of impoverished families. During the first stage of the program, 60,000 campesino families across the country were provided with corrugated iron and nails to extend or change the roofs of their houses.
This program is coordinated by the Commission of Reconciliation, Peace and Justice and the Emergency Social Investment Fund (FISE). A few days ago the President of FISE, Nelson Artola, commented that the government is now ready to launch the second stage of the "Roof Plan" as part of which a further 64,300 campesino families will be benefited before the end of the year.
Legalization of land ownership
Another of the programs which is having a positive impact on the Nicaraguan population's housing situation is the Property Intendant's Office's enormous effort to register the ownership of small and large properties across the country.
As part of this initiative 69,286 property deeds have been provided to the same number of families in different departments of the country, according to the recent government report referred to above.
Additionally, the government has marked out the limits and handed over the deeds of communal land belonging to 214 mayagna, miskito and creole indigenous communities in Nicaragua's Caribbean Coast regions.
The land marked out and registered in the names of these communities represents a territorial expansion of 22,500 square kilometres, equivalent to 17.25% of the entirety of Nicaragua's territory.
This acknowledgement of the ancestral rights of Nicaragua's indigenous people has created legal security for the 103,790 inhabitants of the communities benefited .
Social Housing Program in alliance with the private sector
Of all the different government programs that form part of the effort to improve the national housing situation, the program which, without doubt, will have the greatest impact in the medium and long term is the Social Housing Program, which was launched by President Daniel Ortega in January of this year.
Like so many of the FSLN government's social and economic policy reforms during the last three and a half years, the Social Housing Program is not the result of a noteworthy increase in available resources but the application of political will inspired by a commitment to change.
After initially establishing the need to prioritize the reduction of the country's housing deficit via the mass construction of social housing, President Ortega's administration began work on a new Social Housing Law.
This legislation, Law 677, which was passed by the National Assembly in April 2009, "sets the legal and practical foundations for the development and implementation of a National Social Housing Plan by committing State and private sector resources in the long term," according to the recently published government report.
For example, among many other measures, Law 677 creates a publicly owned land bank requiring local governments to identify areas suitable for urban development to be designated exclusively for the development of social housing projects.
Also as part of the Social Housing Law a body called the National Social Housing Council, presided over by INVUR's Judith Silva, and made up of the heads of seven different state institutions and six different private sector associations, was created. The main task assigned to this Council is to overcome the administrative, financial and other obstacles preventing private sector investment in social housing.
(The Social Housing Law defines a social house as a house measuring between 36 and 60 square metres, with access to running water and electricity, valued at US$30,000 or less.)
This Council, in a very short space of time, has achieved the implementation of several aspects of Law 677 including the simplification of transactions regarding requests for permission to build social housing projects (transactions which are overseen by INVUR). Since January 2010, this has facilitated, permission for 157 social housing projects granted to the respective urban development companies in a record time of 90 days or less.
Additionally, the Council has secured important agreements with the two main cement producing companies permitting a C$50 discount on bags of cement (approximately a 30% discount) for social housing projects.
Only the rich could access mortgages under the neoliberal system
The Nicaraguan Social Security Institute (INSS) has played a key role in the implementation of the Social Housing Program. During a TV interview with journalist Alberto Mora in January of this year, the President of INSS, Roberto López, spoke in detail about the different administrative and financial obstacles which the new housing program has overcome, and the mechanisms created in order to do so.
Among other things, López explained that when the FSLN came to power in 2007 only 5% of the country's banks' credit portfolio was set aside for mortgages and that the vast majority of the mortgages available were for houses worth over US$70,000 with ten to fifteen year payback periods and 14 - 16% annual interest. Monthly payments on this sort of mortgage are around US$500 or US$600.
In other words, it was simply impossible for the immense majority of the Nicaraguan population to get a mortgage. Today, as a result of the Social Housing Program, the four main Nicaraguan banks (BDF, Bancentro, BAC and Banpro) do offer mortgages with favourable conditions for workers in formal employment.
López explained that in order get the banks to agree to off mortgages for social housing, it was necessary for INSS to take back a certain amount of control over its own financial reserves (which are invested within the national banking system).
As part of the Social Housing Program INSS conditioned the investment of US$45 million (approximately 10% of the institution's financial reserves) in the national banking system, on the banks' willingness to use those funds to provide formal sector workers with mortgages for social housing.
López described this new arrangement vis-a-vis INSS' financial reserves as "a radical change." Previously INSS deposited its reserves in the national banking system but did not have any control over the subsequent investments the banks made with that money.
Also as part of the program, the banks committed to doubling the initial US$45 million invested by INSS. This means that, since January, US$90 million have been made available for social housing mortgages in Nicaragua, something unprecedented in the country's history.
Now mortgages with US$100 monthly payments are available
According to the recent government report mentioned above, almost US$16.7 million were disbursed by the banks for the purchase of 1,230 social houses between January and July 2010. These mortgages have 20 year payback periods, 8% annual interest and can be paid back in monthly payments of between US$100 - 130.
Additionally, the government has committed to subsidizing up to half of the interest on mortgages for houses worth US$20,000 or less. For buyers with interest rates subsidized by the government monthly payments on mortgages often work out at less than US$100.
During a recent interview with the journalist Erwin Vega, the Vice President of CADUR, Alberto Atha, spoke enthusiastically about the impact of the Social Housing Program so far:
"[Right now] we are witnessing the lowest interest rates for mortgages in the history of Nicaragua," says Atha. "Never before has it been so easy to buy a house. Never before have there been such favourable financial conditions for home buyers."
"Compared to the 200 [social] houses that [the private sector] built last year, [during the first semester of] this year, we have built between 1,500 and 1750 houses. That is not much at all considering this country's enormous housing deficit, but it is a lot more than last year."
According to Atha, soon the lowest price for social houses on the Nicaraguan market will be reduced to US$10,000 thanks to an alliance being forged between CADUR and the local governments to reduce the price of land for social housing projects.
At present, those most able to access a mortgage for a social house are precisely the INSS affiliated workers (the ones whose funds have been made available to facilitate the program in the first place) given that these workers are more able to convince the banks of their ability to payment.
And for the moment, it looks like the different sectors involved are confident that the number of houses sold to low income families will experience a steady increase. "This is a new law," says Atha, "[we expect to see] continuous progress."
The informal sector requires other sorts of housing programs
There are many sectors of society, however, sectors that probably represent the majority of the population (campesinos, informal sector workers, the unemployed) who are not able to access a mortgage even under the favourable conditions that exist today.
These social sectors - the most impoverished families in the country - are unable to access a mortgage not necessarily just because they don't earn enough income, but also because of their lack of formal employment.
María Hernández' family's situation is similar to that of thousands of Nicaraguan families who, for one reason or another, have found no alternative but to set up home in improvised and highly marginalized settlements on land that does not legally belong to them. The inhabitants of this sort of settlement are the ones who took most of the weight of the neoliberal system imposed on Nicaragua until recently.
María lives with her husband and their two daughters in an annex of "La Primavera" neighbourhood in Managua called "Las Viudas." Their house, which consists of one room four metres long and two metres wide, is situated just a few meters from the shores of Lake Xolotlán.
Legally the sector known as "Las Viudas" belongs to Managua's local government. About 13 years ago, however, landless families began to set up home there. Subsequently some of the families "sold" their plots to others.
"We want to legalize our situation but we don't know how"
María and her family have been living on the plot of land they bought from the previous "owners" for 12 years. The walls and the roof are made of rusty and broken strips of corrugated iron. All the wooden beams that make up the structure of the house are rotten.
María's husband, Cristóbal Lanuza (75), is critically ill with several different diseases including Parkinson's disease, arthritis, gastritis and high blood pressure. He can barely stand up or walk.
The family's financial situation is precarious given that none of the family members is employed. Cristóbal, who worked all his life as a builder, receives a pension from INSS for C$2,600 (US$120) a month with which the family buys food and certain medicines for Cristóbal which are not covered by the public health system.
"Our priority right now would be to change all the beams of the house," says María, although she recognizes that it is a contradiction to continue investing on land that does not belong to them. "We want to legalize our situation but we don't know how to. We need a housing project that adapts to our situation."
María thinks it would be possible for the family to put aside between C$300 or C$400 (US$14 to US$19) a month to payback a loan for the purchase of a plot of land should such an opportunity exist. "Although we would have to limit our food intake a bit," she says.
The land ownership and housing situation in the countryside
In the countryside the situation regarding housing and land ownership is similarly unfavourable for the poorest families. It is an unhappy reality that after the example Nicaragua gave the world with its Land Reform in the 1980s, today so many campesino families are again landless. But, effectively, during the 16 years of neoliberalism, Nicaraguan campesinos were converted back into subordinates of the rich landowners.
According to Pedro Haslam, President of the Rural Development Institute, "more than 50% of the land handed over to campesinos as part of the land reform of the 80s was returned [to the landowning class]. It was either sold back or it was taken away from the campesinos. Different mechanisms were used, but the result was that the land did not remain in the hands of the campesino families it was originally given to."
But as well as all the families benefited by the land reform who are again landless today, one must also take into account the thousands of young campesino families that have emerged over the last twenty years, the vast majority of whom do not own even a small plot of land to build a house on.
"Not one young family from my community has been able to buy a plot of land"
Teresa Rayo (17) and Germán López (21) are a young couple from two of the most remote communities of the department of Estelí. Teresa is from Potrero Grande in the municipality of Estelí and Germán is from San Marcos in the municipality of San Nicolás. Both communities are situated more than five hours walk from the nearest city (Estelí).
Teresa and Germán do not own any land, but, with great sacrifice, they have been able to build a small house on the plot of land owned by Teresa's grandmother. "We scrimped and saved and were able to buy seven sheets of corrugated iron which was enough for half the roof. The other half of the house is covered with plastic sheeting," explains Teresa. "We invested a little more than C$2,000 (US$93) building the house."
Because of the lack of work in Potrero Grande and the couple's lack of land on which to grow crops, however, Teresa and Germán have felt obliged to live and work on the farms of rich landowners, looking after cattle and working the land in order to earn a little money.
"Our plan is to work as hard as we can so that one day we can buy our own plot of land. We don't want to work on other people's land all our lives, going from one farm to another, because that way you can't work your way out of the situation you are in," says Teresa. "If we had our own plot of land we could work hard and try to live a little better."
According to the couple, the inaccessibility of land is a problem felt by the entire younger generation in their communities: Germán says he is not aware of any young family in San Marcos that has been able to buy a plot of land to build a house on: "the only families that have land to build on are those that inherited from their parents."
In communities like San Marcos and Potrero Grande a reasonable sized plot of land (roughly a third of an acre) costs between C$12,000 and C$15,000 (between US$557 and US$696). Teresa and Germán say that, were it possible to access a loan to buy a plot of land, they could put aside C$500 (US$23) of the C$2,000 (US$93) they earn for a monthly payment. (At present the minimum salary for agricultural work is C$1,767.57 (US$82) a month.)
That means that, if they were given a loan for a plot of land worth C$13,500 (US$627), they would be able to pay off the debt, plus 8% annual interest, in less than three years.
Condemning the housing deficit to the past
It is difficult to overestimate the importance of owning a secure and dignified house in terms of a family's ability to achieve well-being and happiness. Looked at from a national perspective, a housing and land-ownership deficit that affects the majority of the population represents an enormous obstacle on the path to the development of society as a whole.
To discuss these issues in Nicaragua is to touch one of the most sensitive points of the national reality and one of the most shocking reminders of the nation's neoliberal past.
During the last three and a half years the Government of Reconciliation and National Unity has demonstrated its commitment to resolve the problems related to the housing deficit in the country, and we have already seen the first concrete results of that commitment.
It has also become clear, however, that there are many limiting factors affecting the capacity, both of the government and of the people, to resolve these problems in the short term.
It is clear that many more years will be needed before Nicaragua can condemn this reminder of its neoliberal past to the collective memory of the new nation.