Housing Finance

Access to adequate housing is critically
important to the health and wellbeing of the world’s
population. Yet, despite the fact that this statement is
part of the United Nations Universal Declaration of Human
Rights and has been on the global policy agenda for many
years, hundreds of millions of people continue to live in
inadequate conditions with little or no access to decent
housing. The demand for housing solutions will increase as
urbanization and population growth persists. The United
Nations Human Settlements Program (UN-Habitat) has estimated
that the number of people living in slums around the world
will rise to 900 million by 2020 if nothing is done. Asia
and Africa will face special challenges, because
urbanization in those regions is proceeding rapidly. Housing
is frequently unaffordable to all but the top earners. A
recent report estimates a housing affordability gap
affecting 330 million households, with 200 million
households in the developing world living in slums (McKinsey
Global Institute 2014). Research has shown that more and
better housing increases the welfare of occupants.
Homeownership may increase stability and civic engagement,
and provide financial security in old age. Improvements in
housing also have important benefits to the economy. Housing
construction and home improvement generate demand for
professional, skilled, semi-skilled, and unskilled labor;
and allow many micro and small businesses to flourish. The
housing market is an important component of national
economies and housing booms and busts can have significant
effects on the macro economy and financial sector. The core
purpose of this learning product is to generate knowledge
and provide lessons learned from World Bank Group support to
housing finance. Lessons were derived primarily from
evaluated interventions in the form of World Bank loans or
International Finance Corporation (IFC) investments and
advisory services. World Bank technical assistance and
knowledge products and interventions on housing finance
matters were considered when provided in the context of
lending operations. One limitation faced in preparation of
this learning product was the lack of coverage of
stand-alone World Bank advisory services.