Social Housing Group Final Report

Sustaining the Kaantabay Sa Kauswagan Program in Naga City: Srengths, Challenges and Recommendations

Submitted to Mayor Jesse Robredo The Naga City Planning Department and Dr Nora Angeles Allison Jones & Lang Lang School of Community and Regional Planning University of British Columbia June 08, 2007

Executive Summary Naga city is recognized for its commitment to housing its urban poor. During the last ten years, Kaantabay sa Kauswagan (KSK), the city’s social housing program, has achieved impressive results. The Kaantabay program, over all, is already a “best practice” in social housing provision. As a pro-poor, well-established system, this program has benefited many urban poor families by ensuring tenure security and improving basic facilities and services. However, the program faces some challenges in sustaining itself in the long run. Cost recovery, resale of homelots, program expansion and institutional barriers compromise Kaantabay’s long term viability. Through interviews with city staff and program beneficiaries, the report has not only identified what the challenges are, but also examines the deeper reasons behind these challenges. Interview findings are combined with lessons learned from international case studies to offer recommendations on livelihood improvement, social preparation, administrative efficiency and financial resource diversification. Our recommendations for increasing the long term sustainability of Kaantabay are as follows: 1. Improve Implementation of “Social Preparation” Programs Adequate and ongoing social preparation training must be prioritized in Kaantabay’s program implementation. When beneficiaries gain livelihood and savings capacities, they will be better able to meet their obligations.

2. Increase Efficiency of Kaantabay Program Administration A consistent and locally based collection program can greatly enhance the repayment rate. Robust links from policy to barangay level implementation are needed. 3. Open Sources Pursuing homelot financial increase viability.

Conduits To New Funding other funding sources for provision will decrease the pressure on the City and the program’s long term

4. Adopt a Comprehensive, Integrated Approach to the Social Housing Program Social housing is not a stand alone issue. Although tenure security can improve the urban poor’s standard of living, it must be integrated into a more comprehensive and visionary approach toward poverty alleviation.

Acknowledements As our study comes to a close, we wish to extend our gratitude to all of the kind and generous people who have helped us pursue our research in Naga City. Firstly, the city’s planning staff welcomed us with open arms. We deeply appreciate their hospitality, warmth and diligence in coordinating our research contacts. Mr. Willy Prilles, Chit Reodique and Rosemary Ciudadano have been fountains of information on the history, context and planning challenges in Naga City. We also extend warm thanks to Mr. Rolando Campillos for his patience and guidance through our numerous interviews at the Urban Poor Affairs Office. He helped bring to light some of the key challenges for the social housing program amidst its many accomplishments. We especially appreciate the help of Ms. Flor Halili who has been an invaluable contact and has accompanied us on all of our site visits to urban poor communities. Her long history with the Naga City Urban Poor Federation has let us see how participatory governance is practiced in the day to day. We have enjoyed her good humour and assistance through many hot afternoons here. We would also like to thank Ateneo University and the Centre for Local Governance for lending us human and material resources for our research project. They have offered guided tours, event coordination, library facilities

and free wireless internet; all are gift for which we are endebted. Finally, a heartfelt thank you to Dr. Leonora Angeles who has tirelessly attended to our academic and personal queries with equanimity and support. We are proud to have participated in the first Naga City Planning Studio! June 07, 2007 Naga City, Philippines

TABLE OF CONENTS I. INTRODUCTION...................................................................................5 BACKGROUND OF THE PROBLEM

5

GOAL AND OBJECTIVES

6

METHODS OF DATA COLLECTION AND ANALYSIS

6

ORGANIZATION OF THE REPORT

6

II. CONTEXT OF PROBLEM ........................................................................7 III. KEY FINDINGS FROM COMMUNITY INTERVIEWS ...........................................8 IV. CASE STUDIES ................................................................................. 11 1.ILO, PERU: MULTISECTORAL CONTRIBUTIONS TO SOCIAL HOUSING DEVELOPMENT

12

2. WOODWARD’S REDEVELOPMENT, VANCOUVER : PUBLIC PRIVATE PARTNERSHIP

14

3. VOI, KENYA: COMMUNITY LAND TRUST

16

4. PAYATAS, METRO MANILA, PHILIPPINES: MICRO FINANCE AND SAVINGS PROGRAM

19

V. RECOMMENDATIONS .......................................................................... 21 VI. CONCLUSION .................................................................................. 23

I.

INTRODUCTION

It is widely acknowledged that tenure security is linked to long term poverty alleviation for the urban poor. In the mid 1980s, the Philippine government made shelter provision a national policy priority. In 1997, Naga City followed suit with the institutionalization of its social housing program, Kaantabay sa Kauswagan. The long term viability of this housing program depends on innovative cost recovery strategies, beneficiary collaboration and administrative efficiency for sustainable homelot provision. The following report addresses the challenges of Kaantabay sa Kauswagan (hereafter referred to as Kaantabay) in the context of pro poor governance strategies in Naga City. Background of the Problem As in many other urban centres, Naga faces the dilemma of informal settlement expansion. Its strategy is to allocate land to all urban poor households that have housing insecurity. Renters, sharers and squatters all qualify to avail of the Kaantabay program. As of 2007, 8,763 families are beneficiaries (State of the City Report). Naga takes a single land tenure approach to urban poor land rights which has improved the lives of thousands of its residents. The granting of individual title also places significant financial pressure on the local government. Housing policy must be a responsibility shared with the provincial and national governments. A fundamental problem

with Philippine national urban poor housing programs such as the Community Mortgage Program (CMP) and the National Shelter Program (NSP) is the instability and inadequacy of funding sources (Lourdes and Rebullida, 1999). Nevertheless, CMP and NSP have supplemented Kaantabay’s efforts in numerous urban poor settlements. Non governmental organizations (NGOs) such as Gawag Kalinga and Habitat for Humanity International also contribute housing units on homelots provided by the city for the poorest households in Naga. Since the social housing program’s inception, the Naga City Urban Poor Federation has also played a vital role in advocating for urban poor residents. Founded in 1965, the Federation has grown from 9 to 65 member organizations, a reflection of Naga city’s growth as well as the increase in urban poor populations living here. As membership in urban poor associations expands, there is a clear corollary impact on the demand for home lot distribution. The financial sustainability of Naga’s social housing program is at the crux of our research in the Naga City Planning Studio. Kaanatabay sa Kauswagan is at a crossroads. Its literal meaning “partners in development” and intent becomes vulnerable when many beneficiaries can not meet their partnership obligations. Kaantabay must pursue programs and policy that bolster the urban poor’s capacity to earn livelihoods, learn savings techniques and educate their children. Insodoing, Kaantabay can increase its institutional capacity for

long term success. Goal and Objectives Through consultation with urban poor residents, our goal is to offer ways to sustain the Kaantabay program in the long term while building on its strengths. We have four objectives: 1) to identify realistic mechanisms that could encourage increased repayment. 2) to reduce the chances of beneficiaries selling their land for short-term gains 3) to generate innovative financial alternatives to alleviate the cost burden to the city. 4) to address institutional barriers that constrain program success. Methods of Data Collection and Analysis The study team’s research methods allowed us to gather firsthand information from qualitative informational interviews and focus groups. We gathered only basic quantitative data from the Urban Poor Affairs Office (UPAO) due to time, communication and availability limitations. We interviewed two city staff from UPAO and MetroPeso and two members of the Housing Board (also city staff). The Vice President of the Naga City Urban Poor Federation (NCUPF) was kind enough to help us coordinate three focus groups in addition to being interviewed. We conducted interviews at two onsite communities in Lerma and Triangulo and two resettlement sites in Pacol and Del Rosario. We visited an informal settlement site in Lower Green Valley slated for relocation and briefly spoke with one resident living there. There were three limitations in our interview processes. First, all of our interviews with residents were held

during the day on week days, when many people are working. This resulted in our respondents being almost entirely female. Most were either housewives or teachers. Second, we faced language barriers in communicating effectively on sensitive subject matters. Finally, almost all focus groups were coordinated by the Vice President of the Naga City Urban Poor Federation. Some bias results from respondents’ similar points of view. Our secondary research consisted of international practices for social housing provision. In the context of supportive government policy, Naga City’s program stands out as exemplary. Our examples are grounded in a comprehensive approach to problem solving, relevant at the local level. The study addresses interrelated issues that impact the long term viability of the Kaantabay program in Naga. Organization of the Report First, we define the context of the problem. Second, we identify institutional barriers to Kaantabay’s long term success. We then discuss key findings from our field research. Case studies provide examples of innovative policy alternatives. Finally, we offer our recommendations based on our findings. ™ ™ ™ ™ ™

GUIDING PRINCIPLES B U I L D on strengths of Kaantabay sa Kauswagan I D E N T I F Y opportunities for improvement U S E consultative, community driven solutions AV O I D prescriptive, mechanisms S U G G E S T implementable recommendations

Figure 1: Rate of Partial, Full, and None Payment comparison between on site and off site 45%

41%

41%

40% 35%

II. CONTEXT OF PROBLEM rate

30%

The Kaantabay program was galvanized by an urban poor barangay initiative following the creation of the National Agency for the Urban Poor in 1987 by Corazon Aquino (Angeles, 1997). Up to now, Kaantabay has made a tremendous contribution to tenure security in Naga City. However, with a rapidly growing population, caused by both natural increase and migration patterns, the Kaantabay program faces some challenges to sustain itself in the long run. Amortization repayment of existing beneficiaries is very low which makes it difficult for the city to recover the cost from land purchases and service provision. According to the data available from UPAO, the fully repaid rate is only 17% while the rate of households that never pay their monthly amortization is as high as 24%. When we break down the beneficiaries into categories, we find that it is particularly hard to get repayment from off-site projects. The rate of non payment in off-site projects is as high as 41%, much higher than the average rate (Figure 1). The low repayment rate makes it very difficult for the city to recover their land purchase and infrastructure costs. Some beneficiaries have sold their land which violates the original purpose of this program. Although a revision of article VII, section 22 of the Kaantabay sa Kauswagan Ordinance addresses selling and transferring rights, these cases are

28%

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25% 17%

20%

20% 16% 12%

15% 10% 5% 0% PARTIAL

NONE On si t e

FULL

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Of f si t e

difficult to track and enforce for multiple reasons. Selling clearly violates the Kaantabay beneficiary agreement and thus transfers are kept quiet in urban poor communities. The legal process to prove transfers is lengthy and unwieldy, especially with limited staff resources. By the time enforcement can be addressed, the lot may have changed hands again. Some new buyers are obviously not from the urban poor class but have taken advantage of this program. Gentrification is taking place in some of the beneficiary areas. The original beneficiaries may start squatting again in Naga or other cities. The reselling for urgent cash makes squatting a cyclical problem for the city. Growing demand and increasing land values puts an enlarged burden on the Kaantabay program. As the economic hub of the Bicol region, Naga has experienced an increase in land value. In the outer regions, where many urban poor resettlement sites are located, current land value is 1000-1500PhP/sq. metre. Residential land in the urban centre sells for 3000-3500PhP/sq. metre. This means that centrally located social housing lots sell for up to nine times their original cost. While the land cost is increasing, the city also needs to prepare for an enlarged demand for

social housing. Naga has a very high population growth rate. Population growth is at 4% by natural increase and 9% if considering migrants. The city will need to face the increasing financial burden on the social housing program. Some institutional barriers may also prevent further expansion of this social housing program. 1. Administration of collection is centralized and ineffective. UPAO administers the amortization repayment system but is understaffed to ensure that consistent payments are made. The lack of consistent dues notices and lack of enforcement for those in default further contribute to low repayment rates. 2. The Urban Development and Housing Board (UDHB) has no direct oversight over the Urban Poor Affairs Office (UPAO). The UDHB functions as the policy making body for housing issues. UPAO is the implementation arm and operationalizes the UDHB’s policy mandates. However, UPAO is not directly supervised by the Housing Board. Accountability and efficiency may be compromised as a result of this disconnect. 3. The Kaantabay program depends on one funding stream for land purchases. Figure II.

Naga City allots 10% of its annual budget to UPAO. Funds from amortizations, the housing trust fund and social housing project equity also goes to Kaantabay (see Figure II). Although housing units are built through NGO partnerships and self help from beneficiaries, municipal funding as the primary source of support leaves the program vulnerable to political change. 4. The Bayadnihan program is under-resourced. “Bayadnihan” draws on the Filipino cultural ethic of cooperative undertaking (ASSRC, 2003) and allows beneficiaries to work as skilled or unskilled labourers to pay off their amortization. As of now, only 100 beneficiaries have enrolled in the program. It is constrained by the limited number of opportunities in government and private sector projects. III. Key Findings Interviews

from

Community

After we learnt from the city staff the challenges the Kaantabay program is struggling with, we visited four urban poor housing sites: two on-site communities, Triangulo and Lerma, and two off site communities, Del Rosario and Pacol. We interviewed some beneficiaries and

some barangay association leaders who are beneficiaries as well, about four categories of questions: 1) What does owning a land lot mean to you and how has it changed your life? 2) What do you think are the reasons for some people not repaying their monthly amortization? 3) What do you think about reselling the homelot? 4) What are your suggestions to improve the program in the future? Through the interviews and our observations, we have concluded several key findings: 1. Many positive changes have taken place in the lives of beneficiaries. Every beneficiary we met expressed their appreciation to this program and the city government. They all experienced a great improvement to their lives since they became beneficiaries. The beneficiaries also experienced an improvement of basic services and facilities. Most interviewees from the on-site communities had lived there for 40 to 50 years before it became a city property. For all these years as renters on private land, they never had electricity or water supply. It is only after the city got the land through negotiation with the owner that basic facilities started to reach these areas. For the off-site communities, they experienced a hard time when they first moved to the suburban location, since they were far from the centro where most services are located. The children usually needed to travel a long way to school. The adults also traveled to buy

groceries and to go to church. But the situation has improved over time. Schools, markets, churches and other services have been developed in their communities. The highland location is an advantage when the typhoon season comes. It is less likely to have floods than the central region. Besides better services, the most fundamental change in their lives has been to build a sense of security. When the beneficiaries lived on private land, the rent they needed to pay was much higher than the monthly amortization they pay to the city now. One of our interviewees said her family paid close to 400PhP monthly when renting. Now her family only needs to pay 150PhP each month. They all feel less pressure financially. In addition, when they lived on private land, they could be evicted any time upon the owner’s will. There was a constant anxiety about losing their home at any time. One of the old ladies we met told us that she used to have a piece of farm land. In order to force her and her family to move away, the owner of the land burnt their field right before the harvest during the night, when they were sleeping. They now feel that they have a stable life. They are more likely to spend time and money to improve their living conditions. 2. Livelihood difficulty is the key reason for delaying repayment and reselling homelots. Although their lives have obviously improved, almost all of the beneficiaries reported that they have difficulty paying regularly.

Everyday living expenditures (food, electricity, water, etc.) and expenditures for their children (lunch fees, books, school supplies and transportation) are priorities for them compared to the amortization. When their income is limited, they must spend it on these priorities and delay amortization payment. The off-site communities report particular hardship due to the distance from the central city, which can be seen as an explanation for the difference in repayment rates between on-site and off-site projects. Though markets and other services are being developed in suburban sites, they are far from adequate. The grocery is much more expensive than in the centro. Good medical facilities are not available. For serious medical problems, people still need to travel to the centro. Transportation costs have risen. Traveling from Pacol to the centro costs 13 PhP each way; from Del Rosario the cost is 8 PhP. To a poor family for whom each peso counts a lot, transportation is a big burden. Most importantly, people need to travel for work. These communities suffer from a lack of employment opportunities. The wage earners need to travel regularly for their job. For example, a sales clerk in Robinson Mall earns 80-120PhP per day. Nearly one fourth of his/her daily income goes in to transportation if he/she lives in Pacol (26 PhP/ day). The lack of employment opportunities negatively affects housewives. Though their priority is to take care of the children, they hope there can be jobs available nearby and then they can

combine their role as caretakers and wage earners. If there are two wage earners, they will more easily pay off the amortization. Reselling of homelots is a more sensitive issue. Most beneficiaries did not want to talk about this. However, the organization leaders do report reselling taking place in all four sites. The houses that are sold to private owners are very identifiable. The building materials are usually better quality, the houses are significantly larger and the structures are more stable. 3. Multi-layered “social preparation” is needed. In our interviews, several beneficiaries mentioned that some sort of training is needed. The organization leader calls it “social preparation” for home ownership. Firstly, job skills training is very important. All the people we interviewed said they have adult children who are still living with them because they do not have an income to support themselves due to lack of skills. Since the cost of university education is high and seen as unaffordable by the urban poor, job skills training is in most people’s favor. Lack of financial management skills is also mentioned. The housewives report that they don’t know how to save money. They have little control over where their limited income goes. The organization leaders thought that not everyone is suffering from scarcity of money all the time. Sometimes, people either gamble away their extra cash or

spend it on alcohol. Thus, by the end of the month, they do not have money left for amortization. A better money managing model should be introduced. In addition, the association leaders see that there is a lack of understanding of what the home owner’s obligations are. Ms. Halili, the vice president of NCUPF, in particular mentions that social preparation trainings and certification programs held in the nearby municipality of General Santos should be adopted. 4. Controversial views of the possible change in program management. We mentioned some possible changes to the collection method and management structures. We also introduced some of our research suggestions. People’s attitudes are various toward these suggestions. The Urban Development and Housing Board has proposed a localization of the payment collection system. The barangay associations would collect repayment in the community which would replace the old model that requires beneficiaries come to city hall individually to pay. The localized model is almost exclusively preferred by organization leaders. Other beneficiaries think that having someone to collect payment regularly at your door is too much pressure. The other city-proposed policy is to use USUFRUCT. The land ownership still belongs to the city while the beneficiaries only hold the right to use it and pass it on to their children. Most people we have talked to do not have

very positive attitudes toward this policy. They do, however, prefer it as an alternative for those who have payment difficulties. If they have the chance, they still prefer true ownership over the land. We suggested the idea of cooperative ownership, in which the community shares the financial burden together and holds common ownership. This is not popular with beneficiaries. Except for one or two people, most beneficiaries think collective ownership will cause problems. They emphasize that individual ownership is important for them. Our other suggestion has been welcomed by most of the beneficiaries. We asked if repayment is used directly to benefit the community would people be more willing to pay? Most of them think it will encourage people to pay, especially if a portion of the amortization is set aside for a scholarship fund for their barangay’s children’s education. Analyzing these interview findings, we can conclude that poverty and lack of livelihood skills is the number one issue which causes the low repayment rate and reselling of homelots. Some reform is definitely needed to sustain the Kaantabay program; however, the beneficiaries have very diverse ideas of what kind of reform should take place. Their ideas and livelihood difficulties will all be considered in our recommendations. IV. CASE STUDIES

We have selected one Philippine and three international case studies that demonstrate innovative approaches to tenure security for the urban poor. Each of the case studies target a different challenge faced by the Kaantabay program. We first clarify which particular challenge the case study targets. Then we identify the benefits and potential drawbacks of each example. We also explain each case’s applicability in the Naga context. 1. Ilo, Peru: Multisectoral Contributions to Social Housing Development TA R G E T S : Resources for new resettlement: future expansion of the social housing program. W H AT W O R K S : Beneficiaries contribute up front. Lot preparation is jointly managed and partly financed by the communities. POTENTIAL DRAWBACKS: Individual survival takes precendent. NAGA’S POTENTIAL: Strong barangay associations exist. Brief Description: Ilo is a small port city in southern Peru with a population of 60,000. Ilo plays a strategic role as the headquarters for Latin American integration with the Pacific Basin. Its port is also accessed by Bolivia. Ilo’s current government shares similarities with Naga and faces some of the same challenges; the population is growing rapidly, the municipal government is well respected and trusted and the mayor has ensured that land is available for its lowest income residents. Ilo’s approach to social housing and

environmental management is multisectoral. It relies on cooperation between local government, NGOs and community management committees, formed at the neighbourhood level, to house its low income people. Management committees are officially recognized by the municipal government through municipal resolutions. Housing and infrastructure projects are then developed and implemented in partnership with local government and NGOs. Ilo’s key distinguishing feature is that the homelot preparation process is jointly managed and partly financed by the communities involved (Follegatti 1999: 3). Community management committees use a variety of local, small scale funding strategies such as direct resident contributions. They also use group fundraising activities such as food sales or raffles. Added support comes in the form of grants or donations. Community management committees also contribute labour and materials to projects (see table 2).

To become a beneficiary of the Ilo municipal program, residents go through an approval process similar to the urban poor housing application process in Naga. When beneficiaries have completed their contribution to one basic service and are approved for other services, they can avail of the program. Beneficiaries themselves pay

the costs of urban servicing of the assigned lots to an amount not exceeding the equivalent of US$ 60. The delivery to each lot occupant of the definitive property title is the final stage in the program (Follegatti 1999: 4). Applicability in Naga Context: Ilo has a history of institutional continuity. Ernesto Herrera, the current mayor, has served for six terms and is responsible for a range of city planning, much like Mayor Jesse Robredo. Herrera’s campaign slogan, “from protest to proposal”, was enthusiastically supported and draws on the collective spirit of Iloans. Naga also has a long history of institutional integrity and stability. Naga could further build on its strong participatory tradition through adopting a similar strategy to engage the urban poor at the beginning of development projects in their communities.

something while also getting something in return. Financial Implications for Beneficiaries: In Ilo, program beneficiaries pay their own expenses: fees for processing, authorization for lot occupation, adjudication and property title. These charges finance expenses incurred by government bodies throughout the process and ensure that each step of the phase is properly executed. (Follegatti 1999:17). Establishing a material or financial partnership early on with community members, wherein they are key contributors to projects, can prepare beneficiaries to habitualize the amortization payment. Financial implications for the City: During our field research, we were shown two World Bank infrastructure projects that require community contributions to go toward cost recovery. Community members agree to pay a nominal amount (approx. 1000PhP) over three years. Naga City also contributed to these projects. Both partnership projects were constructed for flood aversion.

As urban poor residents are already members of barangay associations, many of them are actively involved in advocating for urban poor rights. However, financial contributions were not mentioned in our interviews, likely because many individuals in the sector struggle to meet their basic daily needs. It could be an additional role of barangay associations to pool community resources. As Mayor Robredo states, “there is always a better way.”

In contrast to these projects, the Ilo example emphasizes the preparedness of the community to invest in projects on the front end. The residents are thereby partners rather than recipients and see themselves as joint investors rather than beneficiaries.

Developing multisectoral partnership skills builds on Naga’s tradition of urban poor advocacy. By taking it to the next level, the community contributes

The advantage to this system is that the city knows which finance, resources and labour will be contributed in advance and can save on up front costs. To give

an example in Ilo, the construction of a 720 square metre block in the Tren al Sur settlement, the community provided labour, concrete, fuel, water and US$ 3,580; the municipality contributed US$ 2,200. In the paving of 528 square metres of cité 15 of San Pedro Alto Ilo, the community contributed US$ 3,200 and the municipality US$ 600. As demonstrated through savings and cost-sharing with the community, an expansion of municipal objectives will follow as funds are freed up. Benefits to the Urban Poor: In many interviews, there was a common perception that the social housing program is taken for granted and that residents feel little obligation to pay the city back. In terms of financial partnership, the approach taken in Ilo could be very useful here. First, beneficiaries would need to contribute in order to receive the award. Second, if this were standardized a sense of mutual responsibility may be better infused in to the Kaantabay program in general. Finally, contributions by local residents of any amount in whatever way they determine to be feasible would foster a relationship with the municipality based on shared interest for community improvements and housing development. Financial responsibility is no longer entirely shouldered by the city and the residents may become invested in long term community development. Woodward’s Redevelopment, Vancouver, Canada: Public Private Partnership

Brief description: Woodward’s, formerly a department store in downtown Vancouver, is at the heart of the city’s historical, social and economic identity. Woodward’s was formerly a magnet for working people from around the region and closed in 1993. The building symbolizes the economic highpoint of the neighbourhood which has since declined. With very little new investment, it has become the most economically depressed area in Vancouver. The TA R G E T S : New capital resources for expansion of social housing. W H AT W O R K S : The private sector provides housing. Low income residents receive amenities, jobs and housing. P O T E N T I A L D R AW B A C K S : Gentrification. N A G A’ S P O T E N T I A L : 20% Urban Development and Housing Act social housing requirement. Naga City Balanced Development Ordinance. majority of the neighbourhood’s residents are low income and live at or below the poverty level. Woodward’s is seen as a revitalization catalyst for the neighbourhood. The land here is very valuable as it is the last adjacent land to the CBD that has not yet been built out. The redevelopment project has been extremely contentious; squatters occupied the building in 2002, demanding that it be converted to 100% social housing. Planning efforts by the city, private developer, architects and the community have resulted in a

multistakeholder project that fulfills the 20% social housing set aside, mandated by the City of Vancouver for major projects. Extensive community consultation was conducted with design charettes. Visioning also ensured that the low income residents shaped the future of the redevelopment. Woodward’s relevant guiding principles state that the project must: • be financially viable and self-sustaining • include at least 100 units of non-market housing • be an urban revitalization catalyst • incorporate the talents, visions and desires of community residents • provide employment opportunities for local residents in both the construction and operation of the new building • provide opportunities and create synergies for local owners and businesses This case study demonstrates how the private sector can help the city meet its social responsibility goals in a financially sustainable manner. Woodward’s is a comprehensive project. It requires that community residents be employed in its construction. The City of Vancouver will retain ownership of 31,500 square feet of space for non profit offices (NGOs). Employment skills training will also be offered on-site. Woodward’s is an excellent example of incorporating social housing in to a new, high-end development site. The City of Vancouver relies on Provincial funding to build and operate social housing units. In the Woodward’s example, 200

of the total 700 units will be social housing for families and singles. This allocation is based on community need, neighbourhood advocacy and strict observation of the 20% rule. Importantly, Woodward’s integrates residents’ other basic needs besides housing into the development. Job skills training, educational facilities and community spaces will all be housed there. Applicability in Naga context: Naga’s subdivision growth is an ideal starting point to apply the 20% rule. According to the Urban Development and Housing Act, developers in the Philippines are required to set aside 20% of the developed area or the amount they spend on the project for social housing (Angeles 1997: 108). Naga’s 2000 Land Use Plan cites private developers as a key resource for future social housing development. Based on Naga’s housing goals, the policy recommendation supports strict implementation of the social housing requirement. The plan also states that maximum participation of the private sector in actual housing construction and funds mobilization should be enlisted(Naga City Land Use Plan, 2000). Private sector participation could effectively reduce wait times for homelot awards to the urban poor, currently estimated at seven years. It may not be appropriate to integrate social housing lots in to new subdivisions; however the set aside should be built in central, accessible areas. Amenity contributions may also be considered for services beyond infrastructure such as childcare centres.

waiting is reduced. Financial Implications for Beneficiaries: In Canada, social housing beneficiaries pay rent subsidies to a non profit housing operator through direct transfers. There is no amortization because the units are rental. Financial Implications for the City: Provincial governments provide rent subsidies so the city does not benefit directly. However, market condominium owners contribute to property taxes and bring a badly needed infusion of consumer capital to the area. The city also retains ownership of the land and leases it on a 60 year term to the social housing provider, much as USUFRUCT agreements can be used here. Finally, the city will make some return on investment from rents of the agencies that occupy the non profit space. There is a larger benefit for the city than the specific cost recovery for social housing rents. The Woodward’s project will serve as a revitalization gateway in the area. The financial ripple out effects for the city will be substantial. This redevelopment sets a precedent for new market housing developers in the neighbourhood. As a showcase project for mixed income living, Woodward’s serves as a prototype for a consultative, economically viable and socially responsible project. Benefits to the Urban Poor: Public private partnership project can address a portion of the social housing needs more efficiently than government subsidized land. Beneficiaries have less wait and thus the number of people

Mixed income communities are lauded in the North American context as opportunities for low income people to gain access to middle class social networks. The poor, it is thought, will be more likely to escape poverty living in close proximity to middle class households. However, mixed income communities are also controversial and are often met with some resistance. Even in the Woodward’s example, the social housing units will be constructed completely separately from the market housing units. There is no easy formula to determine whether mixed income communities are effective at alleviating poverty. In the Pacol settlement outside of Naga, government subsidized middle income developments are adjacent to the urban poor community. The two communities live in harmony while the biggest challenge to the urban poor remains access to livelihood. Woodward’s social housing beneficiaries will be relocated to an upgraded facility in their community. It is thus a form of on-site relocation which helps retain social networks. The redevelopment’s inclusive consultation process benefits the urban poor as some of their dreams are realized in the new facility. Finally, amenities secured through community amenity contributions (CACs) such as a child care facility and a grocery store will benefit the low income residents. 3. Voi, Kenya: Community Land Trust TA R G E T S : Preventing reselling gentrification.

and

W H AT W O R K S : Shared ownership, shared responsibility. Eliminates social housing sales on the market. Reduces administrative burden. P O T E N T I A L D R AW B A C K S : Community tension. N A G A’ S P O T E N T I A L : Community Mortgage Program. USUFRUCT in place. Interviewees not in favour. Brief description: Kenya is one of the first African countries to replace indigenous community-owned tenure with individualized freehold and leasehold titles. The Kenyan land registration program has subdivided, adjudicated and registered over 6,885,329 hectares of land and issued approximately two million titles under the Registered Lands Act and the Registration of Titles Act (Bassett and Jacobs 1997: 215). This market reform creates some problems. In particular, it has forced the urban poor and new rural migrants out of the formal housing market due to increased land and housing prices.

the Ministry of Local Government (MLF), aimed to avoid problems in other informal settlement upgrading projects. In response to problems of reselling, gentrification and hardship of property tax assessment, this project started to consider different financial arrangements for informal development. The Community Land Trust (CLT) model from America came in to favor as an alternative to individual leasehold. CLT is a form of ownership that combines community ownership and control of land with individual ownership of improvements on the land. While individuals have some well-defined rights on use and building improvements upon the land, ownership and rights for sale stay with the community. Tanzania-Bondeni settlement (644 households and 214 persons/ hectare density [Bassett and Jacobs 1997: 223]) in Voi, a secondary city in south Kenya, was selected as a CLT experiment.

The Kenyan government, as well as many NGOs and international organizations, have taken great efforts to improve tenure security and living conditions for urban poor residents; however, most of the resettlement or upgrading projects have led to gentrification in the end. The urban poor hardly benefited. Squatting became a cyclical problem.

The residents in Tanzania-Bondeni settlement almost exclusively voted for CLT model over individual ownership. With the support of people, Tanzania-Bondeni Community Land Trust was constituted in 1993. Up until now, positive changes have been made for the community’s physical upgrading. A comprehensive community plan was made and implemented while selling land to gentrifiers was largely prevented.

In the early 1990s, a small donorsponsored project, Small Towns Development Project (STDP) located in

Applicability in Naga context: The background context in which the

Tanzania-Bondeni CLT project took place is very similar to Naga’s current context. Firstly, like Naga, Voi is a secondary city rather than the national economic center. Without booming economies, Voi and Naga both have limited financial resources, but as most third world towns, they both experience an increase of population. Tanzania-Bondeni settlement has similar demographic characteristics to the urban poor settlements in Naga. The income level is low while the living density is high. The houses are built in simple, temporary structures. As in most urban poor settlements in Naga, the residents in this settlement do not have ownership over the land. In terms of dealing with the informal settlement and urban poor, Voi and Naga have similar problems too: both cities have a hard time with cost recovery from the beneficiary areas once the freehold or leasehold title is issued. Voi has trouble getting property tax while Naga has a hard time getting repayment. Moreover, both cities have difficulties with resale prevention and gentrification. The reason for Voi, and Kenya as a whole, to adopt CLT is to prevent individual sale to gentrifiers. Naga is struggling with the reselling issue as well. In terms of a policy framework, Naga has some characteristics that match with Voi’s reasons for success. The open attitude of Voi’s government is seen as an important facilitating force of CLT. Naga certainly has a pro-poor and open-minded political environment. The existence of de facto community organizations which manage land tenure issues and the tribe-ownership

tradition can be seen as social preparation for the CLT. Most urban poor settlements in Naga also have strong community organizations and the Community Mortgage Program is in practice. Both of these traditions can also pave the way toward CLT for Naga. Financial Implications for Beneficiaries: Within Kenya’s existing legal framework, the Tanzania-Bondeni Community Land Trust has two legal bodies. The first is a society which is responsible for the day-to-day workings of the community-based organization. The second body is a trust which is solely concerned with administration of land matters. This trust holds the title deed of the land for the society. There are other obligations for the trust including issuing leases to society members, determining fees for land rental, making decisions on land use, providing oversight of sales and improvements and controlling any proposed encumbrance and alienation of land. Financial Implications for the City: CLT model provides the city more control over the settlement. Financially, it is easier for the city to recover its cost. The trust can serve as a collector of amortization or rent. Instead of dealing with each individual beneficiary, the city only needs to contact the trust. The responsibility on the other hand would be delegated to the trust. Since the operators of the trust are also members of the community and know the beneficiaries in person, the beneficiaries may feel more pressured or obligated to pay on time. For a city with a limited labour force, the trust

can also solve the problem of staff scarcity. In addition, since all the decisions about land transformation are made by the community as a whole, it effectively prevents individuals from selling their land to private gentrifiers. Even though the sale of houses is allowed under this model, the ownership of the land stays with the trust which means the city does not lose control over it.

repayment rates. W H AT W O R K S : Small scale, incremental savings program. Community based, NGO administered. P O T E N T I A L D R AW B A C K S : Community tension N A G A’ S P O T E N T I A L : Strong community organization Culture of participation Experience with micro finance

4. Payatas, Quezon City, Metro Manila, Philippines: Micro Finance and Savings Program for the Urban Poor

Brief description Payatas is a village inhabited by 300,000 people, the majority of whom work as waste-pickers and live in informal housing. Despite the existence of different micro-finance institutions, there was no real access to capital for this group of the poorest of the poor. In 1993, Father Norberto Carcellar, head of the Vincentian Missionaries Social Development Foundation (VMSDF), helped organize an association of the waste-pickers, Payatas Scavengers’ Association, Inc. (PSAI). To empower the waste-pickers, PSAI established a credit pool for this community. By 1999, the membership had mushroomed to 25,000 (The Center for Urban Development Studies 2000:68). Their total savings reached 31 million PhP by the end of the 1990s, among which more than 600,000 PhP was raised for housing purposes (The Center for Urban Development Studies 2000:69). Funded through this savings, a housing arm, the Payatas Scavengers’ Homeowners’ Association, Inc. (PSHAI), was also established to assist land acquisition initiatives and housing construction on legal land.

TA R G E T S : Savings schemes

With the deposits, PSHAI has developed

Benefits to the Urban Poor For the urban poor community, the barangay associations’ role in community affairs will continue in the CLT. Important individual ownership rights are maintained. Though the CLT model is based on community rights to land, it protects individuals’ right of use to the property and provides the correct incentives for housing improvement. Most significantly, individuals hold the right to sell the house and related improvements and the right to bequeath housing and land assets to their children. At the same time, as a trust, the beneficiaries can access some capital collectively. Financial institutions are more likely to give loans to collective owners than low-income individuals. Most importantly, the members of the society have the right to decide who has access to their land, which prevents political favoritism and resource misallocation in the social housing system.

for

improving

more housing sites for its members through land negotiation, basic service provision and technical help for construction. Many members use their small-scale loans to improve housing conditions. Besides the improvement of their physical living environment, the PSAI also encourages participation of their group members in public processes relating to health, education, housing and other matters of interest to the local community. Every 500 households form a group cluster that sends representatives to official gatherings where service issues that may affect the community are discussed. As an organization, PSAI also lobbies the government to ensure the benefit of its members. Applicability in Naga context: This example is chosen because it is in the Filipino context. Although Metro Manila is growing at a much faster pace in terms of population and economic development compared to Naga, the urban poor in both cities share very similar cultural contexts and living conditions. More importantly, lack of savings schemes and financial management has been mentioned as one of our interviewees’ concerns. This case study serves as an example of how savings programs can be designed for urban poor communities. The success of this program is ensured by the establishment of community organizations. Besides serving as a savings and loan agencies, they are also responsible for community building and encouraging social participation. In Naga, people’s organizations are already well-established, and participation in public affairs has

become a culture of the urban poor society. In addition, micro financing is not new to Naga. Many of Metro PESO’s programs are actually providing micro financial help to the urban poor. All these characteristics of Naga can encourage NGOs’ participation in a housing micro finance program. Financial Implications for Beneficiaries: The members of PSHAI involved in the savings schemes are arranged into savings groups of seven to 15 families

(see above). Individual members must deposit a minimum of 25 PhP or a maximum of 250 PhP weekly. When a savings group has acquired 1,000 PhP, the group is given a passbook with which to record members’ savings. Once the group saving hits 5,000 PhP, they are eligible to receive loans. Two types of housing related loans are offered: loans for housing repairs and loans for land acquisition through Fixed Deposit for Land and Housing Finance. In order to get the housing repair loan, the application must be approved by the savings group. In Fixed Deposit for Land and Housing Finance, the group members are not allowed to withdraw

their funds, which are retained to be used as equity. Besides the savings from group members, PSHAI also receives funds from a Filipino NGO, Caritas Manila, a German NGO, MISEREOR (Micro-Enterprise Financing and Promotion Program) and the National Homeless People’s Federation Office. The NGOs are also involved in processing the loan applications.

poor people have a hard time getting small-scale loans from formal financial institutions because they lack credit and collateral. Forming an association may enlarge the possibility for urban poor communities to access outside funding. In addition, the association itself is a source for individual micro-scale loans. V. Recommendations

Financial Implications for the City: Now, some micro financing programs are carried out by the Metro PESO department. Though these programs use some international and NGO funds, the responsibility of implementing and repayment collection still largely relies on the City. This example provides an alternative NGO-initiated micro financing arrangement. If the NGO’s participation in micro financing can be enlarged, the burden on the City’s human resources can be alleviated. The savings program can also help the urban poor community to self-finance the land and materials they need for housing. If this model becomes well-established, it can be a big relief for the City’s financial pressure in the long run. Benefits to the Urban Poor From our interviews, we learnt that lack of savings and financial management skills is seen as a problem by the urban poor. Our interviewees reported that although people may have extra money once in awhile, they do not know how to save it or invest it in the right way. The key to this micro finance association model is to force its members to save minimum amounts of their daily earnings for later housing use. As mentioned by the case study, most

We suggest the following recommendations based on data provided by UPAO, our key interview findings and lessons from good practices detailed in our case studies. The recommendations address Kaantabay’s four main challenges. Improve Implementation of “Social Preparation” Programs Adequate and ongoing social preparation training must be prioritized in Kaantabay’s program implementation. When beneficiaries gain livelihood and savings capacities, they will be better able to meet their obligations. • Certification Include amortization training and a certification program prior to beneficiary approval at the local level. • Leadership development Train and employ beneficiaries with good repayment histories to lead others. • Ongoing support Include refresher trainings on savings methods, amortization education and financial resources. Provide information on the national programs like the Abot Kaya Pabaly Fund and local livelihood programs such as Metro PESO. Assist with beneficiary enrollment in these

programs. • Target Focus social preparation training on new beneficiaries. • Information Transfer Encourage new recipients to pass on knowledge. Social preparation programs can increase an ethic of mutual responsibility in barangays as information ripples out. • Comprehensive Include reproductive health education in training programs. Emphasize the importance of home ownership for long term poverty alleviation. Increase Efficiency of Kaantabay Program Administration A consistent and locally based collection program can greatly enhance the repayment rate. Robust links from policy to barangay level implementation are needed. •

•

•

Bridge the Gap Connect policy to implementation directly. Create an administrative and managerial link between The Urban Development and Housing Board and UPAO. Devolve Collection Provide budget for barangay associations to take up a standardized collection system. We suggest that the devolved model be piloted first in one barangay to assess results. At minimum, collectors should be compensated for their transport costs. Rotate collection duties to ensure equity. Consult Consult barangay members on how to best implement a revised, localized repayment program.

•

Document Institutionalize a comprehensive computerized payment and lot sales documentation system. Provide training and support to foster staff capacity. • Revise Repayment Incentives Allow community service as repayment, bolster Bayadnihan program funding, adopt new repayment incentive programs. For example: create a barangay level scholarship fund to be set aside as a percentage of amortization repayments and redistributed back to the community. • Modify Review applicant approval process to include long term ability to pay assessments. • Enforce Devise easy enforcement mechanisms for beneficiaries who default. • Diversify Options Explore alternative tenure options such as the limited used of USUFRUCT, community land trusts and rent supplements. Open Conduits To New Funding Sources Pursuing other funding sources for homelot provision will decrease the financial pressure on the City and increase the program’s long term viability. • Private Sector Increase participation in the low income housing market through the 20% set aside rule. Provide incentives for mixed income residential developments. • Barangay Contributions

Encourage nominal financial contributions from beneficiaries at the local level. • Microfinance Encourage NGOs and the private sector to set up micro-scale loans for beneficiaries. Enlarge the capability for beneficiaries to access outside capital. • National Funding Work in concert with national housing agencies to secure additional funding for land acquisition. Monitor the localization of the Community Mortgage Program in Naga for future funding leverage. Adopt a Comprehensive, Integrated Approach to the Social Housing Program Social housing is not a stand alone issue. Although tenure security can improve the urban poor’s standard of living, it must be integrated into a more comprehensive and visionary approach toward poverty alleviation. • Livelihood When possible, locate new businesses near urban poor settlements. Require new businesses to hire a certain percentage of urban poor workers. For example: the new resort adjacent to Del Rosario could employee urban poor barangay residents. • Transportation Address the transportation barrier, especially in resettlement areas, with ability to pay or voucher schemes. • Nutrition: Integrate urban agriculture strategies in to urban poor settlements. On site food production can reduce household expenditures. • Education Create scholarship funds and loan

opportunities for urban poor youth to avail of technical schools, job skills training and university study. Strengthen the technical capacities of urban poor adults in research and data collection through training programs. • Youth Development Create stipended opportunities for urban poor youth to participate in relevant youth programs. Support programs that build urban poor youth’s ability to advocate and gain livelihoods for themselves. Initiate mentorship programs with Urban Poor Federation officials. Youth are the future leaders of the urban poor settlements.

VI. Conclusion Due to our time limits and our cultural and linguistic barriers, our understanding of the Kaantabay sa Kauswagan program is very limited. However, we know after what we have observed that overall, this program can be seen as a “best practice” among social housing programs. However, it is undeniable that this program is now facing some problems which will challenge its long term sustainability. Through interviews with city staff, we identified cost recovery, prevention of reselling and gentrification of beneficiary land, program expansion and institutional

barriers to be the most significant four challenges. Tracing the deeper social reasons behind these challenges, we contacted some beneficiaries in different urban poor sites. We found that deep poverty has not been solved by housing provision only. Job skills, financial management training and comprehensive social preparation is needed to alleviate poverty and to secure beneficiaries’ home ownership. Recommendations on livelihood improvement, social preparation, administrative efficiency, and financial resource diversification are suggested and are based in our interview findings and lessons learned from international case studies.

Works Cited

Angeles, Jocelyn Vicente. 1997. “The Role of the Naga City Urban Poor Federation in the Passage of Pro Poor Ordinances and Policies.” in Wul, Marlona A. and G.S. Lopez, Philippine Democracy Agenda: Volume 2. State-Civil Society Relations in Policy Making. Third World Studies Center, University of the Philippines. Angeles, Leonora. “Renegotiating Decentralization and State Civil Society Relations: A Reinterpretation of Naga City’s Experiment in Participatory Governance.” P226-262. Bassett, Ellen M. and Harvey M. Jacobs. 1997. “Community- Based Tenure Reform in Urban Africa: the Commununity Land Trust Experiment in Voi, Kenya.” Land Use Policy, Vol. 14, No. 3, P215-229. Campillos, Rolando. 18 & 22, May 2007. Personal interviews. Chief Executive Officer, Urban Poor Affairs Office, Naga City, Philippines. Cesar, Magistrado. 23 May, 2007. Personal Interview. Urban Development and Housing Board, Naga City, Philippines. De la Rosa, Dada. 1 June, 2007. Personal interview. Secretary, Naga City People’s Council, Naga City, Philippines. Del Rosario Community interviews. 31 May, 2007. Personal interviews, 3 respondents, Naga City, Philippines. Follegatti, José Luis López. 1999 “Ilo: A City In Transformation.” Working Paper Series on Urban and Environmental Action. Plans and Local Agenda 21, Working Paper 3. Reprinted from Environment and Urbanization. Geoff Payne and Associates: http://www.gpa.org.uk/ accessed on 27 May, 2007. Halili, Flor Mrs. 24 May, 2007. Vice President, Naga City Urban Poor Federation, Naga City, Philippines. Lim, Cristina P. and Jon Michael R. Villasenor. 2003. A Survey of Ordinances Concerning the Urban Poor in Three Bicol Cities. Ateneo Social Science Research Center (ASSRC) for the Urban Research Consortium-Bicol. Lerma interview. 30 May, 2007. Personal Interview, 1 respondent, Naga City, Philippines. Llanto, Hilberto M. and Aniceto C. Orbeta Jr. 2001. The State of Philippine Housing Programs: A Critical Look At How Philippine Subsidies Work. Philippine Institute for Development Studies.

McCallum, Douglas and Benjamin, Stan. 1985. “Low-Income Urban Housing in the Third World: Broadening the Economic Perspective.” Urban Studies, 22:4, P277-287. Naga City Website: www.naga.gov.ph accessed on 21 May, 2007. Naga City. 2007. State of the City Report, Putting Our People First: Development that Matters. Naga City Land Use Plan. 2000. Pacol Community interviews. 30 May, 2007. Focus group, 4 respondents, Naga City, Philippines. Rosales, Helen. 23 May, 200. Personal Interview. Urban Development and Housing Board, Assistant City Treasurer, Naga City, Philippines. Triangulo Community interviews. 30 May, 2007. Personal interview, 2 respondents, Naga City, Philippines. Urban Poor Settlement Data as of 2006. Urban Poor Affairs Office. Woodward’s Redevelopment Website http://www.city.vancouver.bc.ca/corpsvcs/realestate/woodwards/ accessed on June 3, 2007. Additional Resource List Ortecho, Enrique. 2003. “Integral Programme in Cordoba, Argentina.” International Workshop on Integrated Urban Housing Development, Rugby 17-18. U K D e p a r t m e n t f o r International Development (DFID). Payne, Geoffrey K.and Michael Majale. 2004. The Urban Housing Manual: Making Regulatory Frameworks Work for the Poor. James & James/Earthscan. Struyk. R, Hoffman. M, and Katsura. H. 1990. The Market for Housing in Indonesian Cities. Urban Institute Press, Washington. Tipple, A. Graham and K. G. (Kenneth George) Willis. 2001. Housing the Poor in the Developing World: Methods of Analysis, Case Studies, and Policy. Routledge. United Nations Human Settlements Programme. 2005. “Financing Urban Shelter: Global Report on Human Settlements.” James & James/Earthscan.

About the Authors Allison Jones

Lang Lang

I am a graduate student at the School of Community and Regional Planning. I came to Naga with a keen interest in social housing issues in the Philippines. During my planning studies, I have focused on social and housing policy that affects the most marginalized in society.

I am a Chinese student in the School of Community and Regional Planning, University of British Columbia. My experience of living in China, the U.S. and Canada provide me a chance to look at urban development in different cultural context. I really appreciate the chance to study and research in Naga which provide me a chance to learn urban planning in Filipino context.

My academic interests are closely tied to my previous practical work experience. I have been involved with community development initiatives in the non profit sector in the US for four years. I hold an undergraduate degree in International Political Economy with a focus on Latin America. It has been a pleasure and honour to complete my graduate course work here, in Naga City. The lessons I have learned will stay with me far in to the future.

I intend to write my thesis on China’s housing market reform. My experience and research on Naga’s social housing policy provide me an alternative angle to examine the housing policy of my own country.