A.I.D. Development Information Center

OFFICE OF HOUSING AND URBAN PROGRAMS Bureau for Private Enterprise a United States Agency for International Development a Washington, D.C. CUAID Volume 2, Number 2 August 1993

Housing Reform in Enabling the Private Market to Meet Shelter Needs in the New Independent States

Throughout the Soviet period and for most of Russia's history, land and property have been state-owned. Housing was constructed and allocated Following a devastating tidal wave in Indonesia,over 1,200 families received USAID plastic sheeting for through an inefficient state bureau­ use as roofing for emergency shelters. Most families later incorporated the sheeting into simple cracy, and consequently there has been intermediary bamboo shelters which they used while constructing more permanent houses. The final structures were built on reinforced stone a long-standing severe shortage of masonry foundations such as that shown in progress above. adequate housing. The collapse of the Soviet system of housing provision led to further decline of construction and Disaster Shelter Relief maintenance despite the urgent need Collaboration with OFDA - Preparedness, for additional housing. The flight of Mitigation, and Response ethnic Russians from Central Asia and the demobilization of Russian troops The cable from Indonesia reached the sheeting as roofing for emergency from former Soviet states has further U.S. Office of Foreign Disaster Assis­ shelters. Over 1,200 families received compounded the problem, leading the tance (OFDA) on December 14,1992. USAID sheeting at a cost of around to place housing An earthquake, reported at 6.8 on the US$55 per family compared to about on the top of its reform agenda. Richter Scale, had occurred 30 kilome­ US$500 per family for a conventional ters north of Flores Island on Decem­ tent. The U.S.-produced sheeting was Privatization: A First Step ber 12. The earthquake precipitated a also used on about 275 temporary Toward a Free Market massive tidal wave which rolled schools, health centers, and commu­ across the island's largest city killing nity facilities. USAID technical assistance, through an estimated 2,500 persons and the Housing Sector Reform Project, has damaging or destroying 80 percent of Advisors Placed in World's Most emphasized the benefits of a private the buildings. Requests for assistance Vulnerable Regions market as the most efficient way to included plastic sheeting to shelter improve the quantity and quality of homeless survivors. The Office of Housing and Urban available housing in Russia. The Law David Hollister, USAID's regional Programs and OFDA have collabo­ on Federal Housing Policy passed by disaster shelter advisor, was dis­ rated on the shelter problems resulting the Supreme Soviet in December 1992 patched from Bangkok to Flores to from disasters for a number of years. legalized private property ownership assess the situation and train local Since 1990, a unique memorandum NIS continued on page II. responders in the use of plastic DISASTER continued on page 10. 'Fromthe 'Director Personnel Update As I write, the Agency.'s reorganiza­ Atwood Brings New Vision to tion process otnes ayo the Agency; Calls for Teamwork you hav e seen the draft reorg-aniza­ tion plan1 putf out by the Adminis­ TIhere have been trator in August. J. Brian racy in transitional societies around the individuals many responses fromn Atwood world and achieved notable success in and weCUnder­ anld organizations, was sworn Chile, Nicaragua, Namibia, Pakistan, will stand that the Admninistrator in on May Panama, the Philippines, and the review these before announcing the 10 as nations of Eastern Europe and the final plan, in Septemnber. We were Adminis­ former Soviet Union. was able pleased that MIr. Atwood trator of the Atwood began his federal govern­ us onl to spend an hour with U.S. ment career at the National Security Ill impressed Auguslt 16. We were Agency for Agency in 1964, and entered the w.ith Isl candor and relaxed, open Interna­ Foreign Service in 1966. In 1972, he ito excellent stvie and look forward tional became a legislative assistant for leadership. Development. Atwood brings a new foreign policy and defense on the staff There appears to bie a high vision and sense of purpose to the of Senator Thomas Eagleton. He that the Off ice degree of probability Agency, backed by 30 years of in­ returned to the State Department five of I ousing and Urban Programis volvement in national and global years later as deputy assistant secretary will end uip in the niew Bureau for affairs from both inside and outside of for congressional relations, and was Global Programs, Field Support the government. In a notice ad­ named assistant secretary in 1979. In Research. If this does prove to and dressed to Agency staff on July 30 1981, he became dean of professional be the cas~e, we should be very regarding USAID's ongoing process of studies and academic affairs at the much at homne with the philosophy reorganization, he promised that the Foreign Service Institute, followed by and approach of that bureau. W\e Agency would change "in abig way." one year each as a vice president with see oulrselves as a group of techni­ He stated: the International Reporting and Infor­ cal specialists whose mission is to "USAID faces a new world. The end mation Systems, and executive director sUpport thle A\gencv's field pro­ of the Cold War has presented the United of the Democratic Senatorial Campaign for world­ gramns while striving States with a new set of politicalchal­Committee under Senator Lloyd class expertise in and cutting-ed ,ge lenges that aredevelopmental in nature: Bentsen. understanding of urban programns. overpopulation,environmentaldegrada­Atwood was born in Wareham, In thle mneantimle, we have a tion, endemic poverty. These arethe new Massachusetts in 1942. He received a a, we great flurry of activity strategicthreats,and they imperilour bachelor of arts degree in history and the authorizAation of this comeplete nationas much as Soviet missilesever government from Boston University in programn. MaInY of our field year's did." 1964 and did graduate work in public offices w\ill oblig ate hunds in The United States hasan obligationto administration at The American Uni­ wev complete the process A\ugust as renderassistance,and USAID is the best versity. He is married to Susan J. Of seCur-ing thle neeled reserv es and instrument to provide it. This is an Atwood and has two children, John Notifications. Congressional historicopportunityfor ournation and for and Deborah. The nex\t issue of The Urplun each of us. But if we areto effect change, anl opportu­ Report should provide we must be organizedto deliver the thle chalnges in1More nity to discuss trainingandsupport that so many people detail. In an urbanizing world, throughout the world need and desire. programs will be important urban This will requireteamwork as never The Urban Report,a publication ofUSAID's ito economnik grow.th, the environl­ Office ofHousing and Urban Programs, is before. It will demand ourbest as indi­publishedby the Washington Office. Read­ ment, democracy, and poplaLtion viduals andas an agency." ers are encouraged to submit stories, pic­ and health. tures, letters, and ideas to U.S. Agency for Before joining the Clinton adminis­ International Development, Office of tration, Atwood had been president of Housing and Urban Programs,Room 401, the National Democratic Institute for SA-2, Washington, D.C. since 1985. The 20523-0214,Attn:Editor/The International Affairs Urban Report. ISMD organization, affiliated with the Democratic Party, promotes democ­

2 m The Urban Report a August 1993 USAID Office of Housing and Urban Programs Meeting to Meet the Human Settlements Challenge Mike Lippe Leads U.S. Delegation to 1

F> The growth of urban are pent 4 u4 nngement for the first two opportunities as well as hens to d f te next century. development in indur and developing countries.. tie qj* th didt f Progress locus of a great part e no activity and GDP of mos cur U. alion and delegations Cities are essentialt i fmtr or donors stressed the welfare and produ evca cit fr II to focus on signifi­ people in all countre. d u y i r g international under­ growth can also dr es dino Iter conditions (particu­ overburden infrastru l*loping world) and overwhelm mana tnbti finding workable lenge of managing ur a we soluti on relevant, accurate not only confronts id u ons infor o. An important instrument but has dramatic region n for ch information is the implications as well > e I iicators Program, an Elizabeth Dowdeswell, e a anaged by the World Bank Charge of the U.N. Centre fo Sand supported by several Settlements (Habita t), stated i her mronors including USAID. opening remarks at the recent U.S. Delegation helped to place Session of the U.N. Commission on lguage in the final resolution of the Human Settlements (UNCHS): onmmission meeting, providing for a "(the) challengeto achievesustainable forum for NGOs, private and public development...will in large measure be a scheduledio be held in Isabul in associations, and other relevant groups human settlements challenge. It is within June 1996. Habitat II will mark the to run parallel to Habitat II.It sug­ human settlements where the social, 20th anniversary of the Vancouver gested that a parallel trade show economic,and environmentaltasks of Habitat Conference. The Conference would provide an attractive and useful sustainabledevelopment combine to will review national progress in the forum for private sector groups to demonstratetheirinterdependence." sector since Vancouver, including demonstrate state-of-the-art technolo­ The 14th Session of the Commis­ responses to the GlobalShelter gies and equipment for improved sion met in Nairobi, Kenya in late Strategy to the Year 2000, and set management of cities and urban April to "chart a new course and a strategies and plans for shelter and environments. new agenda for sustainable The Office of Housing and human settlements develop­ Urban Programs will work ment in the 21st Century." with the U.S. Department of Mike Lippe, Deputy Director Housing and Urban Develop­ of USAID's Office of Housing ment (HUD) and other U.S. and Urban Programs headed government agencies to the U.S. Delegation to the ensure that the United States meeting. The Office has been takes a leadership role in the the U.S. governments point preparations for Habitat II. of contact with Habitat since SandraSmithey contributedto the organization's creation, this article. and has played a major role in UNCHS and Habitat activities Amonggthe U.S. delegates to the 14th Session of the Commission on for the past 17 years. HumanSetftements are (from left) Lindsay Elmendorf, Howard Sumka, Nestor Weigand, Hugh Mields, U.S. Delegation Head Mike Lippe, Kris Atchleyy,and Jack Howley.

USAID Office of Housing and Urban Programs August 1993 a The Urban Report a 3 Closing the Housing Gap: A 30-Year Commitment Latin America Credits USA ID for Help in Building Sustainable Improvements in Shelter Delive y

For the past 30 years, USAID's Office of Housing and Urban Programs has worked in Latin America to help Peter Kimm Honored in improve the housing policies and Costa Rica service delivery systems for lower income families. The Office first In recognition of USAII's started in Latin America to assist work over the past 30 years in countries in organizing credit systems Latin America, the Costa Rican from which low income families could Ministry of Housing and borrow money for mortgages. USAID's Human Settlements, along efforts in the region enabled the with the Inter-American emergence of state and local finance Housing Union (UNIAPRAVI) companies which have since provided and shelter finance institutions home mortgages for low-income in Latin America, honored the families and helped local builders and Peter Kimm (above) making new friends in Costa Director of USAIYs Office of developers get started. Rica in 1986, and (below) addressing the XXXI Housing and Urban Programs. InterAmerican Housing Conference dedicated to The XXXI InterAmerican him in recognition of his contributions to world­ Housing Conference was Costa Rica Reduces Shortfall wide shelter for the poor­ dedicated to Peter Kimm for Costa Rica is one of several countries his work in the region in demonstrating dramatic results from association opened in 1959 under a designing financial systems USAID's 30-year commitment to the sponsorship that combined govern­ which meet the housing needs region. With technical and capital ment and private industry. of lower income families. assistance from USAID, Costa Rica has Today Peru has a savings and loan Kimm was distinguished for reduced its housing shortfall for the institution that is committed to developing new initiatives, first time in the country's history. With helping low-income families accumu­ redefining programs, and a total investment of about US$175 late savings and acquire long-term structuring new approaches to million, the Costa Rican economy financing for the purchase and im­ the problems of worldwide provided 24,587 new housing units provement of their homes. shelter for during 1992, outpacing the population's the poor. rising demand for shelter. Regional Cooperation Under his The program began in 1964 when leadership, The Central American USAID assisted Costa Rica in creating the Office of Housing and Human the Inter-American Housing Union to Housing and promote the development of housing Settlements Council was Urban launched in August 1992 by finance. In 1991, USAID helped the Program the President of Nicaragua, Government of Costa Rica set up its has placed Violeta Chamorro. This new National Housing Finance System, great impor­ finance company was set up which in turn launched a national tance on to coordinate and promote campaign encouraging Costa Ricans to activities the integration of national set aside money for housing. which not only finance pro­ and regional shelter systems. Because grams and pilot projects, but of USAID's involvement in the Peru Pursues S&L System also influence policy and housing sector in Latin America, 23 develop institutions, resulting to the 1960s, no organized credit Central and South America countries Prior in dramatic sustainable America served the agreed to cooperate at the highest system in Latin improvement in the quality of housing needs of low-income families. levels to jointly address housing needs housing and service delivery One of USAID's most significant and to support the related technical systems in the region. programs was to help Peru launch its institutions. savings and loan system. The first Jule DiNennacontributedto this article.

4 a The Urban Report w August 1993 USAID Office of Housing and Urban Programs SEEM! Close Up

* New Urban Environmental * Mobilizing Local Resources * Privatization of Municipal Management Course for Shelter Upgrading in Services and Local Community Established in Asia South Africa Participation in West Africa A new masters degree program in Through a US$4.4 million grant to A regional conference on privatization Urban Environmental Management securitize construction finance, USAID of municipal services and local has been established at the Asian has mobilized US$26.4 million in local community participation took place in Institute of Technology (AIT). The currency to provide as many as 17,853 Abidjan, C~te d'lvoire in mid-May. Regional Housing and Urban Devel­ new home sites in five urban areas in The conference assembled 90 partici­ opment Office for Bangkok (RHUDO/ South Africa. The grant was provided pants from six African countries to Bangkok) helped to develop this new through USAIDs Shelter and Urban discuss ways of improving local-level field of study in response to needs Development Support Project in management by the privatization of articulated by the 1992 United Nations Pretoria. This project has made municipal services and through the Conference on Environment and enormous strides in assisting commu­ incorporation of local community Development (UNCED) held in Rio de nity-based financial institutions and participation in service delivery. The Janeiro, and the September 1992 joint facilitating policy dialogue to support working groups called for action in RHUDO/Bangkok-AIT conference on the improvement, production, and such major areas as the reinforcement the role of the city in environmental black ownership of affordable hous­ of decentralization at the municipal management held in Bangkok. Both mg. level, the strengthening of local gave recognition to new professional governments' financial autonomy and activities in urban environmental human resource capacity, and a clear management. AIT's new masters political commitment from both program will prepare professionals to central and municipal authorities to deal with the environmental problems choose private management for associated with rapid urbanization. municipal services.

* Decentralization Enhances * Advancing Democratic Democracy in Central America Initiatives in South America Approximately 85 Central American A new local government and munici­ political figures including pal development project was cabinet members, congress­ funded in June to be man­ men, municipal officials, and aged by the Regional Hous­ technical experts convened in Trainigas VitalDeiekpnwxt Tool ing and Urban Development Tegucigalpa, Honduras in Office for South America. May. The meetings were held he Washington office of USAID's Office of Activities supporting this to discuss the importance of HOu sing and Urban Programs (PREM) held atrai ring program will be: decentralizing government to wor khop from June 8-11 to promote the greater i pa 1) the development of a the local level as a means of ofrtr mining as acost-effective Instrument In policy framework dialogue at strengthening participatory essing the criticalIssues of shelter finance, the national level to encour­ democracy, and to agree on m icipal management, and urban environment age the devolution of broader actions for fortifying decen- This workshop brought together regional trainIng authority and responsibilities tralization processes in the era, PREIH staff, and representatives from tha to local governments; and region. The Regional Office Unihed Nations and the World Bank to exchange Ii"Ac 2) the strengthening of for Housing and Urban and share experiences on the use of training to local government managerial Programs in Central America On nce essential skillsIn host countries. The capabilities to respond to (RHUDO/CA) disseminated gue between the regional officers resulted In citizen needs, and the promo­ key components of its Local I mation exchanges that will improve the desigig tion of citizen participation in Government Regional and Increase the efficiency of new training strae lts local decision-making in Outreach Strategy project. a rng their field offices. selected communities. red above are particiants (from left) Nicole Pitter-Path Heister, Barbara Foster, John Fisher, and Julie Robisc

USAID Office of Housing and Urban Programs August 1993 m The UrbanReport 01 5 News from the Regions

Africa components: 1)the operating environ­ ment of the capital market, 2) the devel­ USAID supports several efforts which opment of a debt market with special promote multi-party democracy in emphasis on infrastructure financing, Africa. The Urban and Infrastructure and 3) capital market operations re­ Division of the Regional Economic search. In support of the FIRE project, Development Support Office for East the first tranche of RHUDO/Bangkok's and Southern Africa (REDSO/ESA) is US$125 million Housing Guaranty loan well-positioned to take a leading role Officiating at the inauguration ceremony of was authorized in August. in injecting a local government per­ Aboisso's market which was built with help from In addition, a new RHUDO office spective into such projects. USAID are (from left) the prefectforthe region, the was approved for New Delhi, Earl Kenya and Malawi. Based on many Ministerof Interior,American Ambassadorto Cbte Kessler moved from RHUDO/Bangkok dIvoire Hume Horan, and the Ministerof Urbanism to be Director of RHUDO/New Delhi, years of working with local authorities and Construction. Ambassador Horan is seen and training officials, REDSO/ESA again below adjusting his ceremonial kente after and support positions are now being will be contributing to a USAID/Kenya being made a chief in Aboisso. created. project design. In Malawi, REDSO/ Pakistan. New housing finance ESA discussed using its local govern­ Asia companies continue to be formed in ment training project to train council­ Pakistan largely due to the Shelter ors and senior staff in the operation of The Regional Housing and Urban Resource Mobilization Program. local governments in a multi-party Development Office in Bangkok Mongolia. Early this year, a group environment. (RHUDO/Bangkok), together with the from the State Commission for Privatiza­ COte d'lvoire. The Regional Eco­ Asian Institute of Technology (AM, tion in Mongolia received training in nomic and Development Support are organizing a review of the draft Washington, D.C. and Boston University Office for West and Central Africa curriculum of the jointly developed as part of the RHUDO/Bangkok-man­ (REDSO/WCA) continues to focus on Urban Environmental Management aged housing privatization project in tha issues of solid waste management. The Program (UEMP). country. training component of the Municipal The AIT-Asian Disaster Prepared­ Indonesia. A new US$125 million Development Support Project is ness Center (ADPC) Resident Advisor Housing Guaranty program for urban formulating a training module for C6te is assisting USAID/Nepal in prepar­ environmental infrastructure in Indone­ d'Ivoire and elsewhere in the region to ing a disaster mitigation training sia was authorized in July. This policy­ increase the amount of solid waste program. based program will both finance shelter collected in participating communes, Thailand. The first delegation of related environmental infrastructure and and to leave behind the training local officials under RHUDO/ assist the Government of Indonesia to capacity to replicate the activity. Bangkok's Municipal Twinning adopt an enabling framework for inte­ REDSO/WCA is proced­ Project in Thailand visited Knoxville, grating urban environmental manage­ ing through the following six L Tennessee in May. ment within a system of improved, phases of a training initiative: Sri Lanka. A new five-year decentralized municipal finance and selecting towns and obtain­ US$30 million Housing planning. ing signed pledges of sup­ Guaranty project is being Philippines. An evaluation has been port from mayors, training of designed for Sri Lanka as undertaken of the Community Mortgage trainers, carrying out the capital component of Program, which provides security of baseline solid waste studies USAID/Colombo's Promo­ tenure, services, and home improvement in selected towns, training tion of Private Infrastruc­ loans to squatters and the homeless. public works department ture Project (PPI). The USAID-supported success­ managers, tailoring India. USAID/New sharing meetings of Philippine city community-based Delhi and RHUDO/New mayors continue. The meeting at intervention programs for Delhi are designing a Financial Olangapo City was considered highly each town, following up and Institutions' Reform and successful, with 42 of the 60 mayors on reinforcing the training activities, Expansion (FIRE) Project. The hand to consider innovations in garbage and assessing impact. project will focus on three collection and traffic management.

6 m The Urban Report m August 1993 USAID Office of Housing and Urban Programs Caribbean Central America the incorporation of the National Savings Bank into the Housing A two-person team from the U.S. The Regional Housing and Urban Guaranty program. Environmental Protection Agency Development Office for Central Honduras. LOGROS staff sup­ visited Jamaica in early Spring in America (RHUDO/CA), under its ported the Honduran Municipal response to a Regional Housing and Local Government Regional Outreach Development Project by helping to Urban Development Office for the Strategy (LOGROS) project sponsored establish a municipal foundation to Caribbean (RHUDO/CAR) proposal an exchange of municipal association supply municipalities with technical which focused on the need for local leaders with their U.S. counterparts in services, as well as by giving technical capability to manage chemical hazards Washington, D.C. and Phoenix, assistance to the national Municipal on the island. During the Association and assisting visit, the team met with with an agreement with representatives from both il private universities to the public and private provide training to sector to develop a greater municipalities. awareness of the existing El Salvador and problems. A program of Nicaragua. Through technical assistance and LOGROS, RHUDO/CA is training will be developed assisting the Missions of to assist the Government El Salvador and Nicara­ ofJamaica, industrial and gua in developing na­ community entities to tional decentralization improve the quality of strategies that will set the their industrial and stage for autonomy for environmental disaster their respective municipal emergency preparedness. sectors. Both countries This activity is significant Inzory, Pola nd, a USAID-funded advisor helped an existing housing are embarking on bilateral as it represents co-op through the first the complica ted process of permitting, zoning, construction (in pro ress above), municipal sector projects attempt by the govern- and financing of owner-occupied housing, which will result in the co mpletion of 25 with RHUDO/CA's ment, private sector units by September, 1993. technical assistance. leaders, and community organizations Arizona this Spring. Guatemala and Costa Rica. to address the issue of chemical In the first quarter of FY93 the LOGROS has been involved in meet­ hazards in a systematic manner. Central American Bank for Economic ings and discussions with sector The Urban Institute conducted a Integration, under the Central Ameri­ leaders on how to achieve important comparative study of two urban fringe can Housing and Urban Development policy changes such as the transfer of areas in Jamaica, Montego Bay and Program, presented 1,767 eligible property tax to local government, and Negril, where there has been rapid mortgages valued at US$5.6 million the reform of electoral laws to increase immigration and squatter settlement from the Honduras and Guatemala community involvement with local expansion. The study will analyze the subprograms. RHUDO/CA and leadership. nature and extent of the squatting CABEI are also negotiating the com­ phenomenon, and will form part of a mitment of US$10 million in Honduras Eastern Europe systematic database on informal and US$6 million in Guatemala to fund shelter sector patterns in Jamaica. urban upgrading activities involving Poland. Progress continues on a RHUDO/CAR consultants will local governments. US$25 million USAID Housing examine squatter settlements in Panama. A Housing Guaranty Guaranty program in Poland. Condi­ Montego Bay and Spanish Town in private sector loan was amended to tions precedent for lending of a first order to develop adequate public include the selection of a Panamanian tranche of Housing Guaranty funds policies and standards for sewage Bank to administer the program. Low were met and a borrowing took place facilities in low income residential cost housing production will be in June. Conditions precedent were communities. accelerated by this move as well as by met for World Bank and EBRD loans.

USAID Office of Housing and Urban Programs August 1993 N The Urban Report U 7 A local government strategy was Near East and North Africa began delivering lots to beneficiaries finalized and technical assistance this Spring. An additional 10,000 missions will be initiated in six The Project Identification Document sites will be identified for implemen­ municipalities; Gydnia, Gdansk, (PID) for US$110 million Urban tation this year. Warsaw, Poznan, Lublin, and Infrastructure, Land Development, Jordan. The Housing Guaranty Szczecin. and Financing Project in Morocco was loan for Jordan under the HG-004 in Hungary. Four housing finance completed and approved by the Near the amount of US$15 million dollars experts are providing technical East Bureau in March. The USAID/ was approved by the Near East assistance to the Govern­ Bureau, and was signed ment of Hungary on the in May. design of a mortgage Morocco. RHUDO/ finance system. Work is NENA in collaboration also being done on the with Morocco's Ministry final design of a Housing of Interior, sponsored a Guaranty program in three-day seminar on Hungary. The Urban Environment: Czech Republic. The InnovativeMunicipal final design of a munici­ Responses in Marrakesh pal infrastructure finance in May. The mayor of system is being devel­ Raleigh, North Carolina oped and work is con­ participated along with tinuing on a Housing some 55 local elected Guaranty program in the officials, and representa­ Czech Republic. Technical RHUDO/NE NA Director David Painter (right) talks with Robert Don ovan (middle), tives of national govern­ waste, and with Douglas Watson, city mana ger Auburn, assistance is also being U.S. expert' on solid of ment agrncies, environ­ Alabama, du ring the RHUDO-sponsored regional seminar on urba n environment mental organizations, provided to the City of held in Mai kesh, Morocco in May. Liberec in devising a and the private sector. strategy for housing privatization and Tunisia PID for the US$50 million The Near East Bureau requested management. Private Participation in Environmental that the Office of Housing and Urban Slovak Republic. Slovakia is Services Program was approved by Programs proceedwith the US$15 concentrating on development of a the Near East Bureau in April. million borrowing under HG-002 municipal infrastructure finance Tunisia. RHUDO/NENA Program. system. In response to requests from launched its US$1.8 million three-year the mayors of Banska Bystrica and USAID/Tunisia Local Government New Independent States Trencin, assistance is being provided Support Program which will concen­ to both municipalities in devising a trate on promoting public participa­ Russia. USAID is providing US$2 strategy for improvement and exten­ tion in municipal investment decisions million to the World Bank to acceler­ sion of the city's sanitation system. and improving the accountability and ate the appraisal of a US$400 million Romania. Two housing officers capability of municipal governments. dollar housing loan to the Russian participated in a joint World Bank- The program was approved by the Federation. USAID resources and USAID mission to Romania to provide Bureau for support from its US$18 expertise will allow the appraisal a preliminary assessment of the million Democratic Institutions originally scheduled for 1996 to be conditions of local governments in Support Program. completed by June of 1994. An addi­ Romania. USAID established a training tional US$8 million of USAID funds Bulgaria. The municipalities of program in Municipal Management will be dedicated to a parallel techni­ Blagoevgrad, Stara Zagora, Haskovo, for the Directorate General of Local cal assistance program continuing and Ruse are being assisted to increase Government, Ministry of Interior. through loan disbursement. The access to land for private development Algeria. The Government of cooperative project responds to the and improve land database manage­ Algeria has adopted serviced sites as request by the Government of Russia ment. A seminar was held in May to one of its priority responses to its and the Group of Seven to provide introduce private developers, contrac­ shelter crisis, a concept introduced urgent international assistance in the tors and bankers in Bulgaria to the only last year through RHUDO/ Russian housing sector. The objective principles, requirements and tech­ NENA technical assistance and of the proposed housing loan will be niques of construction lending. training. The government has estab­ to increase the effectiveness of the lished a pilot site with 2,200 plots that housing sector through the encourage-

8 m The UrbanReport N August 1993 USAID Office of Housing and Urban Programs ment of market-based reforms. To South America Ecuador. A major Housing Guar­ achieve this, measures such as to resusci­ The anty program in Ecuador reducing the role ofgovernment in Regional Housing and Urban tate the country's housing finance the financing, Development Office for South production, distribu­ restarted. USAID/ America (RHUDO/SA) system will be tion, and management of housing, received Ecuador will add a US$600,000 and expanding the role of the private approval of its Regional Democratic technical assistance grant to help sector in various aspects Initiatives Project in March. This of housing implement the National Shelter delivery three-year US$2 million program will will be examined. Service Delivery System focus on strengthening Program. At the Vancouver Summit in local govern­ RHUDO/SA continues its technical April, in response to a direct appeal ment, decentralizing authority to assistance for the institutional municipalities, from the Government of Russia, and expanding com­ strengthening of the Ecuadoran munity participation President Clinton announced a US$6 in local decision­ National Association making. The program of Municipal million project to construct 450 will operate in Water Authorities (ANEMAPA). This housing units for retiring Paraguay, Chile, and regionally Russian in program will enable ANEMAPA to officers. other South American countries. The severe housing shortage recovery, reputable ac­ USAID approved bring cost has been repeatedly cited by the the Cooperative counting systems, and planning to the Housing Russian military as one of the most Foundation's Regional other waste and sanitation companies. Cooperative serious obstacles to its demobilization Housing Program in Chile. Technical assistance is South America. In August, efforts. Following a May assessment Peace helping to identify sites for a wastewa­ mission which included meetings Corps volunteers worked with hous­ ter environmental demonstration with ing cooperatives in Ecuador and government and private sector project and an urban revitalization officials,a visit Paraguay to enable low-income to 30 possible project project in Santiago, and to conduct sites and the review of more than 30 families to secure the financing and numerous studies. technical and housing construction proposals, a institutional support Technical assistance to the Govern­ needed to USAID-led team is now negotiating house themselves. ment of Chile led to the introduction memoranda The Housing and Lifelines Insur­ of understanding with of a bill to Congress to extensively local municipalities and construction ance Project, a joint disaster assistance reform capital markets in Chile. One program between contracts with Russian firms. Con­ RHUDO/SA, of the components of the bill is to Partners tracts were initially signed for more of the Americas, and OFDA, establish a framework for pension is designed to use insurance than 300 houses in Novosibirsk, mecha­ funds to invest in the securitization of and Nizhny nisms to combat the effects of natural Novgorod; modest- and low-income housing. additional sites in Ekaterinburg, Tula, disasters such as earthquakes on Paraguay. Community Consulting and Lipetsk brought the total to more housing and lifelines. International's two-year technical Under RHUDO/SA than 450 by August. In addition to and OFDA assistance program with CREDICOOP housing construction, the initiative auspices, a group of Ecuadoran and Peace Corps Paraguay finished engineers and representatives will provide job retraining for 450 from earlier this year. Because of the banking demobilized Russian officers. and insurance sectors, the success of the program in Quito's municipal government, Ukraine. Seven senior Ukrainian and improve­ the Ecuadoran providing home national and local government Civil Defense went to ment loans to low-income officials arrived in New York on July California to study earthquake families through credit preparedness 5 for a nine-day observational study activities which unions, the Government combine public tour on the functioning of private and private of Paraguay increased land and real estate markets, and sector efforts. local Bolivia. RHUDO/SA program lending government financing of resources dramatically. physical infrastructure and urban began dosing out a major In addition Housing to helping development efforts. Following visits Guaranty program strengthen the credit in New in Bolivia this year. To date, York and Boston, the delega­ unions, this program tion spent over 4,150 low-income four days in Washington, has to date helped D.C. meeting with members of families have received loans under the approximately 1,000 Congress, the World Bank, and select program. Techni­ low-income cal assistance under people get government groups including the home improvement loans. USAID's Office of Housing and program helped restructure Urban Programs. the housing finance sector to increase resources for low­ income shelter.

USAID Office of Housing and Urban Pro, August 1993 * The UrbanReport s 9 DISASTER from page 1. and human suffering. Recent U.S. of understanding between the two experience with hurricanes Andrew member offices of USAID has established and Hugo, the Loma Prieta earth­ a program of action to jointly prepare quake in California, and flooding for, mitigate, and respond to the effects along the Mississippi and Missouri of disasters on shelter and urban areas. Rivers has dramatically demonstrated Disaster advisors are in place in this point. Bangkok, Thailand; Kingston, Jamaica; Hurricane Gilbert in September and Quito, Ecuador to work with 1988 caused damage in Jamaica in USAID missions in the world's most excess of I billion Jamaican dollars, vulnerable geographic regions. The and completely reversed the antici­ Office is beginning to incorporate pated five percent growth rate the disaster prevention and mitigation country was expected to achieve in strategies in new Housing Guaranty that year. In Indonesia, the US$150 projects for developing housing and million reconstruction program for the urban infrastructure. Flores Island disaster alone exceeds the US$125 million total value of the Mitigating Circumstances present USAID Environmental Infrastructure Housing Guaranty Reduce Risk in the Caribbean Plastic sheeting supplied by USAID in response to the Flores Island disaster was used as roofing for program which the Office of Housing In the Caribbean, a disaster mitigation this temporary school. and Urban Programs will undertake project will address problems in the with Indonesia over the next six years. siting and construction of the built Pre-emptive Measures Make When one event can wipe out years environment, develop the insurance Economic Sense of development planning and invest­ industry's capacity to assess ment, the value of any pre-emptory catastrophic risk and base premiums The stakes are high. Without strategies efforts toward preparation, mitigation on the level of risk, increase the for disaster management and mitiga­ and response becomes overwhelm­ availability of information to identify tion, increasing urbanization and the ingly clear. risk prone areas, and train artisans and concentration of investment in shelter Steven Sharp contributedto this article. builders in the technology required to and employment infrastructure in improve resistance of the built urban centers can only lead to more environment to disaster occurrences. record-breaking tallies of destruction

On March 199% heavy rains caused a landslide near the town of Cuenca Insouthern Ecuador. in a matter of minutes, the landslide, the largest in recorded history, created a 170 meter high dam (equivalent to a 16 story building) across a iver valley. Backflow waters from the locked river flooded vlag upstream, and threatened nearly Left: The Guenca river valley downstream before flooding, scattered with small land holdings and 40,000 persons and a hydroelectric houses, was one of the most v alleys of southem Ecuadorandamaortoustdestinatio; and infrastructure in the area were dam downstream were the landslide within 24 hours of the damn giving way, all homes. land, destroyed. Right: Aerial shot of flooding upstream which left 1,500 famiies homeless. dam to gie way. The Regional Housing and Urban Development Office In Quito, led by Director William Yaeger and regional disaster advisor Maria Augusta Fernandez, helped the Ecuadoran government coordinate the response to the disaster, providing shelter for displaced paeans and obtaining assistance from OFDA and the U.S. Army Corps of Englneers who advised Ecuadoran army engineers on mitigating the eventual creating and break-up of the dam and resultant flooding. A channel was excavated on the lower side of the slide to divert the waterflow and slow the pace of flooding. When the dam gave way on April 29, 45 million cubic meters of the water flowed out over the next 24 hours - 4,500 were adversely affected; 1,500 families lost everything. However, the Paute hydroelectric dam, which provides over 70 percent of Ecuador's electricity, was spared, and the towns of Cuenca and Azogues were no longer threatened.

10 a 7TheUrban Report a August 1993 USAID Office of Housing and Urban Programs Is from page 1. and gave cities authority to set rent New Publications and housing allowance policies. Reform efforts to date have focused on The structural 1992 Annual Report (English Edition), privatization - in alone over reforms being Office of Housing and Urban 800,000 units have been privatized. implemented Programs, USAID. However, despite this transfer of with ownership, large government subsi­ USAID assistance EnvironmentalPlanningfor Manado dies still exist. are vital.. . . If the andMinahasa:The PotentialEnviron­ To reduce these subsidies, USAID mental Impacts of Growthin Urban advisors in Moscow are working with scarcity of housing Populations,Tourism, and industry, the Institute for Housing Economy continues The Research Triangle Institute. and the city's Department of Commu­ unabated, nal Services on the design and imple­ it could Review of Ongoing USAID Shelter mentation of a housing allowance lead to widespread SectorActivities in Morocco,Mona program which would allow the city social unrest and Serageldin, Driss Benjeloun to raise rents while protecting low­ Francoise Navez Bouchanine, income households. USAID is collabo­ serious Abdah Lehzam and Mohamed rating with the State Committee of consequences for Salahedine, ICMA. Construction and Architecture (GOS- STROI) and the Ministry of Finance to the Russian The Role of the City in Environmental establish the legal framework at the government and Management,J. David Foster, federal level. There has been very RHUDO/Asia. high-level interest in the program; the reform process. USAID advisors were recently asked Urban DevelopmentSector Review - to prepare a summary report of the Philippines,cosponsored by housing allowance program for Mosbusinessbank to initiate market­ HUDCC, PADCO, and USAID/ President Yeltsin. oriented mortgage lending. Advisors Philippines. are also working closely with Stimulating Private Mortgage Sberbank, the state savings bank UrbanInfrastructureand the Urban Lending reconstituted as a commercial bank, Poor:Measurementand Analysis for which now provides loans for private Policy, Planning,andProjectImplemen­ While it is hoped that privatization construction. tation,USAID/Jakarta, Office of will lead to an improvement in the At the request of the First Deputy Private Enterprise Development, quality of existing housing, the Minister of Finance, advisors prepared prepared by Peter Gardinier and shortages can only be alleviated a paper outlining the possible struc­ Mayling-Dey Gerdiner, IHS. through new construction. The ture of the Russian housing finance Government of Russia has legalized system and the appropriate govern­ Women and theMunicipality A New private access to land, however the ment role in that system. Specialists Community Presencein Local Develop­ pool of eligible consumers is limited worked with Sberbank and Mosbusi­ ment in Latin America, IULA/ by the lack of private mortgage nessbank to establish guidelines for CELCADEL, RHUDO/SA, and lending. Average-income Russian the pricing of mortgage loans through WID/USAID. families have no means to finance the determination of the cost of funds, purchase ofa new home. Without the credit risk, administrative costs, and impetus of consumer demand, new profits. Several seminars and work­ Summaries of recent publications of housing construction has stagnated. shops were conducted for bankers on the Office of Housing and Urban To meet this need and in response indexed mortgage instruments as well Programs are available in Abstracts,a to Russian government requests, as loan underwriting, origination, and semi-annual publication. Copies of Abstracts and information USAID is advising Russia on servicing. A successful Mosbusiness­ on the ordering the documents listed design of a housing bank "model" could be replicated above finance system. can be obtained from: USAID Office Technical assistance throughout the country, making is being provided of Housing and Urban Programs, on legal, housing finance widely available and operational, and policy Room 401, SA-2, Washington, D.C. issues. In November, stimulating the construction market an agreement 20523-0214, attn: Communications. was signed between USAID and across Russia. NIS continuedon page 12.

USAID Office of Housing and Urban Programs August 1993m The Urban Report a 11 NIS from page 11. Calendar of Events Laying the Groundwork for Affordable Financing The volatile political and economic climate in Russia continues to hinder August 11-13 - 4th Annual Rinker International Conference on Building Construc­ the reform process. Until recently, tion, Affordable Housing: Presentand Future(hosted by the Shimberg Center for hyperinflation and economic uncer- Affordable Housing and the College of Architecture at the University of Florida); tainty virtually prohibited the housing Gainesville, Florida. Robert Stroh, 904-392-5965. market, and the free market in general, from functioning effectively. USAID August 16-September 3 - Russian language version of the Housing Finance assistance in this area has therefore Training Program (sponsored by the University of Pennsylvania's Fels Center of concentrated on laying the groundwork Government). for the housing finance system. With the framework of a modern private August 18-20 - Regional seminar/workshop on Women and Local Development;The banking system in place, affordable Casesof Boliviaand Argentina (co-sponsored by RHUDO/SA, R&D/WID, and mortgage financing can be made IULA/CELCADEL); La Paz, Bolivia. Lucrecia Tola, 593-2-521-100. available as the economy stabilizes. The structural reforms being imple- August 19-20 - VIII InstitutionalNetwork Meeting on Access to Urbanland by the mented with USAID assistance are vital Informal Sector(co-sponsored by RHUDO/SA and CII-Viviendas); Santo Domingo, to the unique situation in Russia. If Dominican Republic. Isabel Santillan, 593-2-521-100. due the scarcity of housing continues unabated, it could lead to widespread social unrest and serious consequences September 7-10 - Conference on Housing Policyin Europein the 1990s: Transforma- for the Russian government and the tion in the East;Transferencefrom the West (sponsored by ENHR); Budapest, Hun- reform process. Essential supply- and gary. Jozsef Hegedus, 36-1-137-9041. demand-side changes in the housing sector will enable the private sector to October 4 - World HABITAT Day focusing on Women and Shelter Development. meet this need and will also serve as a Sandra Smithey, 202-663-2530. very visible, positive outcome of the reforms being undertaken by the October - III MunicipalDevelopment Seminar/Workshop(co-sponsored by RHUDO/ Russian government. SA, USAID/Paraguay, and ICMA), Paraguay. Marino Henao, 593-2-521-100. Ellen Giordanoand Earle Prattcontributed to this article.

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