ira g. peppercorn financial and private sector development/non bank financial institutions world...
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Ira G. PeppercornFinancial and Private Sector Development/Non Bank Financial Institutions
World BankJanuary 31, 2012
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For those that do not have enough income or whose income is informal
For those now living in poor conditions Mortgages dangerous if outside prudent
underwriting standards Vibrant rental markets are necessary for
workers’ mobility Temporary lodging with dream of returning
home
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Cultural biases in favor of home-ownership Negative perceptions of rental housing Legal framework, especially in relation to
tenant’s rights and evictions Low rate of risk adjusted return Lack of incentive for investors Lack of adequate finance Lack of formal property management
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Workers in urban areas Young professionals Students who live in dormitories; Those experiencing transitional events in
their life Families who cannot afford or qualify for a
mortgage, some of whom might be living in poor housing conditions;
People who simply do not want to own People sharing space with relatives
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Individuals who own a single or a small number of rental units
House or apartment owners that rent a room in their homes
Providers of social housing including governments and NGOs
Companies that provide housing for their workers Medium scale owners that own from 10 to 100 units Institutional owners and investors, for whom the
ownership of rental housing is a significant line of business
Property management companies Builders, contractors, materials suppliers, utility
companies, security firms and others who provide services to the owners of rental housing.
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Is there a shortage of housing? Is this in the overall number of units, in the quality of the
existing units or both? If there is a shortage, is it primarily in certain urban areas? What is the relationship between rental housing prices and the
wages at particular income levels? Is the housing affordable? Who are the potential investors and what incentives do they
need? Is the legal framework fair enough? Are there major imbalances in the fiscal system that
discourages investors? Is there financing available to develop and/or improve the
housing? Are governmental subsidies available and, if so, how and for
what income levels?
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Countries Cities
Africa Owners Renters Others Owners Renters Others Egypt
69 31 - Cairo 37 63 - South-Africa
77 22 2 Johannesburg 55 42 3
Asia China
84 16 - Beijing 59 40 1India
87 11 3 Bangalore 43 55 2Thailand
82 18 - Bangkok 56 40 4
Latin-America Bolivia
60 18 22 Santa Cruz 48 27 25Brazil
73 17 10 Sao Paolo 70 20 10Uruguay
62 15 23 Montevideo Developed Countries
France57 40 3 Paris 48 49 3
Germany 43 57 - Berlin 12 88 -
The Netherlands 57 43 - Rotterdam 26 49 25
Switzerland37 63 Geneva 14 86
United Kingdom 69 31 - London 58 41 -
U.S.A. 67 33 - New York 34 66 -
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Eviction process uncertain, cumbersome or tenant biased
Return/risk ratio favors other investments Rent control Taxation Lack of cost-effective professional property
management
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Tenure insecurity Unfair or no dispute resolution Poor conditions Lack of formal contracts Affordability constraints
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Demand: Targeted but expensive◦ Housing assistance payments◦ Vouchers◦ Housing itself
Supply: Not ongoing; not deep enough◦ Construction or up-front subsidies◦ Direct payments to landlords◦ Tax incentives◦ Land and infrastructure
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Illegal rental units Poor and unsafe conditions Lack of registration Property tax avoidance Pressure on public sector for subsidies and
units Poor property management systems
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Policies recognize rental is an important sector
Fair dispute resolution Tax system favors registration and
investment Small owner incentives, such as capital for
expansion Medium to long term capital availability,
both debt and equity Targeted, effective subsidies
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To establish the building blocks for sustainable, efficient, secure and market based housing finance systems.
To create conditions where housing finance can be a driver of economic growth and job creation through investment in housing
To expand access to housing finance to moderate and lower income households.
Comprehensive housing finance projects Market analyses Legal and regulatory framework Individual building blocks
◦ Including registration, underwriting, credit, training Real estate data and information systems Capital markets design and development Rental housing finance Savings and subsidy programs Housing micro-finance Affordable housing development
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Capital markets development Insurance Post-disaster finance Pension funds Investment funds
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Michel Noel (Manager)◦ [email protected]
Olivier Hassler◦ [email protected]
Ira Peppercorn◦ [email protected]
Simon Walley◦ [email protected]
Andrey Milyutin◦ [email protected]
Ashna Mathema◦ [email protected]
Or find Olivier or Ira at the conference for a discussion on your country’s needs
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From the Housing Finance Team at the World Bank