Review of Affordable Housing Incentives

The research aimed to identify supply and demand side incentives that could be replicated in Haiti under USAID's HOME catalytic housing facility. The study focused on evaluating the outcomes of incentive programs implemented in countries supported by development finance institutions. Academic research was also reviewed to determine the impact of government policy on housing availability and affordability. The research identified several challenges facing Haiti in providing affordable housing products at scale, including extreme poverty, limited land title availability, lack of infrastructure, and high construction costs. Supply-side incentives were examined, including construction loan guarantees, revenue grants, and housing construction refinancing facilities. One example of a successful supply-side incentive is the construction loan guarantee program implemented by OPIC and the Open Society Foundation in South Africa. The program provided loan guarantees to the National Urban Reconstruction and Housing Agency, which supported 884 loans to builders for the construction of 300,000 modest homes. Another example is the revenue grant program used in the United Kingdom and South Africa. The program provides grants to developers to sell housing units at an affordable price, with the grant corresponding to the difference between the reduced price and the market price. The program has been successful in increasing housing delivery in both countries. The research also examined demand-driven incentives, including rental/homeowner voucher programs and partial mortgage guarantees/mortgage insurance. Rental/homeowner voucher programs provide assistance to low-income families to purchase a home in the private market, while partial mortgage guarantees/mortgage insurance provide financial support to homeowners to purchase or rent a home. The study concluded that supply-side incentives, such as construction loan guarantees and revenue grants, can be effective in increasing housing delivery in developing countries. Demand-driven incentives, such as rental/homeowner voucher programs, can also be effective in providing affordable housing options to low-income families.