Impact evaluation of housing guaranty programs in Panama

This report describes and evaluates the impact of the first two completed HG programs exemplifying this reorientation. In the Nuevo Chorillo Housing Cooperative Project, physical outputs, i.e., housing solutions, were surpassed, but considerable delinquency in loan repayments to the cooperative and the latter's lack of a working system to promote community development make replication of the project doubtful. In the slum upgrading project at San Miguelito, basic infrastructure and services were provided as planned, but major revisions were made in the type and number of low-cost housing units due to weak demand and rapidly rising costs. Evaluation of the projects' impacts on beneficiaries was extremely difficult because the program planners tended to treat physical outputs as project purposes. The most dramatic, positive impact, confirmed by beneficiary interviews, was an improved standard of living, especially in Nuevo Chorillo. It is recommended that future HG projects: (1) include short-term indicators of beneficiary impact (e.g., reduced population densities, time and labor savings, provision of basic services, cost-efficiency of solutions); (2) determine beneficiaries' housing preferences and seek their participation; (3) obtain data on specific low-income target groups as to their capacity and willingness to pay for alternative housing; (4) reliably calculate affordability through a full accounting of carrying costs and available household income; (5) seek more innovative cost reduction methods (e.g., less costly materials, lower construction standards, self-help construction with technical assistance); and (6) recognize that subsidies may be required indefinitely to ensure the accessibility of low-income housing. Finally, since inflation and program reorientation have reduced the number of jobs generated by the HG program, adjunct programs to provide jobs for unskilled laborers in other fields (e.g., light manufacturing) should be supported.