Wednesday, November 09, 2005

Home Improvement

Those who own their own house and lot are more likely to want to make improvements to them.

This observation, which seems self evident to me, is the conclusion of a 2 research studies* (not formally published yet) made by two Argentine universities and the Harvard Business School as reported by the Asian Wall Street Journal. (Free browsing for this week only)

According to the AWSJ:
"international development experts say it (the study) is shedding light on a key question for developing economies: Does land "titling" help lift people from poverty?"
And their answer is yes, not so much because the 'landowners' are able to monetize their property, as theorized by Economist Hernando de Soto, but because the people who were able to own their land experience a change in attitude that enable them to enjoy a better quality of life.
"The investigators concluded that titles improved access to credit only slightly. Banks appeared to have a deeply ingrained reluctance to lend to the poor, in part because of the cost and difficulty of foreclosing in Argentina's legal system. But even without bank loans, they said, landowning families improved their homes substantially by squirreling away cash and doing the work themselves. Architects affiliated with the study concluded that homes on titled lots had sturdier walls and sounder roofs, were more spacious and had better sidewalks.

An accompanying study, co-authored by Mr. Di Tella, detected a difference in the attitude of landowners. They were more materialistic and individualistic, and more inclined to say that money was important to happiness, and that individual initiative leads to success.

The researchers found that landownership status seemed to make no difference in employment or income. But it did seem to affect the way residents spent their money, and their aspirations and expectations. The researchers figure that the children of the landowners could eventually earn significantly more than the children of the untitled."

I wish the powers that be reads these studies. It may give new momentum to the Urban Development and Housing Act, a law passed in 1991
The act declared it the policy of the state to
"Uplift the conditions of the underprivileged and homeless citizens in urban areas and in resettlement areas by making available to them decent housing at affordable cost, basic services, and employment opportunities"
At that time, the Philippine government jump started this program through the Community Mortgage Program, funded through the National Home Mortgage Finance Corporation and other government agencies like the Pag-Ibig Fund.

The last major initiative of the Philippine government on this front was made during the time of then chairperson of the Housing and Urban Development and Coordinating Council (HUDCC) Secretary Karina Constantino-David. The initiative was cut short when she resigned because then President Estrada appointed his drinking buddy (forgot his name) to a position that effectively disempowered Secretary David.

Today, Gawad Kalinga (GK), a private organization runs the most prominent initiative for housing the poor. The GK envisions to build 700,000 homes in 7,000 communities in 7 years.

Perhaps if the Philippine government can get its act together and help private initiatives like the GK we can provide housing for those who need it, the Philippines and the Filipinos can rise up from the depths of poverty that grips us.


*Did a google search and the studies can be downloaded in pdf format here and here

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