IDB supports housing and neighbourhood upgrading in Nicaragua

The Nicaraguan government, the Central American Bank for Economic Integration and the Dutch International Guarantees for Housing Foundation, backed by a council that twins cities in The Netherlands and Nicaragua, will provide additional funding. A key component of the program will promote the improvement and progressive construction of housing, providing subsidies to families earning up to $370 a month.

Among the specific results expected from the program: improving 4,250 existing homes, the progressive construction of 4,000 new units, improving the basic infrastructure of 4,000 families in neighborhoods lacking basic services and delivering land titles to 5,000 families.

In Nicaragua, as in other developing countries, most houses are built gradually, as families find resources, a process that can take decades. Nevertheless, housing programs have traditionally prioritized the construction of new units, which are often beyond the reach of poorer families.

Another longstanding problem is the lack of coordination between the housing programs and agencies providing basic services, especially in informal settlements in urban areas.

The Nicaraguan program will aim to improve coordination between the executing agency, the Institute for Urban and Rural Housing (INVUR), and other public and private institutions active in the housing sector, such as municipal governments, utilities, NGOs and microfinance institutions.

A component of the program will provide subsidies to eligible families either to improve the conditions of their existing homes or to start building new units. In this last case, depending on their income levels, families will have to make in-kind contributions, accumulate savings or secure housing loans from financial intermediaries.

Another component of the program will work with community organizations in neighborhoods lacking basic services, financing the provision of potable water, sewage systems, storm drains, public lighting, electricity or road infrastructure. The program will cover up to 70% of the cost of improving neighborhoods. The rest will come from municipal governments (20%) and resident families (10%).

The program will promote participation and partnerships with housing cooperatives, organizations specialized in providing technical assistance for progressive construction, agencies that train construction workers and companies with corporate social responsibility programs that support poor families who build their homes gradually.

The program will also provide resources to strengthen the institutional capacity of INVUR and municipal governments in areas such as urban development and land use planning.



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