Tipo de autoría: Promotor

Low Income Housing Tax Credit in the United States

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Low Income Housing Tax Credit in the United States

Mismatches
Policies and regulations

Main objectives of the project

In the US, most housing subsidies are provided indirectly via the tax system rather than direct public spending. One of the tax subsidies provided for affordable housing is Low-Income Housing Tax Credit (LIHTC) which were introduced by the Tax Reform Act in 1986.

Date

  • 2018:

Stakeholders

  • Promotor: United States government

Location

Continent: North America
Country/Region: United States of America

Description

Since their introduction LIHTCs have helped to fund three million units of affordable housing. They cost the United States government some USD 9.9 billion per year in tax foregone.[1]

LIHTCs are available to both non-profit and for-profit housing developers. Once a housing developer has identified a site and been allocated tax credits, capital is raised by selling the credits to investors. Investors include banks, which have financed 43 per cent on average, 30 per cent from government-sponsored enterprises such as Fannie Mae, 19 per cent from insurance and other finance companies, and 8 per cent from non-financial companies. Tax benefits only flow to investors if the scheme remains compliant for 15-30 years with the rules set when the tax credits were allocated.[2] Notably LIHTCs usually finance around 42 per cent of the costs of a typical housing project. Therefore, to deliver affordable housing this finance must be complemented by public grants and lower-cost financing.

To help fund additional dwellings from the USD 10 billion provided via LIHTC, since 2018 LIHTC projects can offer dwellings with higher income ceilings – up to 80 per cent of the local median income, with rents at 30 per cent of this level. Other dwellings in the same housing development must have lower income ceilings and the overall average of all dwellings in the development must be 60 per cent of area median income.[3]

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Housing Finance Agency of Ireland

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Housing Finance Agency of Ireland

Policies and regulations
Financing
Promotion and production
Ownership and tenure

Main objectives of the project

The Housing Finance Agency (HFA) was established in 1982 and is a public limited company wholly owned by the Irish government.

Date

  • 1982:

Stakeholders

  • Promotor: Housing Finance Agency (HFA)

Location

Continent: Europe
Country/Region: Ireland

Description

Its mandate is to provide loan finance at the lowest interest rates possible to local government and non-profit sector housing associations for social housing provision, to Higher Education Institutions for student housing provision and for mortgage lending to low-income home purchasers.

The Agency sources its finance from two European Union public banks – EIB and CEB – and from short-term deposits from local government. At the end of 2020, the outstanding loan book of HFA was EUR 5.18 billion. The HFA is self-financing – a small margin is added onto its cost of funds to cover its administration costs – so it does not receive any government subvention.

In recent years, HFA has played a key role in funding the expansion of housing support for low-income households in Ireland. In 2010 it began to offer loan finance to non-profit sector social housing providers which had previously been funded primarily by government grants. This significantly increased the volume of finance available to these housing providers and enabled them to greatly increase their output. Securing long-term fixed-rate finance enabled the HFA to offer fixed-rate loans to non-profit social housing providers. This eliminated interest rate risk, which was a key concern for them.[1]

This experience of drawing on HFA loan finance has encouraged some non-profit social housing providers to use private banks and capital markets. HFA has also used these fixed-rate EIB and CEB loan facilities to offer 20-year fixed-rate, low-interest mortgages to low-income Irish home buyers[2]. Long term fixed-interest mortgages are not provided by commercial mortgage lenders in Ireland and this type of loan significantly increases the affordability and predictability of mortgage payments, so it is particularly beneficial for low-income households[3].

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Community Land Trust Brussels (CLTB)

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Community Land Trust Brussels (CLTB)

Policies and regulations
Financing
Promotion and production
Ownership and tenure

Main objectives of the project

Community Land Trust Brussels (CLTB) (https://cltb.be/) develops affordable rental and co-ownership housing projects in Brussels for low-income households.

Date

  • 2020:

Stakeholders

  • Promotor: Community Land Trust Brussels (CLTB)

Location

Continent: Europe
City: Schaerbeek - Schaarbeek
Country/Region: Belgium, Brussels

Description

By April 2020, CLTB had delivered 49 dwellings and a further 59 were under construction. Its co-ownership housing is an example of the subsidy retention model of shared housing equity and therefore provides “permanently affordable” housing.[1]

Under this model, housing is built or refurbished on land which is collectively owned by the community land trust. Home buyers apply to CLTB to buy a home and, if their application is successful, they do so for a price which reflects their income rather than the market value. They also sign a ground lease contract which compels them to lease the land from the CLT for 50 years and when this finishes, they can renew it.

Alternatively, they can sell their dwelling to another household that meets the CLTB conditions of access; though dwellings can also be sold before the ground lease expires, if needed. However, in case of sale, the resident receives 25 per cent of the increase in value above what they paid for the dwelling and CLTB receives 6 per cent or EUR 3,000, whichever is the highest. The next household purchases the home at this sale price, which effectively neutralizes the remaining 69 per cent of the increase in value of the dwelling.

Collaborative management of buildings and the organization are also core principles of CLTB. Before buyers move into their new home they participate in a ‘project group’ with other buyers in same complex which collectively agrees the final design and fit-out of the dwellings and also how the housing estates or building will be managed. After buyers move into their new homes it is envisaged that they will take over responsibility the management of the estate or building. Current and future CLT members can attend the Trust’s annual general meeting and participate in decisions regarding the management of CLTB, as well as sit on the board of directors of CLTB.

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Right of occupancy housing in Finland

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Right of occupancy housing in Finland

Policies and regulations
Financing
Promotion and production
Ownership and tenure

Main objectives of the project

Right-of-occupancy housing [1] is a mix of renting and homeownership. Under this model the occupier must first pay a right-of-occupancy payment, generally amounting to 15 per cent of the purchase price.

Date

Stakeholders

  • Promotor: Housing Finance and Development Centre of Finland (ARA)

Location

Continent: Europe
Country/Region: Finland

Description

This can be used as security for a mortgage and attracts mortgage interest tax relief. In addition, the residents also pay a monthly residence charge for their right to occupy the dwelling. Right-of-occupancy housing is also subject to a monthly residence charge to cover capital expenses and upkeep costs. The amount of the residence charge is based on the cost recovery principle and may not exceed the average market rents of similar dwellings in the same locality. Right of occupancy dwellings can never be bought outright but the occupier has the right to live there permanently.

There are restrictions on the resale of right of occupancy housing. These dwellings can only be sold to a buyer approved by the local municipality. When occupiers of a dwelling of this type decide to give up their right of occupancy, they receive a refund of their right-of-occupancy payment, plus an index increment corresponding to the change in the building cost index.

Anyone aged 18 or older may apply for a right-of-occupancy apartment. There are no income restrictions, but applicants cannot own another dwelling in the same region or have the funds to purchase one. This form of housing has been financed mainly with state-subsidized housing loans or interest subsidy loans.

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State Housing Development Fund of Slovakia

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State Housing Development Fund of Slovakia

Policies and regulations
Financing
Promotion and production
Ownership and tenure

Main objectives of the project

The State Housing Development Fund (SHDF) of Slovakia was established in 1996 as a revolving fund to finance the priorities of the Government of Slovakia defined in the State Housing Policy Concept. It is an independent entity supervised by the Ministry of Transport and Construction of the Slovak Republic.

Date

  • 1996:

Stakeholders

  • Promotor: Štátny fond rozvoja bývania (SFRB)

Location

Continent: Europe
Country/Region: Slovakia

Description

The SHDF provides long-term loans on favourable terms. These cover up to 100 per cent of housing acquisition costs and are available for terms of up to 40 years at interest rates of between zero and 2 per cent. The loans are available for the:

Construction or purchase of dwellings by qualified households – available to people with a disability, families with young people and former residents of orphanages
Renovation or modernization in multi-apartment buildings and family houses
Construction or purchase of social rented dwellings by municipalities and non-profit organizations, and construction of for-profit rented housing by private companies
Construction and refurbishment of social service facilities by municipalities or private companies
Acquisition and servicing of land for social housing by municipalities and also land used by for-profit rented housing by private companies
Acquisition of a lodging-houses by municipalities or by private companies.

SHDF has made a significant contribution to improving the supply and quality of housing in Slovakia. There was a serious shortage of good quality housing, particularly for low-income households, following transition of Slovakia in the early 1990s. This was due to low levels of new housing supply from the market and the privatization of the majority of rented dwellings, which had previously been owned by the state during the communist period.[1] Between its establishment and 2016, the fund supported the provision of 40,858 social housing units, which is one of the highest rates of new social housing output achieved in post-communist countries during that period.[2] Between its establishment and 2018, the SHDF has funded or co-funded the renovation of 25 per cent of the total Slovakian housing stock. Take-up of its loans by municipalities is helped by the fact that these are not included in general government debt.

SHDF is also significant in institutional terms and in terms of the housing finance expertise it can provide. Its extensive experience in financing housing meant that it was ideally placed to act as a special purpose financial intermediary to administer the EU JESSICA programme for energy-efficient renovation of dwellings when it was established in 2013

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National Housing Agency of Albania

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National Housing Agency of Albania

Mismatches
Policies and regulations
Financing
Ownership and tenure

Main objectives of the project

The National Housing Agency (NHA) of Albania was established in 1993 and is a state-owned enterprise.
It is legally mandated to conduct the following tasks:

Financing and entering contracts for construction, completion, and sale of dwellings
Conducting research and advising on housing and urban design
Sourcing finance to implement its mandate
Cooperating with municipalities to meet their obligations in the housing sector
Providing low-cost housing and selling it with favourable conditions for families who need housing.

Date

  • 1993:

Stakeholders

  • Promotor: National Housing Agency (NHA)

Location

Continent: Europe
Country/Region: Albania

Description

NHA was established with the technical assistance of the United States Agency for International Development (USAID) and a World Bank loan to complete the construction of some 6,000 – 7,000 apartments. These were started before 1990 and were left unfinished after the fall of the communist regime. NHA was initially established to manage this loan, the state budget for housing, and other sources of financing. However, in the years following its establishment, NHA accumulated funds from selling apartments to the beneficiaries and subsequently began to use these funds as a revolving fund. This enabled NHA to become self-funding and thereby financially independent from government from 2007 onwards.

NHA now uses accumulated funds to provide new affordable housing and funds from selling this are then invested in new apartments. To start a new project, NHA signs an agreement with the mayor of a city. An agreement is signed only if the municipality assigns a plot of land to NHA. In addition, the municipality may also be required to invest in the land-servicing infrastructure required to construct the dwellings, and to reduce related municipal taxes and fees. The selling price of dwellings reflects the cost of construction, including the price of the land and 4 per cent overhead costs, and of land servicing.

Purchasers of dwellings are selected by municipalities on the grounds of low income and ability to afford the dwelling purchase price. Purchasers can buy with a bank loan or repay NHA in instalments. Loans and repayment in instalment agreements generally have a term of 15-25 years and attract 3 per cent interest.

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Affordable rental scheme in France – using private homes for social tenants

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Affordable rental scheme in France – using private homes for social tenants

Mismatches
Policies and regulations
Ownership and tenure

Main objectives of the project

Sometimes tax incentives are provided to investors in rental housing regardless of the rent-setting or allocation mechanisms being used. However, in France, the “Louer abordable”[1] (affordable rental) scheme attempts to channel some of this investment into providing additional rental housing for households eligible for social housing, by providing tax and other benefits to investors. This scheme has existed in various forms for about thirty years. It currently secures around 9,000 additional affordable dwellings each year and has thus far accumulated a dedicated stock of 100,000 dwellings provided under this tax framework.

Date

  • 2017:

Stakeholders

  • Promotor: Agence Nationale pour l’Amélioration de l’Habitat (ANAH)

Location

Continent: Europe
Country/Region: France

Description

In its most common form, the Louer abordable sees an owner of a dwelling sign a rental agreement (a “louer mieux” contract) with the Agence Nationale pour l’Amélioration de l’Habitat (ANAH)[1] – the national agency which manages the scheme. As part of this agreement, the owner hands over management of the dwelling to an approved ‘social rental agency’ for a fixed period, usually either six or nine years, though this can be extended after the end of the initial contract if both parties agree.

From the perspective of potential tenants, renting a dwelling provided under this programme is similar to renting a ‘traditional’ social housing unit. Eligibility is determined primarily based on income, but the maximum income allowable varies depending on household size and region.[2] In terms of the tax benefits available to landlords who lease their property under the Louer abordable scheme, between 15 per cent and 85 per cent of the rent can be tax free. Higher rates of tax incentives are available to landlords who rent to those on the lowest incomes, with less generous tax breaks available if the property is rented to those on medium incomes. The geographic location of the property is also considered, with higher tax relief in higher-demand areas. The rent that can be charged is fixed by law and varies depending on factors such as size and location of dwelling.

It is also important to note that in the French system, tax breaks only apply in instances where rent is treated as “property income” and not as “industrial or commercial profits”.[3] In this way, the Louer abordable scheme is attractive for small scale individual investors rather than large corporate investment vehicles.

The Louer abordable scheme also has an important environmental element. Should a property need to undergo renovation works, the owner can benefit from various financial supports provided by ANAH, including a lower VAT rate on works and tax credits. To qualify, the renovated dwelling must meet specified minimum-energy standards. In any case, landlords in France must now offer minimum standards of thermal comfort to legally rent their dwelling.

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LIFE REUSING POSIDONIA/ 14 social dwellings in Sant Ferran, Formentera

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LIFE REUSING POSIDONIA/ 14 social dwellings in Sant Ferran, Formentera

Mismatches Climate change
Urban Design Quality

Main objectives of the project

Life Reusing Posidonia is a Climate Change Adaptation Project funded by the European LIFE + program. It integrates Heritage, Architecture, and Climate Change to explore sustainable solutions using local resources. The project focuses on reusing Posidonia, a type of seaweed, as a key material throughout the building.

Date

  • 2017: Construction

Stakeholders

  • Architect: Joaquín Torrebella Nadal
  • Architect:  Alberto Rubido Piñón
  • Promotor: Institut Balear de l’Habitatge (IBAVI)

Location

Continent: Europe
City: Formentera
Country/Region:

Description

Life Reusing Posidonia is a Climate Change Adaptation Project financed by the European LIFE + program for nature conservation projects. The project links Heritage, Architecture and Climate Change with the aim to recover the local resources as a cultural approach in the contemporary research for sustainable solutions.

Traditional architecture has been a constant reference, not for its forms, but as a way of working. By doing so, we look for the available local resources: the juniper trees are now fortunately protected and the sandstone quarries (marès) have been depleted. Therefore, we only have what arrives by sea: Posidonia. So we propose a shift in approach which has been applied to every single part of the building:

“Instead of investing in a chemical plant located 1,500 km away, we could invest the same amount in local labor, who should lay out the Posidonia to dry under the sun and compact it by hand. Sea salt acts as natural biocide and is completely environmentally friendly.” The use of dry Posidonia as thermal insulation reminds us that we do not live in a house but an ecosystem.
1. TO DEMONSTRATE:

The viability of constructing the prototype with an additional cost of 5% over the usual price of the IBAVI social housing buildings.

2. TO REDUCE:

63% of CO2 emissions during the construction of the building.
775,354.6 kg/CO2 have been saved. Calculation performed through the TCQ program of ITEC.
75% of useful energy during the lifetime of the building.
Nearly Zero Energy Building (nZEB), with maximum consumption of 15 kWh/m²/year (17,226.30 kWh/year).
The average thermal comfort measured in situ is 21ºC in winter and 26ºC in summer.
60% water consumption.
Maximum limit 88 l/person and day. Average consumption based on the tenants’ bills.
50% waste production during the construction phase
36.98 tones have been saved due to in-site reusing measures.

3. ORGANIZATION & PROGRAM

The two street facades facing main sea breezes (North & East) to cool in summer allow dividing the volume into two separate blocks with different orientations.
The entrance to all homes is directly on to the street.
All the dwellings face two directions and cross ventilation thanks to the layout of the living room in a Z shape and a bedroom at each corner.

All the materials have been selected through a market study based on their embodied energy and the transport cost to Formentera.

We tested solutions based on the recovery of eco-friendly local artisan industries with KM 0 raw materials, which are in danger of extinction. Usually these are small family companies that do not have eco-labels, but they can easily be inspected in person. The combined use of these available local materials with those imported that do have environmental labels is a replicable model that makes it possible to reduce more than 60% of CO2 emissions during the works. For instance, load-bearing walls with non-reinforced lime foundations, laminated wood slabs, white lime plaster on facades, sandstone cistern vaults, handmade glazed tiles, bricks baked in biomass mortar kilns, etc.

All indoor carpentry and the shutters on the ground floor were made of reused second hand doors and wood from the ‘Deixalles’ waste-management plant in Mallorca.

The organization of spaces and formal decisions have been the result of knowing the advantages and limitations of natural materials, which are more fragile. This fragility has become a design opportunity.

Authors:

Loans to co-finance affordable housing – Council of Europe Development Bank

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Loans to co-finance affordable housing – Council of Europe Development Bank

Mismatches
Financing
Urban Design

Main objectives of the project

The Council of Europe Development Bank (CEB) is a multilateral development bank founded in 1956 by eight member states of the Council of Europe. It has expanded to include 42 countries as shareholders. CEB's mission is to support socially oriented investment projects that promote inclusive growth, support vulnerable groups, and prioritize environmental sustainability. The bank raises funds through borrowing on international capital markets and has a strong credit rating. It co-finances affordable housing projects, including through partnerships with national and international organizations. For example, it is part of an alliance in France to simplify access to funds and expand investments in social housing. CEB has also supported housing projects in the Republic of Moldova.

Date

Stakeholders

  • Promotor: Council of Europe Development Bank

Location

Continent: Europe
Country/Region:

Description

The Council of Europe Development Bank is a multilateral development bank with an exclusively social mandate. It was founded in 1956 by eight member States of the Council of Europe to provide support for refugees and displaced persons in Europe. The Bank has since expanded to include 42 countries which are its shareholders and are eligible to borrow from it.

The mission of CEB has also expanded to encompass supporting the implementation of socially oriented investment projects which promote:

Inclusive growth: working to guarantee access to economic opportunities, ensuring a prosperous future for all
Support for vulnerable groups: helping to integrate the most vulnerable citizens and nurture a more diverse society
Environmental sustainability: supporting a liveable society that promotes environmental sustainability and mitigates or adapts to climate change.
CEB is not funded by its member States, rather its funding is raised by borrowing on international capital markets. The bank’s credit rating is strong and stable at “AA+”, reflecting access to less expensive financing on capital markets.[1] It lends to member States, co-financing eligible social projects. Housing is an important part of the bond issuance programme of CEB. The proceeds of its Social Inclusion Bond, issued since April 2017, are used to finance social housing, education and vocational training, as well as job creation and preservation, in micro, small and medium-sized enterprises. To date, 33 per cent of all proceeds, or EUR 495 million, have been allocated to housing projects. This has led to more than 10,600 housing units being built or renovated out of Social Inclusion Bond proceeds alone.[2]

CEB co-finances affordable housing and regularly partners with national and international organizations who contribute any remaining finance required. For instance, it is a partner in an alliance between public investment banks and social housing providers in France (Alliance européenne pour un logement sociale durable et inclusif), which was formed in 2020 to simplify access to funds, coordinate strategic investment and expand the volume of investments in social housing. This new partnership involves the French Banque des Territoires, CEB, the European Investment Bank, and not-for-profit housing providers. They combine their expertise to access European funding and make long-term investments in public social infrastructure. Additional loans will accelerate social housing construction in economically challenged areas, providing more investment to house people in precarious situations, often including support and health services[3].

Another example of recent CEB-supported activities comes from the Republic of Moldova.[4] CEB financing is being used to improve and increase the housing stock, with beneficiaries including young families; individuals or families in which at least one of its members works in a budgetary institution or works in the field of public services; families with at least three minor children; or persons with severe disabilities. Phase 1 (2008-2011) of the project comprised of the construction of 240 apartment units in four buildings. Phase II (2013-2021), which has an approved budget of EUR 13.4 million, is nearly completed. The total cost of the project is EUR 20.4 million, of which the CEB participation is 65 per cent of the total cost. CEB provides a loan for up to 20 years, including a grace period of 5 years. The contribution of the Republic of Moldova, realized through local authorities, is 35 per cent and consists of in-kind and financial contribution. The project will complete the construction of 667 social housing facilities in total.

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Ethiopia – JIFAR Association

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Ethiopia – JIFAR Association

Main objectives of the project

Ethiopia, located on the Horn of Africa, is rich in archaeological vestiges and is the second most populous country in Africa. Oromia, the largest region in Ethiopia, is known for its highlands and agricultural advantages. However, due to internal conflicts and drought, Oromia is facing a significant population emigration, leaving families in dire conditions. The JIFAR Association aims to provide aid, including nutrition, medical assistance, and education, while constructing sustainable villages using local materials and traditional techniques. Your contribution is crucial in saving lives and helping people regain their dignity and self-sufficiency.

Date

Stakeholders

  • Promotor: JIFAR Association

Location

Continent: Africa
Country/Region: Ethiopia

Description

Cradle of humanity, Ethiopia is located on the Horn of Africa, crossed by the Great Rift Valley, there is an archaeological vestige more than 3 million years old, including the oldest hominids (Lucy) 3.18 million years old and Ardipithecus Kadabba, a 5.2 to 5.8 million year old hominid. Second most populated country in Africa, 115 million inhabitants, 85% of whom are under 20, Ethiopia has common borders with Eritrea (former province) to the north, Somalia to the east-south-east, Sudan to the northwest, South Sudan to the west-southwest, Kenya to the south and the Republic of Djibouti to the northeast.

Oromia is the largest region of the country (353,960 km2) as well as the most populated, the administrative capital of which is Addis Ababa, other cities such as Jimma, Welega, Haramaya and Ambo are home to the largest universities. Mainly made up of highlands, Oromia is known for the origin of coffee and its biodiversity, a climatology that favors agriculture all year round.

Despite all these advantages and in the absence of rational management of natural resources, Oromia is today experiencing one of the largest emigrations of its population in the world, caused by internal armed conflicts and persistent drought.

This emigration has thrown hundreds of thousands of families, women and children, onto the roads, who find themselves without shelter, without food or medical aid, left to fend for themselves in inhuman conditions.

JIFAR Association is a non-profit association, with a humanitarian vocation, founded by friends of Ethiopia including the Bon-Abajobir Abajifar family, which aims to come to the aid of the population of Oromia thanks to aid from all nature (nutritional, medical and educational), and the construction of integrated villages with permanent habitats built from biosourced materials (BTC, rammed earth, wood, bamboo, etc.) and local traditional know-how. Modular and autonomous, equipped with devices for managing natural resources and recycling waste, these scalable and modular habitats adapt to welcoming families of all profiles.

Your contribution to our action is dear and essential to us because it saves thousands of souls from famine and despair, by offering them the means to develop their human resources and the acquisition of self-sufficiency capable of restore their dignity and taste for life.

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