Vivienda Housing and Mortgage Corp. (“Vivienda”) has a program that makes the financing, construction and sale of affordable low cost housing for working families a sound, commercially viable and profitable business. Humanitarian real estate projects offer additonal results that make this socially responsible investing at its best. The economics of affordable low cost housing are based on the fact that demand exceeds supply, and will do so for decades to come. Vivienda's focus is on Central America and the Caribbean basin, with current projects in Costa Rica.

UN-Habitat, a United Nations agency, estimates that 3 billion people will require basic housing over the next 24 years. This means that in order to satisfy that demand 96,150 houses a day, or 4,006 houses per hour need to be built. At present there are 1 billion slum dwellers in developing countries, with new slums happening all the time. UN-Habitat estimates that 670 million people will be looking to leave slums for better housing over the next two decades. This means that some 399 million people, representing 75.8% of the population of Latin America and the Caribbean, live in urban zones and that 32% of that urban population (128 million people) lack adequate affordable housing. UN-Habitat also states that 30.8% of the population of Latin America and the Caribbean basin live in slum dwellings. UN-Habitat has a 5-point slum housing definition that offers some insight into the problem:

• A lack of durable housing to protect against extreme climate conditions
• Insufficient living space, meaning more than 3 people share the same room
• Insufficient access to safe water in sufficient amounts and at affordable rates
• Inadequate private or public toilets shared by a reasonable number of people
• No security of tenure to prevent forced evictions

In Costa Rica, the government has identified affordable low cost housing for working families as a national priority. According to the Fundación Promotora de Vivienda ("Fuprovi") some 174,556 families lived in sub-standard and slum housing in 2007. The La Nación daily newspaper ("www.nacion.com") reported on November 6, 2008 that 157,000 houses were required just to eliminate the worst slums. If one factors in another 100,000 families in sub-standard housing, then the size of the problem is obvious. These numbers show why demand exceeds supply.

The families in question are working families with employment histories and small savings. It is a common misconception that just because people live in slums they are unemployed and without resources. The problem of access to affordable low cost housing has always been one of access to finance, as most of these working families in developing countries do not have credit ratings. That means they could purchase affordable low cost homes if the opportunity was available.

The numbers for other Central and South American jurisdictions are equally staggering. For instance, Nicaragua reports that it needs 519,000 housing units, the Dominican Republic some 623,000 units, while Guatemala has over 100,000 people living in tents, not counting its slum population. Habitat for Humanity estimates that Brazil requires some 6.6 million housing units to solve its slum problems.

Affordable, low cost housing for working families has been a victim of political ineptitude and ongoing systemic problems. There is overwhelming demand, with slum dwellers tending to be employed and paying high rents to slum landlords. Despite these facts, some developers have been reluctant to build affordable low cost housing, because traditional banks are not providing financing to these potential buyers. Banks are not financing projects or home sales, because most working families in developing countries do not have credit ratings, and international lenders restrict banks from lending in the absence of credit ratings. The result is that in Latin America less than 30 per cent of houses are produced by the formal housing market.

Vivienda has identified the affordable low cost housing market as a wide open niche with few competitors. Because demand exceeds supply, many competitors end up working out joint venture relationships, as competition is simply not a factor in the economics of this opportunity. Vivienda has established strong relationships with the CIDA funded Costa Rica - Canada Rural Housing Foundation, of San José, Costa Rica, the ACENVI of Managua, Nicaragua, the RPC International Trust Foundation of San José, Costa Rica, and the National Emergency Commission of San José, Costa Rica, to name a few. Please visit our business plan page for more information.