John Paul

Housing for the Poor – Part II

A month ago, I posted some information about housing technologies for the BOP. This week, a colleague of mine emailed me to tell me about some of her research in the area.

One thing her team has discovered is that the choice of technology may not be as important as the choice of business model. This applies to materials and also applies to a certain extent to design. Quality (safety, durability) are issues but even more important is desirability. Nobody wants to live in a house that looks different, that brands him or her as a poor person; they may also be averse to taking the risk of investing in an unfamiliar material or design that they, or their buddy they hire to do the work for them, may not be able to fix or build onto later.One such successful model is that of a ??homecenter’ (a one-stop supermarket which offers building materials and tools) which provides the interface between the informal builder and manufacturers and retailers. This approach recognizes the demonstrated capacity of the informal sector – the quasi-legal incremental builders, the ??popular’ sector – who succeed despite financial, legal, and physical obstacles. ??Homecenters’ are increasingly found in developing economies and highly successful. San Paulo, Brazil, for example, has several of these ??building supermarkets’ and approximately 80% of their business comes from the low income incremental builder.

This approach is described further in The Hidden Consumer: A New Paradigm Using Materials Distribution and Manufacturers as a Bridge to Improved Housing in Emerging Markets, an excerpt of which can be found here.

Acumen Fund, World Resources Institute