Chili is known as a beautiful South American country that receives interest from tourists from around the world.  However; in recent years the provision of social and affordable housing has roared back to the forefront.  The history of affordable housing in Chili is actually long and quite interesting. The programs in comparison to other countries in the region are actually larger and more defined then many would know.  Low income earners in the country do have more rights in regards to housing and that is a fundamental part of the policy that drives housing and urban development in Chili.

Market Failures

According to the website NACLA, “During the 1950s and 1960s, the central government sought to expand individual home ownership by following a market-oriented model based, at least in part, on the experience of the United States.  Chilean housing and banking officials created agencies such as the National Institution for Investments in Social Welfare and the State Bank of Chile.  Like the U.S. institution Fannie Mae, these entities provided the means for gaining access to government-backed housing loans.  Through an expansion of debt, they increased the number of long-term home mortgages.  The government also financed the development of numerous housing projects, in which they offered subsidies for middle and low-income Chileans and sought to grow the construction industry.”

So we need to understand this policy from a point of driving a market towards capitalism instead of letting communism or socialism creep in.  It is an interesting political and economic strategy that was deployed in this country.

Activism Creates Affordable Housing Structure:

If you read further into the quoted article, you will see that activists did not take to the political ploy and seized large swathes of land to create an affordable housing environment for themselves. It is somewhat reminiscent albeit on a larger scale of the squatter villages you see in countries like Denmark and Germany.  The social cares, leisure activities and cultural care were often organized internally.  it was in fact, small functioning villages and cities that laid the fundamental right of decent affordable housing into the countries DNA.

Quality Housing

The housing remained over time even after suffering slum clearances and forcible removal of people from high value real estate.   Years after returning to a democracy, the commitment to affordable housing continues.  Subsidies as well as building programs take place and continue to provide important affordable housing units to the market.Governing elites and development specialists have interpreted the provision of housing as a technical success and key in building a more just and orderly society.

An article on Cityscape’s website described affordable housing in Chili in the following way.

Throughout South America, Chile has been and continues to serve as a model for housing policy. During the past 20 years, key features of Chile’s housing policy have supported homeownership for low- to moderate-income households. Policies have included household savings schemes, housing subsidies delivered by the state, and government facilitation of long-term mortgages, all of which have significantly contributed to the growth of formal and mortgage-backed homeownership. Chile also began the trend in South America of constructing government-subsidized housing estates that
provide good-quality housing for sale in neighborhoods with infrastructure and services. In cases in which housing is in large, government-supported, multifamily facilities, the Chilean government may fund upward of 95 percent of the costs for a unit (MINVU, 2013). As a result of these efforts, Chile’s housing deficit is relatively minimal—across South America, Chile has the lowest incidence of poor-quality housing; that is, housing unsuitable for habitation and that lacks basic infrastructure services.

Conclusion:

Do you know other South American countries we should highlight?  If so, email us at info@housing-futures.org.

Quoted Articles:

https://nacla.org/news/2015/10/18/right-low-income-housing-chile