How to Provide Affordable Housing

Until August 23, 2006, you can enter the Changemakers "How to Provide Affordable Housing" competition. Participants are competing for the Innovation Award by submitting proposals that address the challenge of providing innovative housing solutions for low-income and marginalized populations. Finalists will be selected by a panel of judges, and Changemakers's online community will vote to select three winners who will each receive a $5,000 prize.

Prizes
Three winners will each receive a $5,000 prize.

Timeline

Winner is Announced

September 12, 2006
  • Launch
    June 15, 2006
  • Entry Deadline
    September 12, 2006
  • Voting start
    June 15, 2006
  • Voting end
    September 12, 2006
  • Winner is Announced
    September 12, 2006

Competition Framework: How to Provide Affordable Housing

By Ashoka Staff

Housing is a basic human right and a primary foothold to the climb out of poverty. Yet the prevalence of homelessness in virtually every country in the world suggests that providing this basic necessity requires addressing complex and interrelated issues. A months-long study of the work of Ashoka fellows and other innovators has produced a mosaic graphing both the barriers to housing for all, and the solutions that have garnered significant success in the field.

Barriers

Dearth of complementary goods (e.g., land, infrastructure). Whether it is shortage of land in shanty slums, or inadequate roads to transport building materials to rural locations, the lack of the basic components of housing is a key issue to overcome. Creatively addressing this issue often means a fundamental shift in thinking around property ownership and the supposedly "fixed" nature of physical assets and materials.

Low individual purchasing power. Those living in poverty often do not have the funds, or access to even simple bank services, to make home purchase or building possible. Aggregating their resources, or expected income over time, however, can reposition this group as a desirable customer for even commercial banks.

Limited access to housing finance. Commercial banks and traditional means of housing finance typically do not serve low-income populations, whose income may be variable based on crop seasons, or below what is seen as a viable threshold to ensure repayment, and who rarely individually have the resources to provide collateral for loans.

Inadequate current product offerings. Mass-built housing development for the poor often results in poorly designed shelters built of materials that are environmentally unsound and unsuited to climate conditions. Creative use of local and "waste" resources, as well as the inclusion of communities themselves in the design and planning, can lead to more appropriate solutions.

Principles

Enable long-term investment

Low-income individuals manage a delicate financial balancing act every day to survive. Making it possible for them to undertake long-term, large investments (or successive short-term investments over long periods of time) requires ensuring the right economic incentives for them, as well as addressing more psychological aspects such as their ability to plan for the future.

Precarious and insecure living conditions heighten the financial risk of any investment occupants might otherwise make in their homes. In an attempt to break this vicious circle, the municipality of Sao Paulo's Bairro Legal initiative succeeded in providing secure tenure to more than 45,000 families through a comprehensive program from 2001 to 2004. Services included conflict mediation between land owners and squatters, assistance for legal acquisition of land directly and through partnership with the local Bar Association, and microcredit through Brazil's largest private sector bank. Another innovative market-based initiative that has enabled slum dwellers to build assets and climb the financial ladder is led by Darin Gunesekera from the Wiros Lokh Institute in Sri Lanka. Darin has started a variation of a stock exchange market to raise funds for the construction of new dwellings for poor families who are entitled to certificates to purchase a new home of their preference. This has changed the practices of developers who need to compete for the preferences of the poor. Low-income families can voice their preferences and gain confidence to invest their resources in home improvement.

Unlocking some of the psychological barriers of low-income families to build a better future is the other side of the coin. Slum Dwellers International, a global network of squatter groups started by several social leaders (including Ashoka Fellows Samsook Boonyabancha and Joel Bolnick respectively in South Africa and Thailand) that counts a total of 5.6 million members in 14 countries has defined its programmatic priorities based on people's aspirations and devised several strategies to enable action and problem-solving among their beneficiaries. These include visits between members from different neighborhoods, cities, and countries in order to encourage learning through real life experience, as opposed to formal education, and generate empowerment. The visible achievements in home improvement are another powerful element to demonstrate that change is possible. Demonstration houses are used to trigger discussion and joint decision-making about design, construction materials, and processes.

Leverage resources that are abundant at the local level

Many of the barriers to housing for the poor require political, or at least multi-stakeholder, solutions—for example, securing land, modifying property rights regimes, or convincing electricity providers to serve a settlement. Social capital is probably the greatest asset of low-income communities who can achieve much by joining forces. This is precisely the key breakthrough of microcredit that replaced traditional loan collateral by social collateral. The South African Homeless People's Federation (SAHPF) is an example of a truly community-based organization designed to be inclusive for the very poor. It uses collective action as a core strategy to strengthen communities and enable them to initiate and manage changes in the areas that they have prioritized such as housing. The core strategy to organize communities is the creation of daily saving groups whose members, mostly women, learn to trust each other and build a discipline. Saving groups are then federated at the neighborhood, regional, and national levels.

More generally, there is a great potential in enabling low-income communities and individuals to become self-reliant. The movement of "mutirões" that started in Brazil and other parts of the world in the early 1980s is based on individuals who come together after work and during weekends to construct their homes and neighborhoods through mutual self-help projects because they are unwilling or unable to rely completely on the state. Despite the fact that this process takes longer than using professional full-time constructors, this approach enables them to reduce costs and effectively teaches self-management and other administration skills to the community. Another initiative that illustrates this principle is ADAPT in Egypt led by Hany El Miniawy. It leverages locally available materials as a substitute for conventional construction materials as well as ancient building techniques that are more adapted to weather conditions and culture, given the limited resources available.

Leveraging the productive potential of low-income communities that can access the inputs needed for success is an important strategy that enables them to increase their purchasing power. YKPR in Indonesia organizes groups of families to apply collectively for credit from the government housing bank that is unavailable on an individual basis and it coordinates repayments on a calendar that accommodates the seasonal nature of incomes. The negotiated credit is "three-way," intended to cover land acquisition, house construction, and income-generating investments to help cover repayments on the loan. The government housing bank now considers them more reliable than its traditional clients and makes additional efforts to achieve customer satisfaction—for example by collecting loan repayments at customers' doorsteps. Although the model was initially developed for rural areas, the principle is applicable to urban settings.

Radically lower the cost of the whole housing delivery process

Thinking holistically about how to make the overall housing transaction affordable to low-income households rather than reducing the cost of individual components such as cement or labor is critical. Saiban in Pakistan is a remarkable initiative that makes the overall housing transaction affordable and convenient for low-income households by leveraging the benefits of informal housing processes. The organization finances the purchase of unserviced plots of land, and leaves housing and infrastructure to be developed incrementally as each household accumulates the money to pay for them—as occurs in the informal sector. While leveraging informal processes, the organization also improves on them by providing secure land tenure and organizing residents to plan and negotiate for additional services. Security in Saiban settlements is higher; costs of living are lower; and services are obtained years faster than in comparable informal settlements.

Radical cost reductions can be achieved by streamlining the whole process and switching some of the costs and responsibilities to clients—an interesting parallel with the Internet revolution that enabled many companies to rethink their business models by putting customers and partners to work thanks to the Internet interface. Other strategies to increase the profitability of distribution in slums and rural areas include multi-purpose distribution channels and demand aggregation. Examples from other industries such as e-Choupal, an ITC-led initiative for small farmers in India, could inspire innovations in housing and building materials. With regards to housing finance, Grameen was one of the pioneers and has already enabled the construction of over 600,000 houses in Bangladesh. Unlike other financial institutions, Grameen ventured into giving housing loans based on the philosophy that investment in shelter for the poor is productive. Its strategy for providing housing microfinance profitably uses the same organizational infrastructure that it uses to make income-generating loans, and restricts eligibility to clients who have developed successful credit histories for four years to reduce risks associated with housing loan products.

Until August 23, 2006, you can enter the Changemakers "How to Provide Affordable Housing" competition. Participants are competing for the Innovation Award by submitting proposals that address the challenge of providing innovative housing solutions for low-income and marginalized populations. Finalists will be selected by a panel of judges, and Changemakers's online community will vote to select three winners who will each receive a $5,000 prize.
Untitled Document

Competition Guidelines
How to Provide Affordable Housing

Welcome to the Changemakers Innovation Awards for "How to Provide Affordable Housing." Whether you entered the competition or participate in the online discussion that reviews applications, please take a look at the competition criteria and timeline below. We look forward to surfacing and discussing innovative solutions that provide affordable housing. Before you share your comments on the entries in the discussion forum, please read the criteria below.

Eligibility Criteria

The competition is open to all types of organizations (charitable organizations, private companies, or public entities) from all countries. We consider all entries that:

  • Reflect the theme of the competition: How to Provide Affordable Housing. The scope of the competition is actual housing solutions for a significant number of people, not only in the location of origin but also at the country, regional, or global level. Initiatives that consist only in housing policy or advocacy fall outside the scope of the competition.

  • Are beyond the stage of idea, concept, or research, and, at a minimum, are at the demonstration stage and have demonstrable success.

  • Are submitted in English and are complete.

Assessment Criteria

The winners of this Changemakers Innovation Award will be those entries that best meet the following criteria:

  • Innovation: The initiative introduces novel elements, for example in the type of housing products/services provided or in the financing mechanism, that contribute to providing housing for a significant number of people, not only in the location of origin but also at the country, regional, or global level. It is based on leveraged points of intervention.

  • Impact: The initiative addresses a major roadblock to finding affordable housing and has the potential to benefit a significant number of people.

  • Strategy: There is a well-designed operational model to implement the initiative and reach out to beneficiaries. Additionally, there is a solid plan to expand or replicate the model beyond current beneficiary groups/ locations.

  • Sustainability: The initiative has demonstrated a cost-effective approach to provide housing solutions. There is a strong funding base and a strategy to sustain it financially over the long-term


Competition Deadlines, Procedures, and Rules

Online competition submissions were accepted until September 6, 2006 at noon, U.S. Eastern Daylight Time. Any time before this deadline, competition participants could revise their entries based on questions and insights that they receive in the Changemakers discussion. Participation in the discussion enhances one's prospects in the competition and gives the community and the judges an opportunity to understand one's project more completely.

There are three main phases in the competition:

The Changemakers Innovation Award will include a cash prize of US$5,000 for the top three winners.

Participating in the competition provides the chance to get feedback on your model and to advise potential housing investors about how best to change funding/investing patterns for the sector and to maximize the strategic impact and effectiveness of their future investments. The competition will generate an Investor Advisory available to investors, foundations, and other funding agencies. Those participants whose contributions most help frame the contents of the advisory will be acknowledged and may be convened to advise investors at a global meeting.

Disclaimer—Compliance with Legal Restrictions

Ashoka complies fully with all U.S. laws and regulations, including Office of Foreign Assets Control regulations, export control, and anti-money laundering laws. All grants will be awarded subject to compliance with such laws. Ashoka will not make any grant if it finds that to do so would be unlawful. This may prohibit awards in certain countries and/or to certain individuals or entities. All recipients will comply with these laws to the extent they are applicable to such recipients. No recipient will take any action that would cause Ashoka to violate any laws.

For more information, contact housing@changemakers.net.

Changemakers in partnership with Logo: Habitat for Humanity presents:

Mosaic of Innovative Solutions: How to Provide Affordable Housing

 Principles Emerging
from
Innovative Solutions:
 1
Main Barriers:
Dearth of complementary goods (e.g., land and infrastructure) Low individual purchasing power Limited access to housing finance Inadequate current product offerings
Enable long-term investment
Assign property rights to decrease investment risk
Bairro Legal, Brazil
Invest in services and infrastructure to unlock latent housing demand
Orangi Pilot Project, Pakistan
Mobilize low-income families' purchasing power through experience-based learning and demonstration projects
Shack/Slum Dwellers International, Global *
Market program by speaking to the poor's aspirations–housing as patrimony–to catalyze savings
Cemex/Patrimonio Hoy, Mexico
Enable asset-building and create design that meets low-income communities' preferences
Housing Stock Exchange, Sri Lanka *
Leverage resources that are abundant at the local level
Build critical mass and empowerment for communities to negotiate with government
Homeless People Federation, S. Africa
Target already-organized communities
Baan Mankong,
Thailand *
Use "sweat equity" to reduce labor costs and create new skills
Mutirões, Brazil
Scale informal economies
Campamentos Unidos, Mexico
Aggregrate training and resources in a umbrella group to serve multiple co-operatives
COMBINE, Indonesia
Invest in customers' income-generating potential
YKPR, Indonesia *
Build systems to capture savings for all types and sizes of incomes
VSSU, India *
Facilitate community-led design
SPARC, India
Utilize local materials and building techniques
ADAPT, Egypt *
Radically lower the cost of the entire housing delivery process
Harness the effectiveness of existing informal systems
Saiban, Pakistan
Design new electricity distribution channels for slums through cooperatives
Peoples' Electricity Cooperative, India *
Aggregate demand to reduce transaction cost
ICICI Bank, India
Reduce the risk of housing finance by building credit history and income generation opportunities
Grameen Bank Housing Program, Bangladesh
Leverage community-led market research
Shack/Slum Dwellers International, Global *
Shift public policy through advocacy   Expand eligilbility for public funds
First Place Fund for Youth, United States
Introduce "social leasing"
Intranquil Tenants, Brazil
 
* Ashoka Fellows and Global Academy Members

Read About the Overall Framework of the Competition


  1. Principles represent new standards emerging from practical applications that are meant to inspire and guide the innovation process going forward. Note that although the best solutions probably speak to more than one principle, we have chosen to emphasize one specific innovative aspect. If you would like to learn about the multiple innovations behind each solution, please click on each name for a fuller description of each case.


Short Descriptions of Mosaic Cases
  1. Assign property rights to decrease investment risk

  2. Organization: Bairro Legal
    Location: Brazil
    Mosaic principle: Enable long-term investment
    Mosaic barrier: Dearth of complementary goods (e.g., land and infrastructure)

    The city of São Paulo, Brazil is home to 10 million people, more than a third of whom live in informal and/or illegal settlements, subject to eviction or forced relocation. Many of these settlements lack basic amenities such as water, electricity, and sanitation, and are without secure tenure, and residents are reluctant to invest in their homes and neighborhoods. The result is that they are in extremely poor condition, unhealthy and even dangerous. From 2001 to 2004, the municipality of São Paulo's Bairro Legal program succeeded in providing secure tenure to 45,000 families and preempted the eviction of another 13,000. A key element of the municipality's strategy was conflict mediation between squatters and landowners to avoid, where possible, recourse to legal action (eviction or expropriation). The municipality also offered various types of assistance for legal acquisition of land including legal help with the titling process–both directly and through partnership with the local bar association–and second, microcredit at below-market rates through special agreements with Bradesco, Brazil's largest private sector bank. Despite its accomplishments and widespread acclaim from the international community, the program was discontinued with the change of administration in 2005. For more information, check out www.cohre.org/library/COHRE-HRB-Dec04.pdf

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  3. Invest in services and infrastructure to unlock latent housing demand

  4. Organization: Orangi Pilot Project
    Location: Pakistan
    Website:
    www.urckarachi.org
    Mosaic principle: Enable long-term investment
    Mosaic barrier: Dearth of complementary goods (e.g., land and infrastructure)

    Orangi is the largest informal settlement in Karachi, Pakistan with a population of 1.2 million people. In 1980, a participatory needs assessment revealed that the community's number one priority was to obtain sewerage services. The government refused to connect the settlement because of its informal status, so the Orangi Pilot Project supported community members to design a new, low-cost system which they financed and constructed themselves. Seventy-two thousand latrines and 1.3 million feet of pipes were installed. Since then, OPP has diversified to provide support for other environmental improvements and community services such as schools and clinics, incorporating financial support from the Pakistani government and other donors. Collectively, these community improvements have spurred residents to invest in improving their homes; OPP is helping to meet the demand by working with small, local building materials manufacturers to improve quality and efficiency. Twenty-five hundred housing units are built or improved each year in Orangi. OPP's methodology has been replicated in 245 settlements in 12 cities, benefiting hundreds of thousands of families.

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  5. Mobilize low-income families' purchasing power through experience-based learning and demonstration projects

  6. Organization: Shack/Slum Dwellers International (SDI)
    Location: Global
    Website:
    www.sdinet.org
    Mosaic principle: Enable long-term investment
    Mosaic barrier: Low individual purchasing power

    Shack/Slum Dwellers International is a global network that facilitates housing delivery by building self-reliance within low-income communities. This concept, which originated in India in the 1970s, has been implemented successfully in 14 countries and encompasses a total of 5.6 million members, mostly women. The organization is based on a basic strategy of organizing communities: daily savings groups, which are federated at the neighborhood, regional, and national levels. Country federations use a set of methods that enable action among their members, who are accustomed to have little sense of control over their problems, by showing what is achievable. Primary activities include exchanges, in which members from different neighborhoods, cities, and countries learn from and become inspired by each other's experiences; community-designed house exhibitions, which encourage discussion and joint decision-making about the designs, materials, and construction processes that are best suited to members' needs; and enumerations in which members undertake demographic surveys of their settlements in order to negotiate with government officials and others. The result is that communities are mobilized to start building assets and empowered to initiate and manage changes that they prioritize.

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  7. Market program by speaking to the poor's aspirations—housing as patrimony—to catalyze savings

  8. Organization: Cemex/Patrimonio Hoy
    Location: Mexico
    Website:
    www.cemexmexico.com/se/se_ph.html
    Mosaic principle: Enable long-term investment
    Mosaic barrier: Limited access to housing finance

    In most Mexican communities where incomes are low and cultural norms may mitigate against saving for the future, people tend to build their homes incrementally, as and when money becomes available. To build even one additional room can take up to four years. Cement giant CEMEX's Patrimonio Hoy (Assets Now) model addresses the financial constraints of low-income families by building a system for saving and planning ahead. PH marketing emphasizes "patrimony"–an asset and a legacy to pass down to one's children–as opposed to construction materials. Its offer is tailored to the reality of how the poor build their homes, one room at a time, and with their own labor. PH makes it attractive with a "total housing solution" that encompasses financing, cement, other building materials, technical assistance, storage, and quality customer service. Since its creation in 1998, more than 130,000 families have improved their living conditions, built rooms faster, and at an average of 80 percent of previous costs. The program exemplifies how a company successfully translated the social innovation of microfinance to the construction material industry, expanded their core business model to overcome the main barriers faced by their potential customers (e.g., access to financing), and found cost-effective ways to serve this market.

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  9. Enable asset-building and create design that meets low-income communities' preferences

  10. Organization: Housing Stock Market Exchange
    Location: Sri Lanka
    Mosaic principle: Enable long-term investment
    Mosaic barrier: Inadequate current product offerings

    In Colombo, Sri Lanka, the high cost of land forces low-income residents to squat illegally on public or private land. The squatter has physical occupancy of the land, but his opportunity cost is high because he cannot obtain services or invest in his house as long as he is there illegally; the landowner has legal title to the land but his opportunity cost is also high because he cannot realize the value of the land as long as the squatters are there. The crux of the Stock Market Housing Exchange, the brainchild of Ashoka Fellow Darin Gunesekera, is a deal in which squatter and landowner trade in their main items of value: physical occupancy and title, in order to unlock these opportunity costs. The land is sold and former squatters receive the rights to condominiums in a new building financed by the proceeds of the sale. The landowner receives the difference between the sale price of the land and the cost of the new construction. A key feature of the Housing Stock Market Exchange is that the former squatters choose the new building's design: bidding developers submit proposals and the winner is selected by vote. The Colombo building houses 670 families totaling more than 4,000 people and plans for replication in India and Brazil are being explored. For more information see this profile.

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  11. Build critical mass and empowerment for communities to negotiate with government

  12. Organization: South Africa Homeless People's Federation (SAHPF)
    Location: South Africa
    Website:
    www.utshani.org.za/SAHPF.htm
    Mosaic principle: Leverage resources that are abundant at the local level
    Mosaic barrier: Dearth of complementary goods (e.g., land and infrastructure)

    With its goal to put home ownership within reach of all its members, the 80,000-member South African Homeless People's Federation has helped more than 150,000 squatters–mainly women–pool their savings, resulting in 15,000 new homes and the securing of more than 1,000 hectares of government land for development. The Federation, an alliance of the Utshani Fund and People's Dialogue, is an umbrella organization committed to the broader issue of community development in which the very process of bringing members together into savings schemes is intended to build their capacities for managing their own development needs. In that sense, housing only became a means to an end: sustainable urban development. The first step in the Alliance process was to support the growth of a network of town-based grassroots savings schemes (nsukuzonke). This involved exchange programs between the communities and between them and partner organizations overseas (mainly Asia). The focus of this stage was the basic systems, relationships, and institutions that would enable low-income communities to take responsibility for the urban development process. Adequate housing emerged as the number one priority for Federation members. The partnership between the Federation and the government has produced significant changes that include the increasing shift in government thinking on how to provide shelter to the poorest; the role of savings that develops in communities a borrow-and-repay ethic; reforms of the regulatory environment for urban development; and a move toward better coordination between land and housing policies.

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  13. Target already-organized communities

  14. Organization: Baan Mankong
    Location: Thailand
    Website:
    www.achr.net/bmkguide.htm
    Mosaic principle: Leverage resources that are abundant at the local level
    Mosaic barrier: Dearth of complementary goods (e.g., land and infrastructure)

    There are approximately 8 million people living in low-quality, often insecure housing conditions in Thailand. 70-80 percent of people cannot afford conventional housing, either through the market or through government housing programs. In 2003, the Thai government introduced a Shack/Slum Dwellers International-type approach to policy with the inauguration of Baan Mankong or "secure housing,"–a program initiated by Ashoka Fellow Somsook Boonyabancha–a program intended to improve living conditions for 300,000 families by 2008. Implemented by an independent government agency called the Community Organizations Development Institute (CODI), its strategy for delivering low-income housing on the required scale is to channel funds to community-based organizations that plan and carry out projects themselves. Two types of funding are available: a per-household subsidy for non-housing infrastructure, and subsidized loans for housing. Slum upgrading approaches, rather than construction of new homes, are supported wherever possible in recognition of the large investments poor people have already made in their homes. However, very few conditions are imposed in order to allow communities to find the best and most efficient solutions to their problems.

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  15. Use "sweat equity" to reduce labor costs and create new skills

  16. Organization: Mutirões
    Location: Brazil
    Mosaic principle: Enable long-term investment
    Mosaic barrier: Low individual purchasing power

    In Brazil, low-income communities have a long history of banding together in the form of social movements to press the government to provide land, services, etc. At the same time, unwilling or unable to rely completely on the state, these communities have come together after work and during weekends to construct their homes and neighborhoods themselves through mutual self-help projects called "mutirões"–a phenomenon that occurs in many developing countries. In spite of a more lengthy process, the community approach reduces costs. It is also instrumental in teaching self-management and numerous administration skills to the community. While mutirões are not new, the practice of leveraging them as a matter of public policy to help meet the growing demand for low-income housing is relatively recent. In São Paulo, Bairro Legal arranged for designated communities engaged in mutirão to receive microcredit for building materials. Two banks partnered with the municipality to provide the financing.

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  17. Scale informal economies

  18. Organization: Campamentos Unidos
    Location: Mexico
    Mosaic principle: Leverage resources that are abundant at the local level
    Mosaic barrier: Low individual purchasing power

    With urbanization, increasing numbers of people have to create their own jobs. The poor, lacking training and access to credit or other support, are the worst hit. Out of the wreckage wrought by the 1985 Mexico earthquake, Ashoka Fellow Antonio Paz Martinez built a community organization, Campamentos Unidos (tent dwellers united), for the poor who lost their homes. In time, a number of other products grew out of Campamentos Unidos' initial concentration on helping the tent dwellers build new homes. CU figured out that once self-help construction cut out the roughly 50 percent of the cost of a new home that is labor, a significant way to lower the cost of such housing further is by reducing the bill for building materials. A new group to make low cost aluminum window frames was formed, thus proving how the virtuous circle of lowering costs can lead to more community self-help housing and on to yet lower costs. With the building of affordable housing as its springboard, the model is now upgrading homes and is increasingly becoming a broad-based network that is helping the "victims" of the earthquake to come together in small informal networks of producers, to help each other achieve economies of scale. For more information, please see this profile.

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  19. Aggregrate training and resources in a umbrella group to serve multiple co-operatives

  20. Organization: COMBINE (Community-Based Information Network)
    Location: Indonesia
    Website:
    www.combine.or.id
    Mosaic principle: Leverage resources that are abundant at the local level
    Mosaic barrier: Low individual purchasing power

    Using the community-based approach that views communities as essential actors in their own development, Ashoka Fellow Dodo Juliman Widianto has innovated "cooperative housing groups" within low-income communities in Indonesia. This method of collective finance has put home ownership within the means of those who would otherwise be condemned to the exigencies of life in an urban slum. To support the grassroots housing finance services, he founded an umbrella, partnership organization that brought together 22 groups of development consultants, CSOs, and community-based organizations from across the country, with members being well versed in land and financial management, negotiations with government bodies, and housing construction processes. The umbrella body plays the role of intermediary and facilitator among all of the actors, and serves its members as the primary forum for dialogue and exchanges of information, skills, and technology. At the grassroots level, it trains community groups in housing issues and construction techniques; at the political level, it is the premier organization acting to influence national public policy on housing issues.

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  21. Invest in customers' income-generating potential

  22. Organization: Yayasan Kerja Pemukiman Rakyat (YKPR)
    Location: Indonesia
    Mosaic principle: Leverage resources that are abundant at the local level
    Mosaic barrier: Limited access to housing finance

    In Indonesia, where government efforts to support low-income families have mostly focused on infrastructure alone, Ashoka Fellow Ratna Refida's YKPR focuses on total human settlement–providing housing in such a way that it forms the basis for improvements in children's health and education, increased household incomes, and strengthened community ties. Community mobilization and financing are key components of the program. YKPR organizes at least 25 families to apply collectively for credit from the government housing bank, and then allocates the money and coordinates repayment on a quarterly basis which accommodates the seasonal nature of farming and fishing communities' incomes. Credit is "three-way," intended to cover land acquisition, house construction, and income-generating investments to help cover repayments on the loan. The government housing bank now considers them more reliable than its traditional clients and makes additional efforts to achieve customer satisfaction–for example, collecting loan repayments at customers' doorsteps. Although the model was developed for rural areas, this is also applicable to urban settings.

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  23. Build systems to capture savings for all types and sizes of incomes

  24. Organization: VSSU
    Location: India
    Website:
    www.vssu.com
    Mosaic principle: Leverage resources that are abundant at the local level
    Mosaic barrier: Limited access to housing finance

    In rural India, where a majority of the population depends on agriculture for their livelihoods, incomes are low and often seasonal and/or informal in nature. As a result, access to formal financial services is extremely limited. The alternatives are local moneylenders, which charge exorbitant interest rates, and nonprofit microfinance institutions, which do not offer poor clients the full range of services available to their middle and upper class counterparts. In this context, the key innovation of Ashoka Fellow Kapil Mondal's Vivekananda Sevakendra-O-Sishu Uddyan (VSSU) has been to fill the gap in finance available to the poor by mobilizing their own savings. The organization has 11,000 clients and has provided US$1.8 million in loans since 1997. VSSU targets villagers of all income levels in the Indian state of West Bengal, using convenient services like door-to-door daily, weekly, or monthly collection and incentives like gifts for spouses. VSSU's savings accounts bear interest, and after 18 months savers become eligible for short-term loans and insurance products–presenting the poor with a range of financial options similar to those available to higher-income market segments.

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  25. Facilitate community-led design

  26. Organization: SPARC
    Location: India
    Website:
    www.sparcindia.org
    Mosaic principle: Leverage resources that are abundant at the local level
    Mosaic barrier: Inadequate current product offerings

    In most Indian cities, sanitation is an urgent priority. Public toilets are too expensive for poor families, and individual household toilets are infeasible for a wide variety of reasons. Municipal governments have responded by contracting out construction of shared toilet blocks in slum settlements. However, there are far too few to meet demand, and those that exist suffer from poor quality construction and inappropriate design–for example, some have limited water supplies and no access to drainage. SPARC, an Indian affiliate of Shack/Slum Dwellers International, supported women's savings groups within its network to visit government-sponsored toilet blocks, observe the problems, and identify solutions. They developed new designs for community-managed toilet blocks that would be bright, well-ventilated, with large storage water tanks to keep toilets clean and allow washing after use; separate entrances and facilities for men, women, and children; adjoining rooms where caretakers and their families could live (thus reducing ongoing maintenance costs); and in some cases community spaces on top (bringing pressure to keep the toilets clean). To counter initial skepticism that women could suggest viable alternatives to existing design, SPARC sponsored the construction of demonstration blocks. Their success has inspired widespread replication. 391 toilet blocks with a total of approximately 8,000 seats have been constructed to date.

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  27. Utilize local materials and building techniques

  28. Organization: Appropriate Development, Architecture and Planning Technologies (ADAPT)
    Location: Egypt
    Mosaic principle: Leverage resources that are abundant at the local level
    Mosaic barrier: Inadequate current product offerings

    Between 1966 and 1986, 80 percent of the housing built in Egypt was shanty housing built by local masons or the residents themselves. The "slum upgrading" market is thus a significant center of demand for quality construction materials and techniques. Ashoka Fellow Hany El Miniawy set up ADAPT in low-income communities to meet this demand in a sustainable way. ADAPT is working with low-income communities to meet this demand in a sustainable way. The organization uses local ingredients common to the ancient Egyptians, along with treated waste products like rice straw, cement dust, and iron-fabric leftovers to produce environmentally-friendly building materials that are high quality (certified by the Egyptian government) and low cost (30 percent below standard alternatives). ADAPT involves local youth in the material innovation and production processes and trains them in design and construction–for example, using the traditional Kasbah layout with small alleys for women, central courtyards, and double walls and ceilings to make indoor spaces cooler. These youth then act as catalysts, spreading their skills in their communities. Two of ADAPT's early settlements in Algeria, totaling 220 units in 1985, have expanded to more than 20,000 units through this mechanism.

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  29. Harness the effectiveness of existing informal systems

  30. Organization: Saiban
    Location: Pakistan
    Mosaic principle: Radically lower the cost of the entire housing delivery process
    Mosaic barrier: Dearth of complementary goods (e.g., land and infrastructure)

    In Karachi, Pakistan, the traditional "sites and services" approach to affordable housing in which the state sells individual plots of land fully-serviced with water, sewer, electricity, and other amenities is ill-suited to the reality of low-income households that are typically unable to shoulder large up-front costs. The result is that the bulk of the new housing stock in the city is constructed informally. Saiban's key strategy is to leverage these informal systems and make them more efficient. The organization finances the purchase of unserviced plots of land, and leaves housing and infrastructure to be developed incrementally as money accumulates to pay for them–as occurs in the informal sector–but improves on this process by providing secure land tenure and organizing residents to plan and negotiate for addition of services. Security in Saiban settlements is higher; costs of living are lower; and services are obtained years faster than in comparable informal settlements. Read more at www.acumenfund.org/pdf/saiban_study.pdf


  31. Design new electricity distribution channels for slums through cooperatives

  32. Organization: Peoples' Electricity Cooperative
    Location: India
    Mosaic principle: Radically lower the cost of the entire housing delivery process
    Mosaic barrier: Dearth of complementary goods (e.g., land and infrastructure)

    A firm believer in the participatory approach to service management systems, Ashoka Fellow Ashok Bharti is in the process of creating an alternative distribution mechanism for basic civic services to reach the country's slum dwellers. A cooperative acts as the regulatory body in the slum, managing distribution and collection, and liaising with the Regulatory Commission and the electricity company as a representative of the clients. The organization's efforts are focused on two broad areas–social and technical. They bring the community together to spread information about how such a cooperative is beneficial; demystify the technology required to set up the service channels; and identify community leaders to negotiate with stakeholders, service providers and the government.

    Self-help groups are initiated to strengthen the cooperative spirit and encourage saving toward electricity charges so that clients do not default on payments. The groups are also intended to streamline the process of collecting the cooperative's fees and charges for the service. On the technical front, participatory appraisal to assess the electricity consumption needs of each household is being carried out along with a study of actual consumption of power, leakages, inefficiencies, and assessment of electric load. For more information about Ashok Bharti, see this profile.


  33. Aggregate demand to reduce transaction cost

  34. Organization: ICICI Bank
    Location: India
    Website:
    www.icici.com
    Mosaic principle: Radically lower the cost of the entire housing delivery process
    Mosaic barrier: Low individual purchasing power

    ICICI, India's second-largest commercial bank, has brought financial services to the rural poor in a viable, low-cost manner by working through networks of self-help groups rather than traditional branch offices. To reach profitability, the number of self-help groups had to be expanded exponentially without increasing the cost of managing these groups. ICICI therefore created a pyramid model where one bank staff member can serve over 14,000 low-income clients who are aggregated into self-help groups, which in turn are overseen by promoters (elected members of the self-help groups who are paid by the number of groups created). The groups must save for one year before they can collectively apply for a commercial loan, which is collateralized by the entire group. They can also lend to each other through group savings, and are paired with non-profit organizations that provide healthcare, education, and local development projects. ICICI currently works with over 8,000 such groups. The bank expects to add 50 million more customers over the next 2-3 years.


  35. Reduce the risk of housing finance by building credit history and income generation opportunities

  36. Organization: Grameen Bank Housing Program
    Location: Bangladesh
    Website:
    www.grameen-info.org
    Mosaic principle: Radically lower the cost of the entire housing delivery process
    Mosaic barrier: Low individual purchasing power

    In Bangladesh, with approximately 70 percent of the population at the "bottom of the economic pyramid" by global standards, access to formal financial services is severely constrained. However, Bangladesh is also home to Grameen Bank (GB)–a microfinance pioneer having seeded an industry that now serves over 50 million people worldwide. Its key innovation was to substitute peer support for traditional forms of security, such as proof of income or collateral, by lending through solidarity groups. Contrary to conventional wisdom of financial institutions, Grameen ventured into giving loans to the shelterless to build houses for themselves based on the philosophy that investment in shelter for the poor is productive. Rather than a consumption item burdening the poor, it is a vital investment to increase productive capacity and overall well being of a family. Its strategy for providing housing microfinance is two-pronged: leverage the same organizational infrastructure it uses for income generation loans, and restrict eligibility to members who have effectively developed credit histories for four years. This reduces the cost and risk of associated with a housing loan product, making it commercially viable. Approximately US$200 million has been disbursed for housing and over 621,341 houses have been constructed.


  37. Mobilize low-income families' purchasing power through experience-based learning and demonstration projects

  38. Organization: Shack/Slum Dwellers International
    Location: Global
    Website:
    www.sdinet.org
    Mosaic principle: Enable long-term investment
    Mosaic barrier: Low individual purchasing power

    Shack/Slum Dwellers International is a global network that facilitates housing delivery by building self-reliance within low-income communities. This concept, which originated in India in the 1970s, has been implemented successfully in 14 countries and encompasses a total of 5.6 million members, mostly women. The organization is based on a basic strategy of organizing communities: daily savings groups, which are federated at the neighborhood, regional, and national levels. Country federations use a set of methods that enable action among their members, who are accustomed to have little sense of control over their problems, by showing what is achievable. Primary activities include exchanges, in which members from different neighborhoods, cities, and countries learn from and become inspired by each other's experiences; community-designed house exhibitions, which encourage discussion and joint decision-making about the designs, materials, and construction processes that are best suited to members' needs; and enumerations in which members undertake demographic surveys of their settlements in order to negotiate with government officials and others. The result is that communities are mobilized to start building assets and empowered to initiate and manage changes that they prioritize.

    Go back to the mosaic


  39. Expand eligilbility for public funds

  40. Organization: First Place Fund for Youth
    Location: United States
    Website:
    www.firstplacefund.org
    Mosaic principle: Shift public policy through advocacy
    Mosaic barrier: Low individual purchasing power

    In the United States where each year more than 25,000 teenagers "age out" of the foster system only to find themselves with no place to live, no sustainable income, and limited educational prospects, Ashoka Fellow Amy Lemley's organization First Place helps former foster youth secure their "first place" by providing micro loans. Through its community-housing programs and alliance-building initiatives, First Place is transforming the foster care system in the United States at the local and state levels by demonstrating the power of her public-private partnerships model. Based on a peer-to-peer reinforcement model that was borne out of the Grameen Bank example, First Place covers the first month's rent and the security deposit that is paid directly to the landlord. The organization acts as a master tenant, contracting with the landlord and then subleasing to the young people. Ten youth form a "lending circle" and share reciprocal responsibility and mutual support, with each member required to complete a rigorous economic literacy curriculum before receiving a housing loan. For two years the lending circle is collectively responsible for the loan repayment of each lending circle member and for preventing loan default. First Place also supports these youths through an Emancipation Training Center that provides services like educational and vocational counseling, life skills instruction, transportation and grocery vouchers, advocacy support, and community-building events.


  41. Introduce "social leasing"

  42. Organization: National Association of Intranquil Tenants
    Location: Brazil
    Mosaic principle: Shift public policy through advocacy
    Mosaic barrier: Limited access to housing finance

    Ashoka Fellow Maria Elisa Jardim Barbosa's National Association of Intranquil Tenants is seeking to provide poor Brazilian citizens with housing stability. The Association has co-opted a network of organizations–ranging from community organizations, neighborhood associations, tenants groups, consumer defense groups, church groups, to unions and lawyers' collectives–to press for a national housing policy to address the country's acute urban housing problems and inequity. Simultaneously, it is also advocating the introduction of housing subsidies and social leasing that take into account the realities of all individuals who have no property. They have successfully brought the government and businesses together to build low-income housing. The incurred costs are later paid off by the tenants, the arrangements for which are formalized through a long-term leasing contract. For more information see this profile.

Prizes

Total value:
15 000
Three winners will each receive a $5,000 prize.

Entries