Overview of financial and economic analysis of housing projects

Following a brief discussion of the economic, institutional, and policy dimensions of the housing sector, the authors outline steps in appraising the housing sector in a particular country and its potential influences on jobs, trade, financial markets, resource mobilization, and standard of living. The procedure for moving from sector assessment to project design (e.g., defining minimal housing standards, quantifying needs, and identifying constraints) is described next. Steps in evaluating a planned project with regard to its financial feasibility and economic value are then explained, including: (1) identifying, estimating, and disaggregating costs and funding sources; (2) estimating and comparing sales price by unit type, target households" affordable investment, and the sales price of alternative units; and (3) analyzing cash flow and project feasibility from the viewpoints of private developers, private banks, a national housing authority, and a national or local government. A final section discusses economic analysis as a tool for improving programming and policy in the housing sector. (Author abstract, modified)