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NATIONAL HOUSING AUTHORITY

PROGRAM FOR THE CONSTRUCTION OF

5000 AFFORDABLE HOUSING UNITS

AND

CREATION OF A HOME OWNERSHIP AND MORTGAGE

PROGRAM FOR LOW-TO-MIDDLE INCOME EARNERS

MONROVIA, LIBERIA

JUNE 29, 2012

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Table of Contents Acknowledgements ........................................................................................................................................ i

ACRONYMS ................................................................................................................................................ ii

I. OVERVIEW ......................................................................................................................................... 1

II. OVERVIEW OF MORTGAGE FINANCING IN LIBERIA ............................................................... 2

III. AIMS AND OBJECTIVES ............................................................................................................ 4

IV. PROGRAM TO CONSTRUCT 5,000 HOMES ............................................................................... 7

A. Sustainability of the Program ............................................................................................................ 8

B. Replication and Expansion................................................................................................................ 9

C. Sequencing of Housing Development Program ................................................................................ 9

D. Stake Holder Contributions/Inputs .................................................................................................. 12

E. IMPLEMENTATION APPROACH ............................................................................................... 15

1. Sites and Services Program ......................................................................................................... 15

2. Construction of Turn Key Units.................................................................................................. 16

F. FINANCING ................................................................................................................................... 16

V. MORTGAGE PROGRAM FOR LOW-TO-MIDDLE INCOME EARNERS ................................... 18

VI. CONCLUSIONS AND RECOMMENDATIONS ......................................................................... 20

APPENDIX I: NATIONAL POPULATION CENSUS - 2008 .......................................................... 24

APPENDIX II: PERCENTAGE DISTRIBUTION OF POPULATION .............................................. 25

APPENDIX III: AVERAGE HOUSEHOLD SIZE ............................................................................... 25

TABLES ..................................................................................................................................................... 26

REFERENCES ........................................................................................................................................... 29

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Acknowledgements The National Housing Authority extends its thanks and appreciation to the President of Liberia,

Her Excellency Mrs. Ellen Johnson Sirleaf for her vision in directly establishing this deliverable

as part of her 150-Day Action Plan.

We are also grateful to all those who have helped to make this Program document a reality. We

are particularly grateful to the members of the Housing Sector Working Group that was formed

to develop the Program for their time and valuable contributions to the effort. The Working

Group Members are as follows:

Central Bank of Liberia

Ministry of Internal Affairs

Ministry of Planning & Economic Affairs

Ministry of Public Works

We also acknowledge the invaluable suggestions received from the UN Habitat during the

development of the document plus photographs from Ecohomes Liberia Inc.

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ACRONYMS

AfDB Africa Development Bank and Fund

BKN National Credit Guarantee Board (Statens Bostadskreditnmnd - Sweden)

CBL Central Bank of Liberia

CICO China Chongqing International Construction Corp.

CSR Corporate Social Responsibility

DDS Direct Deposit Scheme

ECOWAS Economic Community of West African States

ECOLIB Ecohomes Liberia Inc.

EPA Environmental Protection Agency

FHLMC Federal Home Loan Mortgage Corporation

FIB First International Bank

FNMA Federal National Mortgage Association

GDP Gross Domestic Product

GoL Government of Liberia

GTB Guarantee Trust Bank

IDA International Development Association

IDB Islamic Development Bank

HIPC Heavily Indebted Poor Countries

LBDI Liberia Bank for Development & Investment

LEC Liberia Electricity Corporation

LISGIS Liberia Institute of Statistics and Geo Information Services

LWSC Liberia Water and Sewer Corporation

MIA Ministry of Internal Affairs

MoF Ministry of Finance

MoPEA Ministry of Planning and Economic Affairs

MPW Ministry of Public Works

MTEF Medium Term Expenditure Framework

M&E Monitoring and Evaluation

NASSCORP National Social Security and Welfare Corporation

NHA National Housing Authority

NHSB National Housing & Savings Bank

NOCAL National Oil Company of Liberia

PMC Project Management Committee

PPP Public-Private Partnership

SHAF Shelter Afrique

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A HOUSING DEVELOPMENT AND HOME OWNERSHIP PROPOSAL

FOR LIBERIA

Satellite photograph of Steven A. Tolbert Housing Estate, built in 1979

I. OVERVIEW Housing is a social good, an asset which promotes individual and collective dignity, privacy and

security. In the economic sphere, housing contributes to employment creation and, labor

productivity, community economic development and capital formation at both the micro and

macroeconomic levels. Housing also has impact on environmental management.

Housing is an important component of the economic and social development of Liberia and the

world at large. It is an important part of national infrastructure development and is pivotal to

social development, national competitiveness and economic growth. Availability of affordable

housing remains one of Liberias most pressing social/development problems. While some

middle income and most upper-income housing are comparable to that in neighboring countries

of West Africa, facilities for low-income groups are substandard. However, across all income

categories, the development of housing in Liberia has generally been unplanned with very little

attention paid to zoning and the provision of communal sites and services such as electricity,

water and sewage treatment/disposal. The problem has been aggravated by constant migration

from the rural areas to the cities due to the civil crisis and the search for better economic

conditions, causing a rapid growth of urban slums. Much of the demand for housing is related to

population growth and accumulated unmet needs.

According to the LISGIS National Population & Housing Census 2008 Report, the total

population of Liberia in March, 2008 was reported as 3,476,608 persons (see Appendix I). The

projected growth in population is expected to double the 2008 figure by 2041 if the average

annual growth rate of 2.1 percent persists into the future. It can be said that this is a relatively

short period of time within which the provision of all public goods and facilities should also

double, if only to maintain the current standard of living and provision of services to the

population. Furthermore, if every Liberian household of average 5.5 persons were to have a

separate unit of housing out of a population of 3,476,608 persons, Liberia will need a total of

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681,687 houses. Assuming that by 2030, the countrys population would have increased by 66%

or an additional 2,294,561 persons, about 417,193 new housing units would be required. Hence,

the country needs to develop a strategy to accelerate the delivery of housing that is affordable,

meets demand and supports the countrys plan to become a middle income country by 2030. This

estimated growth in population will require that a wide range of issues be addressed including:

Affordability of Housing

Access to Flexible Home Mortgage Finance

Land Acquisition and Management Urban Decay and Unplanned Sprawl

Rural-to-Urban Migration

II. OVERVIEW OF MORTGAGE FINANCING IN LIBERIA Prior to the start of the Liberian civil war in 1990, the National Housing & Savings Bank

provided an appreciable level of mortgage financing. However, even then, the approach was to

extend mortgage loans to individuals to build their own homes. There was no linkage to the

estate development activity of the National Housing Authority which took either direct mortgage

or rental deposits from estate residents on a monthly basis rather than encouraging residents to

obtain mortgage loans and pay the NHA up front for the full selling price of the homes as a

means of accelerating the home ownership program and the generation of funding for

reinvestment. As a result, less than 1,500 houses were built by the NHA and only under the

present administration has the Government of Liberia (GoL) promoted home ownership by