The Government-of-Haiti-Led Action Plan for Expanding the Availability of Housing Finance was a key objective of the assessment conducted by Chemonics International Inc. on behalf of the USAID’s Bureau for Economic Growth Agriculture and Trade (EGAT). The assessment aimed to identify proven and innovative models for stimulating housing finance in Haiti, considering the country’s unique context and challenges.
The report was developed by Pamela Hedstrom and reviewed by FS Share on behalf of Chemonics International. The assessment considered various models, including commercial bank lending, partial credit guarantees, contract savings schemes for housing, specialized mortgage banks/mortgage bonds, securitization and mortgage-backed securities, state-sponsored models, and other models of housing finance. The report provided recommendations for the Haitian context, with the objective of assisting USAID, the World Bank, the International Finance Corporation (IFC), and other donors in supporting the government of Haiti to develop a comprehensive road map for increasing the availability of affordable housing finance.
The assessment was conducted during the transition period of the Michel Martelly presidency, when the new prime minister and government officials were not yet in place. Despite this challenge, the report provided an overview of the Haitian housing market, highlighting the significant impact of the 7.0-magnitude earthquake that struck Haiti on January 12, 2010. The earthquake resulted in over 220,000 deaths, 300,000 injuries, and 1.5 million people left homeless, with the majority relocating to temporary camps in and around Port-au-Prince.
The report noted that the housing sector suffered losses and damages of $3 billion, and that 340,000 permanent houses would be required to settle the approximately 1.8 million people estimated to be still displaced or in need of community upgrading at a cost of about $2.3 billion. The assessment emphasized that housing represents a huge challenge as Haiti leaves the crisis phase and starts the process of community recovery and reconstruction.
The report identified various preconditions for housing finance, including preconditions for secondary mortgage markets and legal prerequisites for housing finance systems. The assessment also considered primary types of mortgage lending models, including commercial bank model, partial credit guarantees, contract savings schemes for housing, specialized mortgage banks/mortgage bonds, securitization and mortgage-backed securities, and mortgage liquidity facilities.
The report concluded that the Haitian government should develop a comprehensive road map for increasing the availability of affordable housing finance, taking into account the country’s unique context and challenges. The assessment recommended that the government of Haiti should establish a housing finance facility, provide subsidies for housing construction, and implement policies to stimulate the housing market. The report also emphasized the need for a coordinated effort among public and private actors to develop and expand the affordable housing market and the means to finance it.
The assessment was part of a series of tasks undertaken in the FS Share scope of work, which included a Demand Study, Analysis of the Enabling Environment, Stocktaking of Housing Finance Initiatives, and Housing Subsidy Programs. The reports were intended as inputs for a housing finance working group and for developing a housing market and housing finance workshop to be held in future months. The workshop would bring together key public and private actors in the access to finance area, for the purpose of sharing tangible approaches to developing and expanding the affordable housing market and the means to finance it.