Step by Step Program “Strategic alliances for Adequate Housing”

Step by Step Program “Strategic alliances for Adequate Housing”

Ecuador
Organization type: 
nonprofit/ngo/citizen sector
Budget: 
$1 million - $5 million
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

Since 2001 the CIUDAD Research Center has been developing the Step by Step Program aimed at promoting the access to adequate housing to many low income families by means of micro loans, strategic alliances and the articulation of stake holders, through strategic partnerships with the public, private and public sectors to implement concrete solutions that evidence the feasibility of providing quality housing to low income sectors while contributing with the development of an inclusive and sustainable housing policy in Ecuador.

About Project

Problem: What problem is this project trying to address?

The project is addressed to low income urban families in 7 cities of the country who have problems to access to adequate housing and financing. The project's actions contribute with families in obtaining the housing allowance granted by the Ecuadorian State. Head of female household have priority. Work is carried out jointly with social organizations acting as voice of the housing demand; within the understanding that housing is just one step towards improving the quality of life and that the sustainability of these processes is increasingly guaranteed when families are organized beforehand.

Solution: What is the proposed solution? Please be specific!

The housing problem in Ecuador is the most eloquent expression of the social and economic exclusion experienced by a huge number of families. This, in addition, evidences the regional disparity and the disagreement between the housing demand and capacity to meet the needs by the State and the society. At present the accumulated housing deficit is close to 700.000 units. Since 1998 the Ecuadorian State has been granting allowances (SIV) which contemplate non reimbursable funds to help low income families, in 2007 the allowance was increased to $3.600 and in 2010 the allowance amount reached $5.000 dollars. The Step by Step Program helps low income families to comply with the requirements stipulated by the allowance system. 1) previous saving 2) Contract for sale and purchase of a property and 3) commitment with the supplementing loan for financing of the total amount of the house; by means of 1) an initial loan that helps families to achieve the required previous saving, 2) a strategic alliance with private construction companies with a social perspective (Eco-arquitectos) and 3) a direct mortgage loan issued by micro finance entities associated to the program (Cooperativa CCP and Cooperativa Fondvida).
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

Records and frequent evaluation in connection with the impact of the action are kept both in terms of credit as well as training related to gender: 62% of the loan beneficiaries are women. Records and frequent evaluations are registered in connection with the impact of the loan with reference to the applicants’ income: 79.5% of the monthly income of the assisted families is lower than the basic food basket cost and approximately 30% of heads of household work as household help or street vendors. Public and private sector mobilization of resources is monitored: overall 7 million dollars from other sources have been mobilized to finance social housing; 3.1 million of public funds through Bono de la Vivienda [Housing bond] (44,02%), 2,2 millions in previous savings from families (31.15%) 1.7 million of credit from financial entities and loans granted by the constructing company directly (24.83%0). The results of the program depend on the efficiency of the internal process and on the strategic alliances linked directly to the Project (building companies and financial entities). Likewise the project's results are influenced by the actions taken in terms of actors communication in the “Social Contract for Housing Collective” that Step by Step has promoted and took part, which has played a key role in the explicit inclusion of the right to adequate housing and the right to a city provided for in the 2008’s Constitution and at present in the discussion of national housing policy proposal.
About You
Organization:
Centro de Investigaciones CIUDAD
About You
First Name

NANCY

Last Name

SANCHEZ ROMERO

About Your Organization
Organization Name

Centro de Investigaciones CIUDAD

Organization Phone

(593 2) 500 322 // 2225 198 // 2227 091

Organization Address

Calle Arturo Meneses N2457 y Av. La Gasca

Organization Country

, P

Country where this project is creating social impact

, P

How long has your organization been operating?

More than 5 years

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Innovation
What stage is your project in?

Operating for more than 5 years

Share the story of the founder and what inspired the founder to start this project

The families' housing situation and their quality of life have always been a constant concern for the CIUDAD Research center, evidenced by reports and academic productions on the subject. In 1996, within the framework of a Course on Design and Evaluation of Social Project directed by Professor Ernesto Cohen, Silvana Ruiz submitted an initial project that provided the criteria for designing the Step by Step project that started as a bi-national Ecuadorian and Peruvian initiative submitted by DESCO (Peru)-CIUDAD(Ecuador)-KATE(Germany) and IEPALA(Spain) to the European Union applying for financing. The idea was to turn the accumulated academic thoughts into a practical answer to meet the adequate housing requirement of the most disadvantaged people from a perspective of joint responsibility of the whole society to social problems, by focusing the attention on the what was considered the bottle neck: financing addressed to families who in general do not have access to loans.
When the European Union support finished, CIUDAD committed to continue with the rotating fund (constituted within the project's framework) and the implemented credit system, thus strengthening the supplementing actions of training and articulation of actors, key elements to move from a pilot experience to an impact on the public policy.

Social Impact
How many people have been impacted by your project?

1,001 - 10,000

How many people could be impacted by your project in the next three years?

1001‐10,000

What barriers might hinder the success of your project and how do you plan to overcome them?

The expansion of the scale of actions implies the need of funds that at present are not guaranteed.
The performance of the current funding amount allocated to loans does not cover the costs of the whole program, taking into account both the credit lines’ operation cost as well as the cost of the supplementing training and actors’ articulation activities.
The program is looking for low cost financing sources in order to increase the credit fund and/or the non reimbursable contributions for training and actors’ articulation activities.

How will your project evolve over the next three years?

The planned goal in the upcoming three years is:
-Make the access to housing possible to 800 new families
-provide 300 families with training on communitarian cohabitation
-Support the strengthening of the Social Contract for Housing and actions resulting in political incidence to enact a law that guarantees the right to an adequate, house and habitat in line with Constitution’s provisions.

Sustainability
For each selection, please explain the financial and non-financial support from each

When the European Union support finished, CIUDAD committed to continue and increase the rotating fund and the implemented credit system, thus strengthening the supplementing actions of training and articulation of actors, key elements to move from a pilot experience to impact a state policy. CIUDAD’s decision was to implement a supplementing financing strategy by means of projects submitted to many sources.

Non government organizations
ACSUD las Segovias (Spain) supports the formulation of project to b e submitted to autonomous governments in Spain
Regional government
Funding was received to cover operation and funding costs, within the framework of projects submitted to the generalitat Valenciana, the Provincial Council of Valencia and the city of Valencia, Spain.
Clients
The loans granted to families bear an interest stipulated in accordance with the Central Bank of Ecuador, and this interest is similar to the one charged by financial entities associated to the program, in order to avoid disagreement between the families who are granted the mortgage loan and the families who are granted the mortgage loan by the associated entities. The amounts received as interest cover part of the operational costs.
Other
In 2008, IDB approved the support (2008-2011) to Step by Step through a line of non reimbursable technical assistance that covers part of the operational costs and training and actors’ strengthening activities and low cost funding to 10 years.

How do you plan to grow and/or diversify your base of support in the next three years?

Negotiations to sell the portfolio are moving forward, this would enable fresh funding to meet the credit demand. Conditions are being assessed. The intention is to enter into collaboration agreements with two financial institutions in the following two years
CIUDAD- PASO A PASO aims at being formally incorporated to the National Program on Popular Finance, Entrepreneurship and Solidarity Economy which we allow to increase the funding chances and/or strategic alliances.
Participation and support to the Social Contract for Housing is maintained.

Collaboration
Please select your areas of intervention in the home improvement market

Financing, Technical assistance, Citizen/community participation, Public policy.

Is your innovation addressing barriers in the home improvement/progressive housing market? If so, please describe in detail your mechanisms of intervention

1) It helps low income families to have access to a government allowance that otherwise would not be able to obtain a quality house, considering their income.
2) It smooth the progress of supplementing financing through microloans to complete the savings and the mortgage loan amounts, in a direct manner or through the associated financial entities; addressed to families who in general do not have access to loans. More than half the families had never been granted a loan in official entities.
3) It has provided support to space in the civil society who is watchful and contributes with the housing policy issue.

Are you currently collaborating with private companies, or have you partnered with private companies in the past? With which companies?

Ecoarquitectos has deliver 800 house and is building 500 more at present; and delivers quality products at competitive prices compared with the local market. (See appendix.)
• Taller 3 Constructora has started working on 3 housing programs that imply 123 housing units.
Microfinance Entities:
• Cooperativa Construcción Comercio y Producción is a financial entity governed by the Superintendency of Banking and Insurance of Ecuador, SBS has granted 255 mortgage loans to families who initiated the access to housing process through Ciudad-Step by Step.
•Cooperativa Fond Vida, is not governed by SBS but it is affiliated to MIES, the Ministry of social and economic inclusion which has granted 28 mortgage loans.

Please describe in detail the nature of the partnership(s)

Collaboration agreements

Select the unit(s) with which the partnership was formed

Other (please specify).