Chile low income cooperative housing program

Final PES covers the period 6/75-4/81 and is based on document review and discussions with public and private housing officials. A total of 12,846 of 15,500 targeted mortgages and home improvement loans were channeled to cooperatives and their members by the Ministry of Housing"s (MINVU) Servicios de Vivienda (SERVIUS); the Savings and Loan (S&L) System (SINAP); and a rural co-op, (IFICOOP). While SERVIUS and SINAP together furnished 11,608 mortgages to urban housing co-ops, IFICOOP produced only 1,238 of 3,000 planned mortgages and loans for rural credit unions -- due to its inability to collateralize its obligation with the Central Bank, rising unit costs, and a tendency to favor more expensive units. Nonetheless, the project achieved its aims -- 6,500 rural low-income units were built and the Chilean public and private sectors generated financing for co-ops at the level planned. The project also revitalized a stagnating construction sector and demonstrated the strong demand for low-income housing in Chile and the role of cooperatives in delivering such housing. Almost 30% of the project beneficiaries were women. Long-range objectives were not achieved, however, due to a new Government of Chile (GOC) housing policy which identified private commercial and development banks as the main vehicles for housing financing and construction, severely restricted the roles of S&L"s, assigned SERVIUS a more passive housing delivery role, and favored individual over collective home ownership. This policy weakened both the S&L"s and MINVU, on the one hand, and the promoters of low-income housing through co-ops such as SERVIUS, on the other hand-- the two key features of the housing system (developed with A.I.D. help over 20 years) which favored the poor. The commercial and development banks have not responded to low-income housing needs, nor have the GOC"s actions on behalf of the poor, e.g., a subsidy program, compensated for this deficiency. Co-ops are still active, but with open rather than restricted membership, and now compete with private contractors for projects generally benefiting higher-income families. It is too early to judge the effects of the GOC"s changes on the shelter sector; USAID/C should continue to monitor the situation.