a world bank policy paper

washington, DC: The World Bank

Executive summary

Toward a new housing policy agenda

*the housing policy of the world bank in the '80s+ '90s brings some important new policy directions for the bank and his borrowers

*shift:--> advising gov. to abandon prod. of housing role and adopt an enabling role of managing the housing sector.

*policies followed the first 2 decades are not enough

The instruments of an enabling housing policy

gov encouraged to adopt policiesthat enable housing markets to work instruments (applicable in all borrowers countries):

• demand side constraints:
  • developing property rights
  • developing mortgage finance
  • rationalizing subsidies
• supply side constraints
  • providing infrastructure for residential land development
  • regulating land and housing development
  • organising the building industry
• developping institutional framework for managing the housing sector

a framework for world bank assistance

housing policy at the WB has evolved the last 20 years:

• rising interest among borrowers in the housing sector
• growing recognition of the stakes of good housing policy
• WB lending program+ policy research+ technical assistance expanded

  -80's: sites-and services and upgrading pojects --> lending to housing finance institutions

7 main lessons:

1. project succes dependent on level of overall distortions in the housing sector+ ec.
2. informal housing sector makes important contribution to the provision +improvement of housing
3. typical projects are usually to small to affect the housing sector as a whole
4. gov. diverted from regulatory reform+ creating institutions with enabling, facilitating, coordinating roles.
5. desirable shifts occured infocus of bank lending
6. rich variety of lending for housing emerged
7. past focus of WB lending on the poor in the housing sector has been important and should continue

5 principles will guide the WB future assistance

1. WB encourages gov. to play enabling role
2. WB housing assistance will have a sectoral focus instead of a project focus
3. WB housing assists counterpart institutions
4. WB will support innovative models of lending for housing
5. WB will seek greater gov. commitment to help getting rid of the housing problems

the Bank will support policy reform --> policy reform will require a country-specific approach

housing loans importance will increase

strengthening policy content of WB housing assistance will enhance housing sector perfomance in ember countries+ have beneficial consequences for the poor and urban environment+ strengthen the positive contribution of the housing sector to macro-ec. performance.