Technical Notes

Housing Finance in Peru: What is Holding it Back?

AUTHOR(s): Palomino Bonilla, Miguel , Wong Barrantes, Rudy
PUBLISHED: November 2011
RELATED TOPICS: Poverty Reduction and Labor


Housing for most Peruvians is improving but is still grossly inadequate. Nonetheless, public housing finance policies mainly involve programs that subsidize middle-income families and banks that lend to them. Research summarized in this paper indicates that financing will not be the main obstacle to improving housing conditions in Peru and that public sector efforts would be better aimed at dealing with significant externalities and institutional restrictions. Thus, public sector efforts and funds could temporarily support the development of: i) cheaper construction techniques and materials, ii) lower-cost credit technologies for low-income housing and iii) greater availability of adequately enabled land for large-scale low-income housing projects.

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