Housing Sector Development Policy Loan

closed

The development objectives of the Government's housing sector program, and of the Housing Sector Development Policy Loan Project are to strengthen the institutional, regulatory, and fiscal environment for a well-functioning housing market, and for the emergence of market-based solutions to the country's housing sector constraints and needs, in addition to increasing the access of low-income, and severely disadvantaged households, to more affordable and higher quality housing. The loan would support the first objective through policy reforms and measures to modernize urban planning standards and regulations; restructure and refocus public sector housing agencies, and enterprises; and, rationalize and simplify real estate taxes and subsidies. The second objective would be supported by reforms and measures to expand urban slum upgrading, and social housing programs through market-friendly approaches, will improve the efficiency of the residential rental market, and, will expand the access of informal sector and low-income households, to market-based housing finance. However, identified risks concern coordination among the institutions involved; the pace of implementation of the slum upgrading program, and of the Public Housing Operators (OPH) restructuring, and in addition, the potential delays in the legislative reforms for the urban planning code, residential rental sector and real estate taxation, and subsidies, most importantly, the absence of land titling reform. Despite these factors, macroeconomic risks are found to be not critical to the success of reforms.