A panel discussion at the opening of the twenty-first session of the Governing Council of UN-HABITAT tackled financing affordable housing and urban infrastructure in a reformed United Nations.
A group of panelists representing the African Development Bank, the Asian Development Bank, the World Bank, the Baraka Africa Equity Fund, UNEP, and UN-HABITAT agreed past practices had failed to prioritize the housing needs of the urban poor because these were often perceived of as a high risk venture. However, there was a consensus that investing in pro-poor housing could offer genuine investment opportunities.
What was needed was to review the conventional financing models that relied on unaffordable collateral. Instead, there was a call to look into innovations that combined the best of urban planning, housing policies, and property regulation so that the poor could be helped to finance their own homes.
Speaking at the press conference immediately following the Governing Council, UN-HABITAT Executive Director, Mrs. Anna Tibaijuka, said that no single government has the capacity to provide free housing for all its citizens, yet there was a glaring market failure for financing housing for the urban poor. She said this is why UN-HABITAT was trying to act as a broker between financiers and poor urban communities in order to allow them access to funds for mortgages. The aim was to show the private sector that poor people’s housing was bankable.
Mrs. Tibaijuka argued that public and private investment, including Official Development Assistance, currently made up less than 5 percent of the estimated resources required to “improve the living conditions of at least 100 million slum dwellers by the year 2020,” and to “reduce by half the households lacking access to safe drinking water.” This is why it was necessary to find innovative ways of financing slum upgrading.
Therefore, one of the items up for discussion at this Governing Council is the need to revitalize the United Nations Habitat and Human Settlements Foundation. The aim is to try to establish a Revolving Fund Account that would seek to fill in the gap in the international architecture for financing affordable housing and related urban infrastructure.
At the same press conference, the newly elected chair of the Governing Council, Mrs. Kumari Selja, India's Minister of Housing and urban Poverty Alleviation, said the Council would have to make some tough decisions to move the Habitat Agenda forward.