Sidebar

Magazine menu

21
Sat, Oct

From Real Estate Development to Integral Development of Sustainable Communities... Changing the Scale of Production of Social Housing and its Implications...

Disruptive Innovations
Typography

Introduction

The growth of urban centers poses new challenges to human development, to the economic and environmental sustainability of the most vulnerable families, and to the construction of spaces for healthy coexistence and prosperity. The decision to take on the challenges to transform the scale of production of social housing in Colombia, and to participate in the process of social transformation through real estate projects of the Mario Santo Domingo Foundation, pioneers  to propose an innovative model of urban development, and to lead a team of technicians and professionals with incredible qualities to implement it. This will then be a recap of these first eight years of Integral Development of Sustainable Communities' (DINCS).

Context

Understanding  where we came from,  is necessary  to understand where we are and where we are heading in terms of urban development, population concentration growth in cities, economic and social vulnerability, and social equity. In 2008, the housing deficit in Colombia totaled just over four million units, and it was perceived as a great challenge, accompanied by a formidable opportunity for development. The housing deficit was caused by two factors that still nurture its growth and encourage the informal development of our cities. On the one hand, the fact that in the country about 120,000 new homes are constituted every year in conditions of social and economic vulnerability, and on the other, that the articulation of policies and real estate markets has barely produced a maximum of 30,000 houses of priority interest per year. This accumulated deficit, together with the urban population growth processes that now exceed 77 percent of our total population, led the national government to propose a change in the production scale of social housing in Colombia. Great challenges require great solutions, and this is how great urban developments with emphasis on social interest housing in Colombia began under the figure of the Macro-projects of National Social Interest, which later would be complemented by the strategy of the "Locomotive of Housing, " the "Free Housing" program, the "Housing of Priority Interest for Savers -- VIPA," currently "My House Now," and in the near future the "Rent with Purchase Option -- ACOC."

Real estate developers and the financial sector, within the framework of national housing policy and national and local public budgets for social housing subsidies, have sought to promote a more robust and better quality offer to meet the housing needs of millions of Colombians. And it is from this invitation from the National Government to change the scale of production of social housing through Macro-projects of Social Interest from which  the social innovation derives called "Integral Development of Sustainable Communities -- DINCS."

First Steps

In 2008, I was invited by Alejandro Santo Domingo to lead the Foundation that bears the name of his grandfather and which was founded in 1960. The Mario Santo Domingo Foundation has a long history of social development, and within the framework of the Policy of Macro-projects, made the decision to acquire two large extensions of land in the cities of Barranquilla and Cartagena. This, in order to bet on a change of scale in the production of social interest housing to meet the needs of tens of thousands of families without housing in these two important urban centers of the Colombian Caribbean. A lot of more than 150 hectares in Barranquilla, and another one of almost 400 hectares in Cartagena would serve as the basis for the construction of an innovative urban development methodology, seeking to promote opportunities for healthy coexistence and prosperity for about 20,000 families in the first,and 45,000 in the second.

Assuming the Challenge

It was as simple and at the same time as complex. The challenge was to build a city for 100,000 inhabitants on the outskirts of Barranquilla under the name Villas de San Pablo, and another for 220,000 inhabitants in the expansion areas of the city of Cartagena known as Ciudad del Bicentenario.

Learning from the Experience of Other Countries

Meeting this challenge required studying and understanding what was happening in other countries. How they were coping with the growing housing deficit. What lessons had been learned from those processes, and what new questions should we ask ourselves in order to move forward with the state of the art of large-scale urban development. In some countries the case was truly concerning. We were able to see how big scale production of housing had resulted in the abandonment of hundreds of thousands of homes, and the collapse of large construction companies, real estate developers, and financial institutions. In other cases, coexistence among neighbors was violent, promoting the impoverishment, insecurity, and loss of value of developed areas for the benefit of the most vulnerable families. Deficiencies in planning exercises led to large investments of public and private resources, knowledge and capacities of multiple organizations, resulting in the weakening of the economic, social, and environmental capital of many cities in the region, and of the families that inhabited them. Ultimately, large-scale housing production projects are first and foremost major challenges for the healthy development of urban centers, and it is necessary to find new questions that lead us to new answers, and to make innovative and courageous decisions that can break the paradigms that continue feeding the growth of the housing deficit, inequity, informality, and urban poverty.

By studying the experiences from different countries in Latin America and other regions, we have demonstrated the fundamental limitations of real estate development as a mechanism to address large-scale urban social housing projects. It was then necessary to make adjustments to the elements that motivate the development of the real estate market and the existing policy frameworks on housing, promoting joint interventions of different Government entities with businessmen, universities, and civil society organizations.

Looking for New Questions to Change Paradigms

The dimension of the challenge, the need to think, decide, and act in a manner consistent with the reality of the most vulnerable families, promotes in our team the need to ask a multitude of new questions. What does it mean to build 40,000 homes in a city? What decisions must we make to enable these families to achieve decent living standards in these large-scale housing projects? Is the real estate development that we know enough to guarantee urban development that promotes prosperity, healthy coexistence, and sustainability? Which should be the public and private organizations, both for profit and non-profit, that we should call to meet a challenge of this magnitude? Which would be the sources of the resources needed to finance the construction of housing, schools, health centers, early child development centers, recreational and sports areas, police facilities, technology access centers, libraries, cultural and community integration centers, churches and commercial areas, if those who inhabited these new areas of the cities would be primarily low-income, vulnerable, and poor families? How many policemen would be needed to achieve spaces of healthy coexistence? What should be the role of the police during the process of community consolidation? Does the necessary conditions of will and public policy exist to promote integrated and sustainable urban development? Thus, the questions continued to arise day by day from the technical and professional teams, who sought to make the decisions that would lead us to act in line with the goal of building an Integral Development of Sustainable Communities.

Like the new questions, new answers were also emerging . It would be like building a city for more than 200,000 inhabitants, it would require more than 40 schools, and a similar or higher number of early child development centers. One health care center would not be sufficient, and the first basic units would be built with expansion lands necessary to turn it into a large hospital. A police station and several immediate security boots, a fire station, and programs of coexistence and citizen security would be required. It would be necessary to promote the training of micro-entrepreneurs and to provide them with credit to strengthen their businesses, and through this, to strengthen their income generation. It would also be important to associate the entrepreneurs and guilds of the city, so that more and more people in this community would have access to quality jobs that contribute to their development and that of their families. Universities would design research processes to assess the impact of investments in resources, skills, and knowledge, and would engage young people from the city in the construction of these new innovation processes. It would be necessary to prepare the families to inhabit this new environment, inviting them to establish formal agreements of healthy coexistence that promote the development of social cohesion and solidarity in the community.

Integral Develoopment of Sustainable Communities

Traditionally, urban land use decisions are strongly influenced by their economic function, and it was necessary to find mechanisms to give greater relevance to social and environmental functions linked to the well-being of  inhabitants.

Our response was the Integral Development of Sustainable Communities, which can be understood as "a process of analysis, decision making and implementation of actions through the application of vehicles of collective impact, where the participation, leadership and commitment of the community, is aimed to strengthen the economic, social and environmental capital of a relevant number of people who inhabit a delimited territory." Each of these elements would frame the dialogues, actions and, agreements necessary to transform urban areas into spaces that promote the development of people, seeking to optimize the three primary functions of the soil.

The management strategies necessary to implement the Integral Development of Sustainable Communities would break with traditional social policy, financing, and management schemes. In a first stage we defined three management axes as fundamental to seeking the optimization of the social, economic, and environmental functions inherent to the land and its development: the urbanism and housing, articulated with sufficient social infrastructure and robust strategies of community strengthening.

Initially, it was necessary to define the urban structure and housing design, seeking to optimize the quality of development taking into account the  financial and constructive resource constraints of social housing. Through the Ministry of Housing and local authorities, legal, technical, and financial mechanisms were established to allow the adoption and subsequent development of these two National Social Interest Macro-projects, which would be the first of their kind in Colombia. We started a process of continuous learning by all the actors involved through meetings, revision of technical and financial documents, reconciliation of interests and priorities of the central Government, municipalities, designers, academics, builders and suppliers of materials, and the growing participation of a community that began to settle in these territories. In terms of urbanism, long and complex revisions to the adopted schemes were necessary in order to ensure the viability of their development. A little more than three years passed in which the design and rethinking of the urban fabric coexisted with the construction and delivery of housing to the first families who came to inhabit these new areas of expansion of the city.

The definition of housing types and their basic characteristics led the different organizations teams  to seek to maximize the welfare of families, within the framework of a budget limited to USD $15,000 per household.

New questions emerged in this process. Could we use the self-construction of housing in an efficient and reliable way as an alternative to optimize the available human and financial resources? Would it be possible to include design concepts and sustainable construction technologies with such a limited budget? How would we achieve the construction of basic housing units with possibilities for progressive development, in order to strengthen the heritage of families over time? Which elements of design would fit the sociocultural characteristics of the population? Could we use innovative and reliable building materials that provide comfort and constructive efficiency? How far could financial models be taken to assume general burdens and cross-subsidies of land to address the early stages of development? These and other questions led us to design single-family solutions, including some elements of sustainable construction, with a capacity for progressive development to increase from 42 square meters to a little more than 70, improving the comfort and value of the families net-worth. It has been a dynamic process of design, construction, and delivery, which has been supported by renowned architects, and has led to the implementation of innovative architectural solutions.

In terms of social infrastructure, questions and management needs were even more complex, since existing policies did not articulate the development of new housing with investments in schools, early childhood centers, health centers, police stations, libraries, sports areas, technology access centers, and other infrastructure necessary to adequately guarantee the integral development of vulnerable communities. How could we achieve convergence over time in policies and investments in such a wide range of needs? What would be the contents of the dialogues that would motivate the articulation of the different ministries and entities of the central Government, to achieve the implementation of integral development? What would be the institutional cost of seeking and promoting this articulation? Cities' budgets were obviously insufficient, and now they needed to take on investments in social infrastructure from these new expansion zones. The picture was not at all encouraging because it required enormously complex resolve and decisions. When, where, and why to invest public resources for the construction, provision, and operation of the new social infrastructure, competed ethically, politically, and financially, with the historical needs of other areas of the city.

Little by little the management evolved to give its first fruits. The National Government's Free Housing Policy again showed the need to accompany housing development with investment in social infrastructure and community strengthening programs. This was how the Government made three decisions of great value in this direction. On the one hand, it decided to allocate investments of nearly USD $200 million to the construction and provision of social infrastructure in housing projects, promoting the participation and commitment of other ministries. On the other hand, it involved the Department of Social Prosperity to lead the accompaniment to beneficiary families, allocating resources and inviting allies of civil society to join these processes. And finally, it promoted the adoption of Decree 528 of April 2, 2016, which creates and organizes the "National System of Community Strengthening and Social Infrastructure of the Free Housing program and other provisions as dictated." These events marked milestones in the history of social housing in Colombia, articulating policies, resources, and capacities of the central Government to build more sustainable communities. In addition, these decisions positively impact the achievement of the United Nations Sustainable Development Goals, and further alignment with the principles established by the global New Urban Agenda.

In terms of community strengthening, it is important to highlight the Integral Development of Sustainable Communities is structured on the basis of community participation, empowerment, leadership and self-management. There for, the identification and formation of leaders/managers, the creation and strengthening of basic social structures, and the definition of a Local Development Plan by the community are fundamental elements for the success in the design, implementation, and sustainability of this type of urban actions.

Community strengthening begins with the identification of proactive, committed and, determined community leaders to devote time and skills to the service of their community. Achieving community benefits gives these leaders/managers the credibility and legitimacy they need to facilitate their management. They are usually people who are able to listen and understand the community through structured dialogues, which strengthen the basic social structures. The Integral Development of Sustainable Communities has established for each project twelve (12) community committees to address issues related to: urbanism, housing, security, health, education and early childhood, income generation, commerce, recreation and sport, culture, religion, environmental management, and technology. These committees are made up of community leaders/managers who articulate city policies and private social investment with the needs of the community through a Local Development Plan (PDL). The PDLs were adopted by the Mayor of the city and the President of the Community Action Board, serving as a road map to advance dialogues and actions that allow progress in achieving the established objectives.

In the cases of Villas de San Pablo and Ciudad del Bicentenario, about one hundred community leaders/managers participate actively in the implementation of their Local Development Plans. Its committees meet periodically, leaving a formal record of the discussions, the progress made, and the processes of socialization of results with extended groups of the community. Some results have been achieved through channeling resources and programs of the municipality and for profit and non-profit private organizations for the benefit of children, youth, and adults including: average family income increased, reductions in energy and drinking water consumption were realized, and there were lower incidences of police cases compared to urban center indicators..

Continuing with Innovation: Management Mechanisms

The implementation of the Integral Development of Sustainable Communities has demonstrated the need to design and implement different mechanisms, in order to provide solutions to financial inclusion, income generation, coexistence, and the channeling of public resources. These mechanisms include:

Rent with purchase option: In our countries, the housing deficit is largely fed by the lack of access to mortgage credit resources for people who derive their income from the informal economy. In Colombia, it is estimated that about 70 percent of the deficit is made up by these type of families who, lacking credit opportunities, are forced to access informal, substandard housing solutions, overcrowding, or rental of housing that, in many cases, does not meet the minimum standards of decent housing. This is how new questions arise. What motivates the exclusion of access to financial resources for families who derive their income from the informal economy? Is it really their ability to pay? If they have the capacity to pay the current rent costs, what are the barriers that prevent the creation of confidence to access a mortgage loan? Are the conditions allowed for housing to acquire value over time and improve the loan to value ratio of social housing developments, thus reducing the risk associated with credit? Is the current regulatory framework adequate to guarantee the social housing valuation and to reduce the risk of mortgage operations? Is it possible to efficiently recover property affected by situations that violate the repayment of obligations? Is there a protectionist spirit that promotes a culture of non-payment and therefore avoids the strengthening of responsible market operations? These and other questions led us to think about designing this mechanism in order to create trust between the informal debtor and the financial system, promoting real estate valuation, and healthy coexistence.

Commercial Balance of Sustainable Communities: The processes of urban expansion with an emphasis on social housing for informal-earning families can result in the construction of areas where poverty and exclusion deepen. This is due to the limited capacity of these communities to trade goods and services with the urban center to which they belong. The massive relocation of informal-earning families tends to impoverish the community economy, making it necessary to motivate greater commercial dynamics, to channel the necessary resources to acquire goods and services that are not produced in the community. This economic dynamic has led us to promote formal employment programs and the strengthening of micro-entrepreneurs in the community.

Social Fund: The construction and real estate development activities carried out by private for-profit vehicles allows us to obtain the necessary profitability to meet the costs of the capital used, strengthening the market dynamics. In the cases of Villas de San Pablo and Ciudad del Bicentenario, land ownership and real estate activities are at the head of a non-profit entity, which has allowed resources to be allocated to the creation of a Social Fund for the development of infrastructure and the financing of community strengthening programs. Through a real estate matrix trust, an account of accumulation of margins and yields of the operation has been created, which serves the basic social structures to partially finance objectives established in the Local Development Plans.

Public-Private Partnerships for Development: As discussed at the beginning of this article, the scale change in urban housing production brings out important challenges to the financing of social infrastructure. It is common to find that sometimes there are resources to finance access to housing, without the same availability of resources to finance the social infrastructure necessary to achieve adequate real estate valuation and access to decent urban living conditions for the inhabitants of these new developments. Given this reality, it is necessary to identify long-term resource flows in order to finance the design, construction, manning, and operation of this infrastructure. In the cases of Villas de San Pablo and Ciudad del Bicentenario, initiatives are being studied and developed that allow, for example, the use of resources necessary to cover transportation costs for children and young people of school age, and the higher costs of maintenance of the road structure, for a construction endowment for schools that avoid these costs in the future.

Route of Bonding, Adaptation, Accompaniment, and Exit - VAAS Route: No doubt , this is one of the mechanisms that bring greater value to the traditional real estate development, focusing attention on the short, medium, and long term characteristics and dynamics of the communities that live in these new developments. The relocation of these families brings on challenges to the reconstruction of the social fabric and the relations of solidarity established between neighbors, and at the same time increases the opportunities for their development. This is why it is necessary to implement structured programs, in the different stages of accommodations of the community to complement their new living conditions.

The Bonding phase begins three months before the physical delivery of the houses, when the beneficiary families participate in 10 workshops designed by different public and private allies. These workshops address issues related to:

  • New life plan with greater opportunities;
  • Formalization of coexistence agreements;
  • Acquaintance of the new property and the responsibilities it entails;
  • Interaction with leaders/managers of the community and local authorities committed to their development; and
  • Familiarization with the Local Development Plan.

Once this stage of bonding has finalized and the families are already inhabiting the territory, the stage of Adaptation begins. During this period the families that just arrived at the project get to know each other and adapt to the processes of coexistence with those who already inhabit it. Through recreational and community activities, we seek to strengthen the social fabric, promoting bonds that contribute to healthy coexistence, the development of business opportunities, and security. During the Accompaniment stage, a group of allied entities support  the community in achieving the objectives set forth in the Local Development Plan. It is essential to establish an Exit plan, which allows the managing organization to finish its operations from the territory, without causing trauma to the community by creating unwanted dependency bonds.

Thinking, Deciding, and Acting Collectively

This adventure has taught us the transformative power that is unseen in collective thinking, collective planning, and collective action. The achievement of large-scale objectives led us to seek, design, and implement mechanisms that have allowed the community to articulate with public and private actors that contribute to its development. A real estate trust matrix articulates, the commitments of resources, skills, and knowledge of the more than 50 public and private allies that now belong to these Collective Impact Vehicles. As an adaptation of Stanford University's concept, these vehicles have established common goals to address complex social challenges such as those posed by the integral development of Villas de San Pablo and Ciudad del Bicentenario.

The Integral Development of Sustainable Communities has been supported, accompanied, and directed by the Santo Domingo family, the Board of Directors of the Mario Santo Domingo Foundation, its directors and employees, the Ministry of Housing, City, and Territory, the Ministry of Finance And Public Credit, the Ministry of Education, the Ministry of Interior and Justice, the Ministry of Information Technology and Communications, the Department of Social Prosperity, the Colombian Institute of Family Welfare, the Administrative Department of Sports, Recreation, Physical Activity and Leisure Time, the National Police, the Financier for Development - Findeter, the National Service of Learning--Sena, Barranquilla and Cartagena City Hall, Atlantic Governance, Bancoldex, National Savings Fund, The University of the North, the Technological University of Bolivar, the Harvard Center for International Development, the Advanced Urban Development Center of the Massachusetts Institute of Technology, the Colombian Council for Sustainable Construction, Asobancaria, Asomicrofinanzas, Camacol, Profamilia, the Fiduciaria Bogotá, Prodesa, ConinsaRamonH, Azembla, Eternit, the Business Foundations Association, the Alliance “Primero lo Primero”, the Carulla Foundation, the Argos Foundation, ViveBailando, the Salví Foundation, Comfenalco, utilities, curators, notaries and registry offices, as well as a committed group of architects, designers, construction companies, and construction materials suppliers. 

Conclusions, Partial Results, and Lessons Learned

Almost nine years after the start of the design and implementation of the Integral Development of Sustainable Communities in Barranquilla and Cartagena, nearly 30,000 people in poverty and extreme poverty have benefited thanks to the commitment of public and private allies. The increase in the family home equity has sometimes gone from USD $1,000 to USD $15,000, also showing a real estate valuation potential that contributes to its strengthening and economic development. In Villas de San Pablo, thanks to the implementation of prepaid energy technologies, the community has reduced its electricity consumption by close to 45 percent, leaving a lower carbon footprint, and alleviating family expenses. More than 120 community leaders/managers actively participate in community action committees and boards, thus strengthening the community's capacity to plan and manage public investments and actions that determine its development. In a study carried out in Ciudad del Bicentenario to families linked to the mechanism of the Trade Balance of Sustainable Communities, it was found that they had increased their monthly income by an average of 61 percent. The green areas and per-inhabitant areas of equipment in both projects tripled the average of Barranquilla and Cartagena, improving the conditions of the environment and the availability of social infrastructure, to the benefit of the quality of life and the potential for valorization of housing. In conjunction with the National Police, and still having an important way to go in this front, it has been possible to show a substantial improvement in the conditions of security and citizen coexistence. These and many other benefits that are in the process of research and impact assessment are the result of the articulated action of various organizations that have gone through a process of innovation, trial, error, and learning, motivated by finding new ways to approach the challenges of urban poverty and housing of social interest.

Some videos, testimonies and aerial shots of these developments can be visited in the following links, and through the Foundation Mario Santo Domingo website: www.fmsd.org.co

Overflight to VSP 2016:         https://youtu.be/047M-KCPc4k
Prepaid Energy VSP - MVCT:         https://youtu.be/bMF0obnXApk
VSP 2015 Management Report:         https://youtu.be/_zW9rn10whw
VSP Child Development Center:         https://youtu.be/EP0-8KVqnV4
VSP Health Center:         https://youtu.be/4WaNpAT6uA8
Video ANSPE - VSP:                 https://youtu.be/kVQXJAwN8UA
With housing we change lives:         https://youtu.be/2I7TibXYqkI
Supervision of the Ministry of Housing to VSP: https://youtu.be/XMX6D3Ju_PQ

Overflight at CB 2016:         https://youtu.be/TJTKYd5AXSQ
Ciudad del Bicentenario School:         https://youtu.be/SgCjzD_JAJw
CDI Ciudad del Bicentenario:         https://youtu.be/CoS2TMHePJo
Ciudad del Bicentenario Families:         https://youtu.be/SNdQWId7jD0
Presentation of Houses to Displaced people: https://youtu.be/J0X_m45byCs
Community Accompaniment:         https://youtu.be/Fr5KXwmKDlQ
Corvivienda CB:                 https://youtu.be/KkBIwm9S0hg
CB Wind Extractors:         https://youtu.be/X5NOkXOWSDQ
Ecopetrol CSR CB:         https://youtu.be/Rsd06TfGA6Y
Home Presentation CB:         https://youtu.be/Y3wDxfVZWmo

Author Bio

Juan Carlos Franco Villegas is a Civil Engineer with a Master in Business Administration. During his professional experiences, he has led the design, structure, and implementation of innovative and high impact projects in the social and environmental sectors. Currently, he is a principal partner and director of LRA Colombia, a consulting company. He has worked as a General Director of the Human Tissue Association and for eight years served as General Director of Mario Santo Domingo Foundation. Among his biggest professional goals, he aims to fortify market dynamics benefiting vulnerable communities and the articulation of synergies, resources, and skills between public sector, private sector, academy, and civil society through collective impact tools.  

http://es.presidencia.gov.co/normativa/normativa/DECRETO%20528%20DEL%2002%20DE%20ABRIL%20DE%202016.pdf