housing for all india june 2011 newsletter

A NEWSLETTER FROM HFA INDIA | JUNE 2011

thePLATFORM

LAYING A FOUNDATIONFOR AFFORDABLE HOUSINGACROSS INDIAIn 2008, Ashoka’s Full Economic Citizenship initia-tive launched Housing for All (HFA) in India. Across India there exists a tremendous need for new hous-ing that provides legal land rights, durable homes, and access to basic services such as water, electricity and sanitation for low income populations. Ashoka’s HFA initiative intends to address the needs of this socio-economic group while demonstrating the cross-sector profitability of doing so.

Starting in Ahmedabad and working with citizen sec-tor organizations (CSOs) SAATH and SEWA, Ashoka’s HFA team brokered the first agreement between a developer and a CSO in September 2008. After seeing

market research collected by Ashoka’s HFA team and working closely with CSOs, developers understood the real demand for sub-INR10 lakh housing and the potential for turning a profit while serving low-income households. In Ahmedabad, developers sold 1,800 units in nine months to low-income customers through partnerships with CSOs. CSOs meanwhile can advocate for better design and service for their clients and get paid for their expertise and work.

In Ahmedebad we helped demonstrate that afford-able housing can profit all stakeholders—over the next three years, with partners across the country, we hope to replicate this success in fifteen Indian cities.

thePLATFORM | June 2011 | Volume 1 Issue 1 | [email protected]

SpOTLIGHT ON

SATARA

ACCELERATOR ENTREpRENEUR

DEvELOpER

CIvIL SECTOR ORGANIzATION

HOUSING FINANCE

pLOT SIzE

NUmBER OF HOmES

SELLING pRICE

UNIT SIzES

mINImUm pERCENTAGE OF LOw INCOmE CUSTOmERS

LAUNCH

HFA INDIA - SATARA PROJEcT DETAILSABHILASH NAmBUDIRI

AARYA INFRASTRUCTURE

mANNDESHI FOUNDATION

mANNDESHI FOUNDATION, CORpORATION BANk, SHUBHAm HOUSING FINANCE

3.5 ACRES

500BETwEEN INR 5 LAkHS TO INR 8.75 LAkHS (~US$11,111 TO US$19,445)1 Rm-kITCHEN (285Sq-FT), 1 Rm-HALL-kITCHEN (375Sq-FT), AND 2 Rm-HALL-kITCHEN (500Sq-FT) 50%

JUNE 2011

After successfully enabling partnerships to construct pilot projects for affordable housing in Ahmedabad, Housing for All developed a strategy to quickly scale up efforts to create 15 similar projects in 15 cities. A new project in Satara is the first actionable project of this upscaling effort.

Satara, a city110km South of Pune, is home to many small-scale industries. Satara is also home to an esti-mated 57,000 potential customers that are interested in and financially able to afford sub-10 lakh homes. HFA conducted a survey covering 1000 targeted house-holdswith an income range of INR 8,000-15,000 per month (≈US$178-US$335) in Satara. A major propor-tion of those surveyed work in the informal economy as entrepreneurs and have stable incomes. Over 45% of surveyed households indicated the ability to pay a down payment in the range of INR 25,000 to 40,000 (~US$555 to $890). These numbers suggest a huge market opportunity for affordable housing in Satara—an opportunity our local HFA Entrepreneur is excited to turn into a city-wide effort toward the provision of affordable housing.

There is more to come... Satara is just one city in HFA India’s plan to target 15 cities over the next three years, in partnership with new HFA Entrepreneurs, to jump-start a nation-wide push toward afforable Housing for All across India.

ASHOkA’S FIRST HFA enTrepreneUrAbHIlASH nAmbUdIrI

Abhilash nambudiri is our first HFA entrepreneur, playing Ashoka’s convener role in affordable hous-ing projects using the Hybrid Value Chain model. HFA Entrepreneurs like Abhilash will market the benefits of affordable housing, create partnerships with developers and CSOs, and work with banks to supply housing loans to informal sector work-ers. He is currently administering the development of 690 houses in two affordable housing projects in Pune and Satara. He is now planning to expand his work to the state of Maharashtra and the Northern region.“A partnership between a citizen sector organization and a developer is something entirely new to both ac-tors. In order to be successful, the relationship has to rely on trust. This is where my role comes into play—I need to create that common ground.” -Abhilash Nambudiri


bUIldIng codeSAddreSSIng THe lAck oF beST prAcTIceS In THe IndIAn HoUSIng mArkeTby mArTInA wengle

BEST PRAcTIcES WORkSHOPMONDAy, JULy 4th 2011Ashoka HFA will conduct a workshop with devel-opers, citizen sector organizations, architects, de-signers, manufacturers and certification specialists to create a framework for the Best Practices. From this meeting we hope to begin the process of creating a set of standards and practices for afford-able housing nationwide. Our goal is that all voices be represented—get in touch with HFA India to learn more about how you can be involved. For more information, please contact [email protected]

Too often affordable housing is associated with cheap materials, poor design and undesirable locations. If we truly want to address the severe housing shortage for India’s low-income popula-tion, we need to fundamentally alter the afford-able housing pa≠radigm. A set of accepted best practices will provide both a tool to empower prospective low-income homebuyers and a benchmark for affordable housing developers.

Housing affordability remains very broadly defined and is often confused with merely “cheap” housing. But housing is more than a roof over our heads--homes are sources of dignity, community and economic opportunity. Hous-ing solutions for low-income populations therefore need to consider far more than price point. Effectively serving the low-income housing market requires an effort to understand and address a wide range of needs.

Successful affordable housing solutions not only address costs to the household over the life of an investment, but also consider the availability of adequate financing

options. Housing deemed affordable by the low-income segment needs to be of appropriate quality, and designed according to the needs of the community.

Purchasing the ideal home is often a lengthy and strenu-ous process. People from the informal sector generally do not have experience in buying homes, have less ac-cess to information sources and have few resources ad-vocating on their behalf. Hence they have limited choice and empowerment as consumers and their capacity to maximize the value of a real estate purchase is more constrained than in higher income segments.

While considering the demands of low-income, informal segments of the population, we must also keep in mind the profits of developers and financiers, who will be responsible for funding and building the next 26 mil-lion homes currently demanded by the market. Ensuring the use of quality materials is important for buyers, but higher quality means higher cost for builders, eating into profit margins. Alternatively, maintaining profit margins while increasing quality drives up prices for homebuyers, a particularly sensitive area for low-income populations.

keeping in mind this fundamental tension between qual-ity and cost, a set of best practices for affordable housing will be jointly developed by business sector and citizen sector organizations, leveraging their respective exper-tise in commercial and community segments. Ultimately this set of best practices will both serve as signal to po-tential customers that their needs have been addressed and help them make qualified decisions in what may be their first official homebuying decision. Furthermore, a set of best practices that outline a successful model for profitability in the construction of affordable housing will facilitate other developers entering the affordable hous-ing market. By proactively addressing the needs of all stakeholders, best practices advance everyone’s interests.


PUBLIcATIONS

In collaboration with Hystra, a hybrid strategies consulting firm, Ashoka has conducted an investigation into access to housing at the base of the pyramid, specifically for low income urban dwellers worldwide. The study unpacks various models for achieving affordable housing for all, and surfaces crosscutting insights and barriers faced. The study also identifies promising avenues for moving the sector forward, including recommendations for various stakeholders and frameworks for engaging in collaborative action, called Hybrid Value Chains, that leverage the strengths of multiple players.To request an advance copy of the report, email us at: [email protected] complete version will be published in Fall 2011.


Ashoka has studied affordable housing finance products and practices adopted by organiza-tions providing housing loans to low-income households working in the informal sector in urban India. The report outlines the players in the sector and their challenges in providing low-income housing finance, explores the demand for housing finance and the evolution of housing finance environment.To request a copy of the report, please email us at: [email protected]

Access TO HOusing AT THe BAse OF THe PyRAMid

BReAking BARRieRs: HOusing FinAnce FOR indiA’s inFORMAL secTOR

eVenTs | pAST | pRESENT | FUTUREAshoka, in partnership with the Hilti Foundation, brought together 40 housing sector leaders from 12 countries in barcelona for a Summit of global Housing entrepreneurs. The summit’s approach was decidedly unconventional: each participant played an active role in identifying a common agenda to advance affordable housing for base-of-pyramid populations globally.

Vishnu Swaminathan of HFA India spoke on “Catalyzing Affordable Housing through Hybrid Value Chains” at a gathering in Pune as part of a year-long symposium on affordable housing, focusing specifically on renewable energy, sustainable construction and technological innova-tion.

It’s Ashoka’s 30th Anniversary! more than 1,000 changemakers from all around the world will share lessons from the past 30 years and our vision of the future. Vishnu Swaminathan of HFA India will attend the discussions targeting a new housing value chain.

The Inter-American development bank’s (Idb) 1st Idb Forum for the development of the Base of the Pyramid in Latin America and the Caribbean will gather over 500 leading experts and participants for a discussion of market-based approaches that are redefining international development in Latin America and the Caribbean. Vishnu Swaminathan of HFA India will mod-erate the panel on Creating Housing Solutions for the BOP: Prosperity Begins at Home.

HFA India will host a workshop to begin the formulation of a set of best practices for the af-fordable housing segment in India. HFA India is committed to including the perspectives of all stakeholders, so be in touch with HFA India to learn how you can become more involved.

HOUSING SUmmIT

BARCELONA, SpAIN

DECEmBER 2010

HOUSING SYmpOSIUm

pUNE, INDIA

ApRIL 30 2011

30TH ANNIvERSARY

pARIS, FRANCE

JUNE 21-22 2011

IDB FORUm

SAO pAOLO, BRAzIL

JUNE 27-28 2011

BEST pRACTICES wORkSHOp

JULY 4 2011

In 2010, HFA Brazil partnered with an association of cement manufac-turers, a CSO and Brazil’s leading MFI to launch Reforma Mais, a con-sortium to provide low-income families with integrated home improve-ment solutions that include access to housing microcredit and technical assistance. More recently, in 2011, Reforma Mais members entered into a partnership with Habitat for Humanity to develop similarly integrated services with other microfinance institutions in brazil, including banco Santander. For more information, watch our video at: http://www.youtube.com/watch?v=MmfZkWNVAkkHFA Brazil also continues active involvement in Clube de Reforma, a national platform established in 2010 to promote innovation and entre-preneurship in the field of home improvement for low income families. For more information visit: http://www.clubedareforma.com.br

By the end of december 2011, HFA Colombia plans to launch a multi-partner financing initiative to establish a Home Improvement Finance en-tity (HIFE) with multiple points of origination of loans. We bring together community sales forces providing integrated technical assistance, mate-rials suppliers, and experienced finance providers. Social organizations under Alianza por Viviendadigna (AVd) will eventually boast the capacity to scale to 17 cities nationwide. by year 7, the HIFe-AVd partnership projects US$292 million in loan volume benefiting over 120,000 low-in-come households.check out our video, “Pasos y Requisitos para Acceder al Pro-grama AVD”: http://www.youtube.com/watch?v=R87GINoURhk

Fec global sponsored an important Summit of Housing entrepreneurs in barcelona in late 2010, gathering leaders from across sectors to address issues in affordable hous-ing. To see the case studies and initial recommendations from the summit, please visit our website: http://fec.ashoka.org/content/global-summit-housing-entrepreneurs Ashoka principals bill drayton and Valeria budinich spoke in may 2011 at the world bank on “public goods through Social enterprises: creating Hybrid Value chains” based on an article recently published in the Harvard Business Review. A video of the meeting is available at: http://goo.gl/ktnMwThe article can be obtained at: http://fec.ashoka.org/content/request-copy-new-alliance-global-change

HOUSING FOR ALLAroUnd THe world


HFA colombia

HFA Brazil

Full Economic citizenship Global

thePLATFORM Summer2011Volume1|Issue1Editors: MartinaWengle MaiaSmithDesign: JeffJorveContent: HFAIndia FECGlobal

Formoreinformation,pleasevisitourwebsiteat:fec.ashoka.orgTobeincontactorforanyquestionsregardinginforma-tionwithinthisnewsletter,pleaseemailusat:[email protected]

HFA indiAOrigami House Presentation

Check out the HFA India presentation, de-signed by Vishnu Swami-nathan, based on our iconic Origami House.http://goo.gl/tYNch Feel free to send feed-back regarding the presentation to:[email protected]

housing for all india june 2011 newsletter

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