San José, Costa Rica, since 1956

Habitat for Humanity launches housing micro-credit in Costa Rica

There is plenty of housing in Costa Rica but little for those who need it. 

“The State of Housing and Urban Development in Costa Rica 2012,” released Wednesday, observed that a glut of expensive housing developments has out-priced many middle class and poor Costa Ricans as developers emphasized “walled city” style developments with private security and other amenities like swimming pools.

The asymmetry between supply and demand in the housing sector is one reason that Habitat for Humanity International and Plycem, a Mexican building materials company, are partnering with local banks to start a microfinance pilot program here to help the many poor Costa Ricans add on to or build their own homes.

“The supply available does not meet the actual demand,” said Foundation for the Promotion of Housing (FUPROVI) Director Eloisa Ulibarri during the report’s presentation Wednesday. 

Despite the abundance of high-priced housing, Costa Rica currently faces a qualitative housing “deficit” of 152,464 homes, slightly better than in 2011.

According to FUPROVI’s 2012 report, 5.8 percent of the housing in the Central Region, which includes the San José greater metropolitan area, is considered to be in “poor” condition, along with upwards of 13.4 percent along the Atlantic Coast, the Huétar Atlántica Region.

The 2012 report listed 98,965 homes in “poor” condition across Costa Rica, roughly 8 percent of the country’s housing.

Finding affordable, dignified housing in Costa Rica is especially difficult for poor Ticos who can’t afford the housing stock available and lack access to traditional housing credit from banks.

“The purpose of micro-financing is that it offers [lower-income people] financing in amounts they can generally afford,” said Torre H. Nelson, area vice president of Habitat for Humanity, who represents all participating Latin American countries and the Caribbean.

Unlike traditional home ownership, the program also provides some security for people who enroll.

“There’s a difference between a mortgage loan and micro-financing,” Nelson said. Many households in the micro-financing program have a co-signer, or they use personal property as collateral, although the latter practice is inconsistent.

“Most organizations aren’t interested in collecting TVs for collateral. It’s just too expensive for them,” he said.

According to Nelson, strong organizations have shown enormous success with the program; he estimates that default rates are as low as 5 percent and rarely exceed 7 percent. Instead of being evicted from a property, defaulting households may damage their credit history and ruin their chances for a future loan.

Micro-loan proponents believe that the nontraditional loans — often lasting three months instead of 30 years — will benefit poor would-be homeowners and open untapped revenue streams for local banks.

Housing micro-finance projects have has success in Peru, Bolivia, Mexico, El Salvador, Nicaragua, Ecuador, the Dominican Republic, Panama and Brazil.

Robert Isenberg contributed to this story.


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