e_legs

UN: Pro-poor mortgages to curb growth of slums

In Children and Youth, Disaster Relief, Economic Justice, Environment, Housing, International Public Health, International Trade, Labor, Land rights, Laws & Regulation, Progressive Politics, Technology, Urban Planning / Space on November 14, 2006 at 2:24 pm

From the UN late last month:

Mortgages that allow poor people to buy housing will soon be needed to curb the worldwide growth of slums and improve living standards, the head of the United Nations agency charged with promoting socially and environmentally sustainable housing has warned, saying that her organization has already begun testing various financing methods… But she said that there were some signs of progress, noting in particular that new rules, effective since August, meant that UN-HABITAT could finally act as a catalyst, enabling countries to meet the slum upgrading and water and sanitation targets of 2015.

First off, has there been a sudden crisis in the world’s urban slumdwelling population that is in such an emergent need for an innovative tool, but only in need of this tool “soon?” I guess the living standards are deteriorating, but at a slowth enough speed that they’re not needed now… soon will do.

I agree that the expansion “pro-poor” financing options will be useful to the “poor,” but enforcing contracts/mortgages can also be a dangerous tool.

Let’s pull this string through:

Living in a slum, oftentimes on squatted land, and then, as this articles alludes to, water and utility infrastructure improvements shift people off squatted land and onto land where they will be formally recorded and deeded. If they’re not shifted, they are at the very least recorded and deeded. (Here’s a post about utility work and land displacement.)

This deed is then exchanged for a mortgage, be it a “pro-poor” mortgage or what seems under this framework to be an “anti-poor” or perhaps “pro-wealthy” mortgage. Times get tough though because, say, unfair subsidies artificially deflate the prices of the goods these “pro-poor” borrowers can get for their crops. These “pro-poor” homeowners fall behind on their mortgage and while they are unable to sell their goods in an open economy (due to maladjusted subsidies) they are certainly going to tossed from their home, which will then be sold on an open market.

“Pro-poor” mortgage means nothing unless the strongest protections are reserved for the homeowner, not the lender. Shift the “pro” in “pro-poor” to be short for “protection.”

And don’t think this call for protection is paternalistic… it’s actually self-serving.

We all need protections brought back a bit more to the borrowers of the world; the scales are tipped too far in favor of “investors’ rights” at the expense of human rights, in my not-so-modest opinion.
If this were in fact for the urban poor the alarm for this innovative tool would have sounded to have it developed NOW; the call was made for this tool to be developed “soon.” This is for investors, not for the world’s “pro-poor” urban slumdwellers.

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