H,4B/TAT/N7~1_. Vol. IO. No. I/Z. pp. 21-3U. IYM. 111’)7-iY75’Xh $3.11ll + O.Oll Printed in Great Britain. Pcrg;lmorl .lOlll.llill\ Ltd.

Some International Perwectives on Housing Finanke and Management * t

ERIC CARLSON Special Advisor, International Union of Building Societies and

Savings Associations+

Hong Kong provides an excellent locale for the discussion of housing finance and management. We have noted that the housing estates in Hong Kong accom- modate well over 2 million people, account for one-third of total government expenditure, and that this year the Housing Authority will complete over 40,000 units, with construction underway for some 124,000 flats on 39 sites at the end of 1983. This is a tremendous achievement, marked by efficient management, which has accompanied the economic prosperity and productivity of this unique world city. If similar levels of production-management performance were recorded in all countries of East Asia, we can only reflect on the beneficial impact for economic, social and environmental development and enhancement. This is a rewarding area for future study and research.

Long-term planning is required, as well as the development of housing finance and management systems and institutions, and linkages between public and private sectors, if there is to be significant progress. Here we can note that planning of housing construction in Hong Kong is done within a long-term 10 year rolling programme, and financial budgeting is done five years in advance. Increasingly, savings mobilisation efforts and the provision of mortgage facilities by private banks and lending institutions become important components in the development of home ownership schemes and private sector participation programmes which will reduce the scale of public expenditure for housing construction. Housing finance and management techniques, their implications and repercussions, must be considered as basic factors affecting not only the housing stock but also the course of economic and social development of entire countries.

*This is an edited version of a paper presented at the Yth EAROPH International Congt-e\\. 20-71 August 1984, in Hong Kong. The views expressed are those of the author.

+Since this paper was written. further information about trends in lending for tuba11 development has become available from The World Bank Annual Report for 1985 and The Asian Development Bank A,l,rtrtr/ Repori for 1984. The World Bank Reporr shows the following progressive decline in Icnding by IBRD and IDA. in millions of U.S. dollars. for the fiscal period. 1983-19X.5: 19X3. $554.3 or 3.X’%, of total Icnding; IYX1. $500.0 or 3.2%: 1985, $384.6 or 2.7%,. In 1985 ten ‘Urban Development’ loans were approved. of which three are in the Asia and Pacific region: $138 tnillion for India for land infrastructurc+ervicing and slumupgrading program in Bombay; $53 million for Republic of Korea. for traffic and transport in Seoul metropolitan arca: and $27.5 million for Thailand for basic infrastructure, fishing port. commercialiindustrial development and institutional development, etc. The Asian Development Bank 198-l report atatca that hy the end of 19X-1 total Bank lending for urban development and housing had reached $306.2 million for I I projects. hetwccn lYh7 and 1984. and that technical assistance extended by the Bank in this sector amounted to $2 million In percentages. for ‘Urban Development. Education and Health and Population‘ this amounted to 0.2’%, of Ordinary Loan Approvals and 0.4% of Special Funds Loan Approvals. for a combined perccntagc of 0.X’%. In lYX-1. the percentage of loan approvals increased to about I .S% under the broad category used. but ntrnc of these wax for ‘Urban Development’.

$Address for correspondence: International Union of Building Societies and Savings Association\. 20 North Wacker Drive. Suite 2267. Chicago. IL 60606, USA.

21

22 Eric Car/son

There have been important institutional developments in this field in the East Asian region, where I think we can say, generally, that housing is at a high level of political consideration and growing investment concern, especially when compared to many of the countries of Europe at present. There is also increasing recognition of the sophisticated instruments required for attracting the capital markets into much greater commitments for investment in housing and urban development. In the East Asian region, real breakthroughs in this direction are still to come, but may emerge as part of the veritable revolution in housing finance which has begun in the USA with the unprecedented growth of secondary mortgage market institutions and instruments. These are beginning to form an integral part of the “globalisation of capital flows” currently under way.

Clearly, there is need to keep up with the fast pace of developments and to give practical consideration to how the countries of the East Asian region can develop their finance systems and standardised instruments so as to help promote a larger volume of private sector investments, nationally, regionally, and perhaps internationally. It is in this context that we provide “international perspectives” on some of the major developments to date. These “perspectives” will draw on the author’s former experience as Chief of Housing and Director of the housing finance project of the United Nations, as Deputy-Director of the UN Habitat and Human Settlements Foundation, and, more recently, as Special Advisor to the International Union of Building Societies and Savings Associ- ations, founded in 1914, on whose behalf I was recently enabled to visit several countries of the East Asian Region, including China.

To provide background documentation for this paper, there is included in Appendix A a recent report on “United Nations Activities in the Field of Housing Finance - Notes on Proposals for Institutional Development”. This report reviews the progress of the UN project on housing finance, and the efforts to establish an International Housing Finance Corporation, and later the UN Habitat and Human Settlements Foundation, to assist countries with their development of housing finance and management programmes. Appendix B contains some selected references in this field.

One of the first major studies of the UN Housing Finance Project was the report on Finance for Housing and Community Facilities in Developing Countries, eventually published in 1968 (UN Sales No. E.68.1V.4.). The study provided a methodology for estimating the annual cost of housing and basic utilities in the three developing regions. One result of this methodology is shown in Table 1 below, where it was estimated that total costs, including financing costs for 80% of the urban population under realistic construction costs need not exceed 3.6% of aggregate national income. When expected expenditures for the highest income groups were added, total outlays in urban areas would represent approximately 4% of aggregate national incomes, and if expenditures in rural

Table 1. Annual estimated cost IO provide housing and basic services for 80% of the urban population in three developing region.,

(in millions of US dollars)

Region

Housing (including financing)

Minimum Improved Basic services

(including financing) Total

annual cost

Africa 172 I68 330 670 Asia 997 970 I.040 3,007 Latin America 731 702 755 2,188

Total 1,900 I .840 2.125 5.865

Source: United Nations Centre for Housing. Building and Planning, New York

Some lnrernational Perspectives on Housing Finance and Management 23

areas remained at current levels, total expenditures for housing and related facilities would amount to roughly 5% of aggregate national income.

Table 2 shows the total external long-term capital flows to developing countries allocated to the housing sector, in 1964 (the year studied). The report estimated that external resources would be required for approximately 20% of the cost of national housing and related programmes designed to meet existing and future needs over a 30-year period. This would amount to approximately US$l billion annually for the minimum cost programme shown in Table 1. When external costs of the upper 20% of the urban population are added, and some provision made for the costs of rural environmental development, total external capital requirements would be in the order of US$1.4 billion annually. Given the estimated current flow (in 1964) of approximately US$400 million, additional flows of external resources of up to US$l billion would be required each year.

Table 2. Percentage of total long lerm external capital flows to developing countries allocated to housing sector (I 964)

(in millions of U.S. dollars)

Source Estimated gross resources

(1963-1964)

Multilateral disbursements BiFrbr;i (market economies)

Private (net) Bilateral (centrally planned

economies)

Total

1,000 9,000

( 6,000 ) ( 3,000 )

1,000

11,000

Percentage Capital flow allocated to for

housing sector housing sector ~___ ~ ~~~

5 SO

4 240 2 60

5 50

3.6 400

Source: United Nations Centre for Housing, Building and Planning, New York.

The information and findings of this UN report were amplified in several subsequent publications. The report prepared by Barbara Ward for the UN, on Urbanization in the Second Development Decade (Sales No. E.70.IV.15), accepted in a general way a target of 5% of GNP as a reasonable one for national investment in housing and urban development. For national action, it stressed that “A full array of savings and credit institutions should be established to mobilise capital and to channel investment into housing and related services”. For international action, it recommended that:

(1) substantial additional international resources should be provided in the form of financial aid and technical cooperation to achieve national goals for housing and urban development;

(2) an international housing finance system should be developed to stimulate the creation and growth of national housing banks and savings institutions.

The United Nations continued its work on the housing finance project, which culminated with the development of specific proposals for action, including the establishment of an entity for promoting international housing finance to promote the achievements of the targets indicated, at national and international levels. This report, Proposals for Action on Finance for Housing, Building and Planning, New York, 1972 (Sales No. E.73.IV.4), remains as a valuable contribution for future international development efforts, though its basic recommendations did not receive support from the majority of donor countries.

Some 20 years after the first United Nations studies in this field, the World Bank issued its own projections for world shelter requirements. These are shown in Tables 3, 4, and 5, below. Table 3 shows the projected growth in the number

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Some International Perspectives on Housing Finance and Management 25

Table 5. The annual investment required in order to provide each household living in poverty in 2000 with a basic unit of shelter*

(billions of 1975 U.S. dollars)

Region

In urban areas

In rural areas

Latin America and the Caribbean 3.10 0.35 Europe, the Middle East and North Africa 0.55 0.15 Eastern Africa 0.30 0.275 Western Africa 0.20 0. 10 South Asia 1.25 0.10 East Asia and the Pacific 0.40 0.40

Total S.80 2.27

Total

3.45 0.70 0.575 0.30 2.25 0.80

8.07

*One twentieth of the estimates given in Table 2.

of households in poverty: rural and urban, 1975-2000. Table 4 shows the total investment required in order to provide each household living in poverty in 2000 with a basic unit of shelter, and Table 4 shows the annual investment requirements, also by region. The tables are reproduced from Shelter, Poverty and Basic Needs Series, September 1980, The World Bank, Washington, D.C.

With further refinements, the Bank’s report then estimated that the resources required for a poverty-focused urban shelter strategy for the next twenty years would be between US$120 billion and US$130 billion (1975 dollars), or an annual expenditure of between US$6 billion and US$7 billion. The Bank estimated that it could be involved and would have the capacity to be involved in about 20% of the total effort, and to finance 10% of the total, which would be a level of US$625 million by fiscal 1983, or US$l billion in current dollars, representing 7.3% of the lending programme of the Bank, which was thought achievable.

In the light of these estimates of some years ago, it may be useful today to see “what the score is” with regard to international flows of capital for the housing sector. Perhaps the most recent estimate is that of the UN Centre for Human Settlements, 10 February 1984 (HS/C/7/6), on “Financial and other assistance provided to and among developing countries for human settlements”. The Executive Director’s report estimates that the annual figure for technical, pre- investment and capital assistance going to human settlements from all donors is approximately US$865.3 million. Of this total, just over US$lOO million is technical assistance. One bias is evident here, that while 73% of all bilateral assistance is being targeted to the low-income countries having less than US$600 annual per capita GNP, only 17% of multilateral assistance is so directed.

The report of the UNCHS points out that the question of targets in assistance levels in the field of human settlements has never been adequately addressed, as it has been in other aid efforts. The report generally reflects a low, and declining, priority for human settlements in overall donor aid programmes. In the case of the United Nations Development Programme, for example, human settlements assistance amounted to 1.7% of its total development assistance in 1980 but declined to 1.6% in 1982. Governments are not without blame as they do not give priority for the formulation of requests for assistance in human settlements, relative to other development sectors. Only 2.2% of the total technical assistance received across all development sectors in 1980-1982 was for human settlements. In monetary terms, the UNDP contribution to human settlements fell from US$64 million in 1980 to US$49.5 million in 1982.

In taking a look at the World Bank’s performance in this field, we can note that it was a latecomer, beginning only in 1972 with its first project in Senegal, followed by another in Turkey and two more, in Nicaragua and Malaysia, in

1973. By the end of fiscal 1981, however, it had approved 62 projects, amounting to US$2.014 billion in lending. These included 36 shelter projects, 10 transport projects, 13 integrated projects and 3 regional projects. Supposedly. 1.9 million households had benefited from the shelter projects alone. By February 1983, the World Bank had 90 urban projects under consideration for the fiscal 1982-1986 lending programme, amounting to about US$4 billion. Projects were proposed in about SO countries, of which half would be new borrowers.

However, by contrast with the goals outlined in the above-mentioned Shelter report, urban lending had risen to only 4.1 “A, of total Bank lending in fiscal 1981. Many problems of basic approach, and of implementation were also becoming evident, with long delays recorded for project completions even with the large build-up of staff in the Bank’s headquarters. Much of this staff had been ‘decentralised’ to form part of the regular Regional Offices within the Bank’s headquarters structure. The central Urban Development Department, morc- over, has now been also assigned responsibility for Water Supply and Sewerage projects. One basic problem seems to be that, until fairly recently, the Bank showed only limited interest in institutional development. strengthening local government structures, and assisting in the establishment and strengthening of specialised housing finance institutions. This latter aspect supposedly is one of the areas of concern of the International Finance Corporation, a Bank affiliate, but progress in this area to date has bee11 disappointing.

The evolution and performance of the World Bank’s urban lending pro- gramme since its inception in 1972 is described in a special evaluation report published by the Bank in 1983, under the title Learning hy Doing. In this report there were the following comments on “The Role of Institutional Finance”:

“As suggested earlier, projects in many countries are seeking to strengthen local institutions so that they can channel financial resources from the Bank and other lenders in ways that will further stimulate private investment in the urban sector. As these institutions increasingly finance infrastructure and leave house construction to private households, they can create conditions in which local housing markets can work more efficiently than in the past. . . While the speed of change will be dictated by existing institutional constraints, upcoming projects will increasingly transform the Bank’s role from retailer to wholesaler in urban development finance.”

With respect to ‘Urban Management and Productivity’, the Bank’s report also pointed out that the provision of municipal services depends on the ability of municipal finance systems to generate sufficient revenues to finance operations, and that how such systems are organised and funded is a vital aspect of urban management. New projects would focus on these areas.

There are seven major borrowers of the Bank’s urban lending programme: Brazil, Colombia, Indonesia, Mexico, Philippines. Republic of Korea, and Thailand. Of the seven named, the East Asian region has four. That is why the policy questions and directions of the World Bank take cm considerable importance for our present audience. The Bank’s Annuul Report ,for 19X.3 showed that cumulative lending operations of the Bank and the International Development Association for Urbanisation projects in East Asia and the Pacific amounted to US$751.1 million, while the amount for Water Supply and Sewerage was US$747.6 million. In 1983, the Bank approved some 14 urban projects in 13 countries, totalling US$554.3 million of Bank lending. Of these projects, US$314.1 is for lending to countries in the Asia and Pacific region: India (US$l71.1 million); Korea (US$lOO million); Pakistan (US$16 million); and the Philippines (US$67 million). We can see therefore, that this region is likely to benefit from an ever-growing volume of World Bank loans to assist with its urban sector development.

The second largest provider of funding for housing, shelter and urban programmes is the US AID Housing Investment Guaranty Program, which in 1983 approved projects totalling US$132.5 million in guaranteed lending, with two projects in the Asia and Pacific region (India - US$lO million and Sri Lanka - US$lO million). Since its beginning in the early 1960s the US AID programme has authorised more than US$1.7 billion in loans, primarily for housing and shelter improvement, More recently, it also has adopted a programme for assistance for urban development, which will continue the Agency’s Congressional Mandate of 1973 to give priority to the needs of low- income families.

From the above, it is clear that the amounts of aid and lending through public sector agencies for housing, shelter and urban improvement in the East Asian region are but a small fraction of the requirements of the growing populations in these countries. Not only is there evident a pronounced failure to meet the targets for assistance to the housing, shelter and urban sectors of the past and present ‘development decades’ to the year 2000, but future needs for housing and urban services will be staggering for many countries. On the other hand, these needs must call forth fresh efforts for public and private sector cooperation in the mobilisation of resources and investment programmes for this sector, at national, regional and international levels. EAROPH as an organisation must gear itself up to take the leadership in evolving new programmes, systems and institutions for dealing with the massive scale of the problems and of the opportunities ahead, a foretaste of which is already in evidence in the building booms of the urban centres in the region.

For a look at how these problems are beginning to be discussed in another part of the world, on a multi-national basis, 1 refer to a recent meeting I attended in Paris of the Organisation for Economic Co-operation and Development (OECD), which includes Canada, the USA, Japan, Australia and New Zealand, as well as the European beneficiary countries of the Marshall Plan. The European region countries face a quite different situation, with much slower population growth and a relatively large housing stock. However, there is now substantial concern on the part of many governments with housing finance and management policies, and particularly with the need for qualitative improve- ment and urban revitalisation. The OECD’s instrument for dealing with these problems is the Group on Urban Affairs, which has now defined and initiated a two-year project on urban housing finance and policy in Member countries. As requested by the government, Japan’s policies in this regard will be the subject of a special review by the OECD. The main objectives of the uroiect are as follows:

1.

2.

3.

4.

5.

.P I .c

to identify the interrelationship between economic, social and environ- mental trends and changes in the urban housing finance policies of Member governments; to examine, in the light of these interrelationships, housing finance policies in OECD countries with a view to identifying the objectives of major housing policies and programmes and innovative ways of achieving these objectives; to examine in particular the role of housing finance policies as an instrument for the revitalisation of urban areas; to review more specifically the taxation policies and financing mechanisms operating in Member countries with regard to investment in housing; and to advise governments on policies and programmes for urban housing finance that are adapted to changing social and economic conditions in the light of the objectives identified for housing policy.

The project will include threefold contributions by OECD countries: first, position papers to provide overviews of government policies and programmes for

urban housing finance. They will identify the rationale behind major policies and will link the efficiency and equity of current housing finance pohcies to the r~tionaie. They will also examine ways in which governments can improve the operation of housing markets. Secondly, there will be two special studies: one on tax policies and their cost and influence on housing markets: and another on housing investment and regeneration of urban areas. Thirdly. there will be a seminar towards the end of the project to focus attention on selected aspects of urban housing finance deemed worthy of further examination.

The position papers are expected to give significant attention to innovative policies for more satisfactory operation of housing markets, in particular increasing adaptability to inflation and volatile interest rates. There will be included discussion on the decentralisation of management structures and the introduction of self-help schemes in social housing. With respect to mortgage markets, there will be included: countries’ experience with policy itlstrulnents designed to spread and reduce risk burdens; the insulation of housing finance institutions; the impact of deregulation; and the introduction of index- linked loans, Further areas of interest are new forms of private financing, including secondary mortgage markets; government cooperation with private sector finance institutions; and the effects of standardisation of finance techniques on international capital flow and developments in cross-country finance.

Should a similar comprehensive review be undertaken for the countries of the East Asian region ? Is this an appropriate project for the UN Economic and Social Commission for Asia and the Pacific? We can note that the UN Economic Commission for Europe in Geneva also has underway an important study and project on housing finance, which includes the’socialist countries and which will culminate with a seminar in July 1985. The Commission of the European Communities in Brussels is expected to issue this year a draft directive on mortgage credit which should facilitate certain modalities of cross-frontier financing and operations in housing finance. Clearly, there is need to keep up with the fast pace of developments in this field.

The International Union of Building Societies and Savings Associations, for which I serve as Special Advisor, is keenly aware of this changing scene, and has commissioned a major book on Nationa! Housing Finance Systems by Mark Boleat of the UK, which was published in October 1984. as the most up-to-date document on this subject. The International Union has also recently conducted some first-hand research which leads to the conclusion that the revolution in housing finance taking place in the USA, with the unprecedented growth of secondary mortgage market institutions and instruments. will inevitably have widespread international implications. This conclusion is based on our visits to six of the largest investment houses in New York City (Salomon Brothers; Citibank; Merrill Lynch; First Boston: Goldman Sachs. and Lehman Brothers: Kuehn Loeb). All of these investment houses have now developed considerable expertise in dealing with mortgage securities in the USA. Moreover, they have appraised the potentials involved in the international trading of mortgage debentures, which they consider an integral part of the ‘globalisation of capital flows’ currently under way.

It is expected that the new tax legislation in the USA will vastly expand the opportunities for sale and placement of bonds and debentures in foreign markets, including those of the secondary mortgage market.

The background to this situation had its origins in the early 197Os, when the major Federally-chartered secondary market institutions in the USA were created. The Government National Mortgage Association (‘Ginnie Mae’) began operations in 1970 to guarantee securities issued by the lender and sold to investors either directly or through securities brokers or dealers. Two other

Some Inrerrutiottal Pervpectives on Housing Finance artd Mattagentettt 29

corporations were also created, the Federal National Mortgage Corporation (‘Fannie Mae’) and the Federal Home Loan Mortgage Corporation (‘Freddie Mac’), to facilitate mortgage sales, and packaging to attract investors. Since 1977, mortgage securities have also been issued without government involve- ment. However, the three original secondary market institutions command 95% of the market, having issued over US$225 billion in mortgage-backed securities. Each offers a different type of mortgage-related security, with varying structures, yields and guarantees. In 1983 over US$89 billion worth of mortgage securities came to market, financing 47% of the year’s home loans. These securities have become attractive packages for investment by pension funds, insurance companies, state and local retirement plans, etc. An estimated 14% of the US$1.7 trillion in mortgages outstanding is now accounted for by such securities. De facto, a national mortgage market has been created where a set of uniform mortgage rates is emerging depending on the type of mortgage offer involved - fixed rate or variable.

Since the late 197Os, with the increase of interest rates, thrift institutions such as savings and loans have become eager to dispose of the unprofitable low-rate mortgages they were holding. Many were in serious financial distress. At this point the Federally-chartered agencies such as Ginnie Mae, Fannie Mae and Freddie Mac, really came to the rescue. In effect, these agencies, which operate as private shareholder-owned corporations, bought mortgages for cash from the thrift institutions and vastly enlarged the market for them by enlisting new investors to help buy up the increasing large mortgage debt for sale. Instead of holding onto the mortgages, after buying them from the thrift institutions, the agencies sell the securities to the Wall Street houses, which in turn resell them, profiting from commissions and price swings as interest rates change. The various securities have such names as “GNMA’s”, “Freddie Mac Participation Certificates”, “Fannie Mae Mortgage-Backed Securities”, “Collateralised Mort- gage Obligation Bonds”, etc. Their various provisions have been designed to attract institutional investors as well as to provide for new instruments such as adjustable rate mortages (ARMS). At the present time, ARMS account for more than 65% of the mortgages being written in the USA. The packaging aspects and options provide for considerable competitive creativity.

Nearly every major Wall Street investment house has expanded its mortgage- trading activity, which has become highly profitable. Most have international networks of offices ready to provide advisory services and assistance for packaging and selling mortgage securities. From their headquarters they operate in the world financial markets, with sophistication and high technology, exemplified by the imposing large banks of computers manned by alert young staff who provide, among other information, instantaneous data on mortgage interest rates, terms and conditions in different areas. Mortgage placement was once a gentlemanly and leisurely business; now it is fiercely competitive. New computerised mortgage information systems, linking buyers and lenders more directly, are allowing home-buyers to shop beyond their local banks or thrift associations. Some large builders, mortgage bankers and investment bankers are issuing their own collateralised mortgage obligations - or CMO’s - to help reduce financing costs and interest rates. The fixed-rate long-terms of mortgages are being replaced by adjustable rate mortgages and a variety of other instruments. The growing number of private issuers entering the secondary mortgage markets, including such giants as General Electric Credit, Sears Mortgage Securities, Residential Funding Corp., are offering investors even more options and choices than those of the government agencies.

The market for mortgage. securities in the USA has been immensely facilitated through the Federal Government’s intervention in standardising credits and conventional loans; the sustained value of home ownership; and the nature of

the standardised instruments, insurance underwriting practices. confidence in the institutions and the enactment of procedures with regard to loan to value ratios as well as ratings on insurers, etc. These aspects must also be considered by institutions in other countries who may wish in the future to raise funds through the issue of mortgage debentures in the international markets. The commonality of mortgage instruments will be an important factor in any large-scale trading potentials for mortgage securities.

The keen interest of the investment houses in the potentials for cross-country financing of mortgage debentures was stimulated earlier this year when several of the large US savings and loan institutions successfully placed bond issues of substantial size (US$lOO million or more) in the London Eurodollar market, at favourable interest rates. For example, the third largest Savings and Loan, the Great Western (US$18 billion) succeeded in placing a 10 year floating rate note issue for US$lOO million at an interest rate, adjustable every six months so as to be only 0.125% over the London inter-bank offered rates (LIBOR) for six- month Eurodollar deposits. In this case, as with the other offerings, the debentures were quickly sold, indicating a considerable interest and appetite on the part of the Eurodollar market. Several of these overseas issues were guaranteed by collateralised Ginnie Mae bonds, which are government- guaranteed. It should be remembered that roughly US$3S billion of net foreign saving was invested in the US in 1983 - more than twice the previous record, but that mortgage requirements in 1984 are estimated to be at least 40% over the total of US$138 billion in 1983.

The new tax legislation in the USA is expected to facilitate and greatly expand potentials for the sale of US bonds and debentures overseas, especially as it will eliminate the requirement of 30% withholding tax for foreign investors.

The US AID Housing Investment Guaranty Program is considered to be a successful example of inducing investment for housing in developing countries. In effect, the US Government guarantees investments from private sources for housing under certain criteria, terms and conditions. The investment houses eagerly bid for such offerings when they are made, and this has helped expand their understanding of such investment opportunities.

In all, it seems clear that the investment houses are likely to be engaged for a long time in the financing of housing through mortgage debenture transactions. They can indeed be helpful in vastly expanding the volume of resources available for investment in this field, both in the USA and in other countries. Their concern with the ‘globalisation of capital flows’ and fitting into such a conceptual arena could mean that increasingly they will be colleagues in international development efforts which include housing and mortgage finance.

The implications of the ‘revolution in housing finance’ for the countries of the East Asian region need special examination and study. On the one hand, there is the whole array of innovative techniques and practices, few of them yet accepted in the region, which were described in the study by James Christian for the International Union. on Housirzg Financefor Developing Countries, published in 1981. Then there is the fast growth of computerisation, funds transfer, and the opening up of housing investment to vast sectors of the capital markets through secondary mortgage operations and the sale of mortgage debentures. Another aspect of the ‘revolution’, which is beginning to be felt in some of the large cities of Europe and North America, is the move towards decentralised management of the housing stock, the promotion of cooperative housing entities, the development of block organisations and citizens’ organisations as methods of halting central urban decline and setting the stage for urban renewal through responsible civic action. The latter involves combinations of consumer, investor and local government interests and agreement to enter into concerted long-term planning and action programmes. Often, in such projects, there are concess-

ionary write-offs for land values, technical assistance and seed capital for cooperative housing efforts, and guaranteed loans, often with certain periods of tax exemption. Although such efforts involve considerable dialogue, and may seem time-consuming, they are steadily proving their worth in maintaining and enhancing existing housing stock and in rehabilitating entire neighbourhoods and communities. The ultimate stimulus and, motivator is the prize of home ownership at the end of the trail and a better quality of life through community improvement efforts. In many countries of the East Asian region, existing housing stock built under public auspices is deteriorating, to the detriment of values and of the urban economy generally. Systematic policy to help promote the decentralised management and ownership of this stock through organised citizen groups and cooperatives is an essential element of good housing finance and management, and should be pursued.

The basic ingredient of all housing finance systems will still be the capability of mobilising domestic savings, which has been done in the past so effectively world-wide through systems of specialised thrift and home financing institutions. The Building Societies, the Savings and Loan Associations, the Bausparkasse are examples of such institutions, and we can note that the membership of the International Union in 65 countries represents combined assets of well over US$l trillion. In spite of deregulation trends in some countries, which have tended to blur distinctions between the functions and capabilities of such institutions with those of savings banks and commercial banks, the rationale for deposit-taking institutions with specialised housing functions remains strong, and in most places, with some mergers and readjustments, they continue to survive and grow - even in highly competitive circumstances. Recently, both the World Bank and the US AID have initiated lending programmes, in Kenya and Zimbabwe, for example, which channel funding through such institutions for specified types of housing investment. An Asia and Pacific Federation of Building Societies has been constituted, with headquarters in Perth, Australia. This Federation has sponsored a housing finance study mission to Papua New Guinea which has recommended the establishment of a small number of “housing finance societies” which would accept deposits in bulk from institutions such as the National Provident Fund, the banks, insurance companies and business houses, and on-lend such funds to individuals for home ownership purposes. In line with their common perceived objectives, EAROPH and the Asian and Pacific Federation of Building Societies could well consider the possibility of mutual cooperation on certain future projects.

On the regional level, we can note that the Asian Development Bank has not generated much momentum for urban sector lending, particularly when compared with the World Bank activity in this field. A few tentative efforts have been made to assess the nature of the housing problem for low-income families, but follow-up has been meagre. Only a very few countries have received loans or technical assistance for urban projects.

The report of the Asian Development Bank for 1983 shows that loan approvals for the Urban Development Sector in 1982 were for one project of US$30.20 million or 1.8% of total lending. In 1983, there was also one loan, for US$35.70 million or 1.94% of total lending. In all, over the period 1967-1983, the Bank has made 10 loans for the Urban Development Sector, totalling US$286.15 or 2.29% of total lending. Technical assistance approvals over the same period are for only 8 projects, amounting to US$1.929 million or 1.53% of the total of such approvals. Certainly, there have been no innovative developments with respect to housing finance, nor in helping countries to establish appropriate specialised institutions in this field. The Bank lags woefully behind in this entire area.

The UN Economic and Social Commission for Asia and the Pacific (ESCAP)

should be encouraged to undertake new comparative studies on housing finance which would currently be of help to the governments. ESCAP organised a Regional Congress of Local Authorities for the Development of Human Settlements in Asia and the Pacific, which met in Yokohama, Japan in June 1982. This Congress did produce certain basic documentation as well as several recommendations concerning urban finance. These recommendations, repro- duced from the Report of the Congress, were as follows:

1. Local authorities should be empowered to enlarge their tax base and/or receive a fixed percentage of national (State) taxes.

2. They should be also allowed, under certain conditions, to enter into revenue-earning and share ventures which would serve the cultural, recreational or other needs of the population.

3. The poss,ibilities of local authority borrowing should be extended. For that purpose, the creation of local government credit institutions should be furthered.

These recommendations, though broad in nature, reflect the need for policy change as well as institution building for and at the local authority level.

A more specific type of meeting was the Asia and Pacific Regional Conference on Human Settlements Finance and Management, jointly organised by the UN Habitat and Human Settlements Foundation and the Philippine Ministry of Human Settlements. Held in Manila in June 1979. this Conference brought together relevant information on housing finance systems of selected countries in the region (Philippines, Sri Lanka, Malaysia, India, Indonesia, Korea, Thai- land). It served to produce important papers on specialised aspects of housing finance in the region and elsewhere. Among the recommendations on housing finance were the following.

1. Governments are urged to increase the allocation of funds from public and private sources for investment in human settlements.

2. The present share of gross national product devoted to housing, in most cases, ranging in the neighbourhood of about 2% and meeting only about 15% of the demand in the region, needs to be increased to 576 over a period of time.

3. Governments should give primary concern to evolving more realistic policies on housing finance for low cost housing, and should prepare long- term programmes for housing backed by adequate financing systems that ensure a continuous flow of funds to the sector. There should be appropriate incentives to increase and harness the flow of private financial resources particularly to the low-cost housing sector.

4. A sound national housing finance system should be established starting with a national apex organisation. This should be accompanied by the setting up of a network of specialised housing finance institutions in both the public and private sectors, and at the regional and local levels for these to work in close collaboration with the existing financial institutions.

5. Governments should ensure that a certain proportion of long-term contractual savings such as insurance funds and provident funds is earmarked for human settlements programmes.

6. Taxation policies should be reviewed to provide incentives for home ownership and rental housing with greater emphasis on low and middle- income groups. The taxation policies should also be used to encourage personal savings for housing finance and to encourage and support human settlements improvement through a system of cross-subsidies.

7. In order to support the human settlements finance system, a secondary mortgage market facility should be established to facilitate greater participation by financial institutions.

8. A mortgage risk insurance scheme should be established to reduce the

Some International Perspectives on Housing Finance and Mantrgement 33

down payment payable by the borrowers to the housing finance institutions.

9. The major portion of the funds required for carrying out the human settlements programmes should be generated internally out of local savings and government funds. However, external seed capital may be useful as an instrument for creating new institutions to improve the housing finance and delivery systems.

10. International assistance can play a much more important role than at present. A regional housing finance institution in the form of an Asian Housing Bank should be set up in collaboration with the various international agencies. During the interim period, the Asian Develop- ment Bank should, like the World Bank, aim at reaching 5% of its total lending for human settlements programmes by the year 1982.

This last recommendation, for the establishment of a regional housing finance institution, was taken up by the UN Commission on Human Settlements, which at its fourth session in 1981 called upon the Executive Director to undertake a feasibility study on the creation of an Asian Human Settlements Bank. This project has had but fitful attention, and, after several expert group meetings whose results were presented to the Commission, the project has still not moved forward in any substantial way.

In fact, at the seventh session of the Commission, held in Libreville, Gabon, in May 1984, the Executive Director presented a brief paper with several recommendations. These included that high-level consultations should be initiated with selected countries of the region and with the Asian Development Bank to explore the role the Bank might play in the establishment of the proposed institution; that Articles of Agreement should be submitted to members and associate members of ESCAP, together with a summary of the reports concerning the proposed institution; and that a suitable regional forum should be selected to discuss the proposal and to appoint a committee of prospective member countries to finalise the charter and other necessary documents for the establishment of the proposed institution.

The Report of the Commission on Human Settlements on the work of its Seventh Session (A/39/8) does not indicate that the Commission took any action on the report on this matter. Obviously, much remains to be done, whether at government or private sector level, if any effective measures for housing finance on a regional level are to be implemented. A sense of commitment seems to be lacking.

In the African and Latin American regions, on the other hand, certain institutional and organisational developments have taken place. For example, progress has been made in establishing the Company for Habitat and Housing in Africa (Shelter-Afrique), supported by the African Development Bank and subscribed to by 23 governments and by other organisations as a regional housing finance institution with headquarters in Nairobi. To give further impetus to housing finance developments in Africa, there was created in June 1984 the African Union of Building Societies and Housing Finance Institutions, also with headquarters in Nairobi. In Latin America, there is an active and experienced Inter-American Savings and Loan Union, which helped bring into being the Inter-American Savings and Loan Bank (BIAPE), with headquarters in Caracas, Venezuela. Both entities have helped promote the mobilization of savings and investment by specialised housing finance institutions. These have done well in the majority of countries despite the serious economic difficulties that some are undergoing. A Caribbean Federation of Building Societies and Hous- ing Finance Institutions is due to be organised and established on 1 November 1984.

The economic dynamism of most of the countries in the East Asian region at present would seem to be propitious for calling forth new efforts at both regional

and national levels to promote, establish and develop housing finance and mortgage systems which will attract the savings and investments required from both internal and external resources to meet the colossal future housing requirements indicated by the population growth estimates presented earlier, Other regions can provide experience and some guidelines, but the national governments and regional entities represented in EAROPH will have to develop concepts and organisational patterns tailored to the unique economic, social and cultural characteristics that prevail here.

Hong Kong and Singapore both provide models of planning and implemen- tation for housing and urban development and there is much to be learned from both examples. But no other country has such city-state situations, where the government and the metropolitan administration are identical, and where there are such linkages between assured financing, planning, building, and manage- ment. Other countries face much more complex situations and must develop programmes and systems which, in conditions of government budgetary stringencies, set up the rules of the game for public and private sector cooperation, and particularly encourage rationalisation and private sector participation and entrepreneurship for housing and community development.

The local governments will continue to have much responsibility for this sector, as in China, for example. But national housing policies must be established so that the “rules of the game” are understood. In China’s case, particularly, a new approach is needed to define and limit the scope and scale of massive subsidisation of housing, so that available resources can be directed to the modernisation of other sectors. Current rents may average 1 to 3% of income, and a 1982 survey showed that rentals paid, on a per cupitu basis, were only about 30 cents per month. This is hardly a way to generate capital for construction of new housing, considering the massive needs. Indicated steps for new housing policy are to require occupants of housing projects at least to pay rentals whose income will cover the costs of operation, repair and maintenance. as weli as depreciation.

Because the scale of the Chinese situation within the EAROPH region is so immense. some of the main aspects pertinent to this paper will be briefly described, based on information provided through the two-year old Ministry of Urban and Rural Construction and Environmental Protection (MURCEP). MURCEP has estimated an urban population growth increase of 110 million by the year 2000. This together with the improvements required for the 1982 urban population of 144.7 million would produce a total construction requirement for housing living area of 1.411 billion sq.m, requiring a yearly investment of about 19.24 billion yuan (about US$9.62 billion). The programme objective for housing by the year 2000 calls for reaching the standard of a complete dwelling unit for each household with an average of eight sq.m of living area or the equivalent of 14.5 to 16 sq.m of building area for every resident. This will involve an extensive effort for renovations and alterations to be carried out on obsolete residences.

The state has invested large sums in house-building, amounting to roughly US$2S billion during the four years from 1979 to 1982, and more than 7.8 million families or about 30 million people moved into new homes during these years. The housing shortage, however, continues to be acute, and it is evident that new steps must be undertaken to encourage home ownership and therefore less subsidisation.

In the rural areas, very considerable progress has been made in improving housing conditions for the peasants, and about 18.75% of peasant families are now living in new houses built in the last ten years. Many of these were built with self help, and families raised their own funds to buy building materials. In some cases there was community assistance for the actual construction. During the

Some International Perspectives on Housing Fiwnce and Managemenl 35

Sixth Five-Year Plan, from 1981 to 1985, it is projected that 2.5 billion sq.m of rural housing, including community services and facilities, will be constructed.

Although China does not as yet have any specialised system for housing finance, currently savings deposits are growing rapidly in the government banking system. Efforts are underway in four designated demonstration cities to develop new patterns of financing for home ownership, in which the prospective owner pays one-third and the balance is subsidised by the government and the enterprise or place of employment. The response has been excellent, and is undoubtedly a forerunner to a greater degree of flexibility in financing, leading to home ownership. Whether the housing sector will be one of the major keys to gradual transformation of the system, towards greater privatisation and the establishment of specialised housing finance institutions remains to be seen.

The Philippines merits special attention as a conceptually advanced example of a human settlements approach to national planning. Under the Ministry of Human Settlements, now six years old, major steps have been taken to establish a framework and programmes for the financing of housing, shelter and livelihood improvement.

Perhaps no other country has adopted a similar comprehensive approach in accord with the spirit and recommendations of such international events as the UN Stockholm Conference on the Human Environment of 1972 and the UN Conference on Human Settlements (Habitat) held in Vancouver in 1976.

The Ministry has adopted a sophisticated approach to housing finance through its various instrumentalities, including the Home Development Mutual Fund, the National Home Mortgage Finance Corporation, and the Home Financing Commission. It has also met with considerable successes in approaches to the private sector for support of the various aspects of its housing programmes. The HDMF is a fund-generator, through a 3% tax on earnings, matched by employers, for deposit to individuals’ accounts, to be drawn upon for retirement, death, permanent departure and disability benefits. Members of the system may apply for housing loans through participating banks and thrift institutions. The NHMFC provides a secondary mortgage system to “take out” housing primary mortgages initiated and serviced by the participating banks. It encourages the flow of long-term and comparatively lower-cost funds from the private sector through the sale of Mortgage Participation Certificates. This maintains the Banks’ liquidity for subsequent housing loans under the HDMF and other loan types. The Home Financing Commission, in addition to its functions of mortgage insurance, supervision of Community Associations, etc., also manages the Land Investment Trust programme. This provides for a land acquisition and development finance process, linked with investment incentives.

Landowners with particular parcels in designated development zones are encouraged to place such properties in trust with the MHS, in exchange for Trust Certificates (LITCS) which are negotiable and can serve as loan collaterals. The Ministry then raises funds for integrated planning and development and works out investment possibilities in special projects. When projects are successfully completed, arrangements are made for the landowners and investors to share with the Ministry in the net profits that may acrue. The Ministry has signed an agreement with the country’s stock exchanges to trade LITCS, and several projects have been funded and completed. The LITCS scheme appears potentially attractive for increasing the flow of private investment for the housing sector, including, possibly foreign investment.

The NHMFC already has considerable possibilities for funding from foreign sources, once the Philippines emerges into a period of greater economic stability. For example, it has the following powers and functions.

1. To develop and provide for a secondary market for house mortgages granted by public and/or private housing finance institutions.

2. To purchase, acquire, sell. discount, re-finance or otherwise deal in home mortgages or participate therein.

3. To borrow funds from domestic or foreign, private or public financial institutions as may from time to time be required for its operations.

4. To issue bonds, promissory notes, debentures and other debt instruments in local and foreign currency.

The above are concepts which other countries of the EAROPH region might well study in the search for additionality of investment flows to meet the housing and shelter needs of their growing populations.

Probably the majority of countries in the East Asian region have institutions which carry out specialised housing finance functions. Some have substantial achievement records; others have barely managed to get off the ground in terms of fulfilling their vast potentials for service. Among the major ones are the following: Malaysia Building Society (MBS), 40% owned by the government; the Housing and Urban Development Corporation of India (HUDCO), established by the Government in 1970; the Housing Development Finance Corporation, India. inaugurated in 1977 to accept deposits and to provide loans for residential housing; the Korea Housing Bank, established in 1967 to act as a financial intermediary through which private capital could be channelled into the housing sector; the Bank Tabunpan Negara (BTN) National Savings Bank of Indonesia, created in 1974 to provide mortgage credit to support home- ownership among low and moderate income families; the Government Housing Bank of Thailand (GHB), established in 1953 with the purposes of mobilising savings deposits and providing long-term finance for housing; the Government Housing Loan Corporation of Japan, established in June 1950; and the Home Development Mutual Fund (pag-IBIG), National Home Mortgage Finance Corporation (NHMFC) and Home Financing Corporation (HFC) of the Philippines.

All of the above institutions have unique characteristics and their structures and operations are steadily evolving. They, and perhaps others, represent the potential nucleus of a regional grouping of specialised housing finance entities which can and should work towards the standardisation of documents, legal aspects, and basic procedures which could be helpful to the countries of the region in improving their national housing finance systems, both for savings mobilisation and assured investment in housing projects and programmes. Eventually, most of them will become involved in financing urban projects on a broader scale, in cooperation with local authorities, governments and others. They have the potential for serving as vehicles for dealing with the responsibil- ities of external finance through bond issues and other securities, and generally to open up and attract the capital markets towards such investments.

In conclusion, it should be remembered that the United Nations General Assembly has declared 1987 as the International Year of Shelter for the Homeless (IYSH) and requested that all countries participate and undertake demonstration projects and basic studies in accord with the objectives of the Year. Governments are also requested to initiate a comprehensive shelter and settlements assessment of prospects, priorities and resources leading to the formulation of national shelter strategies to the year 2000. In the implementation of strategies, bilateral arrangements between and among international agencies, governmental and non-governmental organisations should be used to the full. Sri Lanka took the leadership role with respect to promoting the concept of IYSH and securing its approval in the United Nations. In the UN Centre for Human Settlements (Habitat) in Nairobi, a small secretariat has been established to help with the preparatory and other events leading to the Year, and reportedly over one hundred countries have established national focal points for IYSH. One problem is that, to date, reportedly only about US$l .S million has been pledged

Some Inrernurionul Perspectives 011 Housing Finunce und Managemen/ 37

in voluntary contributions from all governments in support of this project. This means that non-governmental organisations, such as EAROPH, should consider taking on certain promotional functions and responsibilities in this region which will be in accord with IYSH objectives. Perhaps ‘Housing Finance and Management’ is one theme which EAROPH could well carry out in this context, to promote research projects and meetings and symposia on this subject? And, in cooperation with other organisations, to endeavour to achieve more understanding regarding its importance, and the actions which are required by both public and private sectors?

In the USA one device to exchange and promote ideas and action for the IYSH was an International Shelter Conference held 2-3 November, 1984 co- sponsored by the International Union, the International Real Estate Federation, and the International Committee on Building Research and Documentation (CIB). More than 30 national organisations in the USA served as co-hosts of the event. There were four simultaneous working groups, on Financial Mechanisms; Land and Security of Tenure; Materials and Building Technologies, and PubWPrivate Sector Cooperation.

A conference of this type, if held in some of the countries of the East Asian region, could undoubtedly help raise the level of interest and participation with respect to IYSH and its manifold possibilities.

In conclusion, we have endeavoured to present some international perspec- tives on housing finance and management. Much work remains to be done in this field in terms of both research and action. EAROPH could well consider the possibility of helping to promote more research in this area, perhaps through the establishment of a speciai committee on housing finance and management. This could help in pursuing the project for an Asian Housing Finance Institution or system and identifying the modalities thereof. Training and interchange on this subject should be encouraged at universities and at institutional levels. Public/private sector cooperation for the establishment in the region of a centre for housing finance and management emerges as another major project possibility.

APPENDIX A: UNITED NATIONS ACTIVITIES IN THE FIELD OF HOUSING FINANCE*

Notes on Proposals for Institutional Development

ERIC CARLSON IUBSSA Special Advisor

INTRODUCTION

The United Nations concern with housing has taken several directions, beginning with early studies and recommendations emanating from the League of Nations and the International Labour Organisation. In the 1950s this work tended to become more focused and specialised, especially after the creation of a small unit, the Housing and Town and Country Planning Division, at United Nations headquarters in New York.

One example is the study prepared for this Division in 1951, on “Cooperative Housing - An Approach to Solving World Shelter Needs”.’ This study stressed the importance of establishing national housing banks, of promoting systems for savings and building, and recommended the creation of an international funding organisation, which would be a limited profit international authority, eligible to issue tax exempt debentures and to accept loans and grants for housing and community development purposes in specified areas, to be used as part of a revolving fund. The members would include individuals, organisations, cooperatives, labour and

*This is an edited version of a paper prepared for the International Union of Building Societies and Savings Associations (IUBSSA) and published in the Proceedings of its World Congress in Melbourne 1983. It is reproduced here with IUBSSA’s kind permission.

‘Working paper by Eric Carlson.

credit unions. industries and governments as well as financial institutions. The major purpose of the overall organisation would be to serve as a financial holding company and to encourage and promote housing. especially for low and middle-income families, through securing the interest and participation of many individuals and groups. The proposal included provision for a Central Development Company which would have separately incorporated offices in different countries. There was extensive provision for public relations. training and technical assistance.

This study was used as the basic working paper for a UN seminar on “Housing Through Non-Profit Organisations,” for participants from Latin America. held in Copenhagen, Denmark, September-October 1954, in collaboration with the Organisation of American States. the first such seminar in a series for participants from all regions of the world. The seminar participants recommended that:

“The establishment of an international agency or the use of an existing agency - such as the International Bank for Reconstruction and Development - should he considered with a view to making the resources of the international capital market available for investment in housing in countries where capital is scarce.“’

A number of subsequent recommendations along these lines were made during the next decades. In the early 1960s. with strong support from the savings and loan industry and other groups, bills to create an International Home Loan Bank, to be affiliated with the Federal Home Loan Bank system, were introduced into the U.S. Congress. The proposed legislation would have authorised such a bank to invest in loans or advances to, or in shares. accounts. deposits or certificates of indebtedness of foreign mutual thrift and home financing institutions and foreign home loan banks. The proposal was well worked out and would have made use of an existing national institutional structure to provide support for such an international Home Loan Bank. Although an extensive study and hearings were conducted on the subject in March 1963, this lcgisiative effort did not succeed.

The past 30 years have witnessed several surges of interest by the United Nations in matters of housing finance. These culminated in specific proposals for action, including recommendations for institutional development at national, regional and international levels. One of these proposals was for the creation of an International Housing Finance Corporation, which never materialised owing to lack of support from governments and the United Nations bodies concerned. Another was for the establishment of an international fund or financial institution. which was to become the UN Habitat and Human Settlements Foundation, declared operational in 1975. but whose original concept and purposes were deviated in 1978 upon its merger into the UN Centre for Human Settlements (Habitat). There it disappeared as a viable financial entity and its staff wits dispensed.

The International Union of Building Societies and Savings Associations, through various of its iltdivid~l~~l members. and as an organisation, was involved in the development of concepts for both these aborted efforts. At the Xith Congress meeting in Sydney. Australia. from 71 to 25 October 1968. it commended the United Nations for its constructive efforts; and further resolved that the Union support the proposal for an International Housing Finance Corporation as a means of assisting the developing countries to mobilise the funds needed to finance housing and related programmes. The resolution further directed the appointment of a Special Committee to confer with the appropriate UN officials and with the president of the World Bank to inform them of the Union’s position on this proposal and to obtain World Bank support for it, and resolved that the Union, as a body and through its members, give full support to the proposed IHFC. preferably as a subsidiary of the World Bank. In 1969, eight savings and loan executives met with President Robert McNamara to present the Union’s views on this subject. The Union’s representatives also met with the Administrator of the UN Development Programme. Paul C. Hoffman. However, no significant results were achieved.

As for the UN Habitat and Human Settlements Foundation, the International Union early demonstrated its support for the recommendation creating it which emanated from the UN Confcrencc on the Human Environment. held in Stockholm in 1972. Senator Helena 2. Bcnitcz of the Philippines chaired Committee 1 of the Conference which dealt with human settlements and other matters. The re~ommend~~ti[)n, though heavily contested by the developed countries. was adopted by the Conference as a whole. and subsequently formed the basis of a UN General Assembly Resolution. The recommendation directed that:

“Governments and the Secretary Generai take immediate steps towards the establishment of an international fund or financial institution whose primary objectives will he to assist in strengthening national programmes relating to human settlements through the provision of seed capital and the extension of the necessary technical assistance to permit an effective mohilisation of domestic resources for housing and the environmental improvement of human settlements”

Soon after the Foundation’s establishment under the UN Environment Programme in Nairobi. the Union’s Executive Committee met there. in the effort to promote cooperation with those responsible. IUBSSA President John Stadtler. subsequently served on the distinguished Advisory Board for the Foundation at its various meetings up to 1978. The International Union, at its headquarters in London, collaborated in hosting an important international workshop on housing finance organised by the Foundation in March 1977.

The purpose of this retrospective report on UN housing finance activities is not to mourn the lost opportunities of the past. nor the apparent incapacities of govcrnn7cnts or internatioilai secretariats to deal with matters of institutional development for international financing of housing. Rather, the objective is to provide a quick guide to some of the research that was done and the recommend~itions of the advisory and expert group meetings which were held. especially those that may still have relevance for the new efforts which remain to be carried out in this field, under private sector orientation.

First, there will be a summary of some of the UN activities in this field. This background information will be followed by a description of some of the key elements involved in the proposals for the IHFC as well as for the UNHHSF. and how these were followed up. The bibliographies will provide additional references.

‘The extensive report of this meeting, including the basic working paper. was published by the UN as Housing Througl~ Non-Pro/i:c Orgctnisorior~s (Sales No. 195h.IV.7). UN Department of Economic and Society Affairs, N.Y.

Some Inrrrnational Pe’crspecfives on Housing Finance urld Manugemenf 39

BACKGROUND: UN ACTIVITIES ON HOUSING FINANCE

The UN Economic Commission for Europe, based in Geneva, undertook considerable work on housing policy and finance early in its history.” But it was not until the sixth session of the UN General Assembly, in 1954, that in its resolution 537 the Economic and Social Council was requested to give urgent attention to assistance to governments on housing finance from domestic or external sources. The ECOSOC responded at its 20th session in Geneva, 23 July 1955, with a resolution on Financing of Housing and Community Improvement Programmes. This requested the Secretary General to study and assemble. in collaboration wtth appropriate agencies, informatjon on the feasibility of financing housing programmes, including the regional economic commissions, meetings of experts, efc.

As the first project under this resolution, a team of three was recruited, in August 1955. to do a comprehensive report on the financing of housing in Latin America, representing the United Nations. the regional economic commission (ECLA), and the Pan American Union. This team had among its key objectives:

1. To promote a wider and more influential national interest in the financing of housing and community improvement programs.

2. To encourage formation of inter-institutional and inter-professional national working groups through which future technical assistance activities might be expedited.

The team visited eight countries and fourteen cities officially, interviewed and conferred with 260 persons, held 18 press conferences, and established four national working groups. Its report, published as a UN document in 1956” provided considerable stimulus for future action at both national and regional levels. However, no similar teams were established in the other regions. and it was not until February 1959 that the first regional course and workshop on housing finance was held in Latin America, at the Inter-American Housing and Planning Center (CINVA) in BogotB, Colombia.’

Under the enabling resoiutions, the UN headquarters staff contjnued its investigations on housing finance, resulting in the issuance of the UN report in 1957 on Fjnalzcing of Housing and C~mmunjry ~m~ro~emen~ Programmes (Sales No. 57.IV.l) and later the publication in 1968 of a major report on Finuncefor Housing und Community Facilities in Developing Countries (Sales No. E.68.1V.4).

During the early 1960s the World Bank also began to include on its economic teams and study missions to various countries advisers specialised in housing and urban development. Gradually, the UN also promoted fact-finding efforts on housing finance in the other regions. One such effort resulted in the preparation of a basic working paper and the convocation of a UN Seminar on Financing of Housing and Related Community facilities for the Arab States, held in Cairo, U.A.R., 14 to 23 December 1963.h The report of this seminar, adopted by consensus, contained specific recommendations for savings mobilisation, and drew upon the Latin American experience, including a proposal for the establishment of a regional trust fund for housing and related community facilities.

In the African region in the 1960s. the UN Economic Commission for Africa organised a series of subregional meetings on housing finance which culminated in a major regional meeting on technical and social problems of urbanisation with emphasis on financing of housing, held in Addis Ababa, in cooperation with the German Foundation for Developing Countries. This meeting gave special attention to the concept of an International Housing Finance Corporation in relation to the requirements of the African countries, and recommended that such a project be pursued along with other specific recommendations for mobilisation of savings and mortgage finance. Several members of the International Union participated in this meeting, but no major immediate follow-up activities resulted.’ For Asia and Pacific region certain research efforts on housing finance proceeded in different countries. and at least one country, India, organised a major national symposium on housing finance in 1965.

Further impetus as well as broadened legislative authorisation for UN action on housing finance came through the Economic and Social Council Resolution 1170 (XLI), adopted in 1966. The Council requested the Secretary-General:

“(a) To formulate, with the advice of the regional economic commission secretariats . and of such additional consultant services as he deems necessary, and after consultation with the international agencies concerned, specific proposals for:

1. new approaches, methods, forms and institutional facilities that would serve to increase the volume and effectiveness of the flow of domestic and external public and private funds applied to programmes in housing and community facilities; 2. concerted action on the Dart of the United Nations. including the United Or~anisation for Industrial Development, the iegional economic commissions aid other internat~ona1 agencies concerned. which would serve to facilitate the speedy and effective implementation of these proposals and of the overall programme for accelerating the financing of housing and community facilities.”

‘For example. Study on Methods and Technicrues of Financing Housing In Europe. 1952: also. Report on Financing of Housing in Europe, 1958 (Sales No: E.6d.IV.4). - - ’

‘Financing of Housing and Community Improvement Programmes in Latin America. Prepared by Carlos Acevedo, Eric Carlson, Jorge Videla. (TAAILATI7) 11 October 1956.

“As a result of the report, the UN subsequently made available the services of several advisers on housing policy and finance in the region, and undertook other supportive measures. The expert group’s report was considered a factor in bringing priority for housing through the Alliance for Progress and the Social Progress Trust Fund established under the administration of John F. Kennedy.

“Report of the Unired rations Seminar on Financing of H~~~~g and Related ~~rnmuf~ity Facilities for the Arab States. Cairo, U.A.R., 14 to 23 December 1963. Working Paper by Eric Carlson. (ST~AO/SER.C~72).

‘Including: Dr. W. Lehmann, Mr. J. Burgess, Mr. Lalit Pandit, Mr. Norman Griggs.

40 Eric Cwl.~on

UN General Assembly Resolurion 2713 (XXV) urged UN member states and the relevant UN organisations to accelerate the accumulation of domestic savings. inler uliu, through the establishment of appropriate financial practices and special&d institutions for financing the housing and construction sector. Finally, Economic and Social Council Resolltrions f224 (LXIII) and 1670 (LII) requested that attention be paid to innovative approaches, including financing, for providing housing specifically for low-income families.

There is no doubt that considerable success had been achieved in mobilising support for work to proceed on housing finance problems and institutional development. However, when the time came for implementation and budgeting to carry out these resolutions other forces intervened. Steadfast opposition came from some governments. as well as from key elements of the Secretariat itself. where housing was still considered to be a matter of low, priority compared to other development objectives. Increasingly. however, developing countries sought technical assistance on housing finance problems and institutional development for which a number of special missions were undertaken. Although much was being accomplished, de&~ro no more than one full-time post was ever authorised for the UN’s Secretariat work on housing finance. plus the half-time of the Chief of the Housing Section. and perhaps US$lO.OOO or less for meetings and consultant services in any one year.

Through the UN Centre for Housing. Building and Planning, which had been formally constituted in 1965 at UN Headquarters in New York. a further attempt was made to dramatise the situation and to call attention to the world crisis of housing and urbantsation and what should be done about it. The result was the commissioning, in 1968, of a major report by Barbara Ward (Ladv Jackson), which was widely circulated as the UN report on Urhunization in the Second Development Decade.”

This report had seven recommendations for national action in the UN development decade of the 1970s. including:

“A full array of savings and credit institutions should be established to mobilise capital and to channel investment into housing and related services.”

With respect to goals for international level action to improve housing and urban development conditions. there were five major recommendations, of which the first two were:

1. Substantial additional international resources should be provided in the form of financial aid and technical cooperation to achieve national goals for housing and urban development.

2. An international housing finance system should be developed to stimulate the creation and growth of national housing banks and savings institutions.

There were at least two other reference points for endorsement of increased international housing finance activity. One of these was the UN Interregional Seminar on the Improvement of Slums and Uncontrolled Settlements, held in Medellin, Colombia, 15 February-l March 1970. This seminar w’as attended by 33 official delegates, representing 27 countries, as well as by numerous observers and representatives of intergovern- mental and non-governmental organisations. The seminar recommended that:

“Developing countries should consider how international seed capital funds and technical assistance could best be used to mobilise domestic savings. for instance. by establishing national systems for housing finance, national housing banks. savings and loan associations, cooperatives. CIC.

“There is need for new international programmes to facilitate the flow of resources between countries of capital surplus and those of capital need. including a proposed International Housing Finance Corporation and a World Housing Fund, which would operate in a manner similar to that of the World Food Programme, to pool public and private donations of appropriate tools, equipment. materials and skilled manpower to help people in slums and uncontrolled settlements to help themselves.“”

Another event was the Interregional Seminar on the Financing of Housing and Urban Development organised by the United Nations in cooperation with the government of Denmark, and held in Copenhagen from 25 May to IO June 1970. There were more than SO participants from 22 developing countries, and observers from many national and international agencies including the World Bank. and non-governmental organisations including the International Union and the International Savings Banks Institute. The general conclusions of the seminar stated:

“The mobilisation of domestic savings is the fundamental step in meeting long-range capital requirements for housing and related facilities. Strenuous efforts will be required to establish the necessary legal, administrative and institutional framework; and the seminar supported the relevant proposals for national and international actions put forward in the UN report on this subject. It also endorsed the proposal for a new international programme to assist in the establishment of appropriate domestic savings and credit institutions through the provision of technical assistance. research and training, and where appropriate, seed capital. In addition. more attention should be paid to the financial and economic aspects of urban infrastructure and the building materials and construction industries. The interest of the International Bank for Reconstruction and Development (IBRD) in this whole field, in both research and capital assistance for savings institutions and production facilities. is welcome.““’

DRIVE FOR INTERNATIONAL HOUSING FINANCE CORPORATION

It was primarily in response to ECOSOC Resolurion 1170 that a more determined effort in I966 began to produce specific recommendations for action on finance for housing, building and planning, including the

‘United Nations, Urbaniscrtion in the Second Development Decade (Sales No. E.7O.IV. 15). “United Nations, Improvement of Slums und Uncontrolled Set/lements. Report of the Interregional

Seminar, Medellin, Colombia. (Sales No. E.71.1V.6). “‘United Nations, Report of the Interregional Seminar on the Finarrcin~ of Honsirq and Urburt Development.

Copenhagen. Denmark. (Sales No. E.72.1V.S).

Some international Perspectives on Housing Finance and Management 41

proposals for an International Housing Finance Corporation. This work was carried out in the Housing Section of the UN Centre for Housing, Building and Planning, a small unit within an organisation that was endeavouring to find an appropriate role for its mandate. It was handicapped by a governing body, the UN Committee on Housing, Building and Planning, composed of 27 member states, the majority of whose representatives were constrained and lacking in enthusiasm for support of direct action measures. Very limited budgetary resources were always a problem. Nevertheless, the work accomplished was considerable, and much remains valid and of permanent usefulness.

A comprehensive report of the efforts involved in the proposals for an IHFC is contained in the report. Proposals for Action on Finance for Housing, Building and Planning (Sales No. E.73.1V.4). This report” was finally approved by the UN Committee on Housing, Building and Planning at its seventh session, in 1971, and taken note of by the UN Economic and Social Council at its 52nd session in 1972. The report is indispensable to those concerned with further advancement in this field. It summarises the principal findings and recommendations of the various studies and reports carried out by the Centre and others; the conclusions reached at many meetings and seminars; and the ideas and suggestions brought out in discussions with knowledgeable individuals and officials of both public and private institutions. The International Union was well represented and often an active participant in these exercises, with perhaps the most important being a series of advisory group meetings, chaired by the Chief of the Housing Section, convoked to obtain the views of individuals and institutions from many parts of the world.

The first of these meetings was held at UN headquarters in 1966; the participants came chiefly from countries of the western hemisphere. The importance of appropriate institutional structures was stressed at this initial session. The second meeting, an exciting and creative one, was held at Geneva in July 1967, and brought together representatives of many western European financial insitutions, with some individuals from developing countries. At that meeting, the proposal for a new international institution was first recommended, and very specific suggestions were made as to its structure and forms of operation. A third meeting was held at Warsaw in February 1969. Eight socialist countries of eastern Europe participated in the meeting. The discussion covered the experience of socialist countries in meeting housing finance requirements internally, as well as the potential for contributions by the socialist states to assist developing countries to meet the enormous demands confronting them. In the light of the discussions and findings of these advisory group meetings, the UN Secretariat proceeded with the elaboration of a specific organisational scheme. It distributed a report, in early 1969, prepared in cooperation with the Stanford Research Institute, explaining the purpose and functions of the proposed IHFC” and received 180 replies from officials, institutions and individuals in 60 countries giving their views and comments.

As a final step, a concluding group of 10 experts met at UN headquarters in New York from 8 to 12 December 1969 to review the revised draft report, as well as several other original papers prepared specifically for the meeting by consultants. The meeting was chaired by the Under-Secretary-General for Economic and Social Affairs, and included such distinguished participants as Barbara Ward (Lady Jackson), Philip Klutznik, Oscar Kreutz, Chairman of the UN Development Committee of the International Union, and others. A summary of the discussions of this group is contained in the aforementioned report, on Proposals for Action.

In brief, while this final expert group meeting was a positive experience, with new ideas and suggestions materialising, the group hesitated in providing unanimous endorsement for an IHFC. It agreed that the proposal for an IHFC contained the elements of an important and practical programme of international cooperation, but it was considered that it might be unproductive to present further proposals for a new agency at the present time (1969). It was recommended instead that the World Bank be asked to undertake a comprehensive study of the feasibility of the proposal in consultation with the United Nations and the UNDP.

The World Bank subsequently did not agree to undertake such a comprehensive study, but went ahead to establish a Transportation and Urban Projects Department and to begin a programme for urban project lending in 1972, primarily for direct lending for sites and services projects for low-income families, which continues to the present day. An evaluation of the IO-year experience has recently been completed by the Bank’s own staff, and is summarised in a publication available from the Bank, Learning by Doing - World Bank Lending for Urban Development, 197242, February 1983. Following recommendations made over the past years since its founding, the International Finance Corporation, through its Capital Markets Department, has been endeavouring to help assist in the establishment of housing finance development institutions in several developing countries, through equity investment and lending programmes. Results, to date, have been quite limited.

The hesitation of the expert group and later the UN Committee for Housing, Building and Planning and the ECOSOC to recommend more direct UN action and follow-up on the housing finance proposals, after such an investment of time and resources on the part of many individuals and organisations can perhaps be understood in the context of the general weakness of the housing sector in the structure of the UN at the time. This has not changed signficantly since, in spite of the Habitat Conference in 1976 and the establishment of the “new” UN Centre for Human Settlements (Habitat) in Nairobi in 1978. The moribund Committee on Housing, Building and Planning was replaced by a UN Commission on Human Settlements of 58 members, but this Commission has yet to mobilise any significant resources or to promote any practical undertakings. Scepticism can, therefore. be expressed in 1983, at a time of international economic crisis, whether the United Nations is in any position to consider or to authorise any further productive work toward the establishment of a new international financial activity or facility for housing. The initiatives must come from other directions.

The United Nations work toward the establishment of an IHFC was not carried out in isolation, nor a lack of awareness of other proposals for somewhat similar objectives which had surfaced in the 1920s and 1930s. As early as 1931, the International Union’s Congress in Philadelphia had been presented with suggestions for

” UN, Proposals for Action on Finance for Housing, Building and Planning. New York, 1972. (Sales No. E.73.1V.4.).

I2 Wittausch. W.K., Stanford Research Institute, International Assistunce for Housing Finance in Developing Countries. December 1968.

promotio~l of international financing of housing, strongiy reinforced at subsequent Congresses m 1952 and 1962, which became more specific in their focus. The success of external pr~)grammes. such as that of the U.S. AID and the Inter-American Devefopment Bank in helping to establish national housing finance and savings and loan systems in Latin America during the 1960s. was especially taken into account. The UN commissioned a special study to get the facts on these developments.‘” The proposals for an International Home Loan Bank and for a Hemisphere Home Loan Bank, which both emerged in 1962-63, in the studies and testimony on international housing presented to the US Senate Committee on Banking and Currency. were obviously of special interest.

Perhaps in part because of stimulus from the UN efforts on housing finance. the Inter-American Savings and Loan Union at its conference in Rio de Janeiro in 1968 was presented with proposals for a world housing bank. drafted by a group of the Brazilian National Housing Bank and savings and loan executives. After several years of discussion and preparations, this led to agreement to organise a regional hank. which was to become operational in Caracas in 1975. and is known as the Inter-American Savings and Loan Bank (BIAPE). The BIAPE model, it has been suggested. may well be suitable or adaptable for considerable expansion. at both regional and international levels. This warrants further investigation, especially as its creation and establishment was not dependent upon or inhibited by government interference.

The Umted Nations activity on housing finance was not confined to the devel[~pment of the Proposals for Action. and to the IHFC, as such. A steady stream of useful publicati~~ns was produced on various phases of the subject. Though some are in need of revision and updating, many retain their value as reference works. teaching and training materials, and as basic tools of the trade for housing sector development. A listing follows of these principal publications resulting from the UN headquarters housing finance project. Another category contains the special papers produced in connection with the Proposals for Action and the recommendations for the IHFC.

To conclude this particular chapter of UN activity, there follows a summary of the basic features and rutionale of the IHFC, some of which may still be adaptable to a future non-governmental undertaking in this field.

Principni Publications of the UN Housing Finance Project

Finance for Housing und Community Facilities in Developing Countries (Sales No. E.hX.IV.4). Fi~z~ncing Rurcd Housing in Developing Counrries (Sales No. E.J-I.V.2). Finartci~l ~anugement of Governnze~zt Housi~~g Projects (Sales No. E.76.V.1). Housing Policy Guidelines for developing Couniries (Sales No. E.7h.lV. II). Non-Profit Housing Associations: Structure, Orguniz~tjon und Fintrncing (Sales No. E.75.1V.-l). Proposulals {or Action on Finance for Housing, Building and Planning (Sales No. E.73.1V.4). Criteria for Multilateral Financing of Housing and Humin Settiernmts. UN General Assembly document (A/10225). Non-Conventional Finuncing qf Housing for Low-Income Households (Sales No. E.7X.IV. 12). Chapter VII. Housing Finance. World Housing Survey 1974. pp. 71-94. United Nations (Sales No. E.7S.IV.8).

Reports Prepared for Proposals for Action und IHFC

Andrezejewski. A. and Kucharski, M., Financing of Housing in So&list C‘ountrie.s. Working paper, UN Third Advisory Group Meeting on Housing Finance. Warsaw. February 1969. Campbell. Wallace. Editor. International Cooperative Housing Development Association. Tech- niques of Fitl~n~ing Cooperative und Non-profit Housing in Selected Developirlg Countries. Working paper. Third hlceting. Warsaw. 1969. Garcia-Rodriguez, R., Housing lnve.~tment in an ~n~urionury Economy. Santiago. Chile. 1969. Gordon. J.D. er al.. .4 Survey of New Home Financing Irqitutions in L&in America. Parts I and II. Working paper. UN Expert Group, N.Y., April 1969. Guttentag. J. and Keeley. R., Aifernatrve Systems of Housing Finunce. Working paper. UN Expert Group meeting, N.Y. 1969. Heimann. J. and Krooth and Altman. ,YPW Appr0uche.r to Jncrea.sr hrnd~ crnd Re5ource.t /or Progrtma in Housing und Community Futilities. Working paper. UN Second Advisory Group Meeting. Geneva, July 1967. Krul. N. and Revillon, M.. Developmeni Assistance to Increase the FIoM~ of‘ Funds to Housing und Community Fucilirie.s Secror. Second Group, Geneva. 1967. Wittausch, W.K., Stanford Research Institute. Internarionol Assisrurrce ,for Housing Finam.? in Developing Countries. United Nations, December 1968. Bryant. Gov. Farris and Associates. Org~t~i.~uti~~r~ and Functions of ti World Housing Hutrk, Jacksonville. Florida. 1969.

Another Truck - The UN Hlrbitar and Human Settlements Fot~n~lution (UNHHSF)

By 1971, it was quite clear that a stalemate had been reached. at least within the United Nations, regarding possible progress and action toward the establishment of an International Housing Finance Corporation. This was a considerable disappointment to the developing countries, many of whom had become convinced of the need for a new agency or instrument in this field.

“Gordon. Jack D.. er ul.. Washington Federal Savings and Loan Association of Miami Beach. Florida, A Survey of New’ Home Financing Institutions in Latin America (The Savings und Loan Experience), Parts I and II. Working paper for the IJN Expert Group Meeting on Housing Finance. NY, April 1969.

However, in 1972, another track for possible movement toward an effective international housing finance inst~ment was opened at the UN Conference on the Human Environment, held in Sfo~kholm, Sweden. This Conference was a large, prestigious event, which set the pace and established a benchmark for a series of other major ~nternatjonaf conferences in the 1970s covering virtually all major problem sectors of world devefopment. Although the Conference had been set up mainly to deaf with the physical aspects of env~ronmentaf pollution, and to secure agreement for the estabfishm~nt of a new international agency to deal with environmental problems, some of the developing countries were quick to point out that “poverty is pollution”. They wanted more attention to the man-made aspects of the environment. particularly the degrading conditions of urban settlements with massive and mushrooming slums and squatter areas. They wanted more attention to shelter and housing needs, and the requirements for community facilities.

At the Stockholm Conference, Senator Helena 2. Benitez of the Philippines was elected to chair the important Committee I which among other matters, dealt with tire planning and management of human settlements for environmental quality. Despite opposition from some of the developed countries, as weif as from within the Conference secretariat itself, an important recommendation emerged from this Committee, which was subsequently adopted in a contested vote by the representatives of the conference as a whole. This Reco~~e~~uri~~ (No. 17) directed:

“That governments and the Secretary-General take immediate steps towards the establishment of an internati~nai fund or a financial institution whose primary operative objectives will be to assist in strengthening national programmes relating to human settlements through the provision of seed capital and the extension of the necessary technicat assistance to permit an effective mobilisation of domestic resources for housing and the environmental improvement of human settfemenrs.”

On 15 December 1972 the UN General Assembly adopted ~esoiuriffn 2999 (XXVIij which noted in particular recommendation 17 of the Action Plan for the Human Environment adopted in Stockholm; endorsed in principle the establishment of an international fund or financial institution; requested the Secretary. General to prepare a study on Eke establishment and operations of such a fund or institution, together with his recommendations and proposals, and to report thereon to the Assembly at its 29th session; and invited the World Bank to collaborate in the preparation of the study. A small team was designated by the Executive Director of the UN Environment Programme, headed by former US Ambassador Bernard Zagorin, to prepare the report requested by the General Assembly. Without going into detail on the various steps involved, this report broadly surveyed various aspects of national and international developments to date in the housing finance field. It was reviewed by the Governing Council of the UN Environment Programme and by the UN Economic and Social Council in 1974. The 29th session of the UN General Assembly, in December 1974, then adopted Resolution 3327 (xX1X) which decided that a voluntary International Habitat and Human Settlements Foundation be established as from 1 January 1975, and that in addition to its primary operative objective, as stated in the famous ~ec~m~~~~~f~~~o~ 17, this enlity would be concerned with:

I. stimufat~ng innovative approaches to preinvestment, preproject and financing strategies of human settlements activities. while drawing on the accumulated practical experience of both the public and private sectors for mobifisation of financial resources for human habitat and human settlements projects;

2. organising technical assistance services in human settlements and human habitat management, including training facilities and human habitat projects;

3. promoting the adaptation and transfer of appropriate scientific and technical knowledge on human settlements projects.

Under the authority and guidance of the UNEP Governing Council, the Executive Director of UNEP was designated as responsible for administering the FoundaEion and providing the technical and financial services related to that institution. He was also instructed to prepare ‘a plan and programme of operations for the Foundation for presentation to the Governing Council at its third session. The Council authorised a one-time allocation of US$4 million over four years from the UNEP Fund to the foundation which was to be initiated on 1 January 1975. The Plan and Programme of O~rations was prepared and presented to the Governing Council which agreed to the staffing pattern presented, and to the appointment of an Administrator at the level of Assistant Secretary General. An Ad Hoc Committee was estabhshed within UNEP to recruit initial staff and to commence operations. By August 1975, the Foundation was declared operationaf. By early f97h, the first Foundation-paid staff of five had been assembled and began functioning. But, unfortunately, no administrator was appointed until the end of March 1977, taking office only in June and subsequently resigning at the end of 197%. This administrator had little experience on housing finance matters, at either national or international levels, though he had been prior director of Venezuela’s rural housing programme and subsequently director of the Division of Malaria Control and Environmental Sanitation in the Ministry of Health.

Much of the Foundation’s programme for the first two years of its fife, therefore, was to be carried out without a full-time committed administrator - a most serious handicap considering the importance of obtaining government funding commitments at an early stage, to say nothing of the difficulties of endeavouring to establish a new financial institution in the temporary headquarters of the UN Environment programme, six miles from the centre of Nairobi, Kenya.

The Foundation was to have a distinguished Advisory Board of 15 members, but only six were appointed. One of these was John Stadtfer, who was then President of the International Union. The Board met in Nairobi in December 1975 and in May f976, and again in June 1977. The meetings included observers from the World Bank and from the UN Centre for Housing, Building and Planning.

The Board, and later the Governing Council, of UNEP recommended that a financial target for the Foundatjon should be a minimum of US$SO milfion to cover a four-year work programme. Voluntary government contributions to the foundation, however, were nominal, and represented only a fraction of the estimated real needs. The fnternationaf Union was one of the first non-governmental organisations to contribute a modest, token sum to the Foundation. Another problem was caused by the fact that some governments were not prepared to make any commitments for a Foundation for Habitat and Human Settlements until they could see the outcome of the Habitat: UN Conference for Human Settlements, which was to be held in Vancouver, BC., in June 1976.

With its emphasis on innovation and audio-visual presentations (some 230 films were prepared and displayed during the conference). it seemed that finally an international housing programme of adequate scale would be agreed to at this event. including support for the UNHIISF. Very little of the Conference. however. was devoted to the subject of financing, and the real issues were nicely dodged. In fact, the only recommendation is F.8 which declares:”

“Separate financial institutions and adequate means are necessary to meet the requirements of human settlements” with the enjoinder, among ten other items. that special attention should be directed to:

“Encouraging special national savings institutions to support mortgage financing for low income groups”.

The inadequate way in which this issue was dealt with was, perhaps, a precursor of the other difficulties and dilemmas which were to confront the whole Habitat exercise. Some elements of the conference resulted in ;t deadlock, especially for the institutional and financial arrangements required, and for the location of a future headquarters for the anticipated new UN agency which was expected to emerge for implement~~tion of the Habitat re~omm~ndati~~ns. It was not until December 1977 that the UN General Assembly decided upon the structure for international cooperation in the field of human settlements through its comprehensive Hesoiurirttr 321162. This resolution was promoted primarily by Sweden and Canada. Both countries had been opposed to the concept of establishing a fund or other financial institution for human settlements. as recommended at the Stockholm Conference on the Human Environment.

The General Assembly decided that there should be a Commission on Human Settlements, with 5X members elected for three-year terms on a regional basis. The former Committee on Housing. Building and Planning was to be dissolved, as would be its Centre. In its place, there would be a “new” Ccntre for Human Settlements (Habitat) to service the Commission. with an Executive Director at Under-Secretary-General level. This centre would comprise the posts and budgetary resources of the former UNCHBP, certain human settlements activities in UNEP, and the UN Habitat and Human Settlements Foundation. The Centre was to be located in Nairobi, Kenya. but regional activities were to be strengthened.

Through an Executive Order of October 1978, arrangements were made to transfer staff of the former UNCHBP (those that remained) to Nairobi. On 6 July 1978 the appointment of the new Executive Director was announced. He was an Indian engineer, former Director of the Indian Institute of Technology in Madras, and Permanent Secretary to the Government of India in the Department of Science and Technology.

In early 1979 the Executive Director took measures to merge staff of the Foundation (eight in all) into the operating units of the UNCHS, and the Foundation’s resources were used increasingly for a wide range of the Centre’s activities, often commingled with projects financed from the regular budget of the UN. In effect, the concept of the Foundation as a viable and responsible international financial entity was destroyed, and its main function was defined as collecting and channeling funds into the work program of the UNCHS. with one staff member retained to serve as “director” of this process. However, the original UN resolution creating the Foundation still stands, and has never been rescinded.

There has been no consequent realistic review or evaluation of how the Foundation‘s resources have been used. Voluntary contributions by,governments to the Foundation have been slim, to the point where they now usually total less than US$l mtlhon per year.

Before its demise as an operating institution. the Foundation had received more than 60 requests for projects from 50 governments, had supported scvcral important projects in the various regions. and had a good record of implementation in the 30 countries where it had been engaged. Several modest seed capital loans were made which brought good results. One. in the amount of US$l~~,O~. proved instrumental tn helping to establish the Lesotho Building Finance Corporation, which is now a successful, going concern. Another, in similar amount, went to the Housing Bank of Bolivia, to assist it in developing specific new innovative projects for lending purposes. In both cases, the loans were accompanied by technical assistance from the Foundation. A modest grant was made to the Sudan to enable the introduction of improved earth-building technology, and the establishment of a production plant for this purpose. The Foundation’s technical assistance led directly to the establishment of a Housing Bank and housing finance system in Cyprus, and to support for a rural area development financing programme in Honduras, as well as financial advisory scrviccs for marginal settlement improvement projects in the Philippines and Indonesia. Missions on housmg finance were conducted in a number of countries, including Ethiopia. Barbados, Guyana. Ghana, Bangladesh, Kenya. Malawi. Yemen Arab Republic, and others.

The Foundation organised study tours of human settlements in five countries of Asia. and in China, and collaborated in a Seminar on Self-Help Cooperative Housing for African countries, held in Lesotho: and in an inter-regional seminar on marginal settlements held in Jalapa, Mexico. It also organised an important Workshop on NGO Collaboration for Human Settlements Improvement, held in Nairobi, in May 1977, and the London Workshop on Housing Finance. held at International Union headquarters in March 1977. A report on the Foundation’s activities during its first two years of existence covers much of this work.

The London Workshop included experts from 11 developing countries as well as 11 representatives of international and bilateral agencies concerned with housing finance, including the World Bank, Inter- American Development Bank. Commonwealth Development Corporation. US-AID. and others. Leonard Williams was co-chairman of the workshop, having served previously on several of the UN advisory and expert group meetings concerned with the development of an international housing finance system. Eric Carlson of the Foundation staff was the other co-chairman. The focus of the discussions was to develop guidelines for the Foundation’s operations and activities, so that they would he of maximum benefit to developing countries, including the role of the Foundation as a financial intermediary in providing access to capital markets. Special attention was given to the promotion of innovative or alternative methods of housing finance, to the effects of inflation on housing investment, and the possibilities of developing joint projects with other institutions.

“‘UN Report of Habitat: Unired Nations Conference on Human Settlements. Vancouver. 3 I May-l 1 June 1976. (SaIes No. E.76iIV.7).

Some International Perspectives on Housing Finance and Management 4.5

UN ECOSOC Resolution 1914 (LVII) of 10 December 1974 had placed firmly in the mandate of the UN Habitat and Human Settlements Foundation (UNHHSF) responsibility for dealing with the formulation and implementation of housing finance policies. It was in response to this resolution that the Foundation undertook in 1977 to organise a series of regional meetings on human settlements finance and management, which were held during the years 1978 and 1979. These meetings went ahead even though the Foundation was merged into the UNCHS.

The Foundation was further reinforced by a decision of the UNEP Governing Council (93) at its fifth session in 1977 which requested that the Foundation establish:

“an information service for housing and human settlements financing to assist developing countries in establishing links with the principal financial institutions at regional and global levels, including the World Bank, the International Finance Corporation and the United Nations Development Programme, and to improve their effective access to the international capital markets .”

The Foundation‘s Advisory Board, at its meeting in April 1977, had also requested that the Foundation prepare programmes of cooperation with the World Bank and other financial institutions.” It was suggested that the Foundation identify its possible areas of action in developing countries. And that the Foundation convoke a world-scale meeting, possibly in 1978, to which would be invited financial institutions from developing countries, bilateral organisations and representatives of financial institutions of all types and that from such an international meeting would follow regional meetings.

The Administrator of the Foundation, in agreement with the Executive Director of UNEP. decided that it would be preferable to proceed first with the regional meetings, a process which would provide information, ideas and support, to be followed by the proposed international meeting. After his resignation, at the end of 1978, the Executive Director of the UNCHS assumed the post of Administrator of the Foundation, and subsequent to the regional meetings the Executive Director-Administrator decided that an international meeting, as originally proposed, should not be convoked.

The regional meetings were held at a high level and were major events, enjoying the participation of heads of state and the chief ministers concerned with housing and human settlements. They were organised by the Foundation, and served to promote increasing awareness and support for basic principles of housing finance and management, and for understanding of the problems involved. Representatives of the International Union participated in most of these events, as did a wide range of other organisations and institutions. An additional meeting which featured problems of rural housing finance was held at Torremolinos, Spain, in 1979, under the joint sponsorship of the Foundation and the International Association for Rural Housing. Separate reports on all meetings were published.

The regional meetings on Human Settlements Finance and Management were held as follows: For Africa Nairobi, lo-13 Octotier 1978 For Latin America and Caribbean Mexico City. D.F., 27 November-l December 197X For Asia and Pacific Manila, 5-11 June 1979 For West Asia (ECWA) Al-Ain, United Arab Emirates, 25-29 November 1979 For Rural Settlements Torremolinos, Spain, 7-13 October 1979

As for the UNEP Governing Council request of 1977 to the Foundation, there were two responses. One was the preparation and publication of a document entitled: Znternafional Financing of Housing and Human Settlements - Annotated Listing of Institufions, October 1977.

Another important publication, also prepared by the Foundation, was Direcfory of Finance Institutions in the Field of Human Settlemenfs in Developing Counfries, (Publication No. CHSID/81-l/S). This directory is annotated, with information and background on the institutions listed.

Since 1980, there has been little substantive activity on housing finance under the aegis of the UNCHS. A closed expert group meeting was held in 1981, which dealt mainly with suggestions for developing financing for municipal and public works and facilities in human settlements. Efforts have continued to gather information regarding case examples of non-conventional financing for shelter in developing countries, and a more recent short-term project on community-based financing institutions is pulling together data from three or four country examples. The UNCHS does continue to receive requests from developing countries for assistance on housing finance, but has limited specialist staff for extension of services in this field.

In conclusion, there appears to be little progress in the UN system at the present time regarding matters of housing finance. Certainly this progress is not commensurate with the major efforts expended at various levels to mobilise support for the two aborted projects, the International Housing Finance Corporation and the UN Habitat and Human Settlements Foundation. Whether any significant United Nations activity in support of housing finance development will take place in the 1980s and beyond is ultimately up to the nation-states who comprise UN membership. The search for a constituency to support such efforts undoubtedly will continue.

ANNEX I: SUMMARY OF A PROPOSAL TO ESTABLISH AN INTERNATIONAL HOUSING FINANCE CORPORATION

INTRODUCTION

This annex contains a summary of a report prepared for the United Nations Secretariat by the Stanford Research Institute in California.‘” The original report represents a compilation of the views and recommen-

“One member of the Advisory Board, Dr Hans Wuttke, later became Executive Vice President, International Finance Corporation; another, Dr Arthur Brown, became Deputy Administrator, UNDP; Mrs. Imelda Marcos became Minister of Human Settlements, the Philippines; Dr A.M. Kaisouni became Minister of Finance, U.A.R., and Maurice Strong has gone on to be head of several international organisations.

16Stanford Research Institute, International Assistance for Housing Finance in Developing Countries, (Menlo Park, California, December 1968).

dations of special advisory groups on housing finance and other consultations and discussions held by the Secretariat on the subject of new institutional approaches to increase the flow of investment capital for housing and related facilities in developing countries. as called for by the Economic and Social Council in its Resolution I! 70 (XLI)

The report concentrates on a proposal for international action to promote and support the establishment of domestic savings and credit institutions. This proposal was originally formulated by the Second Advisory Group on Housing Finance and was briefly discussed by the Committee on Housing, Building and Planning at its fifth session. In examining conditions governing the availability of long-term credit for investment in the housing sector in developing countries, the Second Advisory Group and other advisers reached a number of conclusions. These can be summarised as follow,:

(a) While there is a general shortage of capital for most investment purposes. the shortage in the housing sector is relatively more acute. owing to the large volume of capital required. the long-term. low-yield nature of the capital requirements and the limited means of mobilising savings from those sources that have traditionally provided the bulk of investment capital in this sector. i.e. individuals. (b) There is a potential to mobilise savings from individuals, provided that the appropriate institutional means are established. Experience in several developing countries supports this conclusion. (c) In most cases, an injection of external seed capital and managerial experience is required to initiate and sustain new financial institutions designed to mobilise savings and extend long-term credit. This can be accomplished through an international programme designed specifically for this purpose. (d) Since no international programme of this type now exists, it is necessary to establish one. This can be accomplished either by expanding the operations of some existing institutions. such as IBRD, or by setting up an autonomous agency. The United Nations is exploring both possibilities.

Purposes

The purposes of the proposed corporation are: (a) to promote within the member states the accumulation of capital for long-term housing finance by establishing savings institutions and encouraging savings practices: (b) to promote foreign and domestic investment in housing in developing countries, by means ot guarantees and participations in loans made by investors, by development of mechanisms to offset the dilution of value of housing investments via inflation; and by making investments in institutions within member states that encourage savings, finance housing or finance elements of the housing industry; (c) to promote the development within member states of a housing industry. including a building materials industry, with resources and techniques adequate for meeting housing needs; (d) to promote the exchange of housing and financing techniques among member states.

Operations

In pursuit of its given purposes. the primary function of the corporation would be catalytic. That is. through the provision of seed capital, investment guarantees and financial reinsurance. and the initiation of appropriate institutional and marketing arrangements, it would hope to engender a much larger self-generating process of savings and housing investment in developing countries.

Seed capital loans

The majority of the funds of the proposed corporation -say, 80% -would be used for seed capital loans, and the remainder would be used to insure its own operations and mortgages marketed by recipient institutions in developing countries. The proposed corporation would provide its technical and seed capital assistance primarily to national housing banks or similar organisations. However, it would not preclude the possibility of loans and assistance directly to operating institutions.

Loans could be made after sufficient indication that sound and appropriate institutions would be established that would serve to mobilise local savings and promote the extension of long-term credit to finance housing and related facilities. Upon receipt of a request for a seed capital loan from a central housing bank or other authorised institution and after approval by the board, the proposed corporation would make a loan at a rate determined by the cost of obtaining its capital, plus administrative expenses. The terms of the loan would be determined in each case to suit the particular requirements, but would normally not exceed 20 years. The loan repayment (in currency of comparable value) would be guaranteed by the government of the borrowing country.

The loan amount normally would not exceed 10% (lJS$2 million) of the total assets of the proposed corporation at the time of application. This amount would be made in the most appropriate currency or combination of currencies.

The loan proceeds. plus the matching amount. would then be made available to one or more existing or newly-created home savings and financing institutions. to be used for home loans and related operations. Repayment provisions would be established and would be made through a central housing bank or other government institution.

Technical assistance

In addition to seed capital loans, the proposed corporation would also be expected to provide. where necessary, advice and assistance on managerial, technical and legal matters in connection with a prospective or active project. This assistance could be provided on a short-term basis (for example. in undertaking a feasibility

Some Intemarhal Perspecrives on Housirlg Finance and Management 47

study to determine whether and what type of financial institutions are required) or on a long-term basis, where one or more experienced individuals could be posted at the location to participate in the establishment and initial operations of an institution. If necessary, the corporation would also undertake certain technical work at the staff level, particularly on legal and monetary matters. Certain types of training programmes might also be required. Technical assistance costs would be included in the loan amount, except for the costs of feasibility studies or where costs were underwritten by a third party. Technical assistance and training could also be provided by the United Nations Development Programme or other appropriate agencies for an initial period of, say, three to five years.

In each of these areas of technical assistance the corporation would endeavour to use existing programmes and institutions. This would require letters of agreement with appropriate official and non-governmental institutions and organisations. In carrying out this work, the corporation would maintain a roster of experts who would be available for assignment, either directly for the corporation or through other agencies wishing to participate.

Marketing assistance, insurance and reinsurance

To facilitate the marketing of mortgage loans and other securities issued by local financial institutions, the corporation would reinsure national insurance programmes, purchase mortgages or securities based on mortgages issued by participating countries and obtain reinsurance for its own insurance operations. In the course of discussion at meetings of the Advisory Groups, and on subsequent occasions, the importance of secondary marketing operations was pointed out. The ability to convert mortgages-or other debt instruments held as collateral against loans - into cash is particularly important in the early years of newly-established institutions where the flow of savings deposits and repayments is low. However, in most developing countries, the opportunities for the resale of such securities is limited. The lack of institutional means, the relatively low yield and long term on mortgages and the understandable preference for investments that reduce or offset inflationary risks are but a few of the obstacles.

Nevertheless, it has been suggested that well conceived insurance and reinsurance programmes can help to improve the attractiveness of these securities for certain types of investors. As the primary objective would be to market the issues domestically. it is possible that a national insurance or guarantee programme which is reinsured by an international agency would be able to develop a security that meets local requirements of risk, term and yield. International sales might also become possible through these operations, but initial preference would be to attract local investors, especially those whose funds might otherwise flow outside the local economy.

The corporation (or its insurance subsidiary) could reinsure against certain ,risks those domestic insurance programmes that meet certain requirements. These requirements would include that:

(a) the loan portfolio on which local insurance is issued should be based on real properties meeting physical standards (essentially that they be readily resalable on a competitive basis); (b) home-buyers’ incomes are sufficient to meet mortgage payments and other expenses in reasonable proportion to overall income; (c) the local insurance premium is sufficient to meet administrative costs and reasonable share of expected financial hazards; (d) adequate measures are taken to protect against inflation.

Since no work has been done on the actuarial considerations involved, it is not possible to offer estimates as to the fee structure or make specific proposals regarding the detailed operations of such a reinsurance programme. The corporation would seek to reduce its exposure by transferring a portion of the risk back to the local insurer and by purchasing insurance on its own operations. Inquiries into other international reinsurance operations have been made, however, and the risks do not appear to be prohibitive.

Capital structure and financing

Total authorised capital would be US$l,oOO million. An initial capitalisation of US$ZOO million would be sought as follows.

(a) Membership subscriptions would be sought from governments through the sale of stock equal to 20% (US$40 million) of the initial capitalisation. Member governments would also be asked to provide a pledge of callable capital equal to the balance. The minimum membership subscription would be US$lOO,OOO of which US$20,000 would be paid-one half in gold or convertible currencies, one half in the currency of the member. The balance of the subscription would be subject to call only to meet the obligations of the corporation arising out of loans, guarantees, participations elc. In no event would a member’s liability exceed the amount of its subscription. (b) Borrowers would also be required to purchase stock in the corporation in a proportion to the amount borrowed, which would be determined by the management. Other classes of stock, possibly on a preferred basis, may be offered to private institutions. (c) Bonds or debentures would be issued for sale to private financial institutions and other organisations in amounts equal to the value of callable capital in convertible currencies. Interest in these securities would be determined to attract investors who normally operate in the long-term markets. (d) Premiums would be charged to participants in the corporation’s insurance or guarantee programmes.

Provision should be made for growth of the corporation by authorising the issue of additional debentures upon majority approval. Increases beyond the original capital authorisation (e.g. US$l,OOO million) would require the approval of members holding three quarters of the total voting power. Another possibility to be explored is that of establishing a revolving fund as a separate instrument geared to the operation of the corporation, with the added flexibility of attracting a variety of instruments for its operation.

In the event of the I]N~ value of a member’s currency being reduced or its value depreciated. provision would be made for the maintenance of the value of that currency paid on subscription and held by the corporation.

Loans to be made by the proposed corporation must be: to achieve a purpose set forth in the charter of the United Nations; guaranteed by the member where the borrower is located: and made only where not otherwise reasonably obtainable. They must also be on reasonable terms. sound and recommended by an appropriate loan committee. Where guarantees are made. the abov’c criteria apply. and the corporation would receive suitable compensation for the guarantee.

The investment policy of the proposed corporation would hc to hold 20% of its capitat in cash or liquid securities. One hundred per cent of the premium income from its insurance operation would be invested in liquid securities proportionately compatible with the currencies in which the mortgages are sold.

The corporation would bc a self-supporting institution: however, any profits realised from its lending or insurance operations would he placed in special accounts to he used to further social objectives in this field.

Membership in the corporation would be open to all recognised~national governments, subject to approval hy the board. Members of the United Nations would autom~iticaily be eligible for membership. Membership subscriptions would he those states that are members of the International Bank for Reconstruction and Development, in the same ratio among them as prevails in their IBRD subscription, with US$100,000 as the minimum subscription. For members of the corporation who arc not members of IBRD. the minimum initial subscription would he US$lOO,OOO.

.Nutionul institutiom. The function of the national institutions would be to provide. under the necessary enabling legislation. insurance to lenders and savers, a secondary mortgage facility, technical and supervisory personnel and seed capital loans. It would further act as a bridge between the local borrower and foreign investor capital.

Standardised legislation dealing with mortgages or other financial instruments would in effect, standardise the instruments themselves and encourage their marketability. Similarly, the national housing institution would seek laws to provide suitable building sites. to make possible rapid acquisition of title to land and to keep costs of transferring legal title to housing and real estate as low as possible.

Mortgage insurance provided by a national housing savings instituti~~n would be available for single-~~miiy and multi-family projects, both profit and non-profit operations, and would be backed by the agency’s reserves and by the guarantee of the national government. The national institution would also insure savings on deposits accepted by the local institutions.

As a facility for secondary mortgages, a national housing savings institution would assure the free flow of

capital into m[~rt~ges within a domestic money market. In this capacity, it would (a) set the level of yields, based on overall money market considerations and (b) act as a clearing house or standard for the country’s mortgage-making facilities. or (c) purchase substantial amounts of mortgages and resell them together rather than singly to long-term investors. Accordingly, the institution could sell both long-term and intermediate debentures based on its full faith and credit. This combination of techniques would provide considerable ~exibility in tapping money markets at different periods of time.

Local institutions. On the local level. housing savings institutions would on the one hand attract savers, thereby accumulating new capital, and on the other, would make loans in order to make capital available for housing. From the difference between money paid on savings and charged on loans, the institution would pay operating expenses. accumulate and maintain loss reserves, return the principal and interest on funds borrowed and pay dividends. The interest rate paid on savings would be such that it attracts more people to save, and the interest rate charged on loans would be low enough to allow more people to borrow at a reasonable cost.

The saver’s greatest concern is the security of the money he deposits with the local institution. Confidence in the ability of the institution to safeguard savers’ funds is based on many factors. notably the reputation of the institution’s management; the extent of government supervision and regulations; the existence of savings insurance: and the liquidity or availability of deposited savings. In developing countries. moreover. inflation is a prime threat to the stability of the value of savings. .4 variety of mechanisms are available to adjust savings to changes in the real value of money. The value of money may be related to an index, such as wages or the cost of living. and the savings and mortgage balances adjusted periodically relatively to changes in the index. The government of Chile, for example, requires ad.iustment according to a wage-salary index. Argentina uses a construction-cost index. In Brazil and BoIivia, a legal minimum wage is the index.

Local housing savings institutions fall within the category of institutions known as “financial intermediaries” whose function is to collect liquid. short-term savings.

Flow of ~IO~~S~F?~ in~est~~e~i funds

The fIow of capital from investor and saver to borrower and back. with interest, through the international, national, and local institutions, is shown in Fig. I. The initial capital, subscribed by member governments and matched by the national government of the developing country, would be loaned by the local housing savings institutions. With the IHFC maintaining a balance. the system is inherently self-supporting.

Some International Perspectives on Housing Finance and Management 49

Capital

International Housing Finance Corporation --_-_-----_----_-- Finance Institution

Interest

I Investors

Fig. I

APPENDIX B

Some Recent References

Carlson Eric, Human Settlements in the Philippines. Observations After A Decade. September 1983. Unpublished.

Cooperative Housing Foundation, Housing is for People: A Thirty Year Review. 1983. 2501 M Street, N.W., Washington, D.C. 20037.

Hardoy, Jorge E. and Satterthwaite, David, Shelter Need and Response. Housing, Land and Settlement Policies in Seventeen Third World Nations. John Wiley and Sons. 1981.

International City Management Association, Housing and Local Government. Nenno and Brophy. 1983. Washington, D.C.

International Union of Building Societies and Savings Associations, 20 North Wacker Drive, Suite 2267, Chicago, Ill. 60606:

Proceedings, World Congress, Melbourne 1983.

Boleat, Mark, National Housing Finance Systems - A Comparative Study. October 1984.

Housing Finance in Developing Countries. James Christian. 1981.

Monetary Correction, Thrift Institutions and Housing Finance. George Cardis and Harold Robinson. 1983.

International Insights, April 1984: Norman Strunk, Recent Developments in the Savings and Loan or Building Society Business in the United States. July 1984. Eric Carlson, Housing Construction Programs in Key Asian Countries.

National Reports, 1983.

United Nations, Habitat and Human Settlements Foundation, Final Report, Asia and Pacific Regional Conference on Human Settlements: Finance and Management. Manila, The Philippines, 5-l 1 June 1979.

UNCHS, Directory 6: Finance Institutions in the Field of Human Settlements in Developing Countries. 1982. Nairobi, Kenya.

United States, Agency for International Development, Office of Housing and Urban Programs. Housing Investment Guaranty Program, Annual Report, 1983. Washington, D.C.

Federal Home Loan Mortgage Corporation, The Secondary Market in Residential Mortgages. August 1983. Washington, D.C.

Philippines, Ministry of Human Settlements, Annual Report 1983. Manila.

World Bank, Washington, D.C. 20433. Learning by Doing. World Bank Lending for Urban Development, 1972-82. February 1983. “Urban Finance in Developing Countries: Research Issues and Findings.” Research News, Vol. 5, No. 1, Spring 1984. The Task Ahead for the Cities of the Developing Countries. World Bank Reprint Series: No. 97. Shelter, Poverty and Basic Needs Series, September 1980. World Development Report 1983. Annual Report 1983.