1
Research proposal
HOUSING FINANCE IN LATIN AMERICA AND THE CARIBBEAN.
WHAT IS HOLDING IT BACK?
Single country study: the case of SURINAME
Context
1. Motivation for the proposed study: 1 page
The housing situation in Suriname (population 2008 est. 517,000, area ca 164,000 km²) is and has been a challenge for consecutive governments, housing institutions, and most of all, for the growing population, since Independence in 1975. Several documents[1] refer to a housing demand by about 30% of the households in Suriname since 2000. Simultaneously hundreds of houses are un-inhabited. The problem seems to be a consistent and severe mismatch: lots of housing facilities are built but are too expensive for the majority of the working population. They are built for renting them to foreigners, consultants, and other high income resident aliens in Suriname (staff of foreign companies, embassies etc), as well as to be used as Office space. Absenteeism, owners living abroad, forms an important part of the housing landscape.
Dwellings containing more than 10 persons are not uncommon, leading to severe social and economic problems, such as sexual molest of children by elders, domestic violence, and the total absencse of privacy for many. While in 1999/2000 and in 2007/2008 households spent respectively 6% and 15% on housing (and utilities) on average, it is not uncommon for individual households to spend even up to 90% of their consumption expenditure on housing (and utilities). [2] This is an unhealthy situation, which poses a threat to the productive development of the entire population.
The IDB launched a second Low Income Shelter Program, a program geared specifically towards lower income groups to enable them to built, improve or restore their dwellings. The first LISP program was successful and generated about 5000- 6000 housing solutions. Government, with the Central Bank of Suriname, introduced a bottom rate housing lending scheme in 2009, where a heavily subsidized interest rate for new constructions is charged by the banks. Still the demand is estimated at about 30,000 living spaces.
The country has one of the lowest population density ratios in the region. On top of that, several
regional (Habitat for Humanity) and international Housing organizations (from the Netherlands) and churches are willing to built homes for the lowest income groups. But they are not getting the domain-land that is required from the GOS, so they have to buy land, which immediately puts the houses built, out of the reach of the middle and lower income groups. Given the abovementioned characteristics, one is very eager to understand what is really the problem with the housing market and the housing finance market, as a subset of the housing market.
What is holding the GOS back to formulate and execute an immediate and effective housing scheme? Why is a large portion of the population living under such bad housing circumstances, while land is in abundance, building companies offer their services and credit is subsidized?
2. Data templates (Excel format ); preliminary assessment of data availability
Desk research will be the main way to go in this section.
-Central Bank Annual Reports with the interest rates on lending (all types)
-Annual reports of the mortgage finance banks and credit institutions
-Low Income shelter Program Evaluation report (LISP I)
-Low income shelter Preparation report LISP II
-Ministry of Housing Multi-annual Program for the Housing sector Final Report 2005 – 2008 (housing demand, housing stock, policies implemented and to be implemented.
-General Bureau of Statistics Household Surveys, various years (income, consumption, health care, education levels, water, telephone, electricity)
3. Strategy for collecting data, including regulatory data
Suriname is a very small open economy with a small private sector and a relatively large public sector. Collecting data and information is not expected to pose a serious challenge, because a vast amount of research has been carried out within the framework of the bi-lateral official development assistance (ODA) relations which exist between Suriname and counterparts, and other multi-lateral finance institutions.
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3.1. Reviewing reports on Housing studies and data;
3.2. Study the Publications of the General Bureau of Statistics, Household Budget
Surveys;
3.3. Research relevant publications on housings rents, prizes, challenges, locations etc.
3.2. Set up a range of interviews with banks and other (financial) institutions providing
housing loans
3.3. Interviews with Real Estate brokers and firms; research
3.4. Interviews with organizations of squatters of (private and public) land
3.5. Interviews with multi-lateral organizations for housing
3.6. Interviews with and data of Housing Corporations
3.7. Interviews with and data of the Ministries of Housing, Planning and Justice.
3.8. Interviews with other relevant stakeholders (Public Notaries)
3.9. Long term price developments; estimates of supply and demand factors for land and houses (Public notaries)
4. Description of methodologies to be used in section 3
a) Construction of a problem-tree (Hausmann, Rodrik and Velasco (2005), which seeks to prioritize the economic distortions a country should eliminate or reduce in an effort to enhance economic growth. An effort will be made to adapt and apply this approach to the housing finance market in Suriname: what are causes or determinants and what are the consequences or results of an observed situation? What are the underlying factors driving this outcome?
b) Substantiating the theory with literature, interviews with key persons and institutions.
c)
Listing van variabelen werkfile HBS2007/2008DOMAIN / domeincode / domain code
SEGM / segmentnr / segment number
SEGMPERIODE / segmentperiode / segment period
DIST / distrikt / district
RES / ressort / resort
TELBL / telblok / counting block
PANR / pointer adres / pointer address
HHNR / huishoud volgnr / household data base number
decielentotuitg / decielen gewogen totale maanduitgaven / deciles
domdecieltotuitg / decielen binnen domein gewogen totale maanduitgaven / deciles within domain weighted total monthly expenditures
decielen / decielen gewogen totale consumptieve maanduitgaven / deciles weighted total consumption monthly expenditures
domdeciel / decielen binnen domein gewogen totale consumptieve maanduitgaven / deciles within domain weighted total monthly cons exp
hhweight / wegingsfactor op huishoudniveau / weight factor on household level
hhdweightnorm / wegingsfactor op domeinniveau / weight factor on domain level
TOTWMNDEXP / hhweight gewogen totale maanduitgaven / weighted total monthly expenditures
BELASTING / hhweight gewogen uitgaven aan belasting / weighted expenditures for taxes
OVERIG NCON / hhweight gewogen uitgaven aan overig nonconsumptieve uitgaven / weighted exp to other non consumption exp
TOTWNCONMNDEXP / hhweight gewogen totale non consumptieve uitgaven / weighted total non consumption exp
totwcon / hhweight gewogen totale consumptieve uitgaven / weighted total consumption exp
TOTWCONMNDEXP / hhweight gewogen totale consumptieve uitgaven / weighted total consumtion exp
eigenmnd / hhweight gewogen eigen consumptieve uitgaven / eighted own consumtion exp
hfdgrp 01 / hhweight gewogen consumptieve uitgaven hoofdgroep 01 / weighted consumtion exp main category 1
hfdgrp 02 / hhweight gewogen consumptieve uitgaven hoofdgroep 02 / weighted consumtion exp main category 2
hfdgrp 03 / hhweight gewogen consumptieve uitgaven hoofdgroep 03 / weighted consumtion exp main category 3
hfdgrp 04 / hhweight gewogen consumptieve uitgaven hoofdgroep 04 / weighted consumtion exp main category 4
hfdgrp 05 / hhweight gewogen consumptieve uitgaven hoofdgroep 05 / weighted consumtion exp main category 5
hfdgrp 06 / hhweight gewogen consumptieve uitgaven hoofdgroep 06 / weighted consumtion exp main category 6
hfdgrp 07 / hhweight gewogen consumptieve uitgaven hoofdgroep 07 / weighted consumtion exp main category 7
hfdgrp 08 / hhweight gewogen consumptieve uitgaven hoofdgroep 08 / weighted consumtion exp main category 8
hfdgrp 09 / hhweight gewogen consumptieve uitgaven hoofdgroep 09 / weighted consumtion exp main category 9
hfdgrp 10 / hhweight gewogen consumptieve uitgaven hoofdgroep 10 / weighted consumtion exp main category 10
hfdgrp 11 / hhweight gewogen consumptieve uitgaven hoofdgroep 11 / weighted consumtion exp main category 11
hfdgrp 12 / hhweight gewogen consumptieve uitgaven hoofdgroep 12 / weighted consumtion exp main category 12
whhomv / hhweight gewogen huishoudomvang / weighted household size
hhomv / ongewogen huishoudomvang / unweighted household size
dwhhomv / hhdweightnorm gewogen huishoudomvang / weighted household size
hfdetn / etniciteit van hoofd huishouden / ethnicity of head of household
hfdlft / leeftijd van het hoofd huishouden / age of head household
hfdgesl / geslacht van het hoofd huishouden / sex of head of household
hfdwrkst / werkstatus van het hoofd huishouden / employment status head of household
hfdsmnw / samenwoningsverband van het hoofd huishouden / cohabit of head of household
etn / etniciteit aangemaakt voor het tabelleren / ethnicity produced to tabulate
man 0 - 14 / Mannelijke kinderen, 0 t/m 14 jr / male children, 0-14 years
vrw 0 - 14 / Vrouwelijke kinderen, 0 t/m 14 jaar / female children, 0 - 14 year
man 15-59 / Volwassen mannen / adult males
vrw 15-59 / Volwassen vrouwen / adult females
man>=60 / AOV-gerechtigde volwassen mannen / adult men eligible for old age payment
vrw>=60 / AOV-gerechtigde volwassen vrouwen / adult females eligible for old age payment
man lft onbk / Mannen, Leeftijd onbekend / males, age unknown
vrw lft onbk / Vrouwen, Leeftijd onbekend / females, age unknown
TOTUWMNDEXP / ongewogen totale maanduitgaven / unweighted total monthly exp
UWBELASTING / ongewogen uitgaven aan belasting / unweighted exp to taxes
UWOVERIG NCON / ongewogen uitgaven aan overig nonconsumptieve uitgaven / unweighted exp to other non consumptive exp
TOTUWNCONMNDEXP / ongewogen totale non consumptieve uitgaven / unweighted total non consumptive exp
totuwconmndexp / ongewogen totale consumptieve uitgaven / unweighted total consumption exp
uweigenmnd / ongewogen eigen consumptieve uitgaven / unweighted own consumptive exp
uwhfdgrp 01 / ongewogen consumptieve uitgaven hoofdgroep 01 / unweighted consumption exp main category 01
uwhfdgrp 02 / ongewogen consumptieve uitgaven hoofdgroep 02 / unweighted consumption exp main category 02
uwhfdgrp 03 / ongewogen consumptieve uitgaven hoofdgroep 03 / unweighted consumption exp main category 03
uwhfdgrp 04 / ongewogen consumptieve uitgaven hoofdgroep 04 / unweighted consumption exp main category 04
uwhfdgrp 05 / ongewogen consumptieve uitgaven hoofdgroep 05 / unweighted consumption exp main category 05
uwhfdgrp 06 / ongewogen consumptieve uitgaven hoofdgroep 06 / unweighted consumption exp main category 06
uwhfdgrp 07 / ongewogen consumptieve uitgaven hoofdgroep 07 / unweighted consumption exp main category 07
uwhfdgrp 08 / ongewogen consumptieve uitgaven hoofdgroep 08 / unweighted consumption exp main category 08
uwhfdgrp 09 / ongewogen consumptieve uitgaven hoofdgroep 09 / unweighted consumption exp main category 09
uwhfdgrp 10 / ongewogen consumptieve uitgaven hoofdgroep 10 / unweighted consumption exp main category 10
uwhfdgrp 11 / ongewogen consumptieve uitgaven hoofdgroep 11 / unweighted consumption exp main category 11
uwhfdgrp 12 / ongewogen consumptieve uitgaven hoofdgroep 12 / unweighted consumption exp main category 12
Aantal personen / huishoudomvang variabele aangemaakt voor het tabelleren / household variable produced to tabulate
# VERTREKKEN / aantal vertrekken / number of rooms
Aantal slaapkamers / aantal slaapkamers variabele aangemaakt voor het tabelleren / number of bedrooms variable produced to tabulate
# SLPK / aantal slaapkamers / number of bedrooms
TYPE WONING / type van de woning / type of house
TYPE ANDERS / indien andere type / if "other"
SOORT WOONVERBL / soort woonverblijf / kind of housing
SOORT ANDERS / indien andere soort / if "other"
STAAT WON / staat van de woning / state of the house
STAAT ANDERS / indien andere staat / if "other state"
whypotheek / hhweight gewogen hypotheek uitgaven / weighted mortgage exp
uwhypotheek / ongewogen hypotheek uitgaven / unweighted mortgage exp
GEBRUIKSTITEL / gebruikstitel van de woning / users title on the house
GEBRTITEL ANDERS / indien andere titel / if "other title"
CONSTRUCTIE WON / constructie van de woning / construction of the house
CONSTR ANDERS / indien andere constructie / if "other construction"
ELECTRA / electriciteitsvoorziening / electricity provision
BRANDSTOF / gebruikte brandstof voor kookdoeleinden / used fuel to cook
WATERVOORZ / watervoorziening / water provision
TELECOMVOORZ / telecommunicatie voorziening / telecommunication provision
COMPUTER / computer in huis / computer in the house
INTERNET / internet faciliteit in huis / internet facility in the house
dBELASTING / hhdweightnorm gewogen uitgaven aan belasting / weighted exp to taxes
dOVERIG NCON / hhdweightnorm gewogen uitgaven aan overig nonconsumptieve uitgaven / weighted exp to other non-consumption exp
dTOTWNCONMNDEXP / hhdweightnorm gewogen totale non consumptieve uitgaven / weighted total non consumption exp
dTOTWCONMNDEXP / hhdweightnorm gewogen totale consumptieve uitgaven / weighted total consumption exp
dhfdgrp 01 / hhdweightnorm gewogen consumptieve uitgaven hoofdgroep 01 / weighted consumptive exp main category 01
dhfdgrp 02 / hhdweightnorm gewogen consumptieve uitgaven hoofdgroep 02 / weighted consumptive exp main category 02
dhfdgrp 03 / hhdweightnorm gewogen consumptieve uitgaven hoofdgroep 03 / weighted consumptive exp main category 03
dhfdgrp 04 / hhdweightnorm gewogen consumptieve uitgaven hoofdgroep 04 / weighted consumptive exp main category 04
dhfdgrp 05 / hhdweightnorm gewogen consumptieve uitgaven hoofdgroep 05 / weighted consumptive exp main category 05
dhfdgrp 06 / hhdweightnorm gewogen consumptieve uitgaven hoofdgroep 06 / weighted consumptive exp main category 06
dhfdgrp 07 / hhdweightnorm gewogen consumptieve uitgaven hoofdgroep 07 / weighted consumptive exp main category 07
dhfdgrp 08 / hhdweightnorm gewogen consumptieve uitgaven hoofdgroep 08 / weighted consumptive exp main category 08
dhfdgrp 09 / hhdweightnorm gewogen consumptieve uitgaven hoofdgroep 09 / weighted consumptive exp main category 09
dhfdgrp 10 / hhdweightnorm gewogen consumptieve uitgaven hoofdgroep 10 / weighted consumptive exp main category 10
dhfdgrp 11 / hhdweightnorm gewogen consumptieve uitgaven hoofdgroep 11 / weighted consumptive exp main category 11
dhfdgrp 12 / hhdweightnorm gewogen consumptieve uitgaven hoofdgroep 12 / weighted consumptive exp main category 12
aantal art / aantal gekochte artikelen / number of articles bought
aantal aankpn / aantal aankopen / number of purchases
werkzamen / aantal werkzame personen in huishouden / number of employed in household
werklozen / aantal werkloze personen in huishouden / number of unemployed in household
Description of methodologies to be used in section 4
Broadly speaking a combination of (a) Cross-Sectional analysis and (b) Time Series Analysis (including intervention analysis to find out the impact of policy changes and implementation) will be used.
(a1) For the cross-sectional analysis both special commissioned tables to be obtained from the General Bureau of Statistics (GBS) and, after submission of a pertinent research proposal, access to the GBS micro lab facilities to be able to work with the 1999/2000 and 2007/2008 Household Budget Survey databases, will be used.
(a2) Also a (small) sample of homeowners, renters, squatters and others will be surveyed to find out about access to credit, from their point of view.
(b) For the Time Series Analysis, data collected from various organizations (most likely the GBS, Ministry of Social Affairs and Housing, Banks and other Credit Institutions, Ministry of Public Works, Justice Department and Building Contractors) will be utilized.
Our research in this section will focus on:
1-Classifying determinants of the Housing Market (socio-economic, financial, demographic, political, demand side, supply side, Macro-level, micro-level, etc.)
2-Classifying Housing Finance Determinants and Modalities (eligibility of credit seekers, i.e. stability of income or job, net income relative to costs of living and other obligations; age, health)
3-Main Determinants of Housing Demand in Suriname (using regression analysis, find out whether as is customary: housing price, household income and household size and composition are relevant explanatory variables. Most likely the national and international literature review will yield more relevant variables to be included)
4-Main Determinants of Housing Supply in Suriname (find out whether: Land, Credit, Approved building permits, Government Budget deficit, Private sector Investment in residential housing – and maybe other variables – are relevant variables to explain constraints)
5-Finding out whether a demand / supply equilibrium is feasible and if so where it lies.
6-Trying to detect links between the various (groups of) determinants.
Where the expected data is not available in the format required, we shall have to resort to a more narrative approach.
5. A brief survey of previous studies on the country
We have gone through several documents of which the LISP Reports (Low income Shelter Program, a program focusing on providing housing credit to the poor) were very interesting. Lost of information, figures, data and also strategies for working with NGO’s, CBO’s and other social organizations.I have obtained a Report from the LISP Bureau “Suriname Housing Study 2008” (financed by the IDB) that has a lot of information on: Monthly Household Consumption Statistics by decile, 2008, Housing Affordability Analysis, Number of Institutions and assets of the financial system (banks, credit unions, pension funds, insurance companies) with their respective assets. It also contains info on 5 years non-performing loans evolution of the system, housing ownership, and a lot more. So this data already exists.
6. Suggestions as to dissemination of studies
An (electronic) binder of selected studies can be produced. The selection will be based on the usefulness and the applicability of proposed solutions to identified bottlenecks, per country or in general. (We must learn form each other). This binder then will form the main agenda for a Meeting for relevant High Level Stakeholders and Researchers on the topic. This will include civil society groups advocating better and equal housing opportunities in the country/ countries. Political parties in Suriname should receive proposed solutions, because they are the ones in power to change the situation.
[1] IDB Housing, Ecorys, Ministry of Housing and Social affairs
[2] Household Budget Survey results, Statistical Office of Suriname (GBS), various years