Sunday, November 20, 2005

Housing Shortage A Headache For Chávez

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Every morning for the last four months, Yara has connected to the Internet while still in her pajamas to search for an apartment in Venezuela’s capital that fits within her tight budget.

The physical therapist is among hundreds of thousands of Venezuelans who are struggling without proper housing of their own. At 35 years old, she lives in a room in her brother’s house, 30 kilometers from the capital Caracas.

While she voted for President Hugo Chávez in 1998 because he promised social reforms for the poor, she is among those who are disappointed the populist former army officer has yet to fulfill a vow to solve a pressing housing shortage.

“Where are all the houses they were going to build?” said Yara, who asked that her full name not be used for fear she may face discrimination in government housing loan programs.

Despite Venezuela’s great oil wealth, many residents live in poor housing and the poorest often survive in ramshackle shanties that ring Caracas and other cities.

Lower middle-class families often construct informal extensions on their homes to accommodate relatives unable to afford their own housing.

Venezuela suffers from a housing deficit of around 1.6 million homes, according to the Venezuelan Construction Chamber (CVC) and experts estimate about 180,000 new homes must be built annually for the next 15 years to solve the problem.

Chávez, who has spent billions of dollars in oil revenues on social programs as part of his self-described socialist revolution, has vowed to solve the problem in 17 years though his “Mission Housing” project.

But of the 120,000 houses his government has promised would be built this year, only 10,000 have been constructed.

“We are far from reaching the required number of houses, and we think mechanisms should be put in place as soon as possible to reverse that,” said CVC President Alvaro Sucre.

Sucre estimated the number of homes under construction for the poor would reach 15,000 to 20,000 by the end of the year.

‘Dignified’ homes

Chávez seems to acknowledge the struggle to provide decent housing for Venezuelans and the failure of his team to get the job done. He gave one housing minister a very public dressing down over the program’s sluggish progress.

The minister later resigned. He also complained about a plan to construct plastic houses in an area where temperatures soar above 104 degrees Fahrenheit (40 degrees Celsius).

As part of efforts to provide “dignified” housing to poor families, the government has ordered banks to allot 10 percent of their credit portfolios to mortgages with preferential terms.

But Sucre said the loans were not being approved as quickly as they could and this is slowing down construction of new housing.

“When the private developer knows that there are grants, that there are people who can buy in certain areas of the country, the housing will be built almost automatically because that means real demand,” Sucre said. The government plans to hand out around $130 million in housing grants for around 16,600 families. But that amount could reach $160 million if requests could be processed more quickly, Housing Minister Luis Figueroa said.

“As you build houses, you get more money to build more houses,” Figuero said.

State banks to rescue

This month three state banks will start financing a portion of the mortgages usually provided by the private sector in an effort to speed up distribution of loans and in turn stimulate construction of new homes.

The government calculates it could help 6,500 more families in 2005 with this measure. Officials have not yet set targets for 2006.

“We see that the private construction sector is seeking greater security. We say that the security they have is that the government is carrying out the work,” he said.

Meanwhile, the apartment buildings in Caracas for middle class professionals are not covering the avalanche of demand, causing housing prices to surge 30 percent.

In the face of the shortage, some such as Yara are becoming “informal” builders. She is considering building a bathroom in her small room block by block by herself.

“I hope the room doesn’t collapse on me,” she said. Reuters


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