Supereconomic houses: an affordable solution for working people

Martín Meléndez   

When building a house, engineers and architects are usually worried about location, materials to be used, cost, and recently, about the damage that we could cause to our planet as well.

When a family undertakes the construction of its own house, it builds it in a natural manner and according to its possibilities. It is not unusual to see blocks, adobes or tiles kept in the yard for long periods of time, to be used later in a process that usually lasts years before the house is finished.

 

We also have the construction companies. They build houses the quickest way possible in order to make money, and do not take into account that a great percentage of the families cannot afford to pay them during the construction period. Thus, arise the housing and mortgage banks and other financing entities, all of which charge high interest rates.

When building a house through the construction enterprises, it is normal to have bank financing, to buy the materials in a large hardware store and then give it over, key in hand, to the owner. He must pay the financier the value of the house plus interests, which in Latin America are in the rate from 18 to 40% annually with a term from 15 to 20 years. At the end, the proprietor has paid two or three times the value of his house.

The worst thing, however, is that in order to qualify for such a loan a series of requirements and economic possibilities accessible to only a small part of the population become necessary. Only those sectors with high incomes can access these loans. The financier keeps his money safe with profits over 15 or 20 years.

Another option comes from government and/or aid institution programs, which try to solve habitation problems with very little money. They are usually successful, but at the expense of space, or an architectural and structural design contrary to the customs and way of life of the people.

Normally they build against the people and not for the people. The “beneficiaries” are converted into victims that can suffer from the projects.

We believe, however, that other possibilities can exist simply by changing the way of thinking, of acting and, mainly, of building. In our professional this is one of the most difficult tasks because through education and vocation it is one of the most conservative professions. IN CONSTRUCTION ONE DOES NOT INVENT! This is the motto of all good builders.

In the first place, we should define for whom we build, what the intrinsic necessities of the family are and what could be the best house at the best price we can provide. Through sociologists and economists our society has been divided into four major groups:

  • Below the poverty line: The peasants, the miserable, those that sell ice cream, water, books, animals and sex on city corners. Such people are unable to pay for ar house and nobody in his right mind would grant them a loan. But, they have time. As they don't work on a fixed schedule they can devote themselves to construction. This means that the technology should be simple and not require a specialized workforce.
  • Working lass: Bricklayers, carpenters, teachers, nurses, secretaries. People that work sunrise to sunset for a miserable wage, and without any possibility of acquiring loans for their house. They have neither time to work in the construction nor money.
  • Middle class: Professionals, who live on credits, and are the pillar of the microeconomy of the neighborhood and the city. They have an education but neither money nor a bank record to obtain a credit. Usually they do not denigrate themselves by actually working to build their houses, neither do they accept to live in a marginal neighborhood. They are those who eternally live in rented dwellings or in their in-laws' house, waiting for to inherit the house.
  • Upper class: People with money who don't need credit but who do have a bank record to obtain a credit. They are reliable clients who pay back their loans, and this is good for the banks and credit agencies.

The last group mentioned does not require our concern, since they are the most open to changes in the construction and often understand the ecological problems.

The middle class understands the problem. It wants houses like those of the upper class, but has neither the money nor the necessary credit.

Those of the working class want a roof that is safe and its own.

For those below the poverty line, a house is an unreachable dream.

We will not deal with design and structure here, because they should be part of any habitation solution.

Credit system

It is necessary to look for a way that allows the owner not only to get a dignified, comfortable and secure house, but also to be able to pay for, and ensure that others can also get their houses.

The main function of commercial banks is to make money and to secure the funds deposited, to engage in good business and ensure that money borrowed money returns, but increased. Their task is to place the money in a slow recovery scheme and to get even more through interests. The time frame of the credit will depend directly on the intrinsic value of the dwelling. For example, for a house with excellent finish a bank will be willing to grant a credit even for 20 years. When this period has lapsed it is about time to renovate and, of course, a new loan is required. Therefore, the middle and working class, as well as those below the poverty line, never will be clients of a bank.

What can we do?

For those below the line of poverty, the solution is total subsidy with participation of the beneficiaries in the construction work. We seek to provide each family with a housing nucleus that allows them to live, but that can be finished at their own rhythm.

For the middle and working classes, there is another solution: the quick recovery of the capital in order to build more houses along with the client paying the least possible interest. While the finish will depend on what the client is able to pay, comfort and minimum security is ensured.

Supereconomic housing

In Nicaragua, ECOTEC S.A. has begun a program of building supereconomic houses with an attractive design, ecologically friendly materials and an affordable price both for the working and middle class families.

The program allows a family to obtain a dignified dwelling, without luxuries, but which is safe and attractive, with a family income equivalent to two and a half minimum salaries. The finish will come later.

The house covers 48m2 of usable area, divided into two bedrooms, a living-dining room, a kitchen, a bathroom and a laundry area. The total cost is $US 6 000. The premium or " hook ", as they say in Nicaragua, is 33% of the total cost, and a mortgage is granted up to eight years with a maximum of 12% of interest (the rule is the payment years plus 4% = total of the interest on the mortgage). In the practice that means less years to pay, lower interest.

Acceptance for the scheme has been high, as well as the diversity of the families integrated to the program. There is everything from a taxi drivers to an architect, from a parish priest to a director of a health center. The program turns over in one year and we already have seven houses.

Almost all families are paying a mortgage of $US 4,000 over a period of six years, with 10% interest and a monthly payment of $US 74, much less than what is paid for rent in any city of Nicaragua.

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