Post on 16-Mar-2018
Developing 3rd Sector Housing Capacity + Delivery
Presented by:
Larry English & Joe de Swardt
Homeless international
Background:
Est.1987 by UK Social Housing Sector
Backward Linkages: – UK: Social Housing Federations of England, Ireland, Scotland
and Wales (1600 Housing Associations) / Chartered Institute Housing/ Tenant Services Authority
– Alliance: SCC, NBBL, Canadian and Dutch Social Housing Sectors
Forward Linkages (Partners):– Current: 17 partners, 15 Countries
– Extended Network: (HIC, ACHR , ICA AND SDI)
H.I. Background
HOUSING SECTOR(NHF, SFHA, C.CYMRU, NIFHA, )
INDIA, SPARC
INDIA, IVDP
NEPAL, Lumanti
PAKISTAN, OPP + SAIBAN
MOZAMBIQUE, Pamodzi
TANZANIA, CCI
KENYA, Pamoja/AMT
ZAMBIA, PPHPZ
NAMIBIA, HPF Namibia
MALAWI, CCODE
GHANA, PDG
AFRICA
ASIA
KENYA, NACHU
SOCIAL HOUSING UK
ANGOLA, DWA
BURKINA FASO (CREPA)
DEVELOPMENT PARTNERS
DONORS
ACADEMIC/ PROFESSIONAL, UNIV LONDON,
UNIV CARDIFF)
SRI LANKA, Sevanatha
PHILIPPINES, PACSSI
ZIMBABWE, ZINHACO, DZ
SOUTH AFRICA YEAST
Challenge is Urban
Global Urban/ Rural Population
1970
2030
2000
• More than 1 billion people - 1 out of every 3 urban pop live in slums
• 70% African/40% Asian urban pop. live in slums
• By 2030 the largest cities will be in the developing world - = 80% of global urban pop.
• Almost half the world live on less than $2 a day
• Affordable shelter that is inadequate, and adequate shelter is unaffordable
By the year 2030, every third person in the world could be a slum dweller.
Dharavi, Mumbai
Challenge: Growth of Slums
“Slums are the products of failed policies, bad governance, inappropriate legal and regulatory frameworks, dysfunctional markets, unresponsive financial systems and not least, a lack of political will” (Tannerfeldt, G. and Ljung P)
Limitations of Local Government and Private Sector:– Scale of Slums/ Limited Reach: 50% of cities comprise slum dwellers.
Local Government cannot reach / plan for these communities – Poor relationship/ trust between Government and slum communities – Capacity frequently interrupted by change in leadership and politically
driven imperatives – limited succession – Short-termism (Govt. and Private Sector)
Need for New Instutional arrangements/ New Institutions− Addressing the Slum deficit will take time (decades)– Institutions need to understand complexity, maintain a long term
focus, build capacity/capability over time through planned succession– 3rd Sector is key to addressing the institutional chasm
Why 3rd Sector ?
3rd Sector* Advantages
− Independent of Politics/Profit− Sustained /Regulated Focus (capable of
building capacity over time)− Enterprising – Creating Value/Surplus− Capable of taking Risk− Reinvest vs. Distribute Surplus − Capture Subsidy Corporately vs Privately− Create housing Public Good (infrastructure)
rather than Private Good − Ability to borrow (Creditworthy)− Key to establishing a BOP Market
Third Sector
Private Sector
Govt. Sector
Social Enterprises/ Cooperatives/ Community Development Corporations, Housing Associations etc.
How do we build the 3rd sector?
Challenge = Bridging 4 Gaps:− Institutional Gap: in urban institutional arrangements/ social
enterprises to provide tertiary provision − Solutions Gap: Develop appropriate/ affordable housing and basic
service solutions− Finance Gap: Build bankability and credit-worthiness to access
cheaper finance, and increase affordability − Delivery Gap: Scale up delivery/ Build project pipelines/ economies
of scale/ increase affordability
Method: − Link Project Delivery + Organisational Development (Cap Building)− Start with the end in mind (Scale, Sustainability, Capacity)
Engage Market
STAGES ofDEVELOPMENT
Formation/ Mobilization
Engage Govt
1
2
3
4
5
CAPACITY FUNDING + SUPPORT
Po
litica
l
So
cia
l
Ma
na
ge
rial
Tec
hn
olo
gic
al
Fin
an
cia
l
Demonstration
Self-Reliant
PROJECTS
Community Based Organisation(Dependent)
Social Enterprise (Independent)
Projects Scale up Capacity Scales up Projects
ORGANISATIONAL GROWTH
1,000’s
CLIFF
Delivery and Development
10,000’s
100,000’s
1000,000’s
10,000,000+
COST($)
Graduation Facility
Capital Grants, Soft Loans CLIFF, Org Development/ Fund Mgmt. + HMF TA
Equity, Debt, Guarantees, Fund + Portfolio Dev. Twinning, C/Rating
CLIFF, Guarantees, Refinancing Project/Pipeline TA Fund Mgmt.
Project Grants, Org Development TA, Savings + Credit Systems TA
Small Grants
2
3
4
5
People InfrastructureHousing
Land
1
InfrastructureHousing
Land
PeopleSQUATTING
Land
LandSITES & SERVICES
MODERN
INCREMENTAL
Infrastructure
Infrastructure
Housing
People
People
Housing
People InfrastructureHousingLandTRADITIONAL
Dev. Sequence/Org Approach
Original CLIFF
Com
mu
nity M
obilisation
LOCAL ORG
X
YZ
PEOPLE
REAL ESTATE/ HOUSING
FINANCE
STAGE 1Community Mobilization & Organisation
• Identify legitimate and credible leadership
• Establish CBO to facilitate the delivery of housing and infrastructure
STAGE 2Demonstration (precedent setting/ “bridge building”)
• Development innovative/affordable/ replicable housing/ infrastructure models using community resources
STAGE 3Government Engagement
• Government engages 3rd Sector as partner. Facilitates:• Land Provision
• Subsidies/Matching Funds
• Regularization of Tenure
• Technical Support
• Guarantees
• Projects Scaled up
• Seat at the table
STAGE 4Market Engagement
• NPO/ Social Enterprise Formed
• Leverage Land Market• Increase Scale/Affordability
• Cross-subsidy (Mixed use) Development Projects
• Cross-subsidy Real Estate Portfolio
• Drive pro poor change through practice/ seat at table
Oshiwara Project, Mumbai: 5300 Households
STAGE 5 Self-Reliance
• Track record established
• X-subsidise/ Local Subsidy
• Leverage Assets (Portfolio)
• Access to Private Finance
• Independent, Self Sustaining
Local Banks & Financial Institutions
Homeless International
$ 14.5 million
CLIFF Leverage
CAPITALISATION
• Land/Sale• Rights Sale• Housing/ Sale• Rentals/• Service
Revenues• Loan Revenues
Land Projects
Sanitation projects
Incremental housing projects
Complete housing projects
Partners/ Enterprises
HI /USAID Guarantees
$ 83 million (Projected project value)
LEVERAGE
Funders
Repayments
Loans
GrantsSurplus $ 39
million (Projected)
Rights
Sales
Savings
Loan
Revenues
Land Sales
Land
Donation
Contract Payments
User Revenues
Subsidies
Sales
Land
Donation
Savings
Subsidies
Savings
Loan
Revenues
H.I. FINANCE/CLIFF
CLIFF PARTNER FUND MANAGEMENT
Capital Finance
ProjectDeveloper
Home Loan
Loan Released
Loans and
Interest Repaid
En
d U
ser
Purc
hase
Un
it
Loans Repaid
Loans to selected beneficiaries
Project/ Bridging Finance (Stages)
End-user Finance
Sanitation Loan
PROJECT PACKAGING
COMMUNITY DEV/PREP
COMMUNITY IDENTIFICATION
PIPELINE
Units Completed/ “sold” to end user finance Division
Loan Repaid with interest
Project Prepared
Coordination
VMF INVESTORS/ TAKE OUT FIN
NOT FUNDED BY CLIFF
CAPITAL FINANCING TAKE OUT FINANCING
CLIFF Financing (detail)
Funding Flows
Project Prep Finance
Looking ForwardSeed Funding:– $ 35 million (DFID/SIDA/HI/UKHA):– New Funding (UK Housing/ Venture MF )– 75 Revolving
New Funding Mechanisms– Refinancing Facility (Africa) to expedite – Venture MFI partners
Expanded 3rd Sector Partner Portfolio:– Portfolio 15 Organisations (Africa/Asia)– Graduate 7 to Self-Reliance
Projected Outputs:– Housing Units 35 000 (2015)– Toilets: 1,2 million users – Leverage: $100 million
3rd Sector Key to Institutional Arrangement every country (now and future)
3rd Sector Building requires consideration of the 4 Gaps• Institutional/ solutions / financial/ scale • Capacity to close the gap
3rd Sector Institution requires Financial Sustainability• requires adoption of a Real Estate Development
Approach (Convergence of : People + Land + Finance Markets)
• requires consideration of Housing as Infrastructure (i.e. housing as a public good)
• Building Corporate wealth vs. Personal Wealth
Concluding Remarks