Current Housing Situation in Mexico 2009

Transcription

Current Housing
Situation in Mexico
2009
BBVA-Bancomer
CEPAL-México
Cidoc
Conavi
Fovissste
HIC
Infonavit
Sedesol
SHF
UNAM
Servicio de Estudios Económicos Grupo BBVA-Bancomer
Economic Commission for Latin America and the Caribbean
Fundación Centro de Investigación y Documentación de la Casa A.C.
Comisión Nacional de Vivienda
Fondo de la Vivienda del ISSSTE
Habitat International Coalition
Instituto del Fondo Nacional de la Vivienda para los Trabajadores
Ministry of Social Development
Sociedad Hipotecaria Federal, S.N.C.
National Autonomous University of Mexico
Current Housing Situation in Mexico 2009
First edition, September 2009
© All rights reserved by Cidoc and SHF
Fundación CIDOC
Sierra Mazapil #135
Col. Lomas de Chapultepec, C.P. 11000,
Delegación Miguel Hidalgo
Mexico City, Mexico
Sociedad Hipotecaria Federal
Av. Ejército Nacional #180, piso 10
Col. Anzures, C. P. 11590,
Delegación Miguel Hidalgo,
Mexico City, Mexico
Information from this publication may
be used as long as the source is cited.
Printed and made in Mexico
www.cidoc.com.mx
www.shf.gob.mx
Current Housing
Situation in Mexico
2009
Prepared by Fundación CIDOC and SHF with the participation of:
BBVA-Bancomer, ECLAC-Mexico, CONAVI, FOVISSSTE, HIC, INFONAVIT, Sedesol,
and UNAM.
Presentation
In face of the slowdown of the Mexican economy, affected by conditions abroad, 2009 has been a
year of challenges for the housing sector and, without a doubt, the first half of the year has shown
adjustments in the behavior of the housing train.
Contrary to other countries which have suffered from excess supply, Mexico continues to serve the
demand and backwardness in this sector, guaranteeing the financial viability of the housing policies for
the current presidential term. The aids resulting from the National Pact for Housing to Live Better
(National Pact for Housing to Live Better), signed early this year, have boosted the sector through an
investment of 180 billion pesos, translating into 800 thousand housing actions; this aid was further
strengthened by two loans from the World Bank and the Inter-American Development Bank for one
billion and 2.5 billion dollars, respectively, enabling SHF to promote the development of efficient and
inclusive mortgage markets in Mexico.
The sixth study on the Current Housing Situation in Mexico presents the financial and economic situation
that the sector is experiencing, and analyzes the effect of the mortgage lending and subsidy programs,
as well as the initiatives of the National Housing Institutions. Due to the fact that the National Housing
Program 2007-2012: Towards a Sustainable Housing Development (PNV in Spanish) proposes to grant
six million financings during the presidential term—71.6 percent for new housing and 28.4 percent for
home improvement—it is worth noting that the goal for 2009 is to place slightly over one million 180
thousand financings. By June, 48.1 percent of this goal had been reached. Mortgage securitizations
to encourage the growth of the housing market are also worth mentioning. The total sum accrued
by August this year was roughly 118 thousand 745 million pesos, considering the issuances from SHF,
INFONAVIT, and FOVISSSTE.
The report reviews some fiscal strategies that have managed to jumpstart the development of the
intraurban areas of Brazil. They are the result of a broad participative process and are established within
their City Statutes. In our country, the highlight are the federal guidelines which, in terms of equipping,
infrastructure, and relationship with the environment—derived from Art. 73 of the Housing Law—seek
to revert the urban dispersion and encourage city-building in response to what has been established
by national policy with regard to spatial planning.
Overall, it is estimated that the largest demand for land (57.8%) is in urban areas, where 550 thousand
families will require a home; overcrowded dwellings amount to a little over 551 thousand, and 3.7
million households earn under 3 GMWM (general monthly minimum wages).
Based on borrowers’ opinions, each year the Sociedad Hipotecaria Federal (SHF) puts together the
Residential satisfaction index. With regard to the city and environment, the index stands at 5.80—lower
than last year, due to the environmental and physical features of the construction; almost two of every
three surveyed borrowers would like to expand their dwellings.
In the current environment, international experiences encourage us to constantly assess and monitor
the rules for gaining access to credit. Dealing with the Mexican reality requires the encouragement of
mortgage lending, the generation of a greater diversity of mechanisms for financial liquidity, recovering
the trust of both developers and entrepreneurs, reducing construction and sales times, to continue
supporting the poorer population so they can have access to worthy housing, and aligning the goals of
the housing sector with a sustainable urban development.
This study was made possible through the participation, experience, and dedication of an interinstitutional group of outstanding officials, researchers, academicians, and specialists on the matter, all of
them representatives of the National Housing Institutions, the Ministry of Social Development, the
National Housing Commission, the Sociedad Hipotecaria Federal, the National Autonomous University
of Mexico, Habitat International Coalition and, for the first time, BBVA-Bancomer’s department of
Economic Studies and the Economic Commission for Latin America and the Caribbean in Mexico. The
general coordination and integration of the document was done by Fundación Centro de Investigación
y Documentación de la Casa A. C. (Cidoc). To all those who participated, our sincerest acknowledgement and thanks. The support offered by Mr. Javier Gavito Mohar and Ms. Paloma Silva de Anzorena,
of the Sociedad Hipotecaria Federal, was particularly noteworthy.
In this edition of the Current Housing Situation in Mexico 2009, you will find information on indicators
for the end of 2008 and updates up to June 2009. It is our commitment to get this report into the
hands of all the players of the housing sector, academicians, financiers, analysts, and scholars on the
matter, encouraging the generation of ideas and promotion of initiatives in favor of the quality of life
and its environment. n
Arq. Sara Topelson de Grinberg
Undersecretary of Urban development and Spatial Planning
Sedesol
Acknowledgements
Altta Homes Internacional S.A. de C.V.
Juan Carlos Díaz Arelle
Cementos Apasco S.A. de C.V.
Eduardo Kretschmer
Gustavo Gastelum Gómez
Consorcio Ara S.A de C.V.
Germán Ahumada Russek
Germán Ahumada Alduncin
Cemex México S.A. De C.V.
Ricardo Charvel Orozco
Israel Moreno Barceló
Corporación Geo S.A. de C.V.
Luis Orvañanos Lascurain
Desarrollos Inmobiliarios Sadasi S.A. de C.V.
Enrique Vainer Girs
Isaac Vainer
Luis de Pablo Serna
Hipotecaria Su Casita S.A. de C.V.
José Manuel Agudo Roldán
Luis Covarrubias Salgado
ICA Vivienda S.A. de C.V.
Luis Zárate Rocha
Diego Quintana Kawage
Fundación ICA
Sergio Macuil Robles
Inmobiliairia Came S.A. de C.V.
Carlos Gosselin Maurel
Juan Ramón Ramírez Luna
Sare Holding, S.A. de C.V
Dionisio Sánchez González
Arturo Sánchez Carbajal
This publication was made possible through the participation of the following organizations and persons
who contributed with their experience, knowledge,
and time to the development of the diagnosis of the
Current Housing Situation in Mexico 2009. Without
their support and commitment, this document would
not have been possible.
Javier Gavito Mohar
María Paloma Silva de Anzorena
Antonio Puig Escudero
Marissa González Guzmán
Francisco Gallegos Tovar
Sedesol
Sara Topelson de Grinberg
Silvia Mejía Reza
Craig Davis Arzac
José Luis Llovera
Juan Carlos Zentella
Rafael Vargas Muñoz
Conavi
Ariel Cano Cuevas
Rafael Pírez San Sebastián
Víctor Manuel Santillán Meneses
Roberto Barba Pingarrón
Margarita Chávez Murguía
Infonavit
Víctor M. Borrás Setién
José de Jesús Gómez Dorantes
Nadiezhda de la Uz Blanco
Nora Núñez Carranza
Gabriela Villanueva García
Fovissste
Manuel Pérez Cárdenas
Noemí Stolarski Rosental
Fundación Cidoc
Mónica Rivas Bazán
Habitat International Coalition
Enrique Ortiz Flores
Universidad Nacional Autónoma de México
Esther Maya Pérez
Mary Claudia Martínez García
BBVA-Bancomer
Adolfo Albo Márquez
Fernando Balbuena Campuzano
Eduardo Torres Villanueva
CEPAL-México
Myriam Urzúa Venegas
Executive Summary
The Current Housing Situation in Mexico 2009 is divided into seven sections. The first one summarizes
the housing and urban development policies of the National Program for Urban Development 2009-2012,
which is awaiting publication in the Official Journal of the Federation. It also verifies that CONAVI, heading
the National Housing Policy, has bolstered Social Production of Habitat (SPH), and that the National Pact
for Housing to Live Better showed an advance of 58.1% up to June on the goal set for 2009.
As examples of best practices, two stand out: a project—presented by Development Workshop France
(DWF) in Central Vietnam—winner of the World Habitat Award 2008 for its methodology to apply
basic construction principles and techniques to make typhoon- and flood-resistant dwellings; as well
as the constitution, in Brazil, of a coherent system of urban, land, and housing policy instruments that
guarantees the city’s social, human, an property rights function, and the democratization of urban
management.
The second section analyzes the current situation of the housing market through the main economic
indicators regarding production—such as employment, prices, interest rates, and the exchange rate—
making it possible to identify the situation of the Mexican construction industry in both the national
and global context.
The data shows that 36.7 million people live in dwellings with some sort of backwardness, and that the
overcrowded dwellings amount to 551,801. Based on this, a demand for 966,063 dwellings is estimated
for 2009. This section also shows that one of every four inhabitants (25.8 million) resides in rural areas,
and it highlights the fact that, should the current growth rate remain the same, the land banks developers
currently have are enough for the production of housing for the next 4.6 years, on average.
Based on borrowers’ experience, SHF publishes its Residential satisfaction index, and INFONAVIT continues to develop the Housing Quality Index (ICAVI in Spanish) as an assessment instrument at the time of
granting the loan. Likewise, the institute has its Vivir INFONAVIT program as a new service strategy.
Section three presents the topics of sustainable urban and housing development. The highlights are the
application as of January 1, 2010 of the Federal guidelines for equipping, infrastructure, and relationship with
the environment resulting from Article 73 of the Housing Law, and of Sedesol’s national spatial planning
strategy; the creation, with support from CONAVI, of the State Housing Programs and approval of
their corresponding laws in 20 states; and the Program of municipal competitiveness in housing (PCMV
in Spanish) presented by INFONAVIT in acknowledgement of best practices at the local level.
The interinstitutional coordination set in place by the group of Integrated Sustainable Urban Developments–DUIS in Spanish–has made it possible to evaluate 32 projects nationwide, which are currently
being assessed and represent close to one million 800 thousand dwellings. Likewise, in face of the
effects of the climatic changes, CONAVI has developed the Specific Program for the Development of
Sustainable Housing—the only one of its kind worldwide—through the CO2 emissions reduction certificates or Carbon bonds.
The fourth section deals with land and land banks that, based on the National Urban System (SUN in
Spanish), have the highest demand of land for housing in metropolitan areas.
The fifth section shows the close of 2009 and the progress of the housing financing and subsidy programs up to the first half of the year. The highlight are the loans SHF got from the World Bank and the
Inter-American Development Bank.
Since 2002, the relative importance of SOFOLs (nonbank banks) in housing acquisition has declined.
After standing for 16.4% in that year, it went down to 8.3% in 2005 and 5.7% by the end of 2008. At
the close of 2008, nearly 1.5 million financings under the various formats were placed. For 2009, the
goal is to grant 190 thousand subsidies to the neediest population.
SHF drives two cofinancing programs—Cofinavit and CoFOVISSSTE—boosting borrowers’ resources.
INFONAVIT’s Green mortgage program considers the suitable use of the devices (water-energy)
installed in dwellings as a goal, and has been well received.
Likewise, beginning in 2010, SHF will study repeat sales to have indicators such as: current and purchase
price of property, appreciation/depreciation rate, number of transfers, among others.
The Modernization of the Public Registers of Property program guarantees the legal certainty of ownership
of real estate through the legal records and their advertising; it certifies the legality of the transactions
performed, and identifies alternatives to link the urban and rural land register with the record houses,
making it possible to evaluate the 32 states at the end of 2008.
Some strategies developed to make the sector more efficient are the Registro Único de Vivienda
(RUV) (housing register), in order to reduce procedures and unify criteria; the actions headed by the
Mexican Mortgage Association (AHM in Spanish) in credit granting, funding, and as the main investor
in the housing sector; and the social collection that offers aids to INFONAVIT workers and shows that,
by May 2009, over 160 thousand borrowers had this aid.
The sixth section deals with the secondary housing finance market, and stresses a crucial topic for
current issuances. Mortgage securitization has made it possible to support the growth of the housing
market; by August 2009, the accrued total public MBS issues, at their original value, amount to roughly
118.745 billion pesos. With regard to the securities (CEDEVIs) program, INFONAVIT has placed a little
over 40 billion certificates from June 2004 to the first half of 2009.
The last section includes the achievements in the sector by the end of 2008, and also up to the first
half of 2009. From an institutional perspective, the main challenges for the sector are identified regarding normativity and regulation, urban infrastructure, reordering of the land market, and particularly,
financing. n
Contents
Section 1.
National urban development and housing policies 14
1.1. 1.2. 1.3. 1.4. 1.5. 1.6. 1.7. 1.8. 1.9. National Urban Development Policy National Housing Policy National Housing Pact The global crisis and its impact on the housing sector Follow-up of international obligations in terms of rights to housing Best practices 1.6.1. Actions in the dwellings in Central Vietnam 1.6.2. Urban and housing policy in Brazil Technological promotion Infonavit’s New Vision Key findings 15
16
16
17
20
22
22
24
26
27
29
Section 2.
Current situation of the housing market 2.1. Economic situation 2.2. Estimation of housing backwardness and housing demand, 2009 2.2.1. Housing backwardness at the national level 2.2.2. Characteristics of the families in backward dwellings 2.2.3. Market segmentation 2.2.4. Housing demand, 2009 2.3. Homologating the various classifications of housing in Mexico. Typologies by value 2.4. Social production of habitat (SPH) 2.5. Situation of the households and housing in Mexico 2.6. Rural and semiurban housing 2.7. Housing produced by developers traded on the BMV 2.8. Extraordinary costs in the production of social and economic housing 2.9. SHF home price index in Mexico 2.9.1. Results 2.9.2. Conclusions and next stages 2.10. Indices on the quality of the dwelling 2.10.1. Index of residential satisfaction with the city, the housing complex, the dwelling,
and the financial aspects 2.10.2 Infonavit’s Housing quality index (ICAVI) 2.11. Promotion of quality of life and patrimonial value Vivir Infonavit 2.12. Key findings 30
31
38
38
41
43
44
45
48
50
53
56
60
65
66
68
68
69
76
78
79
Section 3.
Sustainable urban and housing development 80
3.1. 3.2. 3.3 3.4. 3.5. 3.6. 3.7. 3.8. Normativity in urban planning 3.1.1. Federal guidelines for developments derived from Art. 73 of the Housing Law 3.1.2. Housing laws and programs in the states 3.1.3. Homebuilding code Urban and social integration in the recent expansion of the cities in Mexico, 1996-2006 Infonavit’s Program of Municipal competitiveness in housing (PCMV in Spanish) Role of the state Housing Institutions (OREVIS) Financing for infrastructure in urban development 3.5.1. Urban solid waste Sustainable Urban Developments (DUIS): progress and outlook Cities and climatic changes 3.7.1. Rural housing and climatic changes 3.7.2 Specific Program for the Development of Sustainable Housing ante el Climatic changes 3.7.3 Basic package for the Ésta es tu Casa Subsidy Program 3.7.4. Sustainability on an urban level Key findings 81
82
84
84
85
87
89
89
91
93
93
95
96
97
97
99
Section 4.
4.1. 4.2. 4.3. National land policy 4.1.1. Costs and benefits of the formal and informal land markets Geographic location of land banks, magnitude, and legal origin Key findings Land and land banks
100
101
102
106
107
continúa,,,/
Section 5.
Financing for housing 5.1. Confidence in the housing market in Mexico: credit lines from the World Bank
and the Inter-American Development Bank 1
5.1.1. Mortgage Sofols and Sofoms, towards a change in the business model,
or rather a change in regulation? 5.2. Programs in the housing sector 5.2.1. Financing program 5.2.2. Progress on the subsidy program
5.2.3. Result of the evaluation of the subsidy program
5.2.4. The Mexican mortgage insurance market 5.2.5. Cofinancing programs 5.2.5.1. SHF cofninancing program 5.2.5.2. FOVISSSTE Cofinancing
5.2.5.3.
Infonavit Cofinancing 5.2.6. Green mortgage
5.2.7. Dynamism of the used housing market 5.2.7.1. Results 5.2.8. The secondary market: sustainable and complementary growth 5.2.9. Microfinance 5.3. Strategies that promote efficiency in the sector 5.3.1. Progress on the Program for the Modernization of the Public Registers of Property 5.3.2. Importance of the link of the urban and rural land register with the Public Register of Property 5.3.3. The predial tax incorporated into the mortgage
5.3.4. Indicators analysis: Registro Único de Vivienda (housing register)
5.3.5. Actions of the Mexican Mortgage Association
5.3.6. The Total Annual Cost (TAC) and the Costo Efectivo Remanente (CER) 5.3.7. Social collection 5.4. Key findings 108
09
110
112
118
120
120
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122
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126
131
133
135
136
139
140
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146
149
151
154
Section 6.
6.1. 6.2.
6.3. 6.4.
Current issues on the market and their characteristics 6.1.1. Mortgage backed securities (BORHIS in Spanish) 6.1.2. FOVISSSTE mortgage securitization program 6.1.3. Securities program (CEDEVIs) 6.1.4. Infonavit 2009 outlook HiTo (Hipotecaria Total)
Securitization of bridge loans 1
Key findings Development of the secondary market for housing finance 156
157
157
159
160
162
164
64
165
s
Section 7.
Conclusions
7.1. Achievements
7.2. Challenges
166
169
Methodology appendix
Appendix A
Images of the DWF project in Central Vietnam
Appendix B
Activity situation of the construction companies by state
Appendix C Ideal suburban and rural housing
Appendix D
Distribution of the land bank by developer and state
Appendix E
Attributes of the sample in the study Transaction costs in the production of social and economic housing
Appendix F Attributes of the SHF Price Index
Appendixes
Appendix A. Appendix B. Appendix C. Appendix D. 166
List of graphs List of tables and figures Acronyms and abbreviations
Bibliographic references and websites ii
iv
v
vi
vii
ix
xvi
xvii
xix
xxii
Section 1.
National urban development
and housing policies
1.1.
National Urban Development Policy
The guidelines for urban planning have been established within the framework of the existing laws and
of the current administration’s plans and programs.
Article 7, section VII , of the General Law of Human Settlements states that it is the Federation’s
responsibility, through the Ministry of Social Development (Sedesol), to “Formulate and execute the
National Program for Urban Development, as well as to promote, control, and assess its fulfillment”.
In its Strategy 3.3, Objective 3, the National Development Plan 2007-2012 proposes: “to create
a national territorial pattern to stop the disorganized expansion of cities, to provide land suitable for
urban development, and to facilitate access to services and infrastructure in both urban and rural
communities”. As part of the 2030 Vision, it states that “urban and spatial planning must guarantee a
balanced development”.
The National Program for Urban Development 2009-20121, derived from the
previous regulations, defines the following general objectives:
1 Formulated by Sedesol, and reviewed by
the Presidency of the Republic, awaiting
official publication.
1.
2.
3.
4.
5.
6.
7.
8.
9.
Exercise a new leadership based on cooperation between federal, state, and
municipal authorities, and in coordination with the civilian society.
Improve urban and spatial planning.
Reduce urban poverty and improve the services in the cities.
Promote productive and well articulated cities and regions.
Expand the offer of social, public, and private land.
Establish preventive measures and timely responses to natural risks.
Achieve the integration of metropolitan areas, cities medias, and small localities
under a framework of greater equity and distribution of benefits.
Build dense, compact cities, with a mix of compatible land uses.
Strengthen cities’ autonomy and financial independence, with strong and selfsufficient local tax collection.
These objectives guide the national policies and programs for spatial planning,
regional development, management of land, transportation, and urban mobility, and
the instruments that will make it possible to put them into practice.
1.2.
National Housing Policy
Despite the threats and momentary deterioration in some relevant macroeconomic variables, the
Mexican economy has proven to be sound enough to meet the effects of the global financial problems,
so that even exchange rate fluctuations, liquidity problems, companies’ capitalization, and the severe
impact on employment tend towards stability. In order to find solutions in face of the crisis, the Federal
Government assigned an anticyclical role to the most important sectors in the economy, based on
their recent dynamics and impact on the productive plant and on employment; among them, particular
attention is placed on housing and infrastructure, due to their multiplying effect on the economy as
a whole.
With the goal of countering the possible consequences resulting from an unfavorable macroeconomic scenario, measures were set in motion in the housing sector aimed at sustaining the pace of the
commercial housing train, as well as expanding the options and possibilities of the social production
of habitat.
Based on the inertial offer achieved in past years, in the early months of 2009, it is still possible
to observe a favorable trend, similar to the one in 2007, even though the rate of financing is slower
compared to 2008. However, the sector’s dynamics up to the first quarter of 2009 continue to be
favorable, and reflect the benefits of the public strategy to promote the building of new housing complexes through bridge loan credit lines; added to this is the challenge to mass produce dwellings that will
gradually incorporate sustainability features that will allow their occupants to generate substantial savings
in energy and water, and reduce the negative effects on the environment and the climatic changes.
Continuity in the granting of subsidies for this initiative is being supported through the Ésta es
tu casa program which, beginning on March 1st ,2009, incorporated the condition that new dwellings
should have a basic package of water, electricity, and gas savings measures. Thus, it is estimated that of
the goal of 6 million housing loans to be granted by the current administration, 800 thousand should
include these savings measures.
1.3.
National Housing Pact
On March 13, 2009, with Mexican President Felipe Calderon bearing witness, the signing of the National
Pact for Housing to Live Better was completed before representatives from state governments,
legislators, entrepreneurs, bankers, notaries, and real estate developers. The Pact establishes an
investment of 180 billion pesos for the construction or improvement of 800 thousand dwellings in
2009, which boosts their traditional role in the creation and conservation of jobs and in the demand
for inputs from 37 branches of the economy.
At the time, the President of Mexico stressed the need to sustain the growth rate of the industry
to deal with the financial crisis, while at the same time benefiting the most vulnerable families in Mexico.
Thus, as another commitment within the Pact, Sociedad Hipotecaria Federal (SHF) funds financial intermediaries such as SOFOLs, so they can grant loans for dwellings worth under 300 thousand pesos.
• 16 • Current Housing Situation in Mexico 2009
The financial intermediaries committed to guarantee the availability of credits to finance at least
150 thousand loans worth a total of 80 billion pesos. The suppliers of construction materials, such as
cement and steel makers, signed the agreement to guarantee affordable prices, in addition to discounts
within both these industries and copper, as well as in household appliances and other supplies.
This Pact promotes the cohesion within the housing sector in Mexico, both of public and private institutions, to guarantee integrity in terms of housing development, as well as urban and spatial
planning.
Its key objective is to sustain the growth of housing in Mexico by encouraging construction of
housing spaces and the increase of resources destined to mortgage lending. This is expected to raise
the number of Mexican families who can have access to a dwelling—particularly those with lower
incomes.
Progress on the Pact
Despite the little time elapsed since its signing, on June 11, 2009, the Senate Housing Commission, in
coordination with Sedesol, called the Forum on the Progress of the Pact’s Agreements in order to
assess its performance.
This Forum brought together the directors of the National Housing Institutions (ONAVIS in
Spanish), developers, and private financial intermediaries, input suppliers, and authorities in the sector
to inform the legislators on the progress made in terms of actions and resources. Up to June, the
financing awarded by Infonavit, FOVISSSTE, FONHAPO, SHF, and CONAVI together totaled 465,033
actions, which represents 58.1% of the established goal, with resources amounting to over 70 billion
pesos. Further details on this progress are found in section 5.2. of this report and on the website of
CONAVI, which is in charge of following up on the progress of the Pact.
1.4.
The global crisis and its impact
on the housing sector in Mexico
Factors that triggered the crisis in the United States
Following the recession in 2001, in the United States (US) the conditions materialized for the development
of a housing boom: the combination of all-time low mortgage interest rates (below their long-term
trends), a still unfilled housing demand, the longest period of economic expansion in contemporary
history in the US, high interest rates, a broad supply of financing, as well as a deficient bank supervision
and regulation in the sector, all triggered the appreciation of housing in the US. Between 2000 and
2006, prices rose 6.5% per year in real terms, and the percentage of Subprime assets on the mortgage
market went from 12 to 25 percent 2.
The increase in the number of households, the removal of restrictions to enter the mortgage
market, and the promotion of the subprime segment lent a renewed boost to this housing boom. The
gradual increase in interest rates since 2005 didn’t curb the demand for housing, whose prices just
kept rising, boosted by more and more lax lending policies.3 Initially, a sharp rise was seen in housing
prices and in the number of mortgages for traditional segments; then, between 2005 and 2006, the
subprime market spread and became generalized.4
2 Inside Mortgage Finance http://www.
imfpubs.com/issues/imfpubs_imf/
3 In 2001, the Subprime segment stood
for 7% of the total mortgage applications;
by 2006, the ratio had risen to 20 percent.
Meanwhile, earnings went from 2% to 14%
in the same period.
4 Pence (2006), Cutts and Merrill (2008),
Ambrose and Sanders (2004) stress the
importance of state regulation in mortgage
markets.
Section 1. National urban development and housing policies
• 17 •
It is possible to state that the origin of the recent crisis in the US comes from the real estate
sector. From the price drop begun towards the end of 2006, consumer confidence in 2008 showed
a 41% drop in the capital destined to housing finance, the average housing prices decreased 27%, the
sales of new and used housing fell 70% and 33%, respectively; home improvement projects dropped
13 percent. In 2009, these effects are still present, although recently there have been signs of a gradual
stabilization within the conditions in these markets.
How the US crisis spilled over into the Mexican housing sector
In Mexico, the US subprime crisis took a while to become apparent, and its impact was not as strong.
Contrary to the US economy, in Mexico there was no speculative bubble in prices; in fact, they dropped only slightly.
Another important difference was the transition path since, while in the US the crisis began in
the real estate sector, then moved on to the financial, and finally spread into the real sector, in Mexico
the path was the opposite. Lastly, the contraction in housing sales in Mexico, although significant, was
not homogenous, but with marked differences between regions and segments.
The beach areas, real estate developments for foreign investors, or the baby-boomer market
were the first to suffer the effects of the real estate crisis. Between the increase in the cost of financing
in the US, and a more cautious attitude from investors, the dynamism of housing sales in these areas
(Los Cabos, Vallarta, Mazatlan, Cancun, the Mayan Riviera, etc.) began to taper off in the third quarter
of 2008, from annual growth rates of 43.5% between 2006 and 2007, to 0.2% in 2008 and (-)7.2% in
2009 (data up to the first half of the year).
The gradual contraction of private consumption in the US (initially linked to a drop in financial
wealth, due to the lower prices of housing, the decline in stock markets, and slower job creation) had
a negative effect on the maquiladora (in-bond) activity located in the border region of Mexico, through
greater unemployment and mortgage delinquency. The latter began to cause a restriction in lending,
which in turn slowed housing sales in the region.
It wasn’t until late 2008, after the real estate crisis spread throughout the financial sector, that
the deterioration of the real estate market in Mexico became sharper and more generalized. Several
factors came together—a more wary attitude in credit granting by financial institutions; the scarcity of
financing for builders (bridge loans), in some cases due to the financing restrictions faced by SOFOLs;
the expectation of lower sales, and even the increase in costs (11%) above the hike in housing prices
(7%), together with slower job creation in the economy and a gradual deterioration in the production
around the country—all ended up slowing housing construction.
Financing has been improving throughout 2009, both from
public organizations and financial institutions in the private sector;
thus, housing construction is beginning to show signs of stabilization, and everything seems to indicate that the worst of the crisis is
gradually being left behind.
The strong differences between segments are noteworthy. The ones with higher inventory
accumulation between 2005 and 2008 were those catering to the high income segment. This is basically due to two reasons: first, the sudden decrease in demand for second homes by foreigners;
and second, Infonavit’s lending policy expanded its support to include the middle and upper-middle
segments during those years, generating a strong source of financing, which signaled developers to
build housing for this level.
On the other hand, in the lower-income segments, inventories decreased faster, due to the
accumulation they had since 2007, the restriction of bridge loans, and lower financing granted by SOFOLs. Sales dynamism last year, settling at the levels of 2005, was favorable in the process of selling
economic and affordable entry level housing.
In 2008, the change in the policy to access Infonavit loans boosted the dynamism of the real estate
sector. However, with the start of the recession and the liquidity restrictions, the Institute is applying
additional policies to reactivate lending in the sector. 5 For instance, beginning in 2009, registration is
granted to developers who have only between 10 and 40% of construction, and a lending program
was launched for persons with incomes of over 11 minimum wages, called Infonavit Total.
5 In July, the Institute issued mortgage
backed securities worth 2.588 billion
pesos. Meanwhile, Fitch Mexico assigned
Infonavit’s stock certificates a credit quality
rating.
Structural differences between the US and Mexican housing sectors
Due to its narrow relationship with the US economic cycle, one could think that the effects of the
housing bubble was direct and with similar effects on housing prices in Mexico. However, the process
in Mexico was different, due to the following structural characteristics:
n
n
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n
High potential demand in Mexico vs. a lower one in relative terms in the US. There are differences in the population dynamics in terms of the growth of the economically active population,
household formation, and aging. Thus, the real estate market in Mexico specializes in the sale
of new housing, whereas in the US the focus is mainly on used housing.
Low penetration of mortgage lending in Mexico. Mortgage lending as a percentage of GDP in
Mexico is only 14%, whereas in the US it is over 70 percent.
Financing through securitizations is incipient in Mexico, and is mostly used with traditional schemes (plain vanilla). Issues are regulated either by Sociedad Hipotecaria Federal or an insurance
company.6 That is, there is a double review for a suitable generation of loans.
On the other hand, in the US, mortgage securitization has a high penetration, with deficient
normativity which has led to the placement of mortgages in financial markets with an unsuitable
risk assessment, sometimes underestimating the clients’ credit quality.
Contrary to the US, Mexico doesn’t have a market with all the characteristics of the subprime
one, marked by a low or nonexistent down payment (low LTV) and high leverage; interest rates
below market rates, which return to sustainable levels over the lifetime of the loan; mortgages
granted to individuals with no prior credit history or low and variable income levels. In this sense,
Mexico has a deficit of banking for this market.7
6 It is worth noting that, between 2005 and
2008, financing through securitizations grew
103.3% in real terms, showing an increase of
over 50 percent in the last year.
7 Mortgage financing as a percentage of
GDP in Mexico is relatively low, particularly
compared to countries with a similar
income per capita (such as Chile, where
the balance is 16%). This figure is very low
compared to more developed countries
where financing levels are even higher than
100% of GDP (such as Holland, Denmark,
or Switzerland); in Spain, it stands for 63%
and in the US, for 76 percent.
• 19 •
n
n
n
8 Housing Demand in Mexico. Department
of Economics. University of New Mexico.
Albuquerque, NM 87131. September 19,
2007.
Contrary to Mexico, the US has a legal framework with better guarantees for real estate property
rights and a greater liquidity in the used housing market; thus, it would be desirable to improve
both these aspects in our country. Since mortgage regulation, supervision, and designation is
stricter in Mexico, it is less likely that a bubble like the one in the US should appear.
Housing prices in Mexico have remained stable in real terms; that is, there has been no generalized price hike.
Housing demand in Mexico is less susceptible to price changes than in the US. according to
Fontela and Gonzalez (2007), price elasticity in housing demand is lower in Mexico than was
previously thought.8 Thus, the impact of the US recession on the Mexican mortgage sector has
been milder.
Altogether, these characteristics make it possible to catalogue the Mexico housing market with
sound bases and a high potential, which are the hallmark of an emerging market, compared to the US
market, that could be classed as mature. This makes the Mexican real estate market less vulnerable to
a scenario of liquidity restriction, or eventually, of higher stress. Furthermore, it is feasible to consider
a gradual recovery in activity towards 2010. Financing conditions have been restored, and the market
itself has adjusted, which provides the sector with the conditions for a sustained recovery.
1.5.
Follow-up of international obligations in
terms of rights to housing
9 CIDOC and SHF. Current Housing
Situation in Mexico 2008, paragraph 2.
With regard to the Mexican State’s compliance with the obligations derived from being a member
country of the International Covenant on Economic, Social, and Cultural Rights, and to the attention paid
to the recommendations of both the UN Committee on Economic, Social, and Cultural Rights and the
United Nations Special Rapporteur on Adequate Housing, mentioned in the previous report,9 the
following progress is worth noting:
1.
The workgroup for the Development and Implementation of a National Eviction Registration—part
of the Economic, Social, and Cultural Rights Sub-commission of the Commission for Government
Policy on Human Rights, coordinated by the Ministry of the Interior—has continued to gather
information on the situation of evictions in Mexico, their typology, the situation of the delinquent
portfolio of the various organizations, and the evictions resulting from this problem, the existing
legal regulation, and the lack of powers of the departments of the Federal Executive Branch on the
matter. All this was done in order to create a methodology that will lead to the implementation
of a National Eviction Registration that will comply with the international recommendations on
the right to Adequate Housing.
The existence of forced evictions arising from political or religious events, of those derived
from plans and projects proposed by the government itself or by individuals, and of evictions
caused by defaulting on payments agreed on rental or mortgage contracts have made it difficult
to design this methodology.
Thus, when an eviction is carried out due to defaults on a mortgage loan, it is the result
of a legal order issued after a final verdict, which cannot be appealed. Those working to defend
the affected parties argue that although these cannot be called forced evictions, they are often
the result of marred contracts that are far from protecting the rights of the buyers.
The central topic in these types of evictions, arrived at as a result of the legal analysis
performed by the workgroup, is the absence in Mexican statute law of a legal proceeding to
carry them out. The large legal loopholes regarding evictions make it necessary to deepen
the debate and include all sorts of evictions, distinguishing each one, in the proposed National
Registration.
To make progress on this path, the workgroup resorted to the Mexico City Justice
Department. Together with the Citizen Orientation and Human Rights Office, they agreed to
work on a methodology that will lead to the establishment of an Eviction Registration on a local
level; this methodology could later be repeated in all the other states.
Separately, the Federal Executive Branch, and more specifically, the housing sector led
by CONAVI, have placed decision-making tools within the reach of housing buyers; such is the
case of mortgage loan simulators and the development of affordable financial products for the
low-income population that will contribute to the creation of a healthier and better informed
credit market, and thus, prevent difficult commitments from being taken that would later lead
to evictions.
2.
Another topic on which a solid base is under construction for its consolidation during the current
administration is the promotion and support of the social production of habitat as an answer to
the housing needs of the low-income sectors (see paragraph 2.4).
To this effect, the goal is to create a system that will complement the one from the
commercial production to encourage coordination, collaboration, and synergies among the
various players in order to strengthen the National Housing System; on the other hand, it will
open suitable options to gradually make effective the right to housing of the more vulnerable
sectors.
Likewise, it is necessary to stress the changes that are currently being promoted by
Infonavit through its new vision, designed to strengthen the social aspects of housing (see
paragraph 1.8).
In many ways, these initiatives arise in response to the recommendations from the United
Nations Special Rapporteur on Adequate Housing in terms of taking care of the housing needs
of the poor, “placing a greater emphasis on the social aspects of housing and seeing housing less
as an economic sector”.
• 21 •
1.6.
Best practices
Serving the housing needs around the world is an essential commitment. Below, we
present two experiences of interventions that contribute successfully to housing and
urban policy for housing.
1.6.1.
Actions to prevent disasters in dwellings from the impact of typhoons
in Central Vietnam
In 1985, the World Habitat Award was established by the Building and Social Housing Foundation
(BSHF) as a contribution to the United Nation’s International Year of Shelter for the Homeless.
One of the projects that won the 2008 World Habitat Award was the one presented by Development Workshop France (DWF) in Central Vietnam, which for many years has worked with families and
local governments applying basic construction principles and techniques to provide them with security
against typhoons and make both new and used housing and community facilities resistant to floods.
The purpose of the project is to prevent damages to life and the buildings, and particularly, to
reduce the vulnerability of families and the community to natural disasters. Thus is help provided to
mitigate the problems caused by catastrophic expenses and the ensuing persistence and growth of
poverty.
Vietnam is still a poor country, and its growth has only been the consequence of high inflation
rates and a very low starting point. Nationwide, poverty levels still total 16% in urban areas and over
35% in rural ones, where families’ average monthly income is under 50 dollars.
Since 1986, the Vietnamese government has established free market reforms and encouraged
not only private property in both the countryside and in companies, but also foreign investment. Its
economy achieved rapid growth in industrial and farming production, construction, exports, and
foreign investment. According to official data, in 2008, GDP grew 8.2%, placing it as the country with
the highest economic growth in Southeast Asia.
Vietnam is the most exposed continental country to the rise in the level of the seas and the
associated risks. Currently, of a 44 million population, 53% live in low coastal areas and regions of the
delta.
Each year, the coastal plain of Central Vietnam, with roughly 500 km of coast, is affected by an
ever greater number of extreme events such as cyclones, storms, tornadoes, waterspouts, and floods,
leaving destruction and misery in their wake.
Despite their poverty, in the last 20 years, many families have progressively replaced their homes
made of bamboo and thatch for concrete structures, which they culturally find safer. Nonetheless,
several studies show that nearly 70% of the recently-built dwellings are weak and exposed to the
damages caused by these phenomena. The main causes are the lack of basic techniques and rules to
make resistant buildings, and the lack of necessary resources to finish the work.
When disaster strikes, State resources are mainly devoted to strengthening and restoring
the infrastructure and production capacity, and not to aid families, who must face on their own the
rebuilding of their dwellings.
It was thus that, in 1999, DWF began its activities in Central Vietnam, particularly in the Thua
Thien Hué Province, focusing its work on local families or community governments, applying construction
principles and basic techniques in order to provide both new and existing dwellings, as well as community
facilities, with security against extreme events and make them flood-resistant (see Appendix A).
The project has combined several actions:
1.
2.
3.
4.
5.
6.
It sends a clear message to the communities (preventing the damage from cyclones), through
participative communication (singing, dancing, theater plays, posters, t-shirts with the motto,
walls, loudspeakers, TV, written press, regattas in the week of the disasters), that prevention is
a priority and a necessity.
It strengthens the capacity of local authorities and the creation of networks including different
players.
It shows, through practice, preventive actions in public buildings, together with the families. Schools
and other small public buildings and infrastructure play an important part in the process, both in
displaying safe construction techniques and in guaranteeing a safe shelter for the community.
It develops practical abilities in community members and debates on the importance of safe
construction. Theory and practice workshops are held in each municipality both for the community builders and leaders, with a type perspective. A permanent group of persons who offer
this type of training is set up.
It promotes the safe housing program among the schoolchildren. At every elementary school,
a cycle of education regarding children’s rights is organized to find out what they fear when the
cyclone is coming, what they do following a disaster, and what they propose to make them safer.
This cycle is integrated into the school curriculum.
It simplifies access to credit to reinforce their dwellings. It lends support to obtain suitable financing through the association with local banks. For this purpose, DWF has created a package
of innovative measures that enable poor families to obtain loans that contribute to cover the
necessary expenses to rebuild and reinforce their dwellings.
It is important to note that the replacement of a dwelling
that was destroyed by a cyclone represents a cost of between 1,200
and 1,500 dollars; however, following the project’s guide, the cost of
reinforcing the same dwelling averages 300 to 400 dollars.
The basis for the work has been the application of 10 key
principles of safe and storm- and typhoon- resistant construction
that reduce the risk of damages and losses and are related to:
• 23 •
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n
n
n
n
n
n
n
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n
Carefully choosing the site to avoid the force of the wind.
Building the dwelling with a simple shape in order to avoid negative pressures.
Building the roof at an angle of 30° to 45° to keep it from becoming unstuck.
Ensuring that the foundations, walls, roof, and covers are all interacting together.
Avoid large projections of the rooftop and separate the structure of the entryway of the structure of the house.
Ensuring that the rooftop is connected to the structure.
Reinforce the structure with triangular braces in the structure.
Ensuring that the rooftop is adjacent to its structure to keep it from becoming unstuck.
Ensuring a wind corridor by matching opposing openings.
Use doors and windows that can be shut. Seal the dwelling with shutters on the doors and windows, which adds
to the rigidity and solidity of its walls and structure.
Plant trees and vegetation around the dwellings as windbreaks.
The response of the new structures has been extremely positive and has kept the wind from blowing rooftops
away and destroying the dwellings. Thus, there is great demand in other local communities, even in other areas around
the country, for the principles of safe construction to be repeated.
In these times of climatic changes and economic crisis, these simple, inexpensive experiences with possibilities for the
population itself to apply them, with techno-social alternatives so the dwellings can better withstand the impacts of future
extreme events should, without a doubt, translate into risk prevention proposals for the multiple vulnerable areas in our
country, and even for Central America and the Caribbean.
1.6.2.
Urban and housing policy in Brazil
So far this decade, the progress made by Brazil in terms of urban and housing policy instruments is
very relevant.
Due to their strategic importance, it is worth noting the ratification in July 2001 of the City
Statutes which regulate the chapter on urban policy in the Federal Constitution of 1988, Articles 182 and
183, which envision instruments to guarantee the exercise of human rights related to the city, the social
function of the city and of property, and the democratization of urban management. This fundamental
instrument is the result of a process that lasted over 10 years, promoted by the civilian society, organized
in interaction with the federal government, the National Congress, and the municipalities.
The City Statutes offer conceptual, legal, and instrumental support to the municipalities as the
ones responsible, according to the Constitution, for planning and implementing urban policy.
Based on the principle that the property right is subject to its social function, which is defined
through municipal legislation, the Statutes place at the disposal of the municipalities various instruments
to balance the individual and collective interests, to be used singly or combined, based on the city
project agreed on in the master plan of each municipality. Therein, it is worth noting the duty of the
municipalities to over 20 thousand inhabitants to develop a Master Plan of Urban Development.
Among the new instruments contained in the Statutes, seeking to prevent speculative retention
of land, are: parceling, the mandatory building or use of not built on, or underused urban land (Art. 5).
Should the periods established by law not be met, the Municipality applies a growing predial tax over 5
years (Art. 7) and can proceed to expropriate the property, paying with public callable debt in a period
of up to 10 years. The value of the compensation is established on the calculation basis for the predial
tax, discounting the appreciation generated by the works performed by the public power (Art. 8).
These instruments contribute to check cities’ irrational expansion which threatens or destroys
ecological protection areas, aquifer collection areas, or farmlands, and makes it necessary to expand,
at a high cost, the transportation infrastructure, equipping, and networks.
Another interesting instrument is the special collective usucapion, applicable in the case of plots
occupied for housing purposes for five uninterrupted years, without opposition, by low-income persons.
It applies in cases where it is not possible to indentify the land occupied by each holder (Art. 10).
The Statutes include other instruments that establish the separation between the right to property
and the building potential of the plots, defined by urban policy, to keep owners from being benefited
or punished by the latter, which ends up affecting mainly the low-income sectors in their city rights.
Other important aspects in the City Statutes regard the relationship between territorial planning,
budgeting, and democratization in decision-making; the acknowledgement of the mechanisms that
guarantee the participation of both citizens and representative associations in urban planning and in
the creation of public policies; the establishment of urban associations and operations in a consortium;
and the study of the impact of large projects on their surroundings.
Like many other Brazilian instruments for urban and housing policy, the City Statutes are the
result of widely participative processes that have summoned all the players involved in these issues.
The City Statutes have been the basis for the creation of many other instruments, particularly
the creation of the Ministry of Cities in 2003, which sets under a single administration the group of
topics coordinated under urban policy.
Thus, in 2004, the Council of Cities was established—a deliberative authority that integrates all
the players interested in the topic. The participative creation of municipal master plans began in 2006,
and since 2003, the Conference of Cities is organized twice a year.
On the matter of housing, the Council approved the National Housing Policy in 2004 and the
Solidarity Credit Program was created. In 2005, the National Affordable Entry Level Housing System
was established, and in 2006 it became regulated. A strategic part of the system is the National Fund
for Affordable Entry Level Housing, whose creation resulted from the first popular bill of law in Brazil.
Its Managing Council, which has been in operation since 2006, also includes representatives of the
various players involved.
In 2007, a change to the Law of the National Affordable Entry Level Housing System was achieved to include the social production of habitat, and in 2008, the Fund’s Board granted its approval to
its participation in supporting this form of production, the implementation of which began with the
allocation of 10 million reais for that year.
• 25 •
Lastly, in December 2008, the Law on Technical Assistance for Affordable Entry Level Housing
was passed. It will benefit 10 thousand professionals and over 5 million families. This instrument gives
access to resources for financing the technical assistance aimed at the creation of projects from the
cooperatives and associations. The consultancy is comprehensive and includes legal, social, environmental, accounting, engineering, and architecture aspects, which should continue until after the dwelling
is occupied.
This experience is an example of the creation of a coherent system of urban, land, and housing
policy instruments, in favor of society as a whole, and the most vulnerable and lacking sectors in
particular. Its design, application, and follow-up, as well as its operating mechanisms, are an example
of social participation at deliberative levels of decision and control, which lends significant help to the
consolidation of a participative democracy in Brazil.
1.7.
Technological promotion
In order to encourage technological innovations in the productivity of homebuilding, the CONAVIConacyt research fund lends support to scientific and technological research projects to contribute to
the generation of the knowledge required by the housing sector. Since it began operating in 2002 and
up to 2008, 34 projects have been assisted through 40.2 million pesos, 29 million pesos of which have
been channeled to projects that encourage technological developments for the sector.
In order to help make the sector more productive, reduce costs, and offer greater quality
dwellings to the population, the goal is to bring continuity to the fund to encourage financing for viable
projects with a high impact, and multiply similar initiatives in the sector.
An academic event is scheduled for November 2009, in order to publish the results of the finished projects financed by the CONAVI-Conacyt fund. The list of the projects assisted, the persons in
charge, the status of the research, and the open announcements can be viewed at the Commission’s
website <www.CONAVI.gob.mx> under the Technical Development section. Currently, work is being
done to normalize the information to be viewed on the website, where the technical reports, as well
as the finished projects, will be available.
1.8.
Infonavit’s new vision
From 2001 to 2007, Infonavit managed to gain financial strength so that it was able to achieve record
numbers in mortgage loan granting. In 2008, a strategic reflection was carried out to assess its achievements and rethink the way in which it could contribute to workers’ quality of life; it studied its capacity
to consolidate excellence in service, and thus ensure the continuous innovation in order to move closer
to what the society needs, and involve in its activities various external agents.
Consequently, Infonavit has realigned its strategy in order to have a bearing on the factors related
to housing, the environment, and the community to improve workers’ quality of life; fill their housing
needs in sustainable environments suitable for their development; encourage a financial mindset among
its borrowers so they will choose, acquire, and protect their patrimony, save and invest thinking of
their retirement, improve their community, and take care of the environment; and, through Infonavit
Ampliado, promote the creation of alliances with municipal, state, and federal governments, companies
and unions, and social organizations from the civilian society and academic sector.
Under this New Vision, based on tripartism and autonomy, the Institute proposes to contribute
to Mexico’s prosperity as the institution that materializes workers’ efforts to increase their patrimony
and wellbeing by financing their housing needs in a sustainable environment, apt for the development
of their individual and community potential, thus improving their quality of life.
Figure 1.
Infonavit
housing
Axes of the Vivir Infonavit
strategy
Source: Infonavit, 2009
industry
borrower
Infonavit
community
Government
and society
Infonavit
surroundings
• 27 •
The New Vision proposes an Institute seen, within the environment in which it functions, as a promoter of
social wellbeing: future efforts will be channeled towards a new transformation grounded in a model of
governance based on alliances, maximizing social development and promote the lifestyle known as Vivir
Infonavit, which enables the Institute to produce patrimonial value and quality of life for its affiliates.
In addition to continuing to strengthen itself as a social mortgage lender and to better serve
the needs and characteristics of its demand, it will promote initiatives related to the maintenance of
developments financed by Infonavit, community life, and borrowers’ acquaintance with their rights and
obligations. The strategy considers a series of steps that will enable the dwellings offered to the affiliates
to have more quality attributes, protect their patrimony, and favor citizens’ growth in a sustainable
urban environment.
Included among these initiatives are the Hogar Digital which, in a progressive way, will help
dwellings financed by the Institute have the necessary technology so that whoever purchases one will
have a telephone line, Internet, and TV, and thus reduce the cultural gap; the program through which a
affiliate will be able to pay the maintenance fee taking advantage of the direct discount mechanism; or
the product of credit for vertical housing, Tu Casa+Cerca, which takes advantage of urban saturation
and focuses on higher density cities, where commuting to workplaces is complicated and costly, with
a view to reduce commute times and marginalization.
Infonavit contributes to reducing energy consumption and participates in the promotion and
financing of ecological dwellings. Together with CONAVI, it defines the criteria and equipping of the
eco-technologies that will be used in the dwellings purchased by a worker who decides to take advantage of the government aid.
In addition, the Institute will carry out studies that will make it possible to learn permanently the
degree of social vulnerability of those who inhabit the dwellings it has financed, in order to come up with
actions that will buffer, reduce, and help eliminate it, encouraging these persons’ social development.
Likewise, it will get an indicator that will gauge the level of initial and later wellbeing of each borrower
and enable periodic assessments.
1.9.
Key findings
n
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n
The National Program for Urban Development 2009-2012 has been created
by Sedesol and reviewed by the Presidency of the Republic, and is awaiting
publication in the Official Journal of the Federation.
Beginning on March 1, the Ésta es tu casa subsidy program incorporated the
requirement that all new dwellings must have a basic package to include water,
electric energy, and gas savings measures. The National Pact for Housing to
Live Better, signed on March 13, 2009, represents a guaranteed investment
of 180 billion pesos for the construction or improvement of 800 thousand
dwellings in 2009.
In Mexico, the share of mortgage lending as a percentage of GDP barely
amounts to 14%, whereas in the US it is over 70 percent.
Mexico must have a methodology for the design and functioning of a National
Eviction Registration.
One of the projects that won the World Habitat Award 2008 was the one
presented by Development Workshop France (DWF) in Central Vietnam,
through which 1,300 dwellings of low-income families are being reinforced
to prevent the disasters caused by the frequent typhoons.
Brazil has developed urban land and housing policy instruments. Their design,
application, and follow-up, as well as their mechanisms of operation, are
examples of the social participation at deliberative levels, of decision-making
and control nationwide.
Vivir Infonavit, the Institute’s new model, will seek to produce patrimonial
value and quality of life for its affiliates and, in addition to encouraging serving
the more focalized housing demands, it will emphasize social development.
Infonavit and CONAVI participate jointly in the promotion and financing of
ecological dwellings to reduce energy consumption.
• 29 •
Section 2.
Current situation
of the housing market
2.1.
Economic situation
This section looks at some economic indicators related to production, employment, prices, interest rates, and exchange rates,
that make it possible to outline the state of the overall Mexican
construction industry, and the homebuilding sector in particular,
following the global economic crisis.
Economic indicators
Based on the data from the National Statistics and Geography Institute (INEGI in Spanish), the performance of the Mexican economy, gauged through the Global Economic Activity Indicator, or monthly
GDP (IGAE in Spanish), showed an annual contraction, and a reduction of (-)8.1% in real terms up
to June 2009.
125
5%
120.02
4%
120
IGAE (Base 2003=100)
115
109.40
110
(-)8.1%
110.31
1%
-0.20%
100
Global economic activity
indicator
Observed and seasonally adjusted
series
2%
105
Source: Created by SHF with data from
INEGI.
0%
-1%
95
-2%
90
Observed series
Seasonally adjusted series (monthly percentage variation)
85
80
3%
Graph 1.
J F M A M J
J A S O N D J F M A M J
2006
-3%
2007
2008
-4%
2009
From a monthly perspective, seasonally adjusted figures indicate that the service sector, which
represents roughly 63.55% of the Gross Domestic Product (GDP) at current prices, grew 0.80% in
June 2009 from the previous month, mainly due to the positive performance of hospitals, telecommunications, insurance, and other services. On the other hand, the industrial10 sector, which represents
31.91% of GDP, showed a real fall of (-)0.87% in June as a result of decreased production of transportation equipment, electronic appliances, machinery, mineral-based products, civil engineering or heavy
construction, and in the generation, transmission, and supply of electric energy. The farming sector,
whose accrued value is 4.5%, grew 4.0% in June 2009 from the previous month.
10 Includes mining, electricity, utilities,
construction, and manufacturing.
INEGI.
45
44
1.7
1.8
1.5
1.7
1.8
43
43.8
43.0
43.4
F
M
1.9
1.6
M
J
1.9
1.9
J
A
2.0
2.3
1.9
2.4
Figure 2.
INEGI.
Economically
active population
45,709,355
Occupied population
43,344,281
5.2 %
5.3 %
5.3 %
2
43.6
43.5 43.4
43.3 43.0
43.2 43.5
42.9
42.7 43.0
S
O
N
unoccupied
Subordinated
Workers /b
15,358,269
Independent
workers /a
11,838,610
Workers without
Social security
27,683,762
Subordinated
Workers /b
15,845,152
population in search
of employment, or
unoccupied, working
age
2,365,074
2.4
D
J
F
M
A
M
1
0
J
2009
Independent
workers /a
48,685
Workers with
Social security
15,406,954
3
2.4
2.1
unemployment rate
As for the composition of the EAP, workers without social
security represent 60.6%; 35.9% of them are self-employed, 57.2%
are subordinates, and 6.9% are employers. Meanwhile, the underoccupied12 population totaled 4.8 million persons in the second
quarter of 2009, representing a 60.0% annual hike.
Composition of the PEA,
2009
5
2.4
2008
Occupied
4.8 %
5.3 %
5.0 %
4.3 %
4.5 %
4.1%
1.9
44.1 43.9
43.7 44.0 43.9
A
6
4
42
J
4.3 %
4.2 %
4.2 %
3.6 %
3.2 %
46
3.8 %
47
3.6 %
48
3.9 %
Graph 2.
Economically active
population and rate of
open unemployment
Millions of people and percentages
4.0 %
11 46 million persons.
The economic recession had a strong impact on open
unemployment, which has been on a rising trend; by the end of the
second quarter of 2009, it stood at 5.2% of the Economically Active
Population (EAP)11, which is equivalent to 2.4 million people without
a job or income from work.
12 Occupied persons with the need and
availability to offer more work hours than
their current occupation allows.
employers
20,510
self-employed
28,175
subordinated and
wage-earning
15,344,506
remunerated workers
15,098,027
income other than wages
246,479
Unremunerated
workers 13,763
unpaid family workers 11,827
unpaid non-family workers 1,936
employers
1,911,890
self-employed
9,926,720
subordinated and
wage-earning
remunerated
workers
13,059,487
remunerated workers 11,421,720
income other than wages 1,637,767
unpaid family workers 268,3806
Unremunerated
workers
2,785,665
unpaid non-family workers 101,859
a/ There are 16,483 independent workers who didn’t specify if they had social security at the time of the survey. 71% of them are self-employed and the rest are employers.
b/ There are 237,082 subordinated workers who didn’t specify if they had social security at the time of the survey. 31% are on a payroll, 68% receive non-salary compensation, and the
remaining 1% do not receive a salary.
The decreased economic activity and growing unemployment
came about in a context with an overall price hike. Annual inflation,
gauged through the National Consumer Price Index (INPC in Spanish), was 5.7% in June 2009; the core component rose 5.4% and
the non-core, 6.7 percent.
For this reason, Banco de Mexico (or BANXICO, the central bank) reduced the target rate (overnight call rate) in July 2009
from 8.25% in January to 4.5%, causing the spread between it and
the US Federal Reserve’s Target Rate to be cut to 4.25 percentage
points.
$20.00
7.5%
$15.37
6%
$16.00
$13.26
$10.95
4.5%
$12.00
Graph 3.
Overnight call rate,
US target rate, and
exchange rates in Mexico
Banco de Mexico.
3%
$8.00
3.5%
0.25%
0%
J
F
M
A
M
J
J
A
S
O
N
D
J
F
M
2008
A
M
J
J
$4.00
2009
1-day interbank interest rate (Mexico)
Target rate (US)
Exchange rate
On the other hand, the exchange rate depreciated in the
early part of 2009, settling at 15.37 pesos per dollar on March 4.
However, following BANXICO’s intervention through its 13 billion
dollar auction, the exchange market reacted positively, appreciating
down to 13.26 pesos per dollar by July 31, 2009.
In face of this macroeconomic scenario, analysts estimate
that the GDP drop in 2009 could be the worst since 1932, standing
at (-)14.8 percent.13
13 INEGI, Historical statistics.
Section 2. Current situation of the housing market
• 33 •
Current situation of the construction industry
Production in the construction industry dropped (-)6.5% annually in real terms in June
2009, due to less residential (single- and multifamily) construction, which also contributed
to the decrease in nonresidential construction, such as industrial plants and commercial
buildings, among others.
Graph 4.
15%
Mexico: production in the
construction industry
Monthly annual percentage
variations
10%
INEGI.
5%
0%
-5.6%
-5%
-6.5%
-7.2%
-10%
Building
Construction industry
Civil engineering and heavy construction
-15%
J
F
M A M
J
J
A
S
O N D
J
F
M A M
2007
J
J
A
S
O N D
J
F
M A M
2008
J
2009
Within the sector, 46.4% represents building,14 25.4% transportation15, and 11.2% oil and petrochemicals;16 the remaining 17.0%
is the water, irrigation, and sanitation, electricity, communications,
and other construction works.17
14 Meaning the construction of dwellings,
schools, industrial, commercial, and service
buildings, hospitals and clinics, and buildings
for leisure and entertainment.
15 Building of highways, roads, railways,
subway, and light rail, and urbanization and
thoroughfare works, among others..
Graph 5.
16 Includes the drilling of wells, extraction,
refining, and petrochemicals plants,
warehousing and distribution, and pipe
conduction systems.
Transportation
25.39%
Oil and petrochemicals
11.12%
17 Considers setting up signals and
protection systems, movement of soil,
underground digging, setting up metal and
concrete structures, special foundations,
hydraulic-sanitary and gas, electromechanics,
and air conditioning systems..
Water, irrigation,
and sanitation
4.86%
construction
46.42%
Electricity
and Communications
6.17%
Others
6.04%
Mexico: value of the
production of the
construction industry
Percentage distribution
INEGI, March 2009.
Graph 6.
20%
Mexico: index of the
cost of residential
construction
Annual monthly percentage
variations
Overall index
Construction materials
Machinery rental
labor
15%
10%
7.3%
3.7%
5%
Banco de Mexico.
0%
-2.6%
-5%
-4.5%
-10%
J
F
M A M
J
J
A
S O N D
J
F
M A M
2007
J
J
A
S O N D
J
F
2008
M A M
J
2009
The index of costs of materials, labor, and equipment for residential construction dropped
(-)2.6% annually at the end of the second quarter, as a result of the decrease in steel (steel rod, wire,
etc.), and cement prices (see graph 6).
The contraction in the sector caused the activity of some companies to be significantly modified,
going from active to inactive or even written off. Graph 7 shows these changes, based on the size of
the construction company. It is noteworthy that the giant and large ones maintain their share, and the
medium ones do so less. Nonetheless, among the medium, micro, and small builders, the number of
inactive and written off increased.
The states with more written off or inactive companies between 2007 and 2009 are Quintana
Roo, Colima, Baja California Sur, Nayarit, Chiapas, Chihuahua, Sonora, Aguascalientes, Guanajuato,
Nuevo Leon, Guerrero, Coahuila, San Luís Potosí, and Querétaro (see Appendix B).
Graph 7.
Mexico: activity situation
of building companies
by size
Percentage share, 2007-2009
INEGI..
100%
84%
6.8
6.7
7.1
5.0
5.6
19.6
19.7
20.8
24.0
24.3
6.6
3.5
25.1
32.1
4.9
6.3
35.5
34.8
4.1
73.6
72.1
71.0
70.1
68.5
64.4
59.6
51.3
'08
'09
'07
'08
large
Active
'09
'07
'08
medium
inactive
6.2
'09
3.3
4.8
6.2
43.4
'07
'08
43.5
53.3
58.2
36%
Giant
Lower limit Upper limit (mill. P$)
(mill. P$)
1.0
12,912.9
12,913.0
22,014.9
22,015.0
39,492.9
39,493.0
70,766.9
70,767.0
above
Micro
Small
Medium
Large
Giant
59.0
45.7
'07
stratum
42.3
68%
73.6
19 Companies are classed into five
groups (giant, large, medium, small, and
micro). Based on their annual income
at current prices reported before the
Mexican Chamber of the Construction
Industry, the National Chamber of Housing
Development, and in the Economic
Censuses, the classification results in the
following table:
38.5
50.2
52%
5.3
18 INEGI, National Survey of Building
Companies, June 2009.
52.9
50.3
40.6
'09
'07
micro
'08
'09
small
written off
• 35 •
The shutting down or suspension of the construction companies had a negative effect on labor numbers and average real
remunerations20 paid both to workers and employees: between
2007 and 2009, the number of workers declined (-)10.0% and remunerations fell (-)4.7%; as for employees, these percentages were
(-)2.3% and (-)4.9%, respectively.
20 Including all payments made to occupied
personnel in the month of reference, also
including overtime, extraordinary jobs,
Christmas bonuses, bonuses, incentives, paid
vacation, and temporary leave, prior to any
discounts from taxes, social security, union
fees, and others.
400,000
$8,000
334,758
328,548
$7,342
$7,405
301,351
Graph 8.
$7,174
300,000
$6,000
200,000
$4,000
$3,949
$3,959
Mexico: Employment and
remunerations in the
construction industry by
occupation
$3,763
100,000
92,400
90,647
87,845
'07
'08
'09
0
$2,000
INEGI.
$'07
'08
'09
workers
No. of workers
employees
average monthly remunerations (real pesos)
On the other hand, bridge loans for residential construction21 granted to developers by banks,
SOFOLs, and SOFOMs contracted since the third quarter of 2008. By the end of the first quarter of
2009, the number of bridge loans totaled 175 with an investment of 6.735 billion pesos for the construction of 29 thousand 280 dwellings. These figures indicate drops of (-)52.0% and (-)35.8% in the
number of bridge loans and dwellings, compared to the same quarter of 2008.
21 Asociación Mexicana Hipotecaria.
Boletín AHM, information up to March
2009: http://www. ahm.org.mx/docs/
BOLETIN_MAR_09.pdf
365
Graph 9.
383
373
No. of dwellings
No. of bridge loans
(-)52.0%
53,938
45,580
51,061
219
175
(-)35.8%
36,592
29,280
I
II
III
2008
IV
I
2009
Bridge loans and
dwellings built
Number
Source: Created by SHF with information
from AHM.
Likewise, the delinquent portfolio of bridge loans settled at
12.4% at the close of the first quarter of 2009, which is 8.5 percentage points greater than in the same quarter of the previous year.
This hike was due to a reduction in the rate of sales of new housing,
leading housing developers to negotiate the restructuring of their
debt in order to extend their maturities.
Current situation of mortgage finance
CONAVI reports that, up to June 2009, financial institutions had granted 782,733 mortgage loans in their
various modes,22 representing an annual decrease of (-)13.3 percent. The investment corresponding
to this financing totaled 107.9645 billion pesos, which translated into 445,065 housing solutions (67.8%
was used for acquisitions and 32.2% for home improvement and other financing), which means an
advance of 48.1% on the goal set in the National Housing Finance Program 2009 (1,183,865 dwellings).
Section 5 of this report expands on this information.
According to data from the National Banking and Securities Commission (CNBV in Spanish), the
balance of the delinquent mortgage portfolio settled at 12.376 billion pesos in May 2009, meaning a 24.9%
hike vs. December 2008, as a result of the job loss and the deterioration of households’ income.
n
n
n
22 Excluding data from the Priority Zone
Development program carried out by
Sedesol for the improvement of floors, walls,
and rooftops.
The lack of liquidity in the financial system, mainly in funding for bridge loans for housing developers, has caused an economic slowdown in the construction industry and the shutting down
of a significant number of medium, small, and micro companies, reducing remunerations and
employment.
The delinquent portfolio related to individual mortgage loans has increased mainly due to families’
reduced payment capacity, and the higher rate of unemployment.
The construction sector will end the year with a contraction.
• 37 •
2.2.
Estimation of housing
backwardness and
housing demand, 2009
The purpose of this section is to quantify and characterize the population, based on the
degree of service provided by ONAVIS and financial intermediaries, highlighting the housing
backwardness and its relationship to the various segments of the population. Likewise, it shows
an estimation of housing demand for 2009, examining the four components, which are: new
household formation, housing backwardness, mobility, and origination cures.
2.2.1
Housing backwardness at the national level
23 On walls: waste materials, cardboard
sheets, reed, bamboo, palm, or adobe. On
rooftops: waste material, cardboard sheets,
palm, or straw.
24 On walls: metal or asbestos sheet, wood,
or adobe. On rooftops: metal or asbestos
sheet, wood, roofing board, or slates.
25 Of this total, dwellings with two
households represent 92.0%; with three,
7.3%, with four, 0.6%; and with five, 0.1
percent.
26 ONU-CEPAL estimated an expanded
backwardness of 8.5 million for Mexico
in 2005. The methodology used by these
organisms is more rigorous than SHF’s.
Housing backwardness (HB) is comprised by inhabited individual dwellings where two or more
households live (overcrowding), that are built with damaged materials,23 plus those built with some
regular material on rooftops or walls with a lifetime of under 30 years. 24
Overcrowded dwellings total 551,801 throughout the country. 25 Dwellings built with precarious materials in walls or rooftops that must be immediately replaced total 1’140,839; thus, the basic
backwardness amounts to 1’692,640 dwellings (see graph 11). Moreover, dwellings built with regular
materials amount to 7’254,085 units.
Thus, the expanded housing backwardness amounts to 8’946,725 dwellings; that is, in Mexico,
36.7 million people live in dwellings with some sort of backwardness.26 In addition, there are around 7.1
million households that do not own the dwelling where they live (it is borrowed or rented) and they are
considered to be in aspirational housing backwardness, not included in the expanded backwardness.
7.2
8.9
Graph 11.
1.1
1.7
0.6
OvercrowdingDeterioration
Basic backwardnessDwelling with Expanded
r
egular materials
backwardness
Dwellings in expanded
backwardness, 2009
Millions.
Source: SHF estimates with data from
ENIGH, 2008.
When comparing this result with the expanded backwardness of 9.5 million dwellings estimated in previous years (2004), it
shows a (-)6.3% reduction; this decrease is based on the greater
number of financings provided to these families. In fact, from 2004
to 2008, 4.8 million loans for acquisitions and home improvement
were granted, 3.1 million of which were used for the purchase of a
complete or initial dwelling, and 1.5 million for home improvements.
Program types
2004
2005
2006
2007
2008Average annual
growth (%) promedio
Complete housing 1/ 496,052
545,564 641,908
677,229
669,703
7.8
Initial housing 2/, 5/
35,960
32,898
91,333
41,026
50,304
8.8
Physical improvement3/ 263,942
176,738
427,093
276,730
362,750
8.3
7,636
4,374
6,130
694
4,709
(-)11.4
nfrastructure4/, 5/
Total
803,590 759,574 1‘166,464 995,679 1’087,465 7.9
Table 1.
Number of financings for
housing, 2004-2008
Source: SHF with data from the II
Government Report and CONAVI.i.
1/ Including financing for new, used or rental housing, with land availability and a resource mix.
2/ Considering base construction and self-building.
3/ Considering the program for the improvement, rehabilitation, and expansion of dwellings.
4/ Including financing for land acquisition, urbanization with housing use, plots with services, and inputs for housing.
5/ SHF estimate based on figures noted for initial housing and infrastructure from 2004 to 2007.
It is noteworthy that 40.1% of the dwellings built with regular or
precarious materials were constructed by a builder or bricklayer;
40.3% by some member of the household; and 2.0% hired a construction company. Only 0.6% engaged the service of architects
or engineers, as can be seen on table 2, which is indicative of the
structural fragility of these dwellings.
Table 2.
Builders of dwellings
with backwardness
ENIGH, 2008.
Dwellings with Builder or Engineer or Construction Some member Not Total/*
expanded backwardness worker
architect
company of the household specified
Total
3’665,700
53,067
177,576
3’608,446
890,135
/* Does not include overcrowding.
• 39 •
8’394,924
Backwardness volume by state
Five out of every 10 dwellings in HB are concentrated geographically
in nine states: State of Mexico, Nuevo Leon, Mexico City, Tamaulipas, Veracruz, Jalisco, Colima, Chiapas, and Guanajuato.
Table 3.
Dwellings with expanded
backwardness by state,
2009
In descending order
Source: SHF estimates based on
data on financing granted in 2008
by state, and from ENIGH, 2008..
state
backwardness deterioration
BasicDwellings with Expanded
(1)
(2) básico
regular materials
backwardness
(3 = 1 + 2)
(4)
(5 = 3 + 4)
México
46,632
96,411
143,042
613,032
756,074
Nuevo León
38,612
79,829
118,440
507,595
626,035
Distrito Federal
32,053
66,269
98,322
421,377
519,700
Tamaulipas
31,567
65,264
96,831
414,986
511,817
Veracruz
28,565
59,058
87,624
375,525
463,149
Jalisco
27,828
57,534
85,361
365,831
451,192
Colima
24,512
50,679
75,192
322,246
397,438
Chiapas
22,703
46,939
69,642
298,461
368,103
Guanajuato
22,530
46,581
69,111
296,186
365,297
Michoacán
22,164
45,823
67,986
291,366
359,352
Sonora
21,852
45,178
67,029
287,265
354,295
Puebla
21,054
43,529
64,583
276,781
341,364
Oaxaca
20,582
42,553
63,135
270,576
333,711
Baja California
20,077
41,509
61,586
263,937
325,523
Coahuila
16,700
34,528
51,228
219,548
270,776
Sinaloa
15,054
31,123
46,177
197,899
244,076
Guerrero
13,249
27,391
40,640
174,168
214,808
Yucatán
12,608
26,067
38,675
165,750
204,425
Querétaro
12,595
26,039
38,634
165,572
204,206
Hidalgo
12,580
26,009
38,589
165,379
203,967
San Luis Potosí
11,054
22,855
33,909
145,323
179,232
Zacatecas
10,794
22,317
33,111
141,903
175,015
Quintana Roo
10,540
21,791
32,331
138,561
170,892
Aguascalientes
10,039
20,754
30,793
131,969
162,762
Morelos
8,777
18,147
26,924
115,387
142,311
Durango
8,304
17,168
25,472
109,167
134,639
Nayarit
6,202
12,823
19,025
81,536
100,562
Chihuahua
5,309
10,976
16,285
69,791
86,076
Tabasco
5,302
10,963
16,265
69,706
85,971
Tlaxcala
4,777
9,876
14,653
62,796
77,449
Campeche
3,859
7,978
11,836
50,726
62,562
Baja California Sur
3,327
6,879
10,206
43,739
53,945
Total 551,801
1’140,839
1’692,640
7’254,085
8’946,725
2.2.2.
Characteristics of the families27 in backward dwellings
Some of the main features of households residing in backward dwellings are:
a)
27 The concepts of family and household
are used without distinction.
Position at work
Around 5 out of every 10 households in RH obtain their remunerations from subordinated jobs;
likewise, 2 out of every 10 receive their income from independent jobs, whereas 20% combine
their incomes from subordinated and independent jobs. It is also worth noting that the number
of income generators by household in backward dwellings is 4.3% greater than in households
without backwardness.
Households with Remunerations for Income from Income from OtherTotal
expanded
subordinated independent subordinated
transfers / *
backwardness
work
work
and independent work
Total
4’661,490
1’557,281
1’727,653
1’000,301
8’946,725
/* Households that reported income not from the job, as for instance subsidies retirement, pensions, scholarships.
b)
Distribution of
backwardness based on
position at work
Source: SHF with data from ENIGH, 2008.
Income level
Slightly over 4 out of every 10 families—3.7 million—earn less than three general minimum wages
(GMW)28 per month, and the size of the household (members) is 4.1 persons.
28 At the end of 2008, the monthly
minimum wage was 1,550.50 pesos.
Households with From 0 to 3 GMWFrom 3 to 6 GMW
Table 5.
Over to 6 GMWTotal
expanded backwardness
Total
c)
Table 4.
3’724,606
3’096,971
2’125,148
8’946,725
Size of locality
When looking at the size of the localities by number of inhabitants, 41.0% of HB is found in
rural areas, 16.5% in semi-urban, and 42.5% in urban ones. The number of backward dwellings
is similar between rural and urban areas; nonetheless, when the elements of backwardness are
examined, rural communities have a greater number of dwellings built with precarious materials,
whereas urban ones have more overcrowded units.
Households with RuralSemiurbanUrbanTotal
expanded backwardness
Total
Rural: Semiurban: Urban: 3,666,153
1,481,197
with under 2,500 inhabitants.
between 2,501 and 15,000 inhabitants.
over 15,000 inhabitants.
3,799,375
8,946,725
Distribution of
backwardness based on
income level
Table 6.
Distribution of
backwardness by size of
the locality
• 41 •
d)
Affiliation to some social security institution29
In the country, 6.5 million families live in dwellings with some type of backwardness (see graph
12), and are also lacking in medical services and/or medication offered free of charge by institutions in the healthcare sector or as a job benefit. Likewise, 52.2% of the backwardness is found
among families with incomes of under 3.0 monthly GMW, meaning 4,651.5 pesos, 33.3% among
those with incomes from 3.1 to 6.0 GMW, equivalent to 6,977 pesos, and 14.5% of the families
without social security earn over 6 minimum wages, or 9,303 pesos per month.
Housing situationAccess to Number
social security
of households
Affiliated
9.1
Suitable housing
17.8Not affiliated
8.7
Affiliated
26.7
Basic backwardness
2.6
Graph 12.
Expanded backwardness
based on the situation
of the dwelling and
affiliation
Figures in million households
0.4
1.7Not affiliated
1.3
Backwardness due to Not affiliated
5.2
materials duaration
7.2Affiliated
2.0
ENIGH, 2008.
6.5
Concentration
of backwardness
3.4
Graph 13.
Households without
social security by minimum
wage range
Figures in millions of households*
03- GMW
0.6
0.8
0.2
Basic backwardness Housing withExpanded
regular materials
backwardness
1.8
2.2
3-6 GMW
0.3
52.2%
ENIGH, 2008.
structure of the
backwardness
0.4
0.1
Basic backwardness Housing with Expanded
regular materials
backwardness
0.8
Over 6 GMW
0.1
29 Used as an approximation of the
informal sector, defined by the International
Labour Organization (ILO) as “those
households that produce goods and/
or services for the market, but are not
organized”; that is, it includes independent
and salaried workers who have no job
benefits or social security. Of the 26.7
million households in Mexico, the main
source of monetary income of 43.0% is the
formal sector, and for the remaining 57.0%,
the informal.
33.3%
0.9
0.1
0.0
Basic backwardness Housing with Expanded
r
egular materials backwardness
6.5
14.5%
* The income distribution presented above
is for families with housing backwardness
and no social security, whereas table
5 shows all the households living in
backward dwellings
1.
2.
3.
4.
Summarizing:
Although the expanded backwardness has decreased around the country, the volume of persons
living in these conditions (35.6 million) is greater than the total population of Guatemala (14.3
million), Honduras (7.6 million), Nicaragua (5.8 million), Costa Rica (4.6 million), and Panama
(3.5 million) together.30
The states of Mexico, Nuevo Leon, Mexico City, Tamaulipas, Veracruz, Jalisco, Colima, Chiapas,
and Guanajuato hold half of all the backward dwellings.
The most vulnerable families in HB earn under 3.0 GMW per month, their members are not
salaried, and they lack social security.
Backwardness is not limited to rural areas as a large number of dwellings built with regular or
precarious materials, and overcrowded are found in urban localities.
30 Estimated by the United Nations
Program for the Population, year 2010.
<http://esa.un.org/unfp/index.asp>
2.2.3.
Market segmentation
Table 7 incorporates a panoramic view of the market served by public or private financial institutions.
29.2% of the total households (7.7 million) are underserved due to their geographic location, lack of
social security, and low income levels. For these families, access to mortgage lending to purchase a
complete dwelling is limited, even if they can pay to finance an expansion or remodeling.
Monthly income (GMMW)
From 0 to 3 From 3 to 6 From 6 to 9 Urbano
Semiurban
Rural
Total by size of locality
With social security
Without social security
Total by labor situation
5’700,773 1’334,886 1’747,619 8’783,278 3’912,867 4’095,778 8’008,645 3’675,841 577,152 518,396 4’771,389 3’185,120 1’327,502 4’512,622 2’210,255 1’027,559 2’814,299 6’052,113 941,304 4’082,655 5’023,959 n Mercado subatendido
n Infonavit/Fovissste
Over 9 Total
6’111,779 572,036 441,999 7’125,814 5’507,164 1’251,994 6’759,158 17’698,648
3’511,633
5’522,313
26’732,594
13’546,455
10’757,929
24’304,384
Table 7.
Market segmentation by
income levels
Households
ENIGH, 2008.
n Sofoles/Bancos
Note: The totals indicated do not match, as the indicated size of the locality considers all the households (26.7 million). On the other hand, the
total with access to social security considers 24.3 million, where one or more of the occupied members reported having a job, and medical
service in their main employment from either IMSS, ISSSTE, the state, PEMEX, or the armed forces.
Families’ lower incomes
From 2006 to 2008, households’ income decreased (-)1.6% in real terms. For families found in the I
to V deciles, incomes dropped a real average of (-)5.5%; in middle income ones (VI to VIII deciles),
the drop amounted to (-)1.8%. Only 20% of the households with higher incomes (IX and X deciles)
showed a slight increase (see Table 8).
Another perspective on the reduction of family incomes lies in considering the size of the
localities. In those with 2,500 or more inhabitants, total average current income rose 0.8% in the period mentioned above, whereas in localities with under 2,500 residents, incomes dropped (-)16.3%,
adjusted by inflation.31
31 The number of households in localities
with 2,500 or more individuals is 21’345,884,
and in localities with under 2,500 inhabitants,
it is 5’386,710. ENIGH, 2008
• 43 •
Table 8.
Total quarterly average
current income
Constant prices of 2008
ENIGH, 2006 and 2008.
Household 2006
2008
deciles
I
6,651
6,116
II
11,515
10,687
III
15,159
14,393
IV
18,904
17,975
V
23,072
21,951
VI
27,805
27,008
VII
34,422
33,728
VIII
43,311
42,850
IX
59,072
59,182
X
133,078
133,048
Total
37,299
36,694
2006-2008 (%)
variation (%)
(-)8.0
(-)7.2
(-)5.1
(-)4.9
(-)4.9
(-)2.9
(-)2.0
(-)1.1
0.2
0.0
(-)1.6
2.2.4.
Housing demand 2009
Income indicators, the labor market weakness, and fewer bridge loans (see section 2.1) point towards
a low demand for traditional and special mortgage lines and housing solutions. Below, SHF’s estimate
of housing demand for this year is presented, comprising the following four components:
•
•
•
•
New household formation
Considering the economic and employment situation, as well as the geographic location of new
households, they only represent a demand for 301 thousand dwellings, which translates into a
little over 60% of the total.
Housing backwardness
Based on the topics analyzed in section 2.2.1., the number of families that will require some type
of mortgage financing is estimated at 550 thousand.
Housing mobility
This means households that already own a dwelling and have a sufficient income to obtain another standalone house, a house in a complex, or an apartment with a higher value and better
attributes (see section 2.9, SHF home price index in Mexico). 78,609 families will seek their own
dwelling under this concept.
Origination cures
This means persons who have applied for a mortgage loan and were turned down initially, or
who were listed in the Credit Bureau. However, through savings programs or improvements to
their credit profile, their application was later accepted. Demand from cures amounts to 35,807
dwellings.
2009 Demand
Grouping the above components, housing demand for 2009 is
projected to reach 966,063 units, translating into a drop of around
(-)17% compared to the previous year.
Component
New household formation
Backwardness Housing mobility
Cures
Total
2009
301,000
550,647
78,609
35,807
966,063
%
31.2
57.0
8.1
3.7
100.0
Table 9.
Housing demand, 2009
Source: Created by SHF based on: INEGI,
ENIGH (several years); CONAVI, National
Pact for Housing to Live Better and
The Mexican Mortgage Association, among
others.
In sum, in 2009, 194 thousand units less than a year ago
will be demanded, and essentially, housing backwardness and new
households, which together represent 90% of the total demand,
will not be served.
2.3.
Homologating the various classifications of
housing in Mexico. Typologies by value
The agents that participate in the housing market in Mexico classify dwellings differently, based on
their value or price; such is the case of SHF, Infonavit, CONAVI,32 the Mexican Mortgage Association
(AHM), and various private consultants. In addition, and as reference to update the value in time, three
denominations are used: UDIs (investment units), Mexico City Monthly Minimum Wage (Mexico City
MMW), and dollars.
32 National Information and Housing
Indicators System (SNIIV).
Given the importance of having a unique, consistent, and updated framework in the
sector, comparisons of these classifications were performed to arrive at a proposal that will
contribute to the appropriate market segmentation and a more efficient lending operation.
The UDI classification is the one considered in the Total Annual Cost (TAC) report as
required by the law of transparency and of promotion of competition in guaranteed credit
(Law of Transparency and Promotion of Competition in Guaranteed Credit). Likewise, as part of
the definitions established in the Registro Único de Vivienda (RUV) (housing register), Infonavit,
CONAVI, and SHF reached an agreement for its use.
Infonavit’s categorization must be taken with particular consideration, due to the volume
of its operations on the market. Recently, it eliminated the ceiling on the value of the dwellings
for the Apoyo and Cofinancing programs; however, the ceiling price remains for Economic
housing, which is the target of the new subsidy program.
The SNIIV (National Information and Housing Indicators System) initially adopted SHF’s
classification; however, it was later modified, after consulting with Infonavit and FOVISSSTE:
it went from being expressed in UDIs to Mexico City MMW, and the typology was adapted,
particularly considering Infonavit’s Economic housing price ranges.
The housing market segmentation used by private consultants is given in dollars and also
minimum wages. Their housing typology matches SHF’s: Minimum, Social, Economic, Middle,
Residential, and Residential Plus.
On the other hand, AHM agreed to use the classification from the Asociación de
Bancos de Mexico (ABM) (Mexican banking association) to report on bridge loans—very
similar to Infonavit’s.
• 45 •
Below are presented the various classifications—the housing typologies and
prices (values) are compared, to finally present a proposal that will make it possible to
move towards a homologated classification of the housing market in the country..
Table 10.
Housing classifications
and typologies by
institution
Source: Created by SHF with Information
from Infonavit, FOVISSSTE, CONAVI, AHM,
and private consultants.
Range
from
Udi (06-jul-09)
Minimum
hasta 24,500
Social
From 24,501 to 60,000
$104,178
Economic
From 60,001 to 115,000
$255,129
Middle
From 115,001 to 300,000
$488,997
Residential
From 300,001 to 610,000
$1,275,644
Residential Plus
More than 610,000
over
to
4.2521
$104,178
$255,129
$488,997
$1,275,644
$2,593,808
$2,593,808
SNIIV (conavi+infonavit) (National Information and Housing
Range
from
VSMMDF 2008
Economic
hasta 118
Popular
From 118 to 218
$196,579
Social
From 218 to 350
$363,171
Middle
From 350 to 750
$583,072
Residential
From 750 to 1,560
$1,249,440
Residential Plus
More than 1,560
over
to
1,665.92
$196,579
$363,171
$583,072
$1,249,440
$2,598,835
$2,598,835
Private consultants
Range
USD / dólar FIX (06-jul-09)
Social
From 8,000 to 21,000
Economic
From 21,000 to 38,000
Middle
From 38,000 to 100,000
Residential
From 100,000 to 220,000
Residential Pus
From 220,000
Segundas ventas
More than 220,000
from
to
$13.25
$106,000
$278,250
$503,500
$1,325,000
más de
más de
$278,250
$503,500
$1,325,000
$2,915,000
$2,915,000
$2,915,000
VSMMDF 2008
$1,665.92
Minimum
Up to 60
$99,955
Social
From 60 to 160
$ 99,955
$266,547
Economic
From 160 to 300
$266,547
$499,776
Middle
From 300 to 750
$499,776
$1,249,440
Residential
From 750 to 1,670
$1,249,440
$2,782,086
Residential Plus
More than 1,670
over
$2,782,086
AHM agreement to report bridge loans (ABM typology)
from
Prosavi Economic
Traditional housing
$170,000
Low- Middle housing
$350,000
Upper- Middle housing
$500,000
Residential
over
to
$170,000
$350,000
$500,000
$1,000,000
$1,000,000
Graphically, it is possible
to see a strong likeness between
the typologies mentioned above,
both in terms of the minimum
and maximum amounts.
SHF
Private consultants
SNIIV (other nomenclature)
ABM / bridge loans report (other nomenclature)
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$0
minimum
social
economic
middle
residential
residential plus
residential
residential plus
Graph 14.
Housing classification,
ceiling rates.
SHF
Private consultants
SNIIV (other nomenclature)
ABM / bridge loans report (other nomenclature)
Source: Created by SHF.
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$0
minimum
social
economic
middle
Based on the above, a feasible proposal would consist in homologating the limits of the various
classifications to SNIIV’s (in minimum wages) except for Upper Middle housing, at 650 MW, which
matches the Infonavit-FOVISSSTE and AHM-ABM mortgages, also considering the value of Infonavit’s
Economic housing with the following nomenclature, and leaves Social housing in the same place, just as
private consultants and SHF do. The likened classification is shown in the adjoining table; credit must
continue to be granted in the various denominations used on the market.
Range
Mexico City MW 2008 2008
Economic
hasta 118
Popular
de 118 a 218
Social
de 218 a 350
Middle
de 350 a 750
Residential
de 750 a 1,560
Residential Plus
over1,560
fromUp to
$1,665.92
$299,866
$363,171
$583,072
$1,082,848
$2,598,835
$299,866
$363,171
$583,072
$1,082,848
$2,598,835
up
Table 11.
Homologated
classification proposal
Source: Created by SHF.
• 47 •
2.4.
Social production of
habitat
With the creation of the General Coordination of the Social Production of Habitat in January 2008,
within CONAVI, significant progress was made on the process to implement an institutionalized system
to support this form of production, based on Article 85 of the Housing Law.
One of the first tasks undertaken by the Coordination was to identify the players who, based
on the criteria established in the Housing Law, would support or carry out social production processes
in an organized, planned, and continuous manner. With the help of inside consultants and members
of CONAVI’s Social Production of Habitat Committee, social producers operating throughout the
country were identified, making it possible to contact them and visit them on site to confirm the quality,
characteristics, and scope of their work.
The various focuses and modes of intervention of the detected players led to the creation of
a registration form of the institutions with the most consistent track record in order to obtain and
systematize basic information regarding the main features of those who could be considered Social
Developers of Habitat.
A pilot questionnaire was given to 14 organizations present in 19 states. These are non-government institutions, both due to their organization, operations, and legal nature, and to their capacities
and territories of influence. A third of the organizations stated that they had been active between 16
and 25 years, another third, between 10 and 15 years, and a fifth, between 5 and 10 years.
Among the reasons that led to their creation, promotion of housing and productive projects
stand out, as does their origin in the citizenry. The predominating legal figure adopted is the asociación
civil (non-profit corporation) (50%), followed by the savings bank. There is also a cooperative, a micro
finance company, and a civil partnership.
The 14 organizations recorded serve around 33,200 persons, mainly in the rural and indigenous
circle, although two thirds also act or are exclusively in the urban. They all carry out home improvement
works on existing dwellings and 62% produce new housing. The services they offer are quite varied,
the most outstanding being credit granting and technical consultancy.
The average worth of the actions they each perform is
22,500 pesos. Their home improvement loans are recovered in a
period from 6 to 12 months and from 3 to 7 years for new housing.
The recovery charge ranges from 1.6 to 22% annually, the average
being 12%, and the amortization period on the loans is variable in
80% of the cases.
It is worth noting that 6 out of every 10 beneficiaries and
50% of the directors or representatives of the registered organizations are women.
The data indicate a broad range of modes of operation in this
reduced universe of institutions, due to the multiple and diverse reality which must be catered to when working with the population that
has no access to streamline housing as it is below the poverty line.
This verification indicates the need to generate a system of instruments and procedures to support the Social Production of Habitat
(SPH), that will be open, flexible, and offering multiple options.
Simultaneously to the identification and registration of Social Developers of Habitat, the
Coordination followed up on the application of the Ésta es tu casa subsidy program to the first 10
acknowledged Social Executors, making it possible to establish some criteria to review the registration
and move towards loosening the rules for its application.
In 2008, through Social Executors, 162 million pesos of this program were doled out, 72% of
which were operated by only two of these institutions. For 2009, 250 million pesos in subsidies were
allocated for this purpose, the focus being the strengthening of the smaller Executors, the ones with
the broadest geographic coverage, those that offer technical consultancy as well as financing, and those
with lower operating costs.
In 2009, the goal is to position and strengthen SPH, by carrying out pilot experiences where
the 14 Social Executors registered in 2008 and 11 savings bank participate.
Up to June 2009, and as part of the process to position SPH, work was done to fine-tune the
conceptual framework, create a microsite on the Internet that will make it possible to publicize SPH,
prepare the State and municipal housing institutions, search for financing plans, and a model to certify
the institutions that carry out housing actions through SPH. Progress is also being made on prepping a
national workshop on financing and a Latin American encounter on urban and housing policy in various
countries around the region.
It is clearly necessary to shape the scope of SPH and, specifically, its impacts and effects. Thus,
work is being done to establish criteria and parameters to gauge them. However, it is believed that
significant progress will be made on this matter only in the medium term.
In the second half of 2009, a model to certify Social Developers of Habitat
will begin to be applied and the criteria and parameters to gauge SPH will be
established. Likewise, both the Sociedad Hipotecaria Federal and Infonavit are
looking into financial and operational mechanisms to incorporate SPH into their
programs. On the other hand, the executor institutions and social developers
of habitat are in the process of legally establishing the National Network of
Social Producers.
By 2010, CONAVI is planning to consolidate the national coverage of
the SPH system through the development of adequate operating instruments
and mechanisms and the strengthening and creation of new non-profit social
companies that will produce and develop housing. In 2011, it will work on the
professionalization and qualification of the technical assistance, which will make it
possible to achieve the levels of quality, coverage and focalization, or guarantee
the consideration of SPH as a strategic component of the National Housing System and of the country’s housing policy by the end of this presidential term.
• 49 •
2.5.
Situation of the dwellings and
households in Mexico33
The goal of this section is to offer information and an analysis of the main trends in both dwellings and
households to design public and business policies in the financial sector of housing.
33 ENIGH, 2008.
34 Private inhabited dwellings, that is,
collective dwellings, such as homes,
orphanages, boardinghouses, and prisons,
among others, are excluded, as are trailer
homes.
The total number of dwellings34 went from 23’364,983 in 2000 to 26’180,793 by the end
of 2008—accrued growth of 12.1% and equivalent to an average annual rate of 1.4 percent.
With regard to the age of the housing stock, 56.3% is under 20 years old and 35.1% is over
20, whereas in the remaining 8.6% of the dwellings, their inhabitants do not know the date
when they were built (see graph 15).
Thus, the average age of the housing stock in Mexico is 20 years, whereas in 2000 it was
16. Mexico City stands out as the state with the oldest buildings, followed by Zacatecas, Jalisco,
Durango, and Coahuila. On the other hand, the states that have been more recently populated,
such as Quintana Roo and Baja California, and those with high percentages of dwellings built
with precarious materials, such as Chiapas and Tabasco, have the lowest average age.
Graph 15.
Mexico: dwellings by age
30%
27.5
25%
20%
Source: SHF with information from ENIGH,
2008.
18.5
15%
14.7
10%
10.2
12.4
8.6
5%
4.1
3.9
0%
Under 3
years old
From 3 to 6
years old
35 Including standalone and condominium
houses, and apartments.
36 8.5% do not know the built surface area
of the dwelling where they live.
37 Space of the dwelling marked by fixed
walls and a roof of any material, destined
to shelter persons, where various activities
of family life take place; bathrooms, yards,
utility rooms, or garages are not considered
as rooms.
From 7 to10 From 11 to 20 From 21 to 30 From 31 to 50
years old
years old
years old
years old
Over 50
years old
unknown
Other features of the current housing stock are:
n
n
In 48.2% of the dwellings,35 the built surface area spans no more than 75 m2; in 21.4%, between
76 and 100 m2; and in 21.9%, over 100 square meters.36
On average, dwellings have 3.9 rooms,37 2.1 of which are bedrooms.38
38 Room used mainly for sleeping.
Graph 16.
Mexico: dwellings by
number of rooms
Source: SHF with information
from ENIGH, 2008.
8.00
6.81
5.92
6.00
2.00
4.38
3.71
4.00
2.12
1.63
0.85
0.45
0.33
0.00
1
2
3
4
5
6
7
8
9 or more
number of rooms
n
n
n
n
n
n
28.1% of the dwellings lack a full bathroom, whereas 55.8% have one, 13.1% have two, and 3.0%
have three or more full bathrooms.
Seven out of every ten dwellings are located in urban areas and 33% in rural ones.39 The volume
of 8.7 million dwellings found in rural locations nowadays is similar to the whole housing stock
that existed in Mexico in the seventies.
The number of residents per household is 4.0, with 1.3 per room and 2.2 per bedroom. These
indicators take different values, based on whether they are in urban or rural areas. For instance,
the number of inhabitants per dwelling in rural areas is 10.3% greater than in urban ones.
71.5% of the housing stock is inhabited by its owners, 14.3% is rented, and 12.8% is loaned.40
Of the total dwellings inhabited by their owners, 3.5 million were acquired through financing,
59.7% of which was obtained from Infonavit, FOVISSSTE, or FONHAPO, 28.0% from commercial
banks, SOFOLs, or savings accounts, and 12.3% from moneylenders, or relatives.
With regard to equipping in terms of household appliances, 93.7% of the total dwellings have at
least one TV set; 53.4% a stereo, modular, or microcomponent; 56.3% a DVD player; and only
23.3% have a computer.
39 Localities with a population of over
15 thousand inhabitants are denominated
urban zones, and those with under 15
thousand inhabitants are denominated
rural zones.
40 The remaining 1.4% are in situations like,
for instance, litigation, intestate, or invaded.
On the other hand, the total number of households or families amounts to 26’732,594.
Sociodemographic and economic characteristics
2000
2008Var. %
2000-2008
Total dwellings
23,364,983
26,180,793
12.05
Total households
23,667,479
26,732,594
12.95
Total residents in the dwelling
99,280,124
106,866,209
7.64
Total members of the household
98,310,615
106,719,348
8.55
AverageVar. 00-08
Households per dwelling
1.01 1.02 0.01 Size of the household
4.2 4.0 (-)0.16 Age of the head of household
45.4 48.2 2.8
Members of the household under 14 years old 1.3 1.1 (-)0.20 Members of the household aged 14 to 64
2.6 2.6 0.00 Members of the household aged 65 and up
0.2 0.3 0.10 Economically active members of the household aged 14 and up 1.7 1.8 0.10 Not economically active members of the household aged 14 and up
1.3 1.1 (-)0.20
Occupied members of the household aged 14 and up
1.7 1.7 0.00 Wage earners per household
1.9 2.3 0.4
Table 12.
Dwellings and
households in Mexico,
2000-2008
Source: SHF with data
from ENIGH 2008.
• 51 •
n
n
41 The information from ENIGH, 2008
was gathered in the period from August
to November—the period when the
economy showed signs of slowing and the
first negative growth rates in the Global
Economic Activity Indicator: (-)0.67%
in October and (-)2.3% in November, at
annual rates.
Table 13.
Household typology,
2000-2008
n
n
n
The number of households is greater than the number of dwellings, as a result of different dynamics. In fact, 1.02 families share a dwelling, which points to overcrowding despite the reduction
seen in households’ average size.
The members of the household are distributed as follows in terms of age: 1.1 are under 14 years
old, 2.6 are between 14 and 64, and 0.3 are over 65.
The average age of the head of household rose to 48.2 years old.
The number of wage earners rose 4.4% from 2000 to 2008, as a result of various factors, such
as women’s greater participation in economic activities on the market, and families’ need for
higher incomes in times of economic turmoil.41
Households are classified into five groups whose diverse volume and growth have a bearing on
how housing production and demand should be segmented, as can be seen in the Observations
column in table 13.
Type of householdDescriptionYear
2000
2008
Percentage Observations
variation
2000-2008
Unipersonal
Composed of the
head of household
1,747,863
2,352,850
34.6
Represent demand for
apartments and small dwellings.
Nuclear
Nuclear family
(parents and
children)
Nuclear family plus
other relatives
16,722,684
17,516,830
4.7
These households represent the
largest housing demand segment.
5,033,360
6,630,229
31.7
Demand for expansions or
higher value dwellings.
89,266
114,224
Formed by a
nuclear or extended
household with
persons unrelated to
the head of household
Co-residents Head of household
74,306
118,461
and other persons
unrelated to him/her
23,667,479 26,732,594
Total households
28.0
Demand for individual housing if
the different groups or individuals
decide to part, or improvements
or expansions.
59.4
Signify growing demand for oneor two-bedroom housing..
Source: SHF with data from ENIGH,
2000 and 2008.
Extended
Composed
13.0
By way of conclusion, we can note that:
n
n
n
n
The age of the dwellings rose 25 percent.
Rural localities, due to their number of inhabitants and dwellings, represent a large but underserved
market, due to a lack of adequate financial products.
The age of the head of household is rising—an irreversible demographic trend that must be
considered in credit policies to keep it from becoming an obstacle.
The percentage of households resorting to non-institutional forms of financing is 2.3 percent.
2.6.
Rural and semi-urban housing42
SHF looked at the unserved sectors of the country in terms of housing to carry out a focused research
and identify the population’s profile and payment capacity, as well as to become better acquainted with
their housing needs and preferences, so that financial intermediaries and developers who specialize in
solutions such as expansions, remodeling, and self-building can design adequate responses for these
communities. The research was done through households, developers, financial institutions, housing
institutes, and federal and local authorities.43
Mexico is an urban country; however, there are quite a few persons who live in rural communities44 and in semi-urban areas.45 In absolute terms, one out of every four inhabitants lives in rural
areas (25.8 million), occupying 5.7 million dwellings. On the other hand, the semi-urban population
represents 13.7% of the whole (14.1 million), living in 3.3 million dwellings. Thus, the target population
is made up of nearly 9 million dwellings and around 39 million persons—a similar volume of inhabitants
as the whole of Central America.
The settlements in these areas require housing solutions that will keep in mind their idiosyncrasy
and traditions, their socioeconomic context, the climatic conditions, as well as the municipal and state
planning actions, mainly in terms of basic services and spatial planning.
Likewise, the distribution of spaces within rural housing is related to agricultural and livestock
production, and family reproduction. In general, dwellings are built by their inhabitants, with the materials
available in each area, which may be adequate for that particular weather, but that most of the time
deteriorate quickly and do not meet the necessary hygienic conditions to ensure good health.
Based on the ethnographic surveys and studies, Appendix C shows the corresponding plans
for a semi-urban and rural dwelling with ideal conditions, according to the interviewed resident population.
Currently, according to the surveyed housing institutes, the programs promoted mainly by the
federal and state governments are practically nonexistent in rural areas. The aids are offered through
managing entities and reach the borrowers through social, farmer, or indigenous associations, which
makes it difficult to offer more efficient assistance to these groups of society.
Consequently, programs tailored to these segments of the population are necessary, as the main
concern they have expressed is the terms of the loans and adequate installments; that they will offer
the possibility of taking out a loan on their word, and not through mortgage guarantees.
42 The report uses the terms popular
housing and semiurban housing
interchangeably.
43 The study covers 20 states, 87 localities,
and 2,099 households.
44 Localities with under 2,500 inhabitants.
45 Localities with 2,500 to 14,999
inhabitants.
• 53 •
Solution alternatives must consider the following aspects:
n
Rural and semi-urban families:
a.
Are larger than urban ones.
b.
Heads of household are older.
c.
The number of inhabitants under 15 and over 64 (index of dependence) is higher than
in urban areas.
d.
The average number of inhabitants per dwelling is high (4.4 inhabitants in rural areas and
4.2 in semi-urban areas).
n
Most own their dwelling (87.4%) and hold the deed. This suggests different solutions from
acquisition.
Have little confidence in banking institutions, in addition to scarce financial education. People
in rural areas lack information to apply for mortgage financing, given the low use of banking
services.
Traditional banking lacks the infrastructure (branches) and portfolio (financial products) to serve
these segments.
Acknowledging the relevance of women who inhabit these localities since, even as members
of the low-income segment, their role in the household is an important one and they can be
considered priority clients.
n
n
n
46 Disposable Income= household’s current
income less expenditures on food, clothing,
shoes, education, healthcare, transportation,
and electricity.
47 Adjusted Disposable Income= 30%
afectación of a loan in the disposable
income.
Graph 17.
Adjusted disposable
income by state and
nationwide
Current pesos
Servicing rural and semi-urban housing requires diverse strategies based on the ethnographic
characteristics, localities’ geographic dispersion, and households’ adjusted disposable income 46 (ADI)47.
It must also encourage a greater number of financial intermediaries and developers, as well as a critical
mass of infrastructure to enable their development.
$6,000
$5,000
Can pay the monthly installment
$4,000
Source: Created by SHF with data
from ENIGH, 2006.
$3,000
$2,404.76
$2,000
cannot pay the monthly installme
$1,000
Q DF
RO
O
CO
L
P
TA UE
M
P
H S
G
C O
AM
P
SIN
M
O
R
VE
R
G
TO
YU
C
G
R
TL O
AX
ZA
C
O
AX
M
EX
CH
IS
BC
S
SL
P
N
N
Q L
RO
SO
N
A
D Y
G
M O
IC
H
JA
CH L
IH
AG
S
T
CO AB
AH
BC
$0
adjusted disposable income
Adjusted national disposable income
The national average ADI is 2,404.8 pesos per month.
According to the intermediaries who participated in the study, an adequate financial plan to
serve the needs of rural housing (self-production and assisted expansion, to name a few) would consist
in loans of 35 thousand pesos and weekly payments of 570 pesos.
Table 14.
Financing plans
Source: Created by SHF with information
from the intermediaries who participated
in the study.
financingPayment capacity
Sum of the loan Amortization period Ordinary interest ratePayment frequencyPayment ADI
–pesos–
–months–
–pesos–
–pesos–
–% of ID–
Scheme 1
Between 25% Up to 35,000
Up to 24
and 45%
Up to 4% on initial balance
(Monthly) Scheme 2
No podrá ser From 2,000
Up to 24
superior al 50%
Up to 17,000 Scheme 3
Between 25% Up to 35,000
Up to 24
and 35%
Scheme 4
Up to 30% of the Up to 50,000 Up to 24
gross monthly income
will be considered
Weekly
573.88
2,805.66
Biweekly
1,147.77
2,805.66
Fixed monthly
4.5% on initial
balance
Biweekly
586.39
1,172.78
Monthly
1,172.78
1,172.78
Fixed, up to 3.5% monthly on the global balance
Weekly
Biweekly
Monthly
544.89
1,089.77
2,179.55
4,047.73
4,047.73
4,047.73
Fixed monthly
up to 4.5% +
VAT on global balance
Biweekly
1,741.93
8,129.01
Mensual
3,483.86
8,129.01
Weekly
Biweekly
Monthly
573.88
1,147.77
2,295.54
5,356.26
5,356.26
5,356.26
Scheme 5
Up to30 %
Up to 35,000
Up to 24
Up to4 % on initial balance
Based on the above results, and developing a regional strategy, 291 thousand localities48 around
the country were considered, 89% of which have under 50 dwellings; that is, they are scattered hamlets
with difficult access.
The remaining 11% (31,007 rural and semi-urban localities) are geographically distributed throughout the territory, with 81% concentrated in 14 states, of which only Jalisco, Michoacán, San Luis Potosí,
and Tabasco have a sufficient ADI for the payment of a loan; the remaining ten states would require
some type of support, such as a subsidy.
State
States with ADI above the national average
Jalisco
Michoacán
San Luis Potosí
Tabasco
Subtotal
States with ADI below the national average
Chiapas
Guanajuato
Guerrero
Hidalgo
México
Oaxaca
Puebla
Sinaloa
Veracruz
Zacatecas
Subtotal
r
ural population
1,455,175
1,806,932
957,239
1,242,174
5,461,520
2,216,716
1,602,678
1,561,790
1,423,664
3,592,292
2,210,084
2,531,115
955,558
3,468,181
729,519
20,291,597
dwellings
348,306
412,476
210,149
282,044
1,252,975
456,628
337,573
341,479
331,090
763,517
499,858
533,282
229,028
827,165
171,167
4,490,787
48 INEGI, II Population and Housing Count
2005 and SHF.
Table 15.
States classified based on
the ADI
Source: SHF, Rural and popular housing,
2008.
• 55 •
Conclusions
The research reveals that:
1.
2.
3.
4.
5.
The size of the rural market (25.8 million inhabitants and 5.7 million dwellings) is broad enough
to attract private investors.
The need for public policy with a more territorial than sectorial focus, privileging the governance
of each locality, as the rural and semi-urban encompass nearly 80% of the national territory.
Financial intermediaries interested in self-production of housing do not know about building,
which could make the loan more expensive. Likewise, developers do not have the experience to
manage the portfolio, increasing the risk. SHF works in coordination with financial intermediaries
and housing developers to attract the families living in rural areas.
As the rate of population replacement (2.1 live children born statistically replace the parents)
has been achieved, and even with a significant percentage of households earning under 3 GMW,
mortgage microfinance and self-production are viewed as solid alternatives for Mexican families
living in urban, semi-urban, or rural areas.
In the last stage of the research, households were presented with two clearly different products to serve the demand for rural housing solutions. 49.5% of the families would be willing to
participate in self-production programs, whereas 20.4% prefer the option of microfinance and
30.1% showed no interest at all.
2.7.
Housing produced by
developers traded on
the BMV
49 Considering the number of shares issued
and the sales price at July 17, 2009.
Corporación GEO, Desarrolladora Homex, Urbi, Consorcio Ara, Sare Holding, and Consorcio Hogar,
whose sales volume stood for 2.5% of the construction GDP in 2009, are traded on the Mexican
Stock Exchange (BMV in Spanish) and are included in the Habita Index (IH in Spanish), which monitors
fluctuations in the housing stock. The first four are also among the 35 companies included in the stock
benchmark index (IPC in Spanish) and represent 2.0% of the total market capitalization, which stresses
the importance of these construction companies.49
The IPC and IH were affected by the financial crisis and global recession; however, the damages
in the latter were significantly greater, with an accrued loss of 80.0% from April 16, 2007 (all-time
high: 1,051.4 points) to March 9, 2009, when it hit its low (210.17 points). From that point on, the IH
followed a path of sustained recovery in the second quarter, reaching 453.59 units at the end of the
trading session on July 17, which translated into 115.8% growth (see graph 18, dotted circle); the IPC,
on the other hand, recovered 51.7% in the same period.
1250
Graph 18.
40,000
Comparison of IPC and IH
1000
32,000
750
24,000
51.7 %
%
500
59
453.59
(-)80.0%
250
88,000
115.8%
210.17 %
HABITA
HABITA 90PM
IPC
0
11/1/05
16,000
Source: Created by SHF with data from the
Mexican Stock Exchange.
IPC (base October 30, 1978)
IH (base October 31, 1996)
1,051.46
0
5/1/06
11/1/06
5/1/07
11/1/07
5/1/08
11/1/08
5/1/09
Nota: La serie Habita-90MA consiste en los promedios móviles de noventa días del IH.
Note: the Habita-90MA series consists in the ninety-day moving averages of the IH.
Desarrolladora Homex has the largest share within the IH, representing 33.4% of the total
capitalization generated by all six companies, which was close to 68.198 billion pesos by July 17, 2009;
it is followed by Urbi with 31.5%, Corporación Geo with 21.2%, Consorcio Ara with 10.9%, and last,
Sare Holding and Consorcio Hogar with 2.0% and 1.0%, respectively.
Company in the IHNumber of shares Price per share Market capitalization Market share Company
(millions)
(pesos)
(millions of pesos)
(%)
Desarrolladora Homex
Urbi
Corporación Geo
Consorcio Ara
Sare Holding
Consorcio Hogar
Total
335.82
976.45
539.42
1,308.71
379.93
559.20
4,099.52
67.80
22.00
26.80
5.67
3.70
1.19
16.64*
22,768.60
21,481.80
14,456.36
7,420.40
1,405.73
665.45
68,198.33
33.4%
31.5%
21.2%
10.9%
2.1%
1.0%
100.0%
Homex
Urbi
Geo
Ara
Sare
Hogar
Graph 19.
Companies in the IH:
market capitalization
distribution
Figures up to July 17, 2009
Bloomberg.
*Total price per share weighted by market capitalization.
Homex
33.4%
Urbi
31.5%
Hogar
1.0%
Sare
2.0%
Ara
10.9%
Geo
21.2%
• 57 •
With regard to the monthly average price of its shares, the only company with a depreciation
between March and July 2009 was Consorcio Hogar, going from 1.32 to 1.22 pesos per share; this
meant a reduction of (-)7.7%. On the other hand, the most growth in prices per share was seen in
Sare Holding, Homex, and Corporación GEO—150.7%, 107.6%, and 82.3%, respectively—followed
by Urbi with 62.5% and Ara with 53.1%.
Graph 20.
Price performance of the
shares of the companies
in the IH
from Bloomberg.
$120
HOMEX
GEO
URBI
SARE
ARA
HOGAR
$100
$80
$60
65.23
$40
31.42
$20
14.15
12.78
3.60
$-
1.52
1.32
25.80
20.77
5.51
3.81
1.22
-$20
J
F M A M J
J A S O N D J
F M A M J
2007
J A S O N D J
2008
F M A M J
J
2009
The IH responded positively to the liquidity injection from
agents such as SHF through the offer of guarantees and bridge
loans.
Markets served
The companies in the IH focus mainly on the construction and sale
of social and middle housing. Consorcio Ara and Sare Holding also
produce for the upper value segments—that is, Residential Plus and
Vacation housing—and part of their land banks are found in tourist
destinations around the country.
Graph 21.
5
Type of housing built by
each developer
4
number of housing types
BMV and the developers.
3
2
1
0
Ara
Geo
Social
Residential Plus
Hogar
Homex
Meddle
Vacation residential
Sare
Urbi
Residential
Land banks
Based on the financial reports for the first quarter of 2009, housing developers’ land banks, at the current growth rate, are enough for the next 4.6 years, on average. In the case of Desarrolladora Homex,
Urbi, and Consorcio Ara, their land banks amount to 7,920, 4,650, and 4,200 hectares, respectively;
together with the land bank of Corporación GEO, they are equivalent to 1’129,155 dwellings, 90.9%
of which are Affordable Entry Level type, 8.3% Middle, and 0.8% Residential (see Table 16), and are
mainly found in the states of Baja California, Baja California Sur, Jalisco, Mexico, and Quintana Roo
(see Appendix D).
ValueExtension Equivalence Years to Distribution by type of housing (%)
(millions of m2) # of dwellingsdepletion of
AffordableMiddle
Residential
(mill. P$)
reserves
entry
Ara
Geo
Homex
Urbi
Sare
Hogar
Total
5,073.30
3,804.49
11,959.00
10,723.00
1,416.10
430.90
33,406.79
42.00
n. d.
79.20
46.50
n.d.
n.d.
167.70
167,055
320,488
389,690
251,922
47,036
n.d.
1’176,191
6.0
4.8
5.5
4.5
2.0
n.d.
4.6
87.4
93.5
91.8
91.0
n.d.
n.d.
90.9
10.1
5.9
8.2
9.0
n.d.
n.d.
8.3
2.5
0.6
0.0
0.0
n.d.
n.d.
0.8
Table 16.
Housing developers:
land banks
Source: Created by SHF with data from the
developers..
• 59 •
Geographic coverage
The map highlights the states where housing developers are present. None of these
companies is present in six states (Campeche, Colima, San Luís Potosí, Tlaxcala, Yucatán, and Zacatecas).
Figure 3.
Geographic coverage of
the six developers traded
on the BMV
from the developers..
A
G
Hg
Hm
S
U
Ara
Geo
Hogar
Homex
Sare
Urbi
n None of the publicly traded
homebuilders are present in
these states.
Mexico City and
Morelos
2.8.
Extraordinary costs in the production of
Social and Economic housing50
50 Including standalone houses, housing
complexes and apartments.
51
udis
pesos*
Social 24,501 99,842
a 60,000 a 244,512
Economic
60,001
244,512
a 115,000 a 468,647
* With the UDI value at the close of the
fourth quarter of 2008.
The goal of this study, performed by SHF, is to quantify the expenses in money or in kind, not defined
in current laws, codes, or regulations, and which developers may encounter in the production of social
and economic housing.
Likewise, the main procedures that cause delays in the construction and delivery of
the dwellings are also stated. Based on the information obtained, the analysis moves on to
propose public policies designed to discourage these detrimental practices which raise the
production costs, and/or decrease the quality of the dwellings, having a negative effect both
on the market’s efficiency and on borrower satisfaction.
This issue has a great socioeconomic significance, as can be seen in the fact that, due
to their income level and place of residence (urban, semi-urban, or rural), around 12 million
households represent the potential housing demand nationwide.
This is the first study of its kind performed in the housing sector, with assistance from
developers in all 32 states.
The study was performed in the last quarter of 2008 through direct interviews of
homebuilders in the states. The sampling was deterministic, and the construction companies
producing over 50% of the dwellings in the states in the segments mentioned above were
integrated. The information was stratified based on the size of the developer (see Appendix
E) and grouped into six large regions—Bajio, Center, Metro, North, South, and Tourist—
encompassing 43 cities around the Mexican Republic. 52
52 Appendix E describes the sample of
the study.
Ordinary and extraordinary cost structure
Based on the data provided by the developers interviewed in the six regions, the average cost structure
for the construction of social and economic housing is as follows:
a.
b.
Ordinary costs: 40.5% are construction related (materials, machinery, equipment, and labor),
26.4% are administrative and promotional expenses, and the profit margin, 16.3% are urbanization, 9.4% land acquisition, 4.9% underwriting and titling of the dwellings, and
2.52% are related to the line of extraordinary costs (EC). 53 They are mainly destined to urbanization or paving outside the housing complex, bonuses to outsourced personnel, donations
for police cars, bicycles, garbage trucks, as well as construction and/or remodeling of schools,
public markets, and infrastructure, particularly for gas and water.
53 Weighted average for social (2.50%) and
economic (2.62%) housing.
Table 17 shows a list of works that are fully or partially financed through extraordinary resources
that developers disburse.
Destination
Infrastructure
Construction of healthcare centers/schools
Urbanization of streets outside the development
Bonuses Construction of markets
Paving sidewalks
Purchases/donations police cars or bicycles
Hiring/donation of trucks
Extraordinary cost
54 Coefficient of variation = s / x * 100,
where s is the standard deviation and x is
the arithmetic mean of the extraordinary
costs per state.
%
26.0
16.4
12.3
12.3
11.0
11.0
6.9
4.1
100
Table 17.
percentage structure,
national average
percentage structure, national
average
Source: SHF, Transaction costs in the
production of social and economic housing
in Mexico, 2009.
The interviewed state that ECs have an unfavorable effect on the built surface
area of the dwellings (which gets smaller and smaller) and on the quality of the finishes.
Moreover, they feel that the more procedures they are required to turn in, the higher
the likelihood of incurring in ECs. In fact, the latter are present in 7 of every 10 housing
construction works performed.
According to what the developers reported, with regard to social housing,
eleven states have higher extraordinary costs than the national average: the State of
Mexico, San Luis Potosí, Tlaxcala, Hidalgo, Oaxaca, Sonora, Quintana Roo, Guanajuato,
Aguascalientes, Sinaloa, and Baja California. ECs are not equal from one state to another
(differing even from one city to another), as can be seen through the coefficient of
variation which is close to 70 percent. 54
• 61 •
Graph 22.
Extraordinary costs for
social type housing
percentages of the total expenses
production of social and economic housing in
Mexico, 2009.
14%
Minimum
Average
Maximum
12%
10%
Variation coefficient= 69.7%
8%
6%
4%
2%
Yucatán
Zacatecas
Tamaulipas
Colima
Campeche
Durango
Nuevo León
Baja California Sur
Coahuila
Querétaro
Chiapas
Veracruz
Guerrero
Chihuahua
Michoacán
Jalisco
Puebla
National
Sinaloa
Baja California
Guanajuato
Aguascalientes
Sonora
Quintana Roo
Oaxaca
Hidalgo
Tlaxcala
Edo. México
San Luis Potosí
0%
Graph 23 shows the average, maximum, and minimum ECs for Economic housing. Their variability
from one state to another is also high (62.5%). As an example, the difference between Sonora’s and
Tlaxcala’s ECs compared to Yucatan (which has the lowest average) is 4.5 percentage points—nearly
twice as high as the national average for this market.
Graph 23.
Extraordinary costs for
economic type housing
Percentages of the total expenses
Mexico, 2009.
Minimum
Average
Maximum
9%
8%
7%
Variation coefficient= 62.5%
6%
5%
4%
3%
2%
1%
Yucatán
Chiapas
Tamaulipas
Colima
Zacatecas
Campeche
Sinaloa
Morelos
Chihuahua
Puebla
Guerrero
Jalisco
Querétaro
Nuevo León
Baja California Sur
Hidalgo
Coahuila
National
Michoacán
Guanajuato
Nayarit
Veracruz
Oaxaca
Durango
Baja California
Tabasco
San Luis Potosí
Aguascalientes
Quintana Roo
Distrito Federal
Edo México
Sonora
Tlaxcala
0%
Sum of the extraordinary costs
The national production of social and economic housing in
2008 amounted to 573,238 units, as can be seen in table 18. When
the ECs obtained in the study are applied to the total units mentioned
above, we find that they amounted to 2.90 billion pesos in the year
of reference.
To put them into perspective, the extraordinary costs equal
close to 15 thousand dwellings (85% social type and 15% economic)
that were possibly not produced, affecting over 61 thousand persons.
In sum, ECs have an unfavorable effect on companies’ productive
potential, households’ quality of life, and urban functionality, as the
bulk of these buildings are made in peripheral areas with a low level
of community equipping.
DataDwellings built in 2008
SocialEconomic
Number of dwellings built*
487,257
85,986
Average price (pesos)
172,177
356,580
% of extraordinary costs (EC)
2.50%
2.62%
National EC (mill. P$)
$2,097.4
$803.3
EC expressed in number of dwellings
12,181
2,253
Total
573,238
199,837
2.52%
$2,900.7
14,434
Table 18.
Quantification of
extraordinary costs
Mexico, 2009.
** The total dwellings built in 2008 are equal to 720,007 loans for acquisition, less loans for used
housing (146,769), CONAVI report.
Delays in the processes of production and delivery
Extraordinary costs are related to certain procedures that cause delays in either the
production or delivery of the property. Graph 24 presents the seven procedures with
the largest impact on ECs. 55
55 Appendix E describes the
procedures mentioned.
Graph 24.
Slow procedures
Percentages
35%
32.14
30%
25%
Mexico, 2009.
20%
17.86
17.86
17.86
15%
10%
7.14
3.57
5%
3.57
0%
Land use
license
municipalization
Construction
license
Bridge loan
register
Environmental
impact
Sole technical
report (DTU)
Note: The percentages represent the opinion of 80% of the developers interviewed.
• 63 •
Developers with a geographical presence in different municipalities within the
same state said that, at times, for a similar construction work in terms of size, the time
to carry out the procedures varies from one town hall to another, causing delays and
greater expenses.
The local institutions that were more frequently mentioned as the cause of ECs
and delays in the construction of social and economic housing were water operators
(public and private), the municipality’s administration, the delivery of permits for the
development, and the power companies: Luz y Fuerza del Centro and Comisión
Federal de Electricidad.
Conclusions
n
n
n
Extraordinary costs have an inevitable effect on the efficient resource allocation in the sector,
decreasing the production and quality of dwellings for low-income families.
Given the nature of this research, the results must be considered as an initial approach to the
quantification of irregular expenses in the social and economic housing markets. Their increase
can cause strangulation of the productive system for this type of properties.
There is a prevailing feeling among the interviewed of a disconnection between the federal,
state, and municipal legal frameworks regarding the procedures requested and the response
times, as well as with regard to construction regulations, when there are any at all.
Public policies
n
n
n
n
n
To establish the maximum response times for each procedure, as well as the corresponding
penalties for those who do not comply with them, within building regulations and codes. There
can be no systems of responsibilities without clearly established rules.
Encourage the municipality’s participation in the interinstitutional management of the federal
and state housing policies. Simultaneously, consolidate the Municipal Geographic Information
Systems as a tool for urban planning on a microregional scale.
Municipal urban development plans should span 10 years and be broadly spread among the
population, the developers, and the other participants in the housing market.
Government intervention has generally lagged the housing train as it has focused on control processes instead of on the mechanisms of urban regulation and planning based on governance—that
is, a way of governing whose objective is a lasting economic, social, ecological, and institutional
development.
In order to move towards a greater culture of legality, it is necessary to have quantitative indicators of transactions’ transparency; for this reason, SHF will perform a periodical survey.
2.9.
SHF index of housing prices
in Mexico
Keeping in mind international best practices, Sociedad Hipotecaria Federal (SHF) developed the SHF
home price index for Mexico (SHF index), resorting to two statistical procedures that complement
one another and are carried out in different stages: the hedonic method (HM) and the repeat sales
(VR).
Dwellings are groups of structural attributes56 related to the built surface area, number
of bedrooms and bathrooms, age, habitual depreciation of the property, common areas, availability of parking spaces, and elevators, to name a few. Likewise, each dwelling has different
features regarding location (related to community equipping and geographic orientation) and
its environment (inherent to the neighborhood, municipality, and state). Thus, each dwelling
is different due to its own set of attributes and the rate at which it depreciates.
The dwellings (standalone houses, houses in a condominium, apartments, and others57)
for which the SHF Price Index was created are those with a residential purpose that are
additionally subject to mortgage loans.
58 See Appendix F.
56 See Appendix F.
57 Including terraces, covered patios,
servants’ quarters with provisional material,
among others.
A. Hedonic method (HM)58 and information sources
It is based on regression procedures that break down the price of the dwelling
with regard to its attributes and considers that the price depends on its structural
features, as well as location and surroundings. That is, using this method, each
attribute of the dwelling is assigned an implicit price. It is also known as constant
quality price index.
59 The independent variables used are
statistically significant, and the estimated
hedonic models are homocedastic and
have no self-correlation with the residuals
(Appendix F).
Twenty models were estimated: one per year (from 2005 to 2009) and
four by housing typology: standalone house, house in a condominium, apartments,
and others, with generalized linear models. 59
For this purpose, both of SHF’s valuation bases (VB) were used: the first
one with records from 2005 to 2008; the second, from 2008 onwards. The VBs
were purged to eliminate extreme, atypical, or outlying values, having a total of
2.3 million records from 2005 to the first quarter of 2009.
External information came from INEGI for the Levels of Wellbeing variable
by state and municipality, the price index of households’ consumer expenses,
and maps in order to georeference the prices of dwellings to groups of urban
blocks, from the Mexican Postal Service for zip codes, and from BANXICO for
the National Consumer Price Index (INPC in Spanish).
• 65 •
B. Repeat sales method (RS)
It provides longitudinal information on sales prices for a given group of real estate property in selected
cities, including the rental and used (existing dwellings sold by the owner) housing markets. Likewise,
it considers mortgage, financial, and physical aspects of the dwelling to obtain, among others, the
following indicators:
n
60 See Appendix F.
n
n
n
n
n
n
n
n
n
n
61 Also known as PER (median house price
to annual rent ratio). It shows how many
years it takes to recover the investment in
housing (acquisition price), given the annual
return (rental). It is used to gauge possible
overvaluations of the dwelling’s price.
Appreciation/depreciation rate of the property.
Starting and current sum of mortgage.
Starting and current loan to value (LTV).
Acquisition price/Rental price (%).60
Number of transactions on the dwelling.
l
Sold through a real estate broker.
l
Offered by the owner.
Interest rate on the mortgage.
Refinancings.
Rate of absorption (average time the property is on the market).
Maintenance expenses.
Households’ level of indebtedness: mortgage payment/household income.
New attributes in the dwelling, such as ecotechnologies and communications technologies
(Internet), among others.
With a statistically representative sample, the RS method shows similar results to the Hedonic
method. Thus, the results obtained through both methods are incorporated into the mixed method61
to generate continuous information regarding the financial conditions, and the supply and demand in
the sector through the Continuous Residential Financial Survey.
2.9.1.
Results
62 See Appendix F
63 Affordable entry, economic, middle, and
residential.
64 Standalone house, condominium house,
apartment, and others.
65 Published in the Official Journal of the
Federation on September 27, 2004.
The study generated price indices for the national level, by state,
for new and used housing, by class62 and typology63 (the two latter
classifications are the ones used in the Methodology for the Valuation
of Properties Targeted by Guaranteed Credit for Housing).64, 65 SHF has
decided to create and publish them on a quarterly basis.
In the period from 2005.I to 2009.I, the SHF Index showed
an accrued nominal appreciation of 29.0%, equivalent to an annual
increase of 6.6%. By segment, standalone houses grew 26.8%, condominium houses 30.4%, and apartments 46.4 percent.
Graph 25.
Prices of standalone
houses, condominium
houses, and apartments,
2005.I-2009.I
Accrued nominal % var.
26.76
Standalone houses
Houses in a condominium
30.39
Source: Created by SHF, SHF Housing Price
Index for Mexico, 2009.
46.35
apartments
0%
10%
20%
30%
40%
50%
From a state perspective, and based on the growth rate of prices in the first quarter of 2009, three large groups
of states were identified:
n
The first, made up of eleven states (Campeche, Chiapas, Guerrero, Hidalgo, Mexico, Morelos, Puebla, Quintana
Roo, San Luis Potosi, Tabasco, and Veracruz), showed a slowdown in the rate of increase of housing prices;
The second group, made up of ten states (Coahuila, Colima, Mexico City, Jalisco, Querétaro, Michoacán, Nayarit,
Nuevo Leon, Sonora, and Oaxaca), showed stable prices;
The remaining eleven states (Aguascalientes, Baja California, Baja California Sur, Chihuahua, Durango, Guanajuato,
Sinaloa, Tamaulipas, Tlaxcala, Yucatán, and Zacatecas) showed higher growth in housing prices, compared to previous quarters.
n
n
On the international front, the housing markets of France, the US, the United Kingdom and, to a lesser extent,
Canada, price indices show downward trends with sharp depreciations. On the other hand, Mexico’s SHF Index and
Germany’s index showed nominal appreciations in the first quarter of this year.66
France /a
USA /b
United Kingdom /c
Canada /d
Mexico /e
Germany /f
Price trend of housing in
selected countries, 2005.I2009.I
Nominal % var. compared to the
same quarter from a year earlier
20%
14.8%
annual quarterly variation (%)
15%
10%
5%
8.7%
7.9%
7.0%
4.9%
4.9%
0%
Graph 26.
2.0%
0.6%
Source: Created by SHF, SHF Housing Price
Index for Mexico, 2009.
-1.6%
-5%
-6.6%
-7.1%
-10%
-15%
-16.5%
66 See the section Homologating the
various housing classifications in Mexico.
Typologies by value.
-20%
I
II
III
2006
IV
I
II
III
2007
IV
I
II
III
2008
IV
I
2009
• 67 •
2.9.2.
Conclusions and next stages
67 SHF <www.shf.gob.mx>
The Index will be quarterly, showing figures for a national and state level. Later, the SHF Price
Index will be disintegrated into metropolitan areas and selected cities, referenced to digital maps. The
results will be published through a publication calendar with the dates on which they will be released
each quarter. Likewise, there will be access to the Price Index through the SHF67 website and through
a press release.
Thus, Mexico is among the OECD countries that have this essential information for the housing
sector in particular, and for the financial sector in general, and that will make it possible to:
n
n
n
n
n
n
Determine the expansion or contraction of the housing market on a national level and by regions,
indentifying possible price bubbles in the sector.
Become acquainted with the value of the collateral in the credit portfolio in different periods
and states.
Provide information for households and investors on the evolution of the relative prices, e.g. of
new and used housing, houses vs. apartments, or by state.
Establish the quantitative relationship between the variation in the price of the dwelling and the
delinquency rate.
Periodically update the LTV indicator.
Help rate the mortgage backed securities, and establish the price of mortgage guarantees, among
other uses.
2.10.
Indices on housing quality
The term quality of life began to be used between the sixties and seventies as a result of several studies
regarding social indicators in the US. Later, in the early 1980s, differences between these indicators and
quality of life (QL) were established.
68 Rueda, S. (1996). Hábitat y calidad
de vida. Ciudades para un futuro más
sostenible. Universidad Politécnica de
Madrid. Ministerio de Vivienda <http//
hábitat.aq.upm.es/>. Viewed on April
8, 2009.
As a concept, its definition is imprecise as it varies in space and time and contains a
subjective variable that leads to understanding the notion of quality of life as an adaptation
of the individual’s capacities and needs, as perceived by them and the social group, making it
necessary to establish a collective standard, specific for each social group in a given moment
and context (Rueda, 1996).68
In the 1950s, the UN created a group of experts including agencies such as the WHO,
ILO, and Unesco, which in 1961 made their first report to gauge the standards of living on an
international level, proposing the following elements of quality of life: healthcare, food and
nutrition, education, housing, employment and working conditions, clothing, leisure, entertainment, and social security. (ONU, ILO, FAO, 1961).
In 1996, the United Nations Habitat II conference proposed to the National Committees of the Habitat Program to consider as best practices the actions whose goal were
to improve the quality of life in the cities. These goals, in turn, were also those of the Cities
Summit. Throughout, the Urban indicators program (UN-Habitat, Habitat Debate, Vol 10.
No.1, Paris. 2004) was also set in motion.
According to the Habitat Agency, urban indicators are a group of actions towards a
planned future, including the economy, ecology, and society, in a joint search for an equitable
development of the urban centers. As an international strategy, urban indicators must none69 Frausto, O, Perdigón, M:T:, et. al.
theless circumscribe to specific problems on a local level.69
Quality of life is a dynamic concept which is linked to the idea of wellbeing and related Sistema de información de Indicadores
UN-Hábitat. Ciudades 68. Octoberto production-reproduction (work-employment-housework), healthcare, education (learning- December 2005, RNIU, Puebla, Mexico.
formation), and to indicators that make it possible to gauge them, such as access to material
satisfactors such as food, housing, access to drinking water, electric power, and cultural ones,
such as a sense of belonging to a community or social group, that imply habits, customs, and
collective life practices. Thus, we intend to make it clear that quality of life also has a cultural
and values aspect to it.
The most objective indicators are those which can be recorded statistically and then measured.
For this purpose, the INEGI indicators were selected as the main institution that, in Mexico, supplies
statistical data regarding quality of life:
n
n
n
n
n
n
Current income.
Rights of access to government services or goods (for free or at a low cost).
Property (which is the basic patrimony).
Educational levels, abilities, and skills, understood as expressions of the capacity to understand and do in the
social world.
The available time for formal or informal education, leisure, rest, and house chores.
Owning nonessential assets, such as a car or a dwelling, and individuals’ and households’ borrowing capacity.
Another important indicator of quality of life pertains to the quality of the environment—the
territorial scale on which the characteristics of the existing quality of the environment are determined:
housing, residential (local-neighborhood-housing development), urban-territorial (metropolis, region,
planet).70
70 Valladares, R, Chávez, M., Moreno, S.
Elementos de la habitabilidad urbana.
<www.uady.mx/arquitec/sac>. Consultado
on April 8, 2009.
2.10.1.
Residential satisfaction with the city, the housing complex, the
dwelling, and the financial aspects
The study that SHF performs every year is done based on residents’ opinion, with the following
goals::
n
n
Assess the level of satisfaction of the population that purchases a new dwelling within housing
complexes with a On-time payment guarantee (GPO in Spanish), acquired through loans from
SOFOLs, banks, Infonavit, or FOVISSSTE.
Inform the public and private agents of the mortgage market of the results in the fourth71 study,
in order to improve the quality of the dwellings, cities, financial products, and customer service
for the end buyer.
71 To view the previous results,
please visit: <http://nuevoportal.SHF.
gob.mx/prensa/Publicaciones/Paginas/
edoactualvivmex aspx>
• 69 •
What is residential satisfaction
72 The legal and financial aspects are not
included in the weighting of the Global
Index of Residential Satisfaction as these
segments are alternated in each survey.
The Residential Satisfaction Survey is made up of four segments,72 which gauge the inhabitants’
assessments regarding the specific features of:
Dwelling: Legal aspects:
1.Physical characteristics of the construction. 1. Complaints regarding the delivery of the dwelling..
2. Spatial, Functional, and formal. 2. Quality of the resolution.
3. Environmental characteristics of the dwelling
4. Adaptations and transformations.
Housing complex and city: 1. Location.
2. Housing complex. 3. Urbanization and services. 4. Social and community equipping.
Financial aspects:
1. Credit characteristics.
2. Response times.
3. Specifics on the service.
5. Perception of the city.
Methodology
73 The sample included 1,412 dwellings.
The 2.6% sampling error is calculated
using a simple random sampling with a
95% replacement and significance level.
The survey is one of semantic differential: one represents the minimum satisfaction and 10 the maximum. From six on, it is considered to be an acceptable level of residents’ satisfaction. The interviews
are direct (one to one) in the dwelling.
The interviews are on a national level, representing some states of interest. The fourth survey was
carried out in December 2008 in nine states, including 30 selected cities (figure 4), under the following
criteria:73
n
n
The most mortgage loans placed between 2007 and 2008 by the various financial agents, including
SHF.
Housing complexes with On-time payment guarantee (GPO) for social and economic dwellings.
Figure 4.
Participating states
and cities
Source: SHF, Residential Satisfaction
Survey, 2008.
StateCity
1 Baja California
Ensenada, Mexicali y Tijuana
2 Coahuila
Piedras Negras, Saltillo y Torreón
3 Chihuahua
Cd. Juárez, Chihuahua, Cuauhtémoc
y Nuevas Casas Grandes
4 Jalisco
Lagos de Moreno, Tlajomulco, Tlaquepaque, Tonalá y Zapopan
5 Nuevo León
García, Guadalupe y Juárez
6 Sonora
Hermosillo, Nogales y San Luis Río Colorado
7 Tamaulipas
Matamoros, Nuevo Laredo y Reynosa
8 Veracruz Boca del Río, Emiliano Zapata, Orizaba, Tuxpan y Veracruz
9 Guanajuato
Guanajuato
Socioeconomic characteristics of the
residents
74 Refers to the most recurrent
characteristics (modes of the sample).
The typical resident74 is married, occupying their own dwelling
which they are paying for, aged between 26 and 35, working
in the private sector with a monthly family income of under
10 thousand pesos (6.4 times the GMW in 2008).
Age of head of household
Graph 27.
Socioeconomic
characteristics of the
residents
20%
18 a 25
42%
26 a 35
Survey, 2008..
23%
35 a 45
15%
46 and up
0%
10%
20%
30%
40%
50%
Marital status
Household’s monthly income
73%
Married
13%
Single
65%
Under $10,000
22%
Between $10,000 and $20,000
5%
Widowed
4%
Over $20,001
10%
Commonlaw Marriage
0%
0%
20%
40%
60%
Borrower’s employment situation
49%
1%
10%
50%
60%
25%
5%
Own, fully paid
7%
0%
40%
66%
Rented
13%
retired
30%
Own, paying for it
31%
Wage earner (public sector)
Not working
20%
Household’s monthly income
Wage earner (private sector)
Independent or freelance
10%
80%
20%
30%
40%
50%
60%
Borrowed
3%
Perk
0.4%
other
0.4%
0%
10%
20%
30%
40%
50%
Note: The percentages may not add up to 100% due to the rounding off
• 71 •
60%
70%
70%
Results
Satisfaction with the dwelling
The index settled at 5.80, as the residents assigned a
lower rating to environmental and physical characteristics of the
construction compared to previous years. On the other hand, the
spatial, functional, and adaptation and transformation aspects rose
marginally.
5.73
6.91
5.89
6.16
5.75
4.27
5.65
5.85
5.74
6.26
5.94
6
5.92
7
6.35
8
5.73
Source: SHF, Residential
Satisfaction Survey, 2008.
9
5.73
Graph 28.
Satisfaction with
the dwelling
8.16
a)
5
4
3
2
1
0
Physical characteristics
of the construction
Spatial and functional
characteristics
2005
75 Based
on international criteria,
a dwelling is considered to be
overcrowded if there are more than
two persons per bedroom.
Table 19.
Factors that
determine expansions
or remodeling of the
dwelling
Percentages
Survey, 2008.
Adaptation and transformations
2006
2007
Environmental characteristics
2008
Nearly two out of every three individuals interviewed would like to expand their dwelling to
provide more space for the inhabitants who join the household (e.g. births), or due to overcrowding75,
which is present in 13% of the dwellings in the sample. For remodeling, the most outstanding factors
regard the time they have lived in the place of residence, the deterioration of the dwelling, and greater
comfort for the inhabitants.
ExpansionsRemodeling
Why?Why?
• Increase in the number of inhabitants
34
• Increase in the number of inhabitants
24
• Overcrowding
20
• They like where they live
17
• For greater comfort
16
• It is deteriorated
16
• They like where they live
14
• For greater comfort
15
• Can’t buy a new home
12
• Overcrowding 15
• Expand space/bigger
9
• Can’t buy a new home • 72 • Current Housing Situation in Mexico 2009
7
b)
Satisfaction with the housing complex and the city
The index received an unsatisfactory rating of 5.63. The complexes’
physical and architectural features recorded the lowest rating.
Perception of the city showed the greatest decrease compared to
previous years, due to the level of insecurity. Also affecting this result were
the characteristics of the complex and its location.
.
7.07
6.46
6.92
6.67
5.67
6.22
5.83
5.71
6.62
7.08
6.68
7.53
6.22
5.32
4.74
5
4.92
4.71
5.99
6.25
5.39
7
6.02
8
7.38
7.44
9
6
Graph 29.
8.88
10
Satisfaction with the
housing complex and the
city
Source: SHF, Residential Satisfaction Survey,
2008.
4
3
2
1
0
location
Characteristics of the
housing complex
Urbanization
and services
2005
2006
Perception of the Social and community
complex
equipping
2007
Perception
of the city
2008
c)
Legal aspects
Fifteen percent of the persons surveyed expressed some problem
with delivery of the dwelling; this is a lower percentage than in the previous
study, which amounted to 21% (see graph 30).
Graph 30.
Negative aspects regarding
delivery of the dwelling
no
problems
85%
Note: they do not add up to 100%
due to multiple responses.s
Some
problem
15%
2008.
49%
Failure to meet delivery date
47%
Breach of terms and conditions of the contract
23%
Undue charges
Refusal to deliver the dwelling or make a discount
11%
Note: They do not add up to 100%, due to multiple responses
Likewise, seven out of every 10 residents with some problem in the delivery of their dwellings
contacted the developer, whereas 20% requested no support from any institution or person; only 5%
turned to some federal or state authority (see graph 31).
• 73 •
70%
Graph 31.
Persons to whom the
borrowers turned
Percentages
Note: they do not add up to 100% due to
multiple responses.
2008.
20%
11%
Builder/
developer
Financial
intermediary
3%
2%
2%
profeco
State authorities
other
No one
d)
Financial satisfaction
Difficulties to obtain a loan and insurance on mortgage loans. Time in
the current job, households’ minimum required income, and the lack of proof of income
received continue to be the main obstacles in obtaining a loan.
Graph 32.
Obstacles in obtaining
a loan
Percentages
2008.
no problems
86%
Some
problem
14%
35%
Time at the job
18%
Household’s minimum required income
15%
Proof of income
11%
Credit record
Does not have enough points
Minimum income of the head of household
High interest rate
others
10%
7%
6%
15%
Compared to the results from previous surveys, the most recent study shows that borrowers
are better acquainted with the availability of insurance on their mortgage loans—namely damages,
followed by life, unemployment, and disability. Nonetheless, the index gauging the use of insurance
remains low.
Graph 33.
The borrower doesn’t know
11%
None
TYPES OF INSURANCE
ON MORTGAGE LOANS
17%
Acquaintance with
mortgage insurance
Percentages
40%
Unemployment and disability insurance
2008.
43%
Life insurance
46%
Damages insurance
0%
10%
20%
30%
40%
50%
Incidence in the use of insurance
l
No
90%
lost their job (7.1%)
damages to the dwelling by accident (2.4%)
l accident that prevents them from working (0.5%)
l
Yes
10%
e)
Global Index of Residential Satisfaction
When consolidating the indices of satisfaction with the dwelling (5.80) and the complex and the
city (5.63), the Global Index shows an unfavorable 5.72. Only Yucatán, Querétaro, Morelos, Nuevo
Leon, Zacatecas, Guanajuato, Nayarit, Guerrero, Jalisco, San Luís Potosí, and Mexico have acceptable
residential satisfaction indices.
f)
Borrowers’ opinions
In view of the changes to the prevailing economic conditions, due to the Subprime crisis that
began in the United States, a segment regarding borrowers’ perception of their financial environment
was included. The relevant results are as follows:
n
n
n
n
15% of the borrowers indicated that they would fail to pay one of their monthly installments on
their mortgage in 2009.
Two out of every 10 borrowers had already missed some payment on their mortgage in the
last six months.
Nearly 20% of the households took out a new loan in the last half of 2008 for household and
electronic appliances.
Faced by the need to cut expenses, the persons interviewed are considering reducing their
expenses on clothing, shoes, entertainment, and cell phones.
With regard to the actions to improve the quality of life in both their dwellings and housing
complexes, the residents indicated the need to:
n
n
n
Use higher quality materials in the dwellings.
Make the houses with larger and more comfortable spaces.
Increase security and surveillance within the housing complexes.
• 75 •
2.10.2.
Housing Quality Index (ICAVI in Spanish)76
76 The ICAVI conceptual model can be
viewed on the Infonavit website. <www.
infonavit.org.mx> under the section housing
offers, ICAVI.
The Housing Quality Index (ICAVI) synthesizes the quality characteristics of a dwelling, based on
the information of the valuation performed to grant the loan. It is done on the dwellings purchased
through Infonavit and those in the process of being sold. It is designed to gain knowledge regarding
quality features, such as:
n
n
n
The dwelling: size, number of bedrooms, bathrooms, parking spaces, commercial space, main
power source for utilities—for instance, phone and natural gas—as well as project quality.
The housing complex: material on streets and sidewalks, types of electrification networks,
rainwater drainage, streetlights, services such as telephone, natural gas, surveillance, and trash
collection, as well as the existence of street signs and numbering.
The urban surroundings: location and equipping.
Objectives
n
n
Act as guidelines for the affiliate to help them make their purchase decision after comparing the
quality characteristics of the various complexes.
Promote and encourage competition between the various players in the housing process to
generate actions to raise the quality of their products and thus help improve affiliates’ quality
of life.
In 2008, new quality attributes were included to be recognized in the ICAVI;
specifically, those regarding the urban environment. Currently, the ICAVI can be viewed
by type of dwelling, housing complex, municipality, and state. See the website: www.
infonavit.org.mx
Likewise, in order to bring more transparency to the creation of the Index, its
conceptual calculation model was released with a simulator that enables developers
to estimate their punctuation and determine how to improve the current one for
their projects.
Gradually, work is being done to strengthen this indicator on a national level, as a
parameter of quality for the development of housing projects. In sum, it seeks to sustain
and increase the patrimonial value and quality of life of the Institute’s borrowers.
In this context, the incorporation is scheduled of those quality characteristics
that are integrated into the dwellings as a result of the institutional programs Infonavit
promotes in the framework of the national housing policy, such as works, elements,
and installations aimed towards saving water and energy; larger dwellings, areas for
neighbors to gather, and neighbor organizations, among others.
The averages obtained through the ICAVI in 2008 by state and type of dwelling
are shown on the following table.
Table 20.
Housing Quality Index by
category, 2008
Averages
Source: Infonavit, 2009.
Icavi
Traditional housing
State National
Guerrero
Baja California Sur
Puebla
Morelos
Campeche
Sonora
Tlaxcala
Tabasco
Yucatán
Querétaro
Chihuahua
Jalisco
Coahuila
San Luis Potosí
Sinaloa
Guanajuato
Nayarit
Michoacán
Distrito Federal
Aguascalientes
Veracruz
Colima
Chiapas
Zacatecas
Nuevo León
Quintana Roo
México
Oaxaca
Durango
Baja California
Tamaulipas
Hidalgo
2008
78.00
83.45
81.77
80.84
80.57
80.12
79.87
79.69
79.51
79.49
79.43
79.22
79.04
79.00
78.87
78.85
78.61
78.55
78.52
78.37
78.00
77.83
77.58
77.45
77.39
77.08
77.03
76.95
76.62
76.62
76.39
75.33
74.39
Icavi
Economic housing
State
National
Tlaxcala
Chiapas
Sonora
San Luis Potosí
Nuevo León
Durango
Aguascalientes
Tabasco
Hidalgo
Baja California Sur
Yucatán
Quintana Roo
Oaxaca
Guanajuato
Tamaulipas
Zacatecas
Coahuila
Sinaloa
Veracruz
Morelos
Puebla
Campeche
Jalisco
Michoacán
Querétaro
Baja California
Chihuahua
Colima
Guerrero
México
Nayarit
2008
77.48
83.62
80.73
80.67
80.13
79.89
79.55
79.43
79.27
78.88
78.21
78.06
77.42
77.40
76.96
76.90
76.81
76.57
76.42
76.06
75.94
75.88
75.56
75.43
75.36
74.93
74.88
74.81
74.76
74.51
74.07
74.00
• 77 •
2.11.
Promotion of quality of life and
patrimonial value Vivir Infonavit
The goal of the Vivir Infonavit program is to ensure that Infonavit’s functions will generate quality of life
and patrimonial value for its affiliates. This goal is to be met through four axes with specific purposes:
n
n
n
n
Table 21.
Objectives by axes of the
Vivir Infonavit program
Housing Axis, representing the industry.
Surroundings Axis, representing governments.
Community Axis, represented by society, including Infonavit affiliates and borrowers.
Being Axis, referring to affiliates’ education—a fundamental pillar of this action and basis of the
Vivir Infonavit program and of all the initiatives
Being
Promote the education of the affiliate, government, and industry in a culture of sustainability
Housing
Promote the development of housing that will meet the needs of its affiliates in quantity and
under quality standards that consider a social, urban, and ecological logic, as well as actions to
encourage growth of the patrimony
Environment
Promote a competitive urban environment in terms of inhabitability
Community
Contribute to a harmonious development and an environment of wellbeing with a social
fabric within Infonavit communities
The programs to be carried out on these axes are innovative, but depend on the alliance
and collaboration with the third parties represented in each axis. For instance, in the Housing
axis, we find the Green mortgage program, which is already operating, and Digital Home; in
the Surroundings axis, we find the Municipal competitiveness in housing Program; and in the
Community one, the Neighborly Organization and Community Centers Program.
The initiatives of the Vivir Infonavit Program are intended to raise the quality and sustainability of the dwellings financed with Infonavit loans, improve the environment where they
are built, and ensure that they contribute towards developing more harmonious and integrated
communities. That is, the Program carries out a series of strategies for change that follow the
institutional mission of contributing towards the wellbeing and patrimony of the workers and
their families, permanently involving the authorities, the industry, and society.
2.12.
Key findings
n
n
n
n
n
n
n
n
n
n
n
n
n
n
The GDP drop in 2009 could be the worst since the (-)14.8% seen in 1932.
Production in the construction industry fell (-)9.5% up to May 2009, due to less residential (single- and
multifamily) construction.
SHF proposes homologating the various classifications of housing typologies.
CONAVI implemented a pilot program with 14 organizations of Social Developers of Habitat.
According to information from ENIGH-2008, the total number of inhabited dwellings in Mexico went from
23.4 million in 2000 to 26.2 million in 2008.
Nearly seven out of every 10 dwellings in Mexico are found in urban areas.
Households’ size decreased by 4.8% between 2000 and 2008, down to 4 members.
5.9% of the dwellings are mortgaged—a still very low percentage, considering that there are currently almost
552 thousand households sharing a dwelling with other families.
The size of the rural and semi-urban market is 9 million dwellings.
87.4% of the population in rural areas own the deed.
The land bank of the six public developers traded on the BMV (167.7 million m2) is enough to guarantee
housing construction for the next 4.6 years.
The SHF home price index for Mexico makes it possible to estimate national price levels by state, for new
and used housing, and by typology.
Mexico is one of the OECD countries with essential information for the housing sector, via the SHF home
price index for Mexico.
80% of the national territory is rural and semi-urban. It is necessary to have public policies with a territorial
focus.
• 79 •
Section 3.
Sustainable urban
and housing development
3.1.
Normativity in urban planning
In the 1976-1982 period, urban planning in Mexico was more strongly institutionalized, with a large
body of national, regional, state, and municipal plans. In addition to normative and regulatory instruments for land use, cities nowadays must have plans that will make it possible to regulate the current
growth trends and boost the economic, social, and environmental capacities, assuming the concept of
sustainable development.
Although Article 115, section V, of the Political Constitution of the Mexican United States
says that municipalities have the power to regulate urban development, control land use, and
issue construction licenses and permits. It is necessary to make an in-depth analysis of the
state where the cities of the National Urban System are, supported by a system of information
that will make it possible to update, follow up and monitor it, and enable the design of the
interventions tailored to each urban and rural reality.
In accordance with the goals of the General Law on Human Settlements, the National Land
and Urban Development Policy incorporated into the 2009-2012 National Urban Development
Program is in keeping with the Mexico 2030 Vision, which proposes to:
n
n
n
Establish the concurrence of the Federation, the states, and the municipalities, for the ordinance
and regulation of human settlements in the national territory.
Establish the basic norms to plan and regulate the spatial planning of the human settlements and
the creation, preservation, improvement, and growth of population centers.
Define the principles to determine the provisions, reserves, uses, and destinations of areas and
plots that will regulate ownership in the population centers, and determine the bases for social
participation in terms of human settlements77
In this context, with a view to meet the current social and urban requirements, Sedesol, via the
Undersecretariat of Urban Development and Spatial Planning, has developed Methodological Guides as
instruments to support the state and local authorities in creating and updating their urban development
laws, plans, or programs in their various territorial circles.
77 General Law on Human Settlements,
Article 1.
Table 22.
Urban Development Plans
in cities of the National
Urban System
Source: SEDESOL, 2009.
Have a plan
Metropolitan areas
41
Localities with over 50 thousand inhabitants
70
Localities with under 50 thousand inhabitants
161
272
National Urban System
d
o not have a plan
Total
15
56
3
73
68
86
229
358
358
Having updated information on the growth and development dynamics of the cities and metropolitan areas, as
well as being acquainted with the state of the human settlements in the various territories, will make it possible to define
the management of urban and rural land.
On the other hand, the spatial planning policy at the regional level in Mexico follows goals from the 2007-2012
National Development Plan defined in Axis 3. Equal Opportunities, which states: “reduce regional, gender, and social group
inequality by diminishing the regional disparities in spatial planning and social infrastructure, integrating marginalized regions
into the development processes, triggering the productive potentialities.”
Likewise, the Plan promotes a national policy at the regional level, designed to encourage competitive, equitable,
and sustainable integrated development; for this purpose, it establishes two main strategies:
1) 2)
Link the marginalized areas with developed areas, profiting from their competitive advantages.
Promote the national spatial planning via actions coordinated between the three levels of government and agreed
on with the civilian society.
3.1.1.
Federal guidelines for developments derived from Art. 73 of the housing law
Although the development of the housing sector in the last few years has displayed fast growth dynamics, the lack of
infrastructure and equipping has caused imbalances in some population centers and affected the quality of life of their
inhabitants.
The state and municipal regulations for developments did not consider the complexes of 10, 15, or up to 25 thousand
dwellings which are built nowadays; therefore, it is essential to consider and reach a consensus on that such large complexes
have a considerable regional impact.
In addition, there are very few regulations regarding the conditions that the urban layout of developments must
meet, so the dwellings can be linked through streets and clearly accessible public spaces for groups that will encourage
the possibility of voluntary social contact. On the other hand, an internal organization has prevailed, based on exclusion
and isolation limiting social contact, and thus increasing the chance of neighborly conflicts.
On the other hand, local regulatory restrictions have often prevented the developments from considering the
presence of complementary—and indispensable—uses and activities as part of their design, for the adequate fulfillment of
the housing function; the lack of these activities increases travel to meet residents’ various needs for goods and services.
In order to tackle this issue, Article 73 of the Housing Law states that the actions of land and housing financed or
subsidized through federal resources, as well as those of the organizations that finance housing for workers in keeping
with the obligation stated in Article 123 of the Political Constitution of the Mexican United States, must follow the guidelines
that SEDESOL has established with regard to equipping, infrastructure, and relationship with the environment, heeding the
opinion of CONAVI, for each group of the population, in order to consider their impact, as per the General Law on Human
Settlements and other applicable regulations.
Based on the comparative analysis of the normativity regarding developments throughout the
country, Sedesol designed the technical specifications—valid as of January 1, 2010—that can currently
be viewed at <www.sedesol.gob.mx>. These guidelines were designed to:
n
n
n
n
n
n
n
Establish a norm that will guarantee the minimal conditions in terms of infrastructure equipping
and relationship with the environment.
Establish a technical support both for private developers and the local public administration in
urban development and production of housing within housing developments.
Establish shared criteria as a guide in decision-making for the final beneficiary, the developer, the
financier, and the public servant.
Encourage social inclusion, community life, and sustainable development.
Encourage identification and mitigation of regional impacts, based on the size of the developments.
Encourage regulatory improvement within local regulatory frameworks.
Begin a system for the recognition and promotion of the urban development quality of the housing
developments.
The guidelines were designed considering that:
n
n
n
n
n
The equipping needs must be determined based on the population served.
The nature and features of the equipping must vary, based on the scale of the developments.
Installed capacity must be recognized when it is within accessible distances.
The distance to equipping is considered as real routes, not as influence radiuses.
Inner and outer connectivity and non-motorized mobility are favored.
Figure 5.
Example for 60 dwell/ha.
neighborhood
100 to 1,000 inhabitants
area
1,000 to 5,000
inhabitantss
Thoroughfare and equipping
must encourage accessibility,
social integration, and
coexistence in hierarchically
organized spaces to create
neighborhoods.
Source: SEDESOL, 2009.
suburb
5,000 to 25,000
inhabitants
Section 3. Sustainable urban and housing development • 83 •
3.1.2.
State housing laws and programs
During 2007, CONAVI signed coordination agreements with the governments of 16 states through
which efforts and resources were pooled to create their corresponding housing laws and programs;
these projects were subjected to citizen consultation in various state forums, to later be revised within
the corresponding local congresses.
In 2008, the cases of the states of Guanajuato and Oaxaca are worth noting, as they officially
published their fully valid housing laws. Moreover, the states of Jalisco, Nayarit, and Nuevo Leon released
their housing programs.
CONAVI entered coordination agreements with the state governments of Baja California Sur,
Quintana Roo, Veracruz, and Yucatan for the creation of their bills of law and housing programs, which
were submitted for consideration to the Commission and in some cases have already been presented
to citizen consultation forums. At the end of 2008, 20 states had both instruments, essential for the
planning and operation of actions to take care of housing demand.
In 2009, the creation of agreements with Baja California, the State of Mexico, Durango, and
Tlaxcala is promoted. In the case of Baja California, the agreement for the creation of its housing law
is close to being signed.
3.1.3.
Homebuilding code
The Housing law states that CONAVI will design a model of regulations so the corresponding authorities
will issue, apply, and keep current and permanently updated the legal regulations, official Mexican norms,
codes of building processes, and construction regulations. In compliance with that regulation, in 2007
the Commission coordinated the publication of the Code of Housing Construction (CEV) whose goal is
to have an instrument that will incorporate the regulations for the development of safe, reliable, and
inhabitable construction in an urban context; likewise, it should make it possible to homologate the
technical, administrative, and legal concepts and criteria of the regulations for construction, respecting
the local characteristics.
In 2008, the CEV Advisory Council (CACEV in Spanish) was established; this is an interdisciplinary and sectorial workgroup to support CONAVI with various activities related to the promotion and
updating of the CEV. Meetings were also held with local authorities and representatives of the construction sector to promote the Code and establish commitments to develop and carry out a program
of adaptation and adoption, entering collaboration agreements with the states and municipalities.
Through these agreements, commitments are made to
spread the Code and carry out a training program for its implementation. It should be noted that, to date, agreements have been
subscribed with the state governments of Colima, Campeche, and
Aguascalientes, and more are being promoted with the authorities
of 13 other states in the country.
3.2.
Urban and social integration in the
recent expansion of the cities in Mexico,
1996-2006
It is estimated that Mexican cities grow at a rate of 20 thousand hectares per year—nearly 90 thousand
households settle each year in unsuitable places for habitation, under precarious modes; this informal
urbanization costs local governments two or three times more.
The distance of the complexes from the center of the city of the housing developments—built
and under construction—as well as most precarious settlements of the lower income population, taxes
both residents and authorities with extraordinary costs. It is estimated that the population can spend
up to 50% of the family income merely on transportation, and devotes 2 or more hours per day to
travel from their homes to their workplace or school and back.
Likewise, the high cost of land suitable for housing and production purposes, the cost of transportation for people and merchandise, and of communications, the costs resulting from security plans,
waste management, water and energy supply, as well as those derived from road congestion, among
others, imply barriers for the economic and social development of the population. The various levels
of government, as well as the social and private sectors, lose when cities do not function adequately.
In 2007, aided by the Autonomous Metropolitan University78, Sedesol developed the study known
as Urban and social integration in the recent expansion of the cities in Mexico, 1996-2006 with the following
goals: a) to become acquainted with and determine the degree and forms of urban-social integration
of the expansion of the cities in Mexico in the 1996-2006 period, and b) to become acquainted with
the situation within the complexes, their relationship with their immediate surroundings as well as with
the main city, and the perception of the inhabitants of the selected housing complexes.
The information on which the analysis was based was obtained onsite, via broad technical research,
covering a representative sample of the complexes built on the outskirts of the cities included in the
National Urban System in the decade mentioned above. The sample had 3,013 questionnaires taken
in 100 housing complexes or developments, located in 21 cities. The questionnaire, comprised of 520
details, forms a statistical base of 1’566,760 records,79 where the target population was the inhabitants
of the dwellings in the period mentioned above.
78 Through UAM Xochimilco’s University
Program of Metropolitan Studies.
79 A probabilistic, stratified, multi-stage
sample was performed, with an initial
selection of conglomerates as primary
sampling units.
The distance to the city urban center increases its impact when it comes to developments in rural and peripheral settings, where there is a lack of satisfactors, forcing the
residents of these complexes to travel to the city for most of their activities; this situation
was less significant in their previous dwellings.
When considering the distance related to the age of the complexes, there is a
clear behavioral pattern where, consistently, the distances from the newer complexes to
the city limit are significantly greater than for older complexes.
60.9% of the persons surveyed believe that public transportation is mediocre or bad, and it is absent within the complexes, thus
making it difficult for 6 out of every 10 families to get out. In addition,
43.34% of the sample reported isolation; that is, there are no means
to simplify access or exit to and from the complex.
Graph 34.
Travel times
Percentages by range of travel times
Source: Sedesol, 2008
45%
39.5
40%
39.1
35%
30.0
30%
24.1
25%
26.5
23.6
20%
15%
10%
7.8
5%
1.5
3.0
5.0
0%
Over 2 hr
More than 1 hr
to 2 hr
More than 30 min
to 1 hr
previous
50
Graph 35.
Average distances to the
urban center, by age of
the complex
Kilometers
Source: Sedesol, 2008.
45
40
35
30
25
20
15
10
5
0
More than 15 min
to 30 min
Up to 15 min
current
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Figure 6.
Distance from the
housing complexes to the
city center.
Guadalajara
Metropolitan Area.
Kilómetros
Source: Sedesol, 2008
3.3.
Program of Municipal Competitiveness
in Housing (PCMV in Spanish)
The PCMV seeks to identify and promote the best municipal practices that have made it possible,
worldwide, to increase inhabitants’ quality of life, promoting competitiveness and sustainability. It works
through a grading scheme that assesses the main factors that are deemed essential to understand the
dwelling’s degree of sustainability and over which the municipality has direct interference.
The evaluation criteria are classified into four dimensions linked to housing: inhabitability, competitiveness, management and good governance, and solvency. Based on the result of the evaluation, municipalities can be classed into two groups: those with a degree of sustainability and those without.
If the municipality achieves a degree of sustainability, it can receive incentives, e.g. payment of
predial through the mortgage, to encourage the identified best practices. Otherwise, a plan of action
is designed to tackle the detected areas of opportunity and support is provided for the management
of aid programs through other departments to take care of these areas.
The PCMV makes it possible to prioritize the allocation of resources necessary to promote
sustainable housing on a municipal level, while also providing advice and intermediation in those critical
areas that can be improved. It is part of an integrated effort towards the sustainable improvement of
affiliates’ quality of life and offers the municipalities who decide to join it the following benefits:
n
n
n
n
n
n
Measuring culture of the dwelling’s degree of sustainability.
Possibility to obtain economic, public promotion, and aid program incentives to improve the
dwelling’s sustainability conditions.
Strengthening and advise on the best practices on the matter.
Improvement of institutional image and increase in investors’ and developers’ confidence, among
others.
Greater transparency and differentiation from other municipalities.
Earnings from credit.
Evaluation process
n
n
n
n
n
The municipality completes a self-diagnosis containing five prerequisites and over 50 questions;
it presents a list of evidence that validates its answers.
Sedesol and the National Institute for Federalism and Municipal Development (Inafed), among
other departments, support Infonavit in validating the evidence submitted by the municipality.
The rating is calculated automatically once the self-diagnosis validation is completed, and it is
valid for a year.
Based on the result of the rating, a plan of action is designed to encourage the best practices and
help the municipality improve the areas of opportunity detected through the self-diagnosis.
The municipality provides periodical information to Infonavit to follow up the rating and the
plans of action.
Implementation of the PCMV will help encourage a competitive urban environment in terms of
inhabitability via the promotion of best practices for town planning and management on a local level.
For 2009, there is a proposal to rate 62 municipalities throughout the 31 states of the Mexican Republic,
and at least two districts in Mexico City.
3.4.
Role of the State Housing Institutions
(OREVIS)
The National Council of State Housing Institutions (Conorevi) is a non-party non-profit civil partnership, with a legal status and its own patrimony, integrated by the housing institutions of the various
states in the country.
It is established as a body of participation and coordination with the purpose of identifying the
problems related to housing issues and propose actions to the corresponding authorities. Its mission is
to represent, support, and coordinate the state housing institutions before authorities and institutions of
the federal government, as well as before the private and social sectors involved in housing. Its organic
structure is made up of a president, two vice-presidents, and six regional coordinations:
1.
2. 3. 4. 5. 6. Bajio: Aguascalientes, Guanajuato, Queretaro, San Luis Potosi, Zacatecas
Center: Mexico City, State of Mexico, Morelos, Hidalgo, Puebla, Tlaxcala, Veracruz
Northwest: Chihuahua, Baja California, Baja California Sur, Sinaloa, Sonora
West: Colima, Guerrero, Jalisco, Michoacán, Nayarit
Southeast: Campeche, Chiapas, Quintana Roo, Tabasco, Yucatan, Oaxaca
Northeast: Coahuila, Durango, Nuevo Leon, Tamaulipas
One of Conorevi’s goals is to act as an interlocutor and representative for OREVIS before the federal authorities,
and representatives of the private and social sectors, including associations, chambers, institutions, and both national and
international entities on housing-related matters.
On the other hand, the Council has acted as a consultant body in the processes for the issuance, reform, abrogation,
or repeal of all sorts of laws, rules, and regulations related to the matter of housing both on a federal and state level. The
Council is also in charge of promoting and spreading the topics related to the housing sector in the country.
3.5.
Financing for infrastructure in urban
development
The peak of the housing sector, boosted by the need to eradicate the housing backwardness, has led to an increase in the
provision of suitable land and the creation of infrastructure for housing construction, particularly of the social and economic
type, incorporating land and its corresponding infrastructure into close to 8,500 hectares each year.
This is equivalent to building each year the following political districts of Mexico City: Cuauhtemoc, Benito Juarez, and
Iztacalco, with all the uses and utilities and infrastructure that an urban area of that nature requires, with communication
and access routes, power lines, electric substations, water wells, water conduction lines, waterworks, water storage tanks,
sewage collectors and subcollectors, water treatment plants, rainwater networks, equipping for healthcare, education,
culture, leisure, sports, and security, all worth an estimated 40 billion pesos.
However, given the states’ and municipalities’ lack of monetary resources to face this commitment, part of the responsibility for building the infrastructure has fallen to the developer. Thus, it is
not possible to provide the new housing areas with the necessary total infrastructure, as the goal is to
build economic and social housing at affordable prices for the population that earns between 3 and 5
MW. This is why there are currently some housing complexes that are not linked to the nearby urban
areas, while others lack utilities and yet others, equipping.
Graph 36.
Composition of the
sale price per m2 of
construction
Project of Infonavit calculation, license and rights
Opening expenses, interests, bridge loan, and trust
Plot
Source: SHF, 2008.
Equipping
Overheads, profit and promotion
Secondary infrastructure (urbanization)
Primary infrastructure
construction
m2 of construction
Thus, the Group of Promotion and Evaluation of Integrated
Sustainable Urban Developments (DUIS in Spanish)—where Sociedad Hipotecaria Federal and Banco Nacional de Obras y Servicios
Públicos (Banobras), among other departments of the Federal government, participate—is working to create financing, capital, and/
or guarantee structures that projects such as DUIS can receive for
the construction of primary infrastructure.
Individualization
Urbanization and
construction
Cedevis
Infonavit
Securitization
Mortgages
-up to 20
-up to 90% LTV
Financial intermediaries
Concessionaires and PPS
Invies and municipal
governments
SHF
financial
intermediaries
Large developers
Recursos
propios
Mainly
Siefores
GPO
Regional developers
Equipping and
acquisition of
superplots
Basic
infrastructure
Acquisition of
land bank
Fovissste
Debt and capital
Securitization
GPO
SHF
GPO
Main sector
of attention
Public debt
Specialized
developers
International capital
funds:
3 to 5 years
Large
developers
Market
Multilateral org.
Capital
Banobras
Figure 7.
STAGES OF APPROVED
PROJECTS (DUI S)
Source: SHF, 2008.
3.5.1.
Urban solid waste
Mexico, like many other countries worldwide, faces huge challenges in urban solid
waste management. The high degree of urbanization, its industrial development, the
technological modifications, and the change in the population’s consumption patterns,
significantly increased and modified the amount and composition of urban solid waste.
Thus, currently, the generation per inhabitant/day is estimated at 965 grams, placing
the estimated total on a national level at 103 thousand tons per day.
When analyzing generation per capita on a state level, it is clear that Mexico City is
the main generator, which shows clearly the relationship between solid waste generation
and the degree of urbanization and economic development of the regions.
A comparative analysis on a state level results in observations that could guide
the national policies, using the five states with the most generation of urban solid waste
(ton/day) in the country as reference.
Table 23.
Solid waste generation
in Mexico, 2008
Comparison by areas and states
with the most generation
AREAS
WASTE STATE WASTE
(KG/INHAB/DAY)
(KG/INHAB/DAY)
Northern border
1.070
State of Mexico
16,900
North
0.848
Mexico City
13,000
Center
0.938
Jalisco
7,425
Mexico City
1.471
Veracruz
5,575
South
0.742
Nuevo León
5,245
The changes in technology and consumption patterns have had a bearing on the
amount and composition of the solid waste in Mexico. Over four decades ago, plastic barely
represented 1%, and glass 3% of the total waste, whereas organic matter was and still is the
main bulk. In time, the latter tends to decrease its share gradually, going from a range of 65
to 70% in those decades, to a range of 50 to 55% nowadays. These changes are due to the
ever greater incorporation of plastic products in every form and shape and the consumption
of disposable products and containers.
It is estimated that, overall, 53% of the national urban solid waste is organic, whereas
35% is potentially recyclable, like paper and cardboard (14%), glass (6%), plastic (11%), tin
(3%), and textiles (1%). The remaining 12% is wood, leather, rubber, waxed cardboard containers, rags, and various fibers.
In Mexico, solid waste storage is generally done at the site where it is generated, such
as the homes, businesses, and industries. On a household level, the use of polyethylene bags
(generally from supermarkets) is the most common storage method and represents one of
the main operation problems in the processes of collection, transportation, and final disposal,
as their low resistance and low specific gravity cause them to break as they are being transported to the collection truck, or fly off during transportation or once they are deposited
in the landfills, or non-controlled sites. This reduces the efficiency of the processes, raises
costs, pollutes, and generates a bad image. In some places, containers on streets are used for
storage, but this system is often not adequately operated.
The country’s economic situation has limited the allocation of financial resources for solid waste management in
general, and specifically for the final disposal. This is because,
normally, municipal authorities give preference to other
types of works and services that they believe have a higher
priority; thus, support and resource allocation for this sector
has been limited.
However, in the last few years, steps have been taken to
improve the final disposal of waste; nationwide, final disposal
in landfills and controlled sites has risen to a little over 30%
in the last decade.
On a national level, 67% of the waste is deposited in
landfills and/or controlled sites, and 33% is disposed of in sites
with no control.
3.6.
Integrated Sustainable Urban
Developments (DUIS in Spanish):
progress and outlook
The DUIS group has consolidated its goal in the last year. 80 Currently, 32 projects have been registered
nationwide for evaluation, and there are more awaiting incorporation, representing one million 800
thousand dwellings on a surface of 46 thousand hectares.
80 Cidoc and SHF. Current Housing
Situation in Mexico 2008, p. 82.
This leads to the constant interest in promoting projects that will generate sustainable
cities with a high urban level, that will guarantee the population a better quality of life through
proximity to the basic services, to the work sources, spaces for recreation and coexistence,
efficient connectivity, and that will promote urban life.
The evaluation process is based on a system of analysis divided into three levels: regional,
urban, and local. Prior to the process of analyzing and weighting, the projects must meet a
series of prerequisites, such as the feasibility of water, authorizations from the municipal and
state governments, and a valid plan or program for the population center.
Once a project is awarded a DUIS grade, it is subjected to biannual evaluation and
follow-up during the execution stage in order to guarantee that the actions and works promised in the approval are carried out.
The coordination and participation of all five secretariats with the financial and sector
institutions that are part of the Group has been fundamental, as they have managed to integrate the evaluation system through a consensus.
3.7.
Cities and climatic changes
Mexico is one of the most vulnerable countries to phenomena related to climatic changes. 87.7 million
inhabitants reside in risk areas; 70% live in urban areas; 81 34.4% of the population is exposed to hurricanes, and around 33.2% is settled in areas susceptible to floods.82 Despite the efforts to fight the
phenomenon of irregularity, it continues, and roughly 90 thousand irregular plots are urbanized each
year, many of which are found in high risk areas and areas unsuitable for urban development.83
It is worth noting that in the last 20 years there have been 75 geological and hydrometeorological events that have led to over 10 thousand deaths, tens of thousands of affected individuals, and
damages to the national economy. The effects of hurricanes Isidore (2002), Emily (2005), and Dean
(2007) alone caused the federal government, together with the states, to spend 3.421 billion pesos on
housing reconstruction programs.84
81 Secretaría de Desarrollo Social,
National Urban Development Program
2009-2012. Mexico. (En prensa).
82 Mancilla, Elizabeth (1996), Prevención y
atención de desastres en Mexico en Allan
Lavel, et.al. Estado, Sociedad y Gestión
de Desastres en América Latina. La Red.
Mexico.
83 Commission for the Regularization of
Land Tenure (Corett in Spanish). Cited by
Sedesol, National Urban Development
Program 2009-2012, op. cit
84 Undersecretaryhip of Urban
Development and Spatial Planning. Sedesol.
85 Secretaría de Medio Ambiente y
Recursos Naturales, Tercera Comunicación
Nacional ante la Convención Marco de las
Naciones Unidas sobre el Cambio Climático.
Semarnat-INE, Mexico, 2006.
86 Conafovi. Uso eficiente de la energía
en la vivienda. Colección Guías Conafovi,
Mexico, 2006
On the other hand, in 2002, Mexico issued 643 million tons of CO2 equivalent, corresponding to
1.6% of the total world emissions, which places it as the twelfth most important issuer in the world.85
With regard to the housing sector, it consumes roughly 19% of the energy produced in the country
and, together with the retail, service, and public sectors, represents 23% of the energy consumption
in Mexico.
Of this 23%, housing alone consumes 83%.86 According to a study by the International Energy
Agency (IEA, 2008), cities are responsible for between 60% and 80% of the emission of Greenhouse
Gases (GHG); thus, it is their duty to play a key role both in the reduction of these emissions, and in
adopting strategies to adapt to climatic changes.
These estimates are not surprising considering that cities are the places where productive
activities (industrial, commercial, services, etc.) concentrate, together with the demand for inputs to
function, such as electric energy, drinking water, street lighting, urban transportation, final disposal of
solid waste, sanitation, and waste water treatment, etc.
Currently, the National Urban System (SUN in Spanish) is integrated by 358 cities with over 15
thousand inhabitants whose population in 2005 totaled 72.7 million persons, representing 70.4% of
the national population. As housing drives urban development, it is essential to plan its development
and reduce its impact through urban development and spatial planning policies that will consider its
location, density, availability of social equipping, and the existence of work sources, connectivity, urban
design, and that will avoid at all costs a scattered city model that consumes land, natural resources,
and energy.
In terms of relief, through the Undersecretariat of Urban development and Spatial Planning, and
applying the Guidelines for Equipping, Infrastructure and Integration with the Environment, derived from
Article 73 of the Housing law, Sedesol is promoting an urban development and spatial planning policy
for the housing complexes that will guarantee the mix of compatible land uses that will encourage
small trips and walking.
These guidelines discourage the use of motorized transportation and decrease consumption of
fossil fuels, in addition to privileging public and non-motorized transportation over private, as well as
the use of alternate forms of transportation, such as bicycles and walking.
On the other hand, urban solid waste in Mexico has a high content of organic material (over
half); thus, there is considerable potential to reduce CO2 equivalent emissions, estimated at around 16.6
million and 18.7 million tons for 2020. Sedesol participates, in coordination with SEMARNAT and the
local governments, in projects to reduce or eliminate GHG emissions in landfills.
In terms of adaptation, through the Program to Rescue Public Spaces, Sedesol seeks to contribute
to the reforestation and preservation of the urban green spaces which generate microclimates and
relieve the effects of heat waves resulting from global warming. This program renewed 1,855 public
spaces in 287 cities with over 50 thousand inhabitants between 2007 and 2008. The goal for 2009 is
to recover 850 spaces in 290 localities.
On a city level, it is essential to create an Atlas of Natural
Risks and Hazards, which must be established as an input for planning the urban development. Thus, Sedesol created the Manual for
the incorporation of the atlases of hazards and risks into the planning
of urban development, currently under review to be released. In
2008, 16 Atlas de Riesgos were created at a total cost of 9,617,600
million pesos.
On a regional level, and in order to protect the cities from
the effects of extreme natural phenomena, it is essential to protect,
and at times, also reforest wetlands, mangrove swamps, and forests
which provide environmental services to the cities, capture carbon,
are buffer zones, and prevent the dragging of materials and their
sedimentation in riverbeds and hydraulic infrastructure.
3.7.1.
Rural housing and climatic changes
According to the 2007 National Energy Balance (Sener, 2008), total energy consumption in the residential
sector depended 27.6% on firewood. Likewise, according to the National Inventory of Greenhouse Gas
Emissions (National Institute of Ecology, 2006), of the total emissions from final use through activity,
deforestation alone contributed with 14% of the total emissions of the country, estimated at 643
million tons of CO2 equivalent. Thus, through the Microregions Unit, Sedesol promotes a program to
substitute open fires for efficient firewood stoves, one of whose goals is to reduce the use of firewood
as fuel for domestic use.
In some regions of the country, firewood production is not done in a sustainable way, generating
net emissions of GHG. More important still are the various damages to health—particularly for the
women and children of marginalized rural communities—caused by pollution within the dwelling. With
the efficient firewood stoves, there is a reduction of around 99% of the emissions of carbon monoxide
and of carbon particles in the domestic environment, compared to the traditional open fires, and the
volume of firewood consumption decreases by around 70%, which helps reduce the loss of mounding
plants and preserve the carbon sinks.
During fiscal year 2008, through the Unidad Microregions, Sedesol distributed 82,307 ecologic
stoves nationwide to the same number of rural dwellings. Of these stoves, 11,787 are within the universe
served of Strategy 100x100—that is, in the municipalities with a lower Human Development Index (HDI)
which simultaneously have forest vocation.
Type of stoves
Crafted stoves
Self-built stoves
Total # of stoves installed
60,907
21,400
82,307
Table 24.
Efficient firewood stoves
installed in 2008
It is worth noting that of the 82,307 stoves installed, 10,639 actions were carried out by the
National Forestry Commission(CONAFOR) with resources from Sedesol worth 16.3 million pesos,
whereas the Microregions Unit invested slightly over 109 million pesos for the total actions during
fiscal year 2008.
For the fiscal year 2009, the goal of dispersion estimated by the Microregions Unit totals 121
thousand units in the same number of dwellings, where the plan is to install 71,852 prefabricated or industrialized stoves, and 49,148 crafted stoves or self-built in situ. Around the middle of this year, there was
a centralized public auction for a total of 56,946 stoves, corresponding to 49% of the annual goal.
3.7.2.
Specific Program for Sustainable Housing Development in face of Climatic Changes
In 2008, CONAVI presented the Specific Program for Sustainable Housing Development in face of Climatic Changes as part of
the activities of the Clean Development Mechanism (CDM) of the Kyoto Protocol. This Program—the only one of its kind
worldwide—will not only benefit from the CO2 emissions reduction certificates or Carbon bonds, but will become actively
incorporated into the housing sector of the country in the international efforts to relieve the climatic changes.
Among this program’s goals, it is worth noting, among others: to establish guidance of energy and environmental
sustainability in the policies and actions promoted, financed, or implemented by government and private institutions; plan
guidelines that will favor the sustainability of housing development; and generate additional financing to housing through
the CO2 emissions reduction certificates.
In April 2009, a methodology was developed that will enable a calculation of the baseline, the
procedure to monitor, and the conditions of additionality. This methodology is oriented towards housing
developments that will incorporate different combinations of technological elements for energy efficiency.
It should be approved around midyear by the UN(Board of Directors of the CDM).
The methodology covers aspects of:
n
n
n
n
Reduction of electricity consumption in two aspects;
Bioclimatic design (mullions on windows, cross ventilation, heat chimneys, and thermal
insulation) and efficient technologies (light bulbs and air conditioning);
Renewable electricity production (photovoltaic systems); and
Reduction of gas consumption for water heating (solar heaters and circulation heater).
Implementation of the Program includes the development of a pilot project known as Valle las
Palmas, located in Tijuana, Baja California.
The reduction of GHG emissions assumes actions centered on the reduction of electricity
consumption, the production of renewable electricity, and the reduction of gas consumption for water
heating. However, they must be placed in their just dimension, and factors related to location, integration
into the urban fabric, and design guidelines must also be considered in order to have the real Carbon
Footprint left by the housing actions that have been carried out; these footprints will be presented before
the Mexican Committee for Emissions Reduction and Greenhouse Gas Capture Projects(COMEGEI)—
the highest national authority that approves the CDM Projects in the country.
3.7.3.
Basic package for the Ésta es tu Casa subsidy program
In the framework of the Subsidy Program operated by CONAVI, and in order to promote the
production of sustainable housing in the country and the specific program for Sustainable Housing development in face of Climatic changes, the Technical Committee of the program approved and published
on the website of the Commission <www.conavi.gob.mx> the Basic Package Features for Subsidy Program
2009, which include the minimal elements that must be considered for the sustainability of the new
dwellings eligible for federal subsidies, considering the following criteria:
a)
b) c)
d)
e)
Analysis of the site
Efficient use of energy
Efficient use of water
Adequate solid waste management
Maintenance
It is worth noting that each of these general criteria include various aspects that will
require a degree of compliance; evidence that the developer must present; and the application
criteria.
Likewise, as the country is a biogeographic mosaic, a regionalization was established to
identify the areas with similar bioclimatic features and thus boost their advantages.
The features of the basic package for the subsidy program represent considerable progress on the policy towards sustainable housing development as the granting of a subsidy by
the Federal government, in addition to benefiting the families with the subsidy, actively and
directly promotes the construction of new sustainable housing among the sectors involved in
the production and financing.
3.7.4.
Sustainability on an urban level
Sedesol, through the Undersecretariat of Urban Development and Spatial Planning, designs the public
policies to rechannelize the development that will make it possible to relieve the deterioration of the
land, the urban disorder, and contribute to improve inhabitants’ quality of life in Mexican cities.
Among the premises of the public policies, we find: promotion of territorial patterns of concentrated decentralization, increasing the density in the population centers, as well as the hierarchical
distribution of equipping, establishing an efficient primary communications and telecommunications network, and encouraging settlement of intraurban areas in order to simplify the provision of services.
As part of Sedesol´s projects, we find technical advice for the creation of the programs and plans
for urban development—of metropolitan areas, population centers and partial—so they will match
the guidelines and strategies contained in the programs for ecological territorial ordinance, benefit the
population, and encourage the economic development of the cities.
Some of the programs supported in 2008 were the Tlacotalpan Management Plan (delivered
to the municipality), the Urban Development Program for the Villahermosa-Nacajuca Metropolitan Area,
delivered early this year, and the Urban Development Program for the La Laguna Metropolitan Area, (covering four municipalities: Torreon, Lerdo, Matamoros, and Gomez Palacio In the states of Durango
and Coahuila).
87 Sedesol. 2008 figures..
Technical assistance is provided to the local governments for the creation of various instruments:
structuring of land register systems, management models in transportation and urban mobility, as well
as the creation of atlases of natural dangers and risks.
Some cities that received technical support in 2008 were Tuxtla Gutierrez, Morelia, and Acapulco,
including the analysis, evaluation, and recommendations regarding urban transportation, in addition to
integrating their requests for resources for the Federal Aid Program for Mass Transportation from the
National Fund for the Development of Infrastructure (Fonadin).
With regard to management, support was provided to Puebla, Culiacan, and Salamanca
through a global scheme that includes diagnosis, systematization, design, and ongoing training in order
to use informatics technology and specialized tools for the management of public transportation and
thoroughfares.
Through Sedesol´s Public Spaces Rescue Program, five million persons in 230 municipalities around
the country have been benefited as, in 2007 and 2008, 1,855 public spaces were rescued.87 In addition
to the physical rescue of the spaces, the program as a whole encourages work with the population
promoting the community’s appropriation of the spaces through the organization of various social,
physical, and cultural activities.
Moreover, Sedesol has defined and implemented guidelines and norms of urban development
related to urban sustainability and spatial occupation. In Mexico, urban management operates by
constitutional stipulation, in a basically decentralized form from municipalities. This work will contribute to establish norms on matters that must be assumed throughout the country, and to propose a
series of guidelines that are to be incorporated into the local laws and rules. One of the most recent
actions on this matter regards the guidelines for urban development derived from Article 73 of the
Housing Law. n
3.8.
Key findings
n
n
n
n
n
n
n
n
n
There are plans for urban development for the regulation of the land uses in
70 localities with over 50 thousand inhabitants, 161 with under 50 thousand
inhabitants, and 41 metropolitan areas in the country.
Sedesol created the technical specifications derived from Art. 73, that will
become valid on January 1, 2010.
At the end of 2008, 20 states have a Housing Program and Law to follow up
on actions on the matter.
Infonavit started the Program of municipal competitiveness in housing to identify
and promote, through incentives, the best municipal practices.
It is estimated that each inhabitant/day generates 965 grams of urban solid
waste in Mexico. Of the total waste, 67% is deposited in landfills and/or
controlled sites, and 33% is disposed in non-controlled sites.
The 32 DUIS projects represent 1 million 800 thousand new dwellings.
In 2009, CONAVI developed a methodology applicable to housing developments that will incorporate different combinations of technological elements
for energy efficiency. The proposal is awaiting approval by the UN.
CONAVI published on its website the Characteristics of the Basic Package for
the Subsidy Program 2009 for the sustainability of new dwellings eligible for
federal subsidies.
Through Sedesol´s the Public Spaces Rescue Program, in 2007 and 2008, 1,855
public spaces providing urban inhabitability have been rescued. By the end of
2009, there will be 850 more spaces.
Section 4.
Land and land banks
4.1.
National land policy
Until a few years ago, the processes that determined the land and housing requirements were preceded by an explosive demographic process and the fast rate of urbanization of the large cities, and new
housing construction was foreseen as the ultimate housing solution.
Currently, demographic growth has moderated, but there is strong pressure from housing
needs in view of the greater population in the mid age groups that multiply the number of households; likewise, migration phenomena are changing. All this implies not only the construction of
new housing, but also the strengthening of a secondary market for used and rental housing to
meet the effective demand and try to eradicate the historic backwardness.
In this context, the land needs for the segments of the population that earn under 3 MW
are estimated at around 45,071 hectares by the year 2012, which represents 54.4% of the total
requirements. Based on the type of locality of the SUN, the highest demand for land for housing
will come from metropolitan areas (57.8%), followed by rural locations (24.2%). In this scenario,
a total of 3 million 988 thousand dwellings will be required over the next 5 years.
By 2012, over half of these needs (57.5%) will be found in the metropolitan areas of the
SUN, followed by the rural locations (24.5%). Suburban cities and the rest of the urban population centers will come third, representing 17.9%.
The country’s urban policy is designed to generate guidelines that will revert the processes
of precarious urbanization within the cities, based on:
n
n
n
n
Guaranteeing a sufficient offer of legal land, with networks of public services and equipping
for urban use;
Favoring the reutilization of underused central areas with basic infrastructure;
Encouraging the construction of quality housing following sustainability criteria and with
generalized coverage of basic services; and last,
Promoting the legal and institutional innovation for the management of land and
housing.
For this purpose, in the specific case of national land policy, the goals are to:
n
n
n
Create a portfolio of suitable land for housing and urban development, in order to guarantee an
orderly growth of the cities and prevent the illegal occupation of land.
Incorporate irregular settlements, locating them in suitable sites for comprehensive urban improvement projects, in compliance with the city project established in the urban development
programs, as well as performing an evaluation of the scope and results of the regularization
programs.
Identify disused and/or underused land in consolidated areas within the cities, and take advantage
of the existing infrastructure and urban services, as well as the integration of the land with public
use into the state and municipal urban development programs.
4.1.1.
Costs and benefits of the formal and informal land markets for low
income families
With resources from the World Bank, Sedesol developed the study known as Costs and benefits of
the formal and informal land markets for low income families between 2007 and 2008, which analyzed
the operating condition of the land market in eight cities around the country: Tijuana, Tampico, Mérida,
Colima, Durango, Chilpancingo, Los Cabos, and Mexico City (Historic Center).
This work makes it possible to find elements on which a public policy can be based that will
establish various inhabitability alternatives for the low income population, according to their possibilities
and capacities, enabling them to progressively move towards the formal supply of land and housing,
thus guaranteeing them a safe and legal location within the urban structure.
The study provides necessary elements to define a new form of serving urban land, that will
establish a clear and precise policy for the generation of supply within the reach of the various market
segments, in line with the urban development policies of each of the Mexican cities.
Urban development mustn’t be regulated by the real estate market or by the irregular occupation
and land exploitation processes. On the contrary, urban development must prevent the existence of
these irregular processes, and regulate the territorial expansion of the real estate market.
Likewise, the study identifies, explains, and evaluates the real situation on the matter and defines a new policy that will reduce costs and raise the benefits for the various players. It achieves a real
estimate of the specific costs of formal and informal development and assesses its impact on owners
and developers, as well as federal, state, and municipal authorities.
Thus, the general objective of the study was: “To generate an adequate quantity and quality of
information to achieve a scientific and updated acquaintance with, and understanding of the economic
and spatial characteristics of the formal and informal processes of the land market in Mexico, as well
as propose the necessary reforms to the legal framework for urban planning that will make it possible
to improve the conditions of the urbanization processes in the cities of the country and optimize the
application of public resources that target low income families in terms of urban development and
housing”.
A methodology was designed to carry out this study, establishing conventionally accepted statistical and analytical parameters in the framework of performance of the urban and spatial development
policies for the three levels of government, aimed at generating a sufficient and adequate supply of land
that will meet the estimated demand for the next 25 years.
This means designing new instruments to exercise the public authority on the matter, or strengthening the existing ones by considering the problem of urbanizable land as a strategic factor for the
national development, at the same level or higher than, for instance, the problem of drinking water
supply in the cities, or the preservation and use of natural areas.
The results of the study made it possible to corroborate empirical intuitions, formalizing them
through measurable data and case studies in the eight cities selected. For example, it was found that
the factors for the creation of land prices are related to the stages of the land occupation process
and of the production of urbanized land, and therefore, of the dwellings built on it. Two types were
identified: formal occupation and irregular settlements.
In the case of the type of land occupation in the formal market, there is a linear and transparent
four-stage process:
n
n
n
n
Stage 1: purchase of land with an urban use.
Stage 2: official approval to develop, urbanize, and build dwellings.
Stage 3: land urbanization; in this stage, the plots can be sold, although only 5% of the formal
offer corresponds to the sale of urbanized lots, whereas on the remaining 95%, dwellings are
sold.
Stage 4: construction and sale of the dwellings.
The whole process can last from 2 to 5 years, depending on the size and type of the development.
In the case of informal human settlements, the stages do not follow a linear sequence, and even
their content can vary:
n
n
n
n
Stage 1: occupation of the land via some commercial act or invasion; thus, the change of the real
use of the land is de facto;
Stage 2: process of housing construction and obtaining the first basic services. A rough draft of
the organization of the possessionaries is made to carry out the regularization.
Stage 3: following the regularization of the plots comes the process of supplying all the basic
services.
Stage 4: consolidation and integration into the city’s urban structure.
On the informal market, the process can very due to certain circumstances. When there is no
intervention from some government body from the start of the informality, the shift towards formality
takes a little over 10 years for settlements created before and during the eighties; but if the settlement
began in the late nineties or in 2000, then formality is obtained in under five years.
In sum, it can be said that the price formation of the informal and formal offer is the result of a
combination of similar factors in different sequences and times. In order to compare them, the characteristics of each type of settlement/development were divided into four analysis blocks:
Section 4. Land and land banks • 103 •
Benefits
Block 1. Land/housing products and their pricesal
Costs
Benefits
Formal
Costs
Table 25.
Factors to analyze the
price formation in the
formal and informal
markets
Possibility to buy plots to
build housing at prices
in line with their income
level, around 85 and 75%
cheaper than on the formal
market.
No possibility to buy
urbanized plots; only
dwellings sold
Square meters of individual
plots are between 50 and
100% smaller than on the
informal market
The square meters of
the individual plots are
between 50 and 100%
larger than on the informal
market
Source: Sedesol 2009.
Due to their progressive
nature, the size of the
dwellings can be up to
three times larger than
those offered on the
formal market, in addition
to the flexibility to adapt
to the family’s needs and
capacities
The initial dwellings of
the informal settlements
are built with nondurable
and low quality materials,
compared to the quality of
the materials and finishes
offered on the formal
market
Dwellings with good quality
materials
Not flexible dwellings,
especially in affordable
entry level type, which has
no room for growth and
is small in terms of square
meters (44.8 and 59.3 m2)
block 2. Form of acquisition, down payments, terms, and monthly installments
informal
formal
Benefits
Costs
Benefits
Costs
Down payments are
roughly ten times less than
on the formal market
Down payments are
roughly ten times greater
than on the informal
market
The terms granted for the
payment of the plots range
from one to two years on
average, and the monthly
installments average
$400.00, which allows
families with incomes
below the minimum wage
to buy land.
On the formal market,
economic housing is
offered for families with
incomes of around five
minimum wages.
Block 3. Service levels and the times in which the zones were served
InformalFormal
Benefits
Costs
Benefits
The level of services in
informal settlements after
2000 are only electric
energy, drinking water, and
in some cases sewage.
There is no paving,
sidewalks, or street lighting.
It has taken between 12
and 16 years to achieve the
levels of services offered
on the formal market.
Costs
The level of services of
all private developments
include: rough dirt
tracks, middle and low
voltage network, drinking
water network, sanitary
and rainwater drainage,
thoroughfares and
sidewalks, signaling, outside
lighting
Block 4. Location in the city, access roads, and quality levels of the transportation service
InformalFormal
Benefits
Costs
Benefits
Costs
The location of recent
informal settlements (after
2000) in terms of the
distance to the outskirts of
the cities is 5% outside the
urban limit.
Location of the formal
developments in terms
of the distance to the
outskirts of the cities
is between 5 and 10%
outside the city limit.
In terms of road access,
rating is bad.
In terms of road access,
ratings go from regular
to bad
Quality of the
transportation is bad.
Quality of the
transportation is regular
to bad.
4.2.
Geographic location of land
banks, magnitude and legal
origin
88 The growth areas foreseen in the urban
development plans or programs correspond
to the surface that meets the necessary
conditions to be incorporated and that can
eventually be acquired by a public institution
or entity to become their patrimonial land
bank.
The dynamic growth seen in the population centers becomes more and more pronounced. On the one hand, the constant migration of population from the country to the
city, together with the economic development of the urban environment, has resulted in an
alteration of community life within the ejidos and communities of the country.
Thousands of hectares in the social regime (ejido and communal) have been affected to
be incorporated into the urban sector by the demand for land, housing, all types of services,
and physical spaces to set up or expand facilities for industry, sports, education, etc., including
those related to future growth and the preservation of natural spaces, which are ultimately
expressed as areas for growth in the urban development plans or programs.88
The current legislation in the country is remarkable for considering one of the classic
instruments for the incorporation of land into urban development: the creation of land banks.
However, this tool assumes that the state or municipal governments will gain ownership of the
land and then transfer it—a matter that is often all but impossible due to the lack of public
budget resources that will make it possible to finance these actions in the time and magnitude
that the market demands, particularly in the least favored sectors of society.
It is worth noting that the legislation foresees other additional instruments whose
goal it is to incorporate land into urban development: land purchases and sales; donation or
transfer; expropriation for public use; subsidies for urbanization and construction in growth
areas; fiscal measures; agreements between the public, private, and social sectors; and corporations for urban development; however, in most cases, there is no detailed legislation for
their implementation in the country.
On the other hand, through the Habitat Program, the government contributes to overcome poverty and improve the quality of life of the inhabitants of urban-marginalized areas by
improving the urban environment of these settlements. For this purpose, one of the actions
the Program has been taking advantage of is the acquisition of land to enable the development
of housing actions aimed at the population in a situation of patrimonial poverty.
Thus, in the 2003-2008 period, the Habitat Program assisted the state and municipal
governments through coparticipation schemes of federal and local economic resources, in
the acquisition of land for social housing, and urban development. This translated into a series
of actions that enabled the acquisition of 3,067 hectares in 69 cities and metropolitan areas
in the states of the country.
Population rangeNo. of actionsNo. of citiesSurface
Number of inhabitants
100,001 on
104
39
hectares
2,810.78
Table 26.
Habitat Program, land
acquisition
50,001 to 100,000
14
9
90.42
15,000 to 50,000
21
21
166.39
139
69
3,067.59
Total
As a complement to, and in agreement with information
gathered by CONAVI, OREVIS had 33 thousand 475 hectares for
patrimonial land bank in 2005.89 n
Constituted patrimonial land banks
163,312,818.09
Available land banks
47,496,275.45
Identified patrimonial land banks
98,782,114.98
Without classification
17,458,004.60
Land bank under development, constituted on scrubland, constituted urbanized and potential (Jalisco)6,425,873.16
Grand total 2005
333,475,086.28
89 The patrimonial land bank is land
that has already been acquired and
is part of the patrimony of a public
institution or entity.
Table 27.
Inventory of OREVIS’ land
banks, 2005
Square meters
Source: created from CONAVI records,
2005.
4.3.
Key findings
n
n
n
Sedesol estimates that the land requirements for the population segments
that earn under 3 MW will amount to around 45,071 hectares by the year
2012.
The greatest demand for land for housing will come from the metropolitan
areas, representing 57.8%, followed by rural locations, at 24.2%.
On the informal market, down payments to purchase a dwelling are around
ten times lower, and the size of the dwellings, due to their progressive nature,
can be three times greater.
Section 5.
Financing for housing
5.1.
Confidence in the housing market in Mexico:
credit lines from the World Bank and the
Inter-American Development Bank
Until 2008, the Organic Law of Sociedad Hipotecaria Federal stated that, as of October 2009, it wouldn’t
be able to continue granting funding to financial intermediaries, namely Sofols, in order to promote other
sources of financing, such as securitization. Thus, SHF’s participation in mortgage financing decreased
somewhat. However, this year saw a significant reactivation of SHF as a result of the modifications
that Congress approved to its Organic Law—among others, the restriction that prevented it from
providing financing was removed.
Nowadays, the housing actions funded by SHF have increased 138% vs. 2007, for a total of
150,873 as, in addition to the individual loans that had been granted, construction loans (bridge loans)
were reactivated, and microloans were consolidated, boosting the sector.
The international financial crisis has pushed the federal government into designing new strategies to continue with the housing offer that the population is demanding—mainly in the lower income
segment.
Thus, on January 7, 2009, Mexican President Felipe Calderon Hinojosa, in the framework of the
National Agreement in Favor of the Family Economy and Employment, announced that SHF would
increase the credit aids for the popular housing solutions.
These aids have two key goals:
n
n
Enough liquidity in the sector—particularly in Sofols and Sofoms.
Necessary resources to meet the housing production, particularly destined to the low income segments, given the
demand and backwardness yet to be covered.
In order to meet these goals, 60 billion pesos will be moved from the space that SHF has in its balance sheet,
given its degree of capitalization and its operation, as well as the two loans from the World Bank and the Inter-American
Development Bank for one billion and 2.50 billion dollars, respectively.
This makes it possible to progress on the goal of promoting the development of efficient and inclusive mortgage
markets in Mexico, supporting SHF with financial instruments that will enable it to provide liquidity and stability to the
primary and secondary mortgage markets, via a credit line and an element of technical assistance, that will allow SHF to
perform studies, offer consultancy services, and other actions.
The resources will be used mainly to:
n
n
n
n
Strengthen the granting of special lines to meet the lack of current liquidity (construction and individual loans).
Continue with the traditional operation, financing new bridge and individual loans.
Continue with the development of mortgage-backed markets and instruments.
Encourage private financing through the granting of guarantees (GPI, GPO).
In addition, nearly 70 billion pesos will be injected through the guarantees that
encourage private investors’ participation. With the return of SHF to financing bridge
loans, and with the certainty provided to the sector regarding the availability of enough
resources, it is expected that the homebuilding train that the sector has been on so
far will continue.
5.1.1.
Mortgage Sofols and Sofoms, towards a change in the business model,
or a change in regulation?
The global financial crisis has brought the model of supervision and regulation of nonbank financial
intermediaries and of Asset Backed Securities transactions into question. In the countries that have
faced deep real estate crises, such as the US, Europe, and some regions of Asia, an interesting questioning has come up, intending to evolve towards the best regulatory model for these elements of the
real estate sector.
In general terms, there is a debate regarding the existence of inadequate, or unaligned incentives
which led to what in economic theory is known as the existence of moral hazard and adverse selection.
Moral hazard, as it shares part of the risks and therefore of the potential losses, among public and
private institutions, but not so the profits; and adverse selection, because of its slant towards the more
vulnerable segments, which underestimated the implied risks of the transactions.
In the case of Mexico, the problem is fortunately much smaller both in size and coverage. Single
purpose mortgage financial institutions (Sofols) and multiple purpose (Sofoms) have been the most
affected institutions in this environment.
A brief summary of Mortgage Sofols’ contribution
90 This figure does not consider the Sofols
that have become Sofoms and that are not
forced by law to provide information to the
National Banking and Securities Commission
(CNBV) on the situation of their portfolio.
In the housing expansion cycle that began back in 2000, financing from Mortgage Sofols was key, as
they contributed positively to the sector’s growth.
Although officially established in 1992, the Single purpose financial institutions, Sofols, began to
stand out as an alternative source of financing to banks after the economic crisis of 1995. The lack of
liquidity in the banking system in those years, and the high rates of delinquency made it very difficult to
jumpstart the economy; thus, the Sofols became generally used, with good market acceptance, decidedly
boosting the growth of the real estate sector, and particularly, of housing construction.
One of the sectors that benefited the most from the introduction of Sofols was the construction
industry, and particularly the housing market. The creation of Sociedad Hipotecaria Federal in 2001
channeled complementary resources, through credits for the real estate sector, to the loans offered
by Infonavit and FOVISSSTE.
Initially, Sofols’ delinquent portfolio was considered as part of the housing credit, but as of 2005,
BANXICO separated the mortgage institutions. From then on, the delinquency rate remained stable
until 2006, reaching a maximum of 4.5% in December that year, and actually decreasing to 4% in 2007.
However, by the end of 2008, the delinquency rate rose to 11%.90
Likewise, the recent macroeconomic performance has inhibited the dynamism of long-term
financing and revealed serious solvency problems in the sector. The focuses of service were activated
when some of the most important Sofols declared themselves to be in a fragile situation, generating
uncertainty about their permanence on the market.
Based on the main features of mortgage financing presented,
this section discusses the main characteristics of the Mortgage Sofols,
analyzes their recent evolution, and evaluates the sector’s short-term
outlook in face of the effects of the economic recession.
The role of Sofols in Mexico
The acceptance of alternative sources for housing finance was initially more helpful to those who were
not affiliated to Infonavit or FOVISSSTE. Later, the reform which in 2005 created Hipotecaria Nacional
made it possible to combine the aid from Infonavit with other financial institutions of commercial and
development banking.
Since 2002, Sofols’ relative importance in financing for housing acquisition has declined. From
representing 16.4% in that year, it went to 8.3% in 2005 and 5.7% by the end of 2008.91
The lower market penetration is due to some financial type factors, or else, accounting factors,
such as the following:
n
n
n
n
n
n
91 Securitizations alone, which in 2005
amounted to 2.86 million pesos, went to
13.88 million pesos in 2007. However, they
decreased drastically in 2008 to 5.28 million
pesos.
Securitization of a significant part of their credit portfolio.
The purchases that some banks made of the credit portfolio of some Mortgage Sofols between
2005 and 2006.
The acquisition of various Sofols by banking institutions.
The reclassification of some Mortgage Sofols into Sofoms, which affects the available information,
as the latter are not obliged to provide statistics.
To a lesser extent, the reclassification that the National Banking and Securities Commission
(CNBV in Spanish) made of credit to developers as credit to companies and no longer as housing
developers.
Finally, the participation of commercial banks in the granting of this type of financing.
On the other hand, among the structural triggers that have generated Sofols’ recent troubled
situation we find the following:
n
n
n
n
Focus on segments of clients that are more fragile in face of the economic cycles and not served
by other financial intermediaries.
Participation in markets with a higher risk (development of urban infrastructure).
Lax credit-granting policies.
Not competitive, or volatile sources of financing.
In face of the environment of vulnerability, financial authorities have injected liquidity to continue
to offer financing for housing and sustain the sector’s growth rate, in addition to prevent, as much as
possible, the spreading towards other segments of credit. This should be seen as clearly positive.
Section 5. Financing for housing • 111 •
Sofols in perspective in face of the current environment
It should be noted that between 2000 and 2002, Sofols’ development conditions were favorable as the
credit they offered had advantages in terms of costs, compared to any traditional bank loan. Moreover,
the high economic growth of those years increased families’ real income and generalized a favorable
outlook both for supply and demand.
On the other hand, other factors helped too: an unsatisfied market, a high demand (historic
housing deficit, and recurring growth in the economic housing segments), clients’ stable payment capacity, declining interest rates, and the existence of long-term financial resources.
The recent situation has limited Sofols’ sources of financing and caused a reduction in their
financing capacity, particularly for bridge loans. Therefore, the consolidation of Sofols as a financing
model and housing developer, even once there are signs of economic recovery, will depend largely
on their capacity for reorganization and an adequate restructuring in a probably different regulatory
environment, that will tend to correct the problems noted in this recent crisis.
This would make it possible to advance towards a more solid financial system in all its components—both in banking and nonbanking institutions—sustain one of the basic pillars of the sector’s
development, and an abundant credit supply, at more affordable prices and that will cover increasingly
broader segments of demand.
5.2.
Financing and subsidy programs
for the housing sector
This section incorporates basic data regarding the national housing institutions that, as a whole, are
known as ONAVIS and offer mortgage credits in housing programs to serve the affiliates from either
Infonavit or FOVISSSTE; credit and guarantees for the population in general, in the case of SHF; and
the subsidies from FONHAPO and CONAVI.
The most frequent formats are: purchase of new or used housing, home improvement, selfproduction of housing, and purchase of plots with services.
There are other private financial intermediaries whose mortgage loans have national coverage—
especially for housing acquisition—such as commercial banks, Sofols, and Sofoms. Other intermediaries,
such as microfinance companies, savings accounts, cooperatives, and real estate self-financing, operate
with different types of credit.
On the other hand, state institutions to serve housing have been established within each state,
and there is even a growing number of municipal housing institutions in the local governments. The
diversity of activities among these institutions is quite broad; they stand out as local executors of programs that incorporate a federal subsidy, and at times, their own resources, in programs for housing
acquisition or home improvement.
INSTITUTION
Table 28.
Profile of the National
Housing Institutions
Source: Created by Cidoc, based on
information from the ONAVIS..
constitution
powers
It began as Fondo de Operación y
Financiamiento Bancario a la Vivienda
(FOVI), established in 1963, then became
a Development Bank under the name
in 2001.
Promote the development of the primary
and secondary markets of mortgage
lending, by granting credit and guarantees
destined to the construction, acquisition,
and improvement of housing—mostly
affordable entry level—as well as the
increase of the production capacity and
the technological development related to
housing.
Decentralized institution of the Federal
Public Administration, not sectorized,
through which the Federal Executive
Branch acts as coordinator of the
housing sector as per the Housing Law
(2006) and other laws. It was preceded
by Comisión Nacional de Fomento a la
Vivienda (CONAFOVI), created in 2001.
Established in 1972 as a tripartite fund
(employers, workers, and government)
to finance housing for wage-earning
workers in the private sector, through
the employers’ bimonthly contributions,
which are put into a housing subaccount
on behalf of each worker.
Created in 1972 as a separate body
of the State workers’ social security
institute (ISSSTE in Spanish). Each public
employee has a housing subaccount that
is managed by the ISSSTE Housing Fund
(Fovissste).
Established in 1981 as a trust, sectorized
in Sedesol.
Create, perform, direct, coordinate,
evaluate, and follow up on the National
Housing Policy and the national housing
program.
Normative authority of the Ésta es tu
casa Program For Financing and Federal
Subsidy Schemes since 2007, which it
runs jointly with SHF.
Manages the parties’ contributions with
the double duty of providing returns on
the housing subaccount and running a
financing system for workers so they can:
acquire, build, repair, expand, or improve
their dwellings, as well as pay down debt.
Manage the contributions of the
departments and public entities affiliated
to ISSSTE, for the granting of loans
for acquisition, repairs, expansion, or
improvement of the dwellings of State
workers. It grants loans to workers
employed by the State. It coordinates and
finances housing programs with its own
resources and the participation of both
public and private institutions.
It serves the population in a situation of
patrimonial poverty. It is the Normative
Authority of the Tu Casa subsidy
program.
Its governing body is currently
looking at the option of restarting the
channeling of financing via the State and
Municipal Housing Institutions, for the
improvement, acquisition, or construction
of affordable entry level housing.
INSTITUTION
Governing body and basic structure
Target population
Board of Directors composed of nine members, distributed as follows:
a) the Minister of Finance (SHCP in Spanish) as chairman;
b) The Undersecretary of Finance who, in the absence of the Minister of Finance, will
chair the board;
c) the Governor of Banco de Mexico (central bank);
d) a Vice-Governor of Banco de Mexico, appointed by the Governor;
e) the Head of the National Housing Commission; and
f) Four external members.
Preferably middle and low income
population.
Governing body. Governing Board comprised by the Ministers of Finance; Social
Development; Energy; Agrarian Reform; Economy; Communications and Transportation;
Environment and Natural Resources; and a Director General from the Commission, as
Technical Secretary.
As the responsible party for creating and
directing the national housing policy, it
considers all the population demanding
a dwelling. The Ésta es tu casa program
considers low income persons in a range
of up to 2.6 times the GMW for salaried
workers, or up to 4.0 times the GMW
for non-salaried workers (individual
income). In terms of family income, up to
5 times the GMW.
It is made up of a General Management and 4 General Deputy Manager offices.
General, Board of Managers, Surveillance Commission, Audit Commission,
Nonconformity Commission, Information Transparency and Access Commission, and y
Regional Consultative Commissions. All the governing bodies are tripartite. (Director
General and Workers’ Sectorial Management and Companies’ Sectorial Management).
Salaried workers in the private sector,
with incomes starting at 1 time the
GMW.
It has eight General Deputy Manager offices and regional offices in all the states.
Governing bodies: Institute’s Board of Directors, the Fund’s Executive Commission, and
an Executive Member.
It is made up of the Executive Membership and 6 Deputy Manager offices.
Governing body: Technical and Fund Distribution Committee. It has a Director General
and 3 department management offices.
Federal government employees and
those working for some state and
municipal governments and departments,
as well as those of most of the public
universities in the country, with incomes
starting at 1 time the GMW.
Non-salaried population with individual
incomes of up to 2.5 times the Mexico
City GMW, or family incomes of up to 4
times the Mexico City GMW, via credit
and subsidies.
programs
n AHORRASHF
n CASASHF Salarios funding
n Ésta es tu casa
n Payment of liabilities
n Microfinance
n Program for migrants
n SHF-Infonavit cofinancing
n Udis-Pesos restructure
n SHF loan with Apoyo Infonavit
n Rent to own
Previous savings
Interest rate
At least 10% of the value of the dwelling,
except in the cases of cofinanced loans
where the minimum contribution is 5%.
The annual interest rate per month on
the credits, made up of the rate that
SHF will publish monthly, both for credits
in Udis and in pesos, plus the margins
and commissions on applicable SHF
rates, plus the margin of the financial
intermediary.
For the Ésta es tu Casa program, this
meets the rules of the program.
n Construction lending.
Ésta es tu casa Program of Housing Finance and Federal Subsidy Schemes that offers aid for:
a. Acquisition.
b. Home improvement.
c. Self-production.
d. Plots with services.
e. Line I. Financing for the construction of housing complexes.
5% of the value of the dwelling, or 5%
of the housing solution for which the aid
is requested. Except in the cases where
nonrefundable financings are included,
where the savings will be 10%.
The subsidy does not apply. It varies for
the credit, based on the sum.
f. Line II. Housing acquisition.
g. Line II. Homebuilding (on an owned plot).
h. Line IV. Repairs, expansion, and home improvement.
i. Linea V. Debt payments.
j. Cofinavit.
k. Apoyo Infonavit
Housing subaccount
4% to 10% rate indexed in times of
minimum wage (times of MW)
Not applicable
4% to 6% rate.
a. Basic Housing Unit (UBV in Spanish):
$8,250.00.
b. Basic Rural Housing Unit (UBVR in
Spanish): $1,650.00.
c. Urban expansion or home
improvement: 10% of the value.
Rural expansion or home
improvement: 5% of its value.
8% rate.
Executor Entity of the 2007Program of Housing Finance and Federal Subsidy Schemes.
Credit schemes
n Traditional
n With a subsidy
n For pensioners
Cofinanced
n Conyugal-Infonavit
n Alia2
n Respalda2
See the description of
these programs at the
end of this Table (p. 117).
Formats
a. New or used housing acquisitions, be it under an
individual or condominium regime.
b. Individual construction on an owned plot.
c. Expansion.
d. Repairs or home improvement.
e. Debt repayment.
f. Common construction on an owned plot.
g. Granting of cofinanced loans.
h. Underwriting expenses mandatory for the worker.
i. Executor Entity of the 2009 Program of Housing Finance
and Federal Subsidy Schemes.
Subsidies
a. Tu Casa Savings, Credit, and Subsidy for Housing Program (formats: progressive
housing and home improvement).
b. Residents of Habitat polygons.
c. Rural Housing Program.
d. Credit for:
improved housing,
progressive housing, and
finished housing.
(temporarily suspended).
INSTITUTION
Maximum credit
term
The maximum value of the loan will be the lowest between 500,000 Udis and 90% of
the value of the dwelling, except for the cases of cofinanced loans where the credit can
amount to up to 95% of said value.
20 years: for new and used housing
acquisition. Determined by the financial
intermediate.
In this case, the value of the dwelling to be used will be the lower one between the
sales value and the valuation value.
The program considers the awarding fo a subsidy tied to a loan. Therefore, the
maximum sum will depend on the criteria applied by the entities Executors.
Up to 180 times the monthly Mexico City MW ($266,322) with Institute resources.
Not applicable. The aid is granted
immediately a single time. The subsidy
varies, based on the executor Entity.
The credits granted by Fovissste are calculated based on the worker’s basic salary
expressed in times the MMW.
Up to 30 years.
n Traditional: up to 441.8655 times the Mexico City MMW ($736,112.57)
n Subsidized: up to 1458.4212 times the Mexico City MMW ($247,257.84)
Up to 30 years.
n Pensionados: up to 218.9224 times the Mexico City MMW ($364,707.20)
n Conyugal: up to 441.8655 from Fovissste + 220 from Infonavit = 661.8655 times
the Mexico City MMW ($1’057,835.37)
n Alia2: balance of the SAR housing subaccount+ Fovissste maximum sum (66.7659)
and maximum value of the dwelling= 676 times the Mexico City MMW
($1,080,748.24)
n Respalda2: Fovissste grants only the balance of the SAR housing subaccount, the
maximum limit of value of the dwelling is defined by the financial entity
definido por la financial entity.
Up to 117 times the Mexico City MMW ($173,200).
Up to 30 years.
Upfront subsidy
Charge on the salary
Base on the Ésta es tu Casa program.
33% of income, maximum.
a. Home improvement: up to 20 times
the MW ($33,318)
Any applied by the entities
Executors. In the case of the subsidy,
they are nonrefundable.
Traditional FOVISSSTE loans
Crédito Tradicional: In the last two months of the year, Fovissste
holds a lottery of credits among its affiliates. To strengthen the
transparency of the process, in 2008 the Fund obtained the ISO
9001:2000 certification for the lottery, which includes the option
of registering online. Likewise, for the firs time, the locations and
the credit sums of the 75,000 winners nationwide were published
via Fovissste’s website; this information additionally simplifies homebuilding companies’ decision making. The credits can be used
for (1), acquisition and construction of new housing on an owned
plot y (2) acquisition; repairs, home improvement or expansion
of used housing, or debt payments.
b. Self-production: up to 23 times the
MW ($38,316)
c. Lotes con servicios hasta 10 VSMG
($16,659)
In addition to the increase in financing as of September 2008,
the Fund’s Management Board authorized two complementary
strategies:
Based on the Esta es tu Casa program.
1) The application of the balance the worker may have in the
SAR individual housing subaccount, to complement the Fovissste
loan.
2) Couples of affiliate workers will have the right to combine their
Tradicional or Pensionados loan with their partner.
25%.
Crédito Pensiona2: Up to 2006, 93% of the contributing population
retired without having taken out a loan; therefore, the product is
designed for pensioners aged 47 to 74 to be applied to the same
formats as the traditional loan. In addition to being able to increase
their loan by combining it with their partner, they are assisted in
obtaining a subsidy from the Ésta es tu Casa program.
Based on the Esta es tu Casa program.
30%.
Crédito Subsidia2: as of September 2007, Fovissste operates as the
executor of the Ésta es tu Casa program, assisting affiliates whose
monthly base salary is equal to or less than 2.6 times the MW and
retired workes whose pensions amount to up to 4.1 times the MW
per month. This product operates with three components:
Federal:
a. UBV up to $34,500.00.
b. UBVR up to $26,000.00.
c. urban expansion or home
improvement: up to $17,160.00.
d. Rural expansion or home
improvement: up to $13,000.00.
State: in urban programs, equivalent
contribution as the minimum for the
federal subsidy. In rural ones, a minimum
of 20% of the value.
Determined by the authority
executora.
1) FOVISSSTE loan, with a maximum sum of 151.9550 times
the MW.
2) Savings covered with the resources in the SAR housing
subaccount.
3) Subsidy, granted by the Federal Government through
Conavi.
Crédito Conyugal: As of 2007, Fovissste and Infonavit joined forces
to grant joint financings to the affiliates that prove a marriage
between them. This loan is designed for coownership acquisition
of a new or used housing. The maximum sums granted by each
institution will be determined by their individual policies and can
total up to 1´082,848 pesos.
5.2.1.
Financing programs
Based on the data from the preliminary close of the National Mortgage Financing Program 2008
[CONAVI, 2008], 1’421,998 financings were granted throughout the year under the various formats,
with an investment of 281.2539 billion pesos.
n
n
Table 29.
National Mortgage
Financing Program 2008
Progress up to the sixth
bimonthly period
Source: CONAVI, 2009..
Of the total financings, 68.7% were used for housing acquisition and the remaining 31.3% for
home improvement. Of the total investment made, 95.9% was used to finance the acquisition
of housing, and 4.1% to support home improvement.
Altogether, the national housing institutions (Infonavit, FOVISSSTE, and FONHAPO), as well as
SHF and CONAVI, financed 81.9% of the total loans and subsidies delivered throughout 2008,
whereas the remaining 18.1% was exercised via financial institutions, state housing institutions,
and other institutions that finance programs or grant mortgage loans as a benefit for their
workers.
EntityTotal
Infonavit1/
SHF
Fovissste2/
Conavi
Fonhapo
State entities
OREVIS
Other entities3/
Financings
Reduction4/
Equivalence
investment
(mill. P$)
494,073 101,675.7
128,380
11,834.8
90,140
34,669.0
230,296
4,894.9
222,036
2,151.5
207,172 112,358.3
29,414
1,667.8
20,487
6,001.9
1,421,998 281,253.9
-321,204
1,100,794 281,253.9
housing
acquisition
investment
improvements
(mill. P$)
investment
(mill. P$)
488,563 106,329.4
5,510
1,346.3
33,392
11,316.2
94,988
518.6
90,140
34,669.0
126,081
4,285.3
104,215
609.6
21,052
821.2
200,984
1,330.3
199,695 108,553.8
7,477
3,804.5
8,737
1,117.7
20,677
550.1
9,174
2,682.9
11,313
3,319.0
976,834 269,775.5
445,164
11,478.4
-244,267
-76,937
732,567 269,775.5
368,227
11,478.4
1/ Including 8,517 financings in the Apoyo Infonavit program, 109,596 cofinancings, and 94,372 subsidies.
2/ Including 13,110 financings from Alia2, 692 from Respalda2, 4,699 for pensioners and subsidies, and 1,287 from Mancomuna2 (FOVISSSTEInfonavit).
3/ Including: ISSFAM (1,417), Pemex (5,252), CFE (2,223), PEFVM (2,632), LFC (4,766), PET (1,138), Provivah (664), Hábitat (137), and PGR.
4/ Refers to the financings (loans and subsidies) considered in two or more institutions.
Despite the negative economic effects on the national economy in the recent months, the housing train has remained
on a positive track in the first half of 2009. It is worth noting that the sector’s dynamics have historically shown a greater
concentration of financial and commercial activity in the second half of the year; thus, results up to this moment allow the
estimation that it will be possible to achieve the sectorial goal of 1’183,865 global financings, as well as the specific goals
of housing acquisition and investment.
In contrast, the aids from the housing subsidy programs have concentrated in the first half of the year; from a joint
goal for CONAVI and FONHAPO of 291,865 subsidies, 189,804 had been granted up to June, equivalent to 65% of the
program, due both to the reorganization in FONHAPO’s activities, and to CONAVI’s response in the first months of
2009 in face of the expectations of the Ésta es tu Casa program that were impossible to serve at the end of 2008 due to
the premature depletion of the budget.
It is worth noting that, contrary to previous years, in the same line item of housing subsidy,
these results include data from Sedesol´s Priority Zone Development Program (PDZP in Spanish), which
appeared in 2009 in order to improve the conditions of the dwellings and the social and community
infrastructure in the most marginalized territories of the country. Until 2008, this program was known
as Microregions, and for the period from January to June, 212 thousand 865 actions were reported,
corresponding to solid floors, reinforced walls, and rooftops. For greater information, we suggest visiting:
<http://www.microregions.gob.mx>.
EntityTotal
Infonavit1/
Fovissste2/
SHF
Banjército
Conavi
Fonhapo
Financial entities
OREVIS
Other entities3/
Sedesol PDZP 4/
Financings
Reduction5/
Equivalence
investment
(mill. P$)
housing
acquisition
investment
improvements
(mill. P$)
investment
(mill. P$)
204,359
44,184.2
201,571
43,474.0
2,788
710.2
40,150
18,077.0
40,150
18,077.0
30,720
3,731.0
9,458
3,614.6
21,262
116.4
5,459
1,460.2
5,459
1,460.2
107,922
3,164.7
72,342
2,933.8
35,580
230.8
81,882
1,217.1
13,586
551.5
68,296
665.6
72,863
31,264.3
70,092
29,681.2
2,771
1,583.0
19,386
1,201.6
4,141
520.3
15,245
681.3
7,127
2,374.9
2,141
1,332.5
4,986
1,042.6
212,865
1,289.5
212,865
1,289.5
782,733 107,964.5
418,940 101,645.1
363,793
6,319.4
-124,803
-117,252
-7,551
657,930 107,964.5
301,688 101,641.1
356,242
6,319.4
Table 30.
National Mortgage
Financing Program 2009
Progress in the first half of the year
Source: CONAVI, June 2009
1/ Including 3,219 financings in the Apoyo Infonavit, 48,309 cofinancings, and 55,561 subsidies.
2/ Including 2,200 financings from Alia2, 111 from Respalda2, 478 for pensioners and subsidies, and 761 from Mancomuna2 (FOVISSSTEInfonavit).
3/ Including: ISSFAM (382), Pemex (747), CFE (998), PEFVM (2,615), and LFC (3,385).
4/ Including data from the Priority Zone Development Program (formerly Microregions), managed by Sedesol for the improvement of walls
and rooftops.
5/ Refers to the financings (loans or subsidies) considered in two or more institutions.
Entity
1st half ’08 1st half ’09
annual % var
2009 goal
2009 goal %
Infonavit
236,649
204,359
-13.6
500,000
40.9
Fovissste
33,270
40,150
20.7
100,000
40.2
SHF
68,126
30,720
-54.9
82,000
38.4
Banjército
3,053
5,459
78.8
n.d.
n.d.
Conavi
152,625
107,922
-29.3
190,000
56.8
Fonhapo
7,355
81,882
1013.3
101,865
80.4
Financial entities
83,640
72,863
-12.9
150,000
48.5
OREVIS
181,198
19,386
6.5
Other entities
12,768
7,127
-44.2
60,0001/
11.9
Financings
615,684
569,868
-7.4
Reduction
-182,532
-124,803
-31.6
Net financings
433,152
445,065
2.8
Goal total 1´183,865
Table 31.
Financings: annual
variation 2008-2009
Source: CONAVI, June 2009.
Note: Sedesol´s Microregions program was not originally considered in the 2009 goal.
1/ Other institutions: OREVIS, ISSFAM, Pemex, PEFVM, CFE, LFC, PET, and Hábitat.
5.2.2.
Progress on the subsidy program
The Financing Plans and Federal Subsidy for Housing program—Ésta es tu casa—consists in the granting
of a federal subsidy for persons whose income is up to four current general minimum wages, together
with a financing for the acquisition of a dwelling, a plot with services, or else, to build or improve a
dwelling.
The positive demand this program has had caused the depletion of the budgetary resources
originally assigned to it; thus, the budget was expanded so the total expenditures in 2008 amounted
to 4.8949 billion pesos through 230,296 subsidies, which was 75.9% higher than the 130,931 subsidies
awarded in 2007 under the four formats.
For 2009, the subsidy goal in the four formats is 190 thousand actions; until June, 107,922 subsidies
equivalent to 56.8% of the program had been awarded.
5.2.3.
Result of the evaluation of the subsidy program
In the second half of 2008, an external evaluation of the design of Ésta es tu Casa was performed by
the consultancy known as Grupo de Economistas Asociados, as per the terms of reference established
by the National Council of Evaluation of Social Development Policy (CONEVAL).
The results of the evaluation were the base to establish improvements to the Program. They
incorporated the problem tree; the logical framework matrix (LFM), created for the program and
registered on the Web applications forms of the Ministry of Finance and Public Credit (SHCP in Spanish), including the analysis of its vertical and horizontal logic; as well as the contents of its Rules of
Operation, published in the Official Journal of the Federation on February 19, 2007, in addition to two
modifications performed in that same year.
As part of the 2008 Annual Evaluation Program, the first 2008-2009 Specific Performance
Evaluation was created, coordinated by CONEVAL, for the Ésta es tu casa and State and Municipal
Promotion of Housing Production programs managed by CONAVI. These evaluations show the progress on the objectives and goals of the programs, based on a synthesis of the information contained
in the Performance Evaluation System, run by SHCP. The aspects of the evaluation refer to results,
management, coverage, and follow-up on matters of improvement corresponding to each program.
5.2.4.
The Mexican mortgage insurance market
In July 2004, SHF introduced into the market the Mortgage insurance (GPI in Spanish) product—a
forerunner of the Mortgage Loan Insurance (SCV in Spanish) in Mexico.
The creation of the SCV segment has enabled the development, strengthening, and consolidation
of the market, as well as the foray of private participants that offer the product directly to financial
intermediaries. In turn, this made it possible, on April 18, 2008, to establish Seguros de Crédito a la
Vivienda SHF, S.A. de C.V., which began operations on March 6, 2009.
Through SHF’s invitation to players of the insurance sector, via transfer of risk, nowadays there
are two private insurance companies that offer the SCV directly: AIG United Guaranty and Genworth
Financial.
Advantages and benefits of the SCV
n
n
The SCV insures the first loss related to the default on mortgage loans by the end borrower.
Normally, the coverage is expressed as a percentage of the unpaid balance on the loan at the time of the default,
which can go from 5% to 30%.
Based on the international experience and on the development of the secondary mortgage market in Mexico, the
SCV is deemed important for the following reasons:
n
n
n
n
n
n
n
n
It improves the standards for mortgage lending, encouraging competition in price and quality, and not based on lax
lending criteria.
It generates benefits in the capital and reserve liberation requirements for the mortgage loans in financial intermediaries’
balance sheet.
Simplifies portfolio securitization.
Stimulates the generation, analysis, and spread of high-quality credit information.
Encourages standardization of the information, procedures, and integrity of the valuations.
Offers greater accessibility to mortgage lending by simplifying the granting of loans with low down payments.
Attracts private capital to the housing financing market.
Protects the financial intermediary that grants the loan, or the investor, from the risk of default on mortgage payments.
Projections
Due to the current economic situation in the world, it is possible for the range of financial intermediaries that take out
an SCV to increase in benefit of the housing sector and secondary market, and as a clear reinforcement of the Federal
government’s socioeconomic programs.
5.2.5.
Cofinancing programs
Cofinancings boost affiliates’ resources and allow them to acquire a better dwelling. Below are the
different formulas that the housing institutions have developed.
Sociedad Hipotecaria Federal promotes two cofinancing programs: Cofinavit and CoFOVISSSTE.
Both programs help boost the borrower’s resources and allow them to purchase a higher-value
dwelling—mainly for borrowers with incomes of between 6 and 10 current MW. These programs
work as follows:
Basically, the balance of the Housing Sub-account is added to the borrower’s down payment.
The borrower obtains two loans: one from Infonavit or FOVISSSTE (up to the balance of
the Sub-account) and another from SHF through a financial intermediary.
On average, the value of a dwelling acquired in cofinancing is distributed as follows:
Cofinavit:
—SHF loan (55%)
—Infonavit loan (20%)
—Housing Sub-account (15%)
—Down payment (10%)
5.2.5.1.
SHF cofinancing programs
Cofovissste:
—SHF loan (60%)
—FOVISSSTE loan (17%)
—Housing Sub-account (16%)
—Down payment(7%)
Cofinavit has a large share of the total loans granted by SHF. Until 2006, it represented over half
of the ministrado loans. However, as of 2007, Cofinavit’s share in SHF’s mix of programs has declined
to represent 34% of the total loans (June 2009).
This reduction is related to the incentive the program generated in commercial banks when in
August 2007 the limit on the value of the dwelling was increased; by February 2008, this ceiling was
finally eliminated. Due to the premature depletion of the resources at the end of 2008 because of this
opening, this program will once again suffer changes in 2009.
On the other hand, it wasn’t until December 2006 that SHF began to operate the cofinancing
program with FOVISSSTE. This product is special because the credit granted by the financial intermediary with SHF resources is limited to 1,877 Current Monthly Mexico City MW. Until June 2009,
CoFOVISSSTE represented 8.9% of the total loans granted by SHF.
5.2.5.2.
FOVISSSTE runs two cofinanced products:
FOVISSSTE Cofinancing
1)
92 Agreement 35.1315.2008 of the Board
of Directors in which the Programa de
Financiamiento de Créditos para Vivienda
2009 is approved. Maximum Loans Chart
for Alia2, Official Journal of the Federation,
December 4, 2008, p.56.
93 Fixed rate is the interest rate determined
at the time of the formalization of the
contract for the corresponding loan,
applicable to the unpaid balance and for the
period established in said document.
Alia2, is a loan cofinanced by FOVISSSTE and some financial entity, where the Fund supplies the
worker’s balance in the housing Sub-account of the Retirement Savings System (SAR in Spanish) and up to 66.7659 times the GMW ($111,226.65) 92 , and the financial entity supplies the
sum agreed with the applicant, up to a maximum of 1,877 Current Monthly Mexico City MW.
This type of loan can be used for the acquisition of new or used housing and for repayment of
mortgage debt, and it will be originated through the financial entity chosen by the worker and
associated to FOVISSSTE.
The FOVISSSTE part of the loan will be amortized with the future contributions that the
affiliated department or entity makes on behalf of the worker to the housing Sub-account of the
SAR, and the time to repay the loan will be no greater than 30 years of effective payments. The
share of the loan that is awarded by the institutions will be determined based on their policies
and on the stipulations established in the coordination agreement that they enter with the Fund;
it must be in pesos and at a fixed rate for the life of the credit93.
The mortgage guarantee on the credits granted through this format will be first and in proportion
to the unpaid balance for each institution, and both loans must be formalized through a single
deed.
2)
Respalda2, an individual loan where FOVISSSTE enters the equivalent to the balance of the
housing sub-account of the SAR to complement the loan that the worker obtains from some
financial entity for the acquisition of new or used housing.
Under this format, the maximum loan is determined by the financial entity based on the borrower’s
maximum borrowing capacity.
Alia2Respalda2
Composition of the financing
Fovissste supplies the equivalent to the balance of the SAR
housing subaccount and up to 66.7659 times the MW for
future contributions to this subaccount.
Balance of the SAR subaccount + $111,226.61 (Fovissste)
Fovissste pays the equivalent of the balance of the SAR housing
The financial entity grants the rest of the financing until covering
between 90 and 95% of the value of the dwelling; the difference
must be paid by the borrower.
The financial entity grants the difference between the balance
of the SAR housing subaccount and the value of the dwelling,
the limitations being the contributing’s borrowing capacity and a
financing of up to 90% of the value of the dwelling; the resulting
difference must be paid by the borrower.
subaccount
Table 32.
Main characteristics of
the Alia2 and Respalda2
loans
Source: FOVISSSTE, 2009.
Maximum value of the dwelling
$1’082,748.24
No ceiling on the value of the dwelling
Type of housing financed
Finished used or new housing with all the services and debt
payment.
Finished used or new housing with all the services
Additional and conjugal incomes
If there is proof of income, they can be used to increase the borrowing capacity of the FOVISSSTE contributors
Interest rates
FOVISSSTE loan: from 4 to 6% annually on unpaid balance,
based on the worker’s income level.
Loan from the financial entity: Fixed interest rate during the life
of the loan.
Loan from the financial entity: Fixed interest rate during the life
of the loan.
Forms of payment
FOVISSSTE loan: It is paid with the balance of the SAR
housing Subaccount and the subsequent contributions that the
department or entity to which the worker is attached will make
on said worker’s behalf; thus, their net biweekly income does
not suffer discounts for this.
FOVISSSTE loan: It is paid with the balance of the SAR housing
Subaccount, so the worker’s net biweekly income does not
suffer discounts for this.
Loan from the financial entity: Amortization in pesos, made
directly to the financial entity.
Loan from the financial entity: Amortization in pesos, made
directly to the financial entity.
Term of payment
FOVISSSTE loan: up to 30 years
5.2.5.3
Infonavit Cofinancings
Loan from the financial entity: 5, 10, 15, 20 and 30 years
Considering that Infonavit’s priority is to cater to lower income workers, and that its
resources are limited, the credits awarded with 100% of the resources from the Institute
have defined maximum values, both in the sum of the loan that can be granted and in
the value of the dwellings that can be purchased. The limit in the sum of the credit is
reached at an income level of five minimum wages; thus, workers with a higher income
didn’t use the total loan capacity they could obtain based on their income level.
The cofinancing programs developed by Infonavit and financial entities (banks and Sofols) allow
the Institute’s affiliates to complement its financing with resources from other financial entities, and are
known as Cofinavit, Cofinavit Ingresos Adicionales, and Infonavit Total. There is also a program with
FOVISSSTE for couples with one worker in each institution, enabling them to combine their credits
to acquire a dwelling.
In Cofinavit, the Institute awards a loan that is amortized through the employer’s contribution
and a discount from the worker’s salary, without using their total payment capacity, and the financial
entity awards the complementary loan based on the remaining payment capacity, both from their
formal income and from any additional income they may have.
In order to apply for a Cofinavit Ingresos Adicionales loan, the worker’s maximum formal salary
is limited to 4.0 times the Current Monthly Mexico City MW, and is designed mainly for workers whose
additional income is from tips from clients, like those who work in the service sector.
The Infonavit-FOVISSSTE joint credit program began in 2007 in order to allow couples to complement their loans to purchase a dwelling worth up to 650 times the MW, each under the conditions
established by the corresponding institution.
Infonavit Total is a program that began in 2008, designed for affiliates whose incomes range
between 4 and 15 minimum wages to acquire dwellings worth up to 350 times the MW. The financial
conditions of the credit are the same as for a loan from the Institute, but with a higher financing sum,
and a financial entity acquires a part of the loan. The Institute manages these loans.
These programs were implemented in order to provide financing alternatives to the affiliates
with middle and high incomes, as well as to those who have other sources of income that are not
considered as part of their base salary.
The cofinancing programs have been well accepted by Infonavit’s affiliates, as it enables them
to acquire a dwelling that matches their needs, using the conditions of the loan from the Institute and
complementing it with a loan from financial entities.
On the other hand, this decreases the credit risk for the financial entities, as the applicants, in
addition to meeting the criteria of each of them to apply for the loan, must also meet the eligibility
requirements of the Institute. The balance of the workers’ housing sub-account is used as the down
payment, and once the Infonavit loan is paid off, the employer’s contributions are used to amortize
the loan from the financial entity.
Since the beginning of the cofinancing programs in 2004 and until the end of 2008, 263 thousand
114 loans have been awarded as follows:
Table 33.
Credits from the
cofinancing programs
Number
YearCofinavitCofinavit Ingresos
-Fovissste
adicionales
2004
3,243
2005
34,912
3,173
2006
45,373
7,162
2007
47,918
12,153
2008
60,085
16,145
Total
191,531
38,633
Infonavit
84
1,305
1,389
Infonavit TotalTotal
31,561
31,561
3,243
38,085
52,535
60,155
109,096
263,114
5.2.6.
Green mortgage
The goal of this lending format is to contribute to the improvement of the environment by incorporating sustainability criteria into the dwellings financed by Infonavit. It is awarded for the acquisition of a
dwelling that will generate savings through the reduction in water and energy consumption which, in
turn, gives the user an additional payment capacity. Those who request it are awarded an additional
loan for the installation of technologies that will produce those savings.
The main objective of green mortgages is to contribute to taking care of the environment
and to support the national strategy to deal with the climatic change. It hopes to encourage the offer
of housing with ecological criteria; to generate conditions so the affiliates can purchase higher-value
dwellings with innovative technologies that will ensure the reduction in the consumption of energy and
water, and decrease their payments for these services. Thus, the borrower increases their payment
capacity to cover the financing awarded.
Hipoteca verde
Figure 8.
Green mortgage
1,778 transactions formalized*
Credit investment $434 million
Investment in ecotechnologies**
$20.70 million
Savings on water, electricity, and gas***
(per dwelling)
CO2 emissions avoided**
(per dwelling)
$4,200 per year
$350 per month
1.10 annual tons
91.8 kg per month
*Information up to December 31, 2008.
**To participate in a Green mortgage, the
equipment must have been validated by the
National commission for the efficient use
of energy (CONUEE), the Electric Energy
Savings Trust (FIDE), and the National Water
Commission (CONAGUA), all of which
certify the savings.
*** Depending on the bioclimatic region.
One of the stages of the design of the Program consisted in multidisciplinary work with the
internal areas of the Institute to determine the scope and operating process, define the requirements
and adaptations to both processes and systems, and identify the risks. The Green mortgage program
was developed with a view to manage administrative, operating, legal, and financial risks, considering
that its goal is to fulfill a social objective.
Parallel to this, with the support of CONUEE, INE, UNAM, FIDE, and CONAGUA, the minimum
characteristics were defined that can be included in the dwellings to be financed by the Institute, fulfilling
the objective of resource savings—namely, electric energy, gas, and water. These characteristics refer
to economic equipment and implements that will reduce the consumption of water and energy in the
dwellings and that won’t signify large investments, as they couldn’t be implemented in economic dwellings.
For instance, water saving devices as well as energy saving lamps are used. The only exception is a solar
heater, which is nonetheless covered through the credit extension of up to 10 times the MW.
The development of the project requires the participation of various players:
n
n
n
n
n
Developers: they generate the housing supply, incorporating the ecotechnologies that will favor water and energy savings.
Suppliers of ecotechnologies: make available to the developers the adequate and certified water and energy saving
devices..
Borrower: chooses an ecological dwelling, which generates economic benefits and a better quality of life.
Authorities and institutions: support, through regulations to progressively encourage the total dwellings that are to
be built to have energy and water saving devices.
Certifying institutions: guarantee the products that really meet the minimum requirements and technical specifications
to be installed in the dwellings.
Overall, the Green mortgage program has been well accepted by all the players; it is essential to keep encouraging
an ecological culture so the devices installed in the dwellings will be properly used.
5.2.7.
94 Including stand-alone homes,
condominium homes, and apartments.
95 Dwellings with at least one change of
deed recorded in the Public Register of
Property were considered as used.
96 Metropolitan areas (MA) of Mexico City,
Monterrey, Guadalajara, Tijuana, Reynosa,
Cancun, Puerto Vallarta, Acapulco, and León.
Dynamism of the used housing market94
Used 95 or semi-new housing is an important but relatively underdeveloped market niche, compared
to the new housing segment. SHF performed a study in nine metropolitan areas96 in the country, focusing on legal, fiscal, and market aspects that hamper its adequate functioning by increasing transaction
costs. This is a result of the design and establishment of ex-ante transaction contracts and ex-post
compliance checking.
In fact, as described ahead, the complexity of both the legal and fiscal systems, as well as the characteristics of supply and demand, have a bearing on the level of the transaction costs on the semi-new
housing market.
5.2.7.1.
Results
Legal outlook
The normativity that must be considered when offering and purchasing a used dwelling is the
following:
n
n
n
Transfer of property. With regard to inheritance, the Civil Law establishes the procedures to
legalize the ownership of a transferred property. The formality required and the related costs,
such as paying the notary, the tax on the purchase of real estate, and the regularization of the
property sold, decrease the speed of real estate transactions, which is reflected in the time that
they remain on the market (see Index of Absorption, below in this section).
Urban development and land use Land uses are often unknown by the owners, as they are described in the appendix of the public purchase-sale deed; thus, at times there are different land
uses among joint owners of a single property.
Construction rules. At times, the owners of used dwellings modify and expand them without
following the construction regulations. Thus, there are dwellings that, in terms of licenses and from
a regulatory point of view, really have a different built surface area, causing legal contingencies
for a potential new owner.
n
Condominium properties. They are unincorporated and joint owners must set up an Asociación
Civil, which implies legal and accounting expenses, to mention a few, in addition to commitments
in terms of time and maintenance fee payments by the interested parties.The law only recognizes
private areas and common areas, causing important attributes of the dwelling, such as parking
spaces, to not be properly documented in the public purchase-sale deed.
Fiscal outlook
n
Regularization costs. Regularization of used housing involves expenses in both monetary resources and time, particularly to obtain the deed. According to the survey of real estate agents,97
roughly 31% of the properties for sale in the nine metropolitan areas in the study have problems
with their deed, 25% have difficulties due to late predial payments, and nearly 11% expressed
complications in the transfer of the property.
97 Study on the Promotion of the
dynamism of used housing, 2008 SHF. It
included surveys of real estate associations
and promoters.
Graph 37.
Most frequent
irregularities in
used housing
Percentages of the total
mentioned
Source: SHF, Promotion of the
dynamism of used housing, 2008.
Invaded houses
0.5
3.1
Titling of parking spaces
5.7
Land use
6.3
Construction permits
Delays in payment of electricity,
water, and maintenance
7.3
Ownership regime
10.4
10.9
Inheritance problems
25.1
Delays in payments of predial tax
Lack of updated deed
30.7
0%
5%
10%
15%
20%
25%
30%
35%
Market factors
98 Assuming polycentric cities, so the
affirmation of the text must be interpreted
regarding a local center with a high
population density, economic activity, urban
and community equipping.
In general terms, used dwellings have better attributes than new ones. In fact, used
properties are on average 27% larger than new ones (larger built surface area), have
14% more bedrooms, and 10% more bathrooms. In terms of urban proximity, nearly
7% of the used dwellings in 2008 had a central geographical location98, in contrast to
1.8% of the new ones. These figures are for the nation as a whole.
Among the factors that reduce the demand for used housing, we can mention:
1) the family income, 2) the price, as well as the characteristic information asymmetry
of this market, 3) the remodeling expenses, 4) access to mortgage lending, and 5)
transaction costs.
Graph 38.
Used and new housing by
urban proximity
Percentages
70%
57.6%
60%
Source: Office of Economic Studies on
Housing, SHF.
50%
41.7%
40.4%
40%
30%
23.0%
17.6%
20%
11.2%
10%
6.7%
1.8%
0%
Central
intermediate
Used
Table 34
Monetary income, 2008
Source: Office of Economic Studies on
Housing, SHF.
MONETARY INCOME
%
from 0 to 3 SMGM
36.7
from 3 to 6 SMGM
29.9
from 6 to 9 SMGM
14.2
Over 9 SMGM
19.2
1)
2)
99 Including Residential plus.
100 The search for information and bidding
between buyers and sellers is part of the
transaction costs.
3)
101 Remodeling or modifications that do
not increase a dwelling’s useful life.
Peripherals
expansion and rural
New
Family income. Households with incomes of over six general
monthly minimum wages (GMMW) represent only 33.4% of
the total (see Table 34). Over half the used housing is middle
or residential99, so this market is not affordable for 67% of
the families in Mexico.
Price. The wear (normal rate of depreciation of the property)
and use reduce the value of the dwelling, while better characteristics, such as those indicated by the market factors,
increase it. In addition, this market shows marked information
asymmetries100 as often only the seller knows the physical
particulars, location, legal, and fiscal details of the property,
forcing the buyer to engage specialists to compensate for the
unevenness and negotiate adequate prices.
Remodeling expenses. 33.2% of the owners of used dwellings reported that they remodeled
prior to the sale with an average expense of nearly $40 thousand pesos. The owners who didn’t
remodel discounted the estimated sum from the sale price. In addition, the time a used dwelling
remains on the market influenced not only the remodeling expenses, but also the advertising
ones.
According to the ENIGH, 2008, nearly 3 million households remodeled101 their dwellings
(10.8% of the total). These expenses depend on the households’ income level, as can be seen
in the following table: the greater the income, the greater the expense on maintenance.
Monetary income GMMW
from 0 to 3
from 3 to 6
from 6 to 9
from 9 to 12
Over 12
4)
5)
households
average expenditures
627,045
717,755
466,652
303,816
716,245
1,163
1,711
2,027
2,760
5,795
Table 35.
Expenses on remodeling by
level of monetary income
Pesos
Source: SHF, based on the ENIGH 2008.
Access to credit. The requirements for purchasing used housing are many and difficult to gather: 30 years of minimum
useful life remaining, architectural plans, deed of property, past and present payment receipts of predial tax, water
consumption, electric energy, telephone, and maintenance (if it is under the condominium property regime), and
free of encumbrances or the corresponding instruction from the mortgage creditor.
Transaction costs. Among the main ones are the acquisition tax, public register rights, valuation, registration certificate, other documentary evidence,102 notary fees, and socioeconomic study. These transaction costs, expressed
as percentages of the average price of the property, differ between the metropolitan areas in the study; moreover,
they are 1.3 times higher than for new housing.
102 The documentary evidence requested
are mortgage cancellation, free of
encumbrances, certificate of no predial
owed, electricity, water, and predial receipts.
TransactionCost
Acquisition tax
2.02
Public Register rights
0.73
Registration certificate
0.02
Valuation by the thousand
0.25
Catastral valuation
0.12
Other records
0.28
Socioeconomic study
0.31
Notary fees
1.31
Real estate agent fees
4.80
Total
9.84
Table 36.
Average transaction
costs
Percentages of the price of the
dwelling
The list shows the most important
transaction costs, and is therefore
not comprehensive. For instance,
the Technical Determination of
Quality (DTC in Spanish) charged
by Infonavit to confirm the physical
condition of used housing should be
included too.
Source: SHF, Promotion of the dynamism of
used housing in Mexico, 2008.
Market structure103
The results of the study indicate that this market
is distributed as follows, based on the price of
the property:
Over
2,000,000
(27%)
Up to 300,000
(4%)
103 In order to boost the used housing
market, the Ésta es tu Casa program offers
a larger subsidy to individuals who wish to
purchase in this segment. Since 2007 and
until December 2008, 14,759 subsidies
worth an average of $38,000 pesos per
beneficiary were awarded, totaling $562
million pesos in total aids.
From 300,000 to
500,000
(13%)
From 1,000,000 to
2,000,000
(27%)
From 500,000 to
1,000,000
(29%)
Graph 39.
Distribution of the used
housing market
Pesos and percentages
Source: SHF, Office of Economic Studies on
Housing. 2008.
ACurrently, 56% of the used housing market in the nine metropolitan areas
mentioned corresponds to the residential segment, including the Residential plus.
Index of Absorption (IA)
The time the property was on the market was 4.8 months, on average. However, the
IA is different, based on the price of the dwelling. For instance, dwellings worth over
$2 million pesos took nearly 6 months to get sold, whereas those worth under $300
thousand sold in 4 months.
Graph 40.
6.50
Index of Absorption, used
dwellings, 2007-2008
Months on the market/pesos
5.50
months on the market
Source: SHF, Promotion of the dynamism of
used housing, 2008.
6.00
5.00
4.50
4.00
3.50
3.00
2.50
2.00
Up to $300,000
prices of the dwellings
From $300,000 to
$500,000
From $500,000 to From $1,000,000 to Over $2,000,000
$1,000,000
$2,000,000
2007
Conclusions
Based on the study performed, the lack of dynamism on the used housing market as compared
to new housing is largely due to the following factors:
n
n
The low level of underwriting of the properties with housing use in the country.
The insufficient quality of the services offered by the Public Registers of Property (PRP). These
largely state-run institutions are essential to the financial intermediary and the end borrower
as they guarantee the legal certainty of the transaction on the property.
The underlying hypothesis consists in that the full security of property rights (DP in Spanish)
increases the incentives for the patrimonial investment and the access to the credit markets. On
the other hand, the lack of DP not only tends to reduce the investment, but it can also modify
its composition. In fact, insecurity in tenure makes long-term investment more difficult, favoring
short-term investments, as the former is more onerous and involves a greater risk.104
The high transactional costs in the process of buying or selling used dwellings, which are 1.3 times
higher than for new housing. Three stand out in this segment: the tax rate, the commissions
charged by real estate professionals, and notary fees. Altogether, they represent practically 83%
of the average transaction costs (see table 36).
104 SHF is currently carrying out a study
on the relationship between property rights,
the investment in housing, and development.
The target population are households with
incomes of under six minimum wages,
residing in urban areas in the 32 states.
2008
n
5.2.8.
The secondary market: sustainable and complementary growth
Infonavit’s credit granting rules state that the worker is free to choose from the four uses available
for their loan: purchase a new or used dwelling; build on their own land; remodel, repair, or improve
their dwelling; and substitute an existing mortgage from a financial entity with which Infonavit has an
agreement. However, the exercise of credit in the last seven years has focused on transactions for
new housing acquisition.
In the mortgage lending transactions from 2000 to 2006, the growth indices varied due to factors such as workers’ demand, the value of land, and the procedures established by the authorities for
the construction of housing, among others. In this context, the housing stock of new housing doubled
in only six years, both in large metropolitan areas of Mexico City, Monterrey, and Guadalajara and in
middle-growth cities such as Puebla, Morelia, Merida, San Luis Potosi, and in the cities located on the
border of the United States, such as Tijuana, Ciudad Juarez, and Nuevo Laredo.
In 2007, Infonavit established the promotion of used housing as one of the development strategies
of its lending operations in order to complement the supply in those cities which faced difficulties in
the development of new housing, as well as an initiative of sustainability for the communities in order
to exploit the previously established resources and infrastructure.
The strategy had four axes:
n
n
n
n
Adjustments in the institutional processes and policies for the detection of a used dwelling.
Creation and development of an affordable record of used housing for workers.
Exploitation and development of the networks to place the existing used housing.
Promotion of credit related to used housing.
The initial definition of a used dwelling was related to its age, and therefore, to the year of construction and completion recorded in the valuation, since a used dwelling was one built over a year earlier. However, there were operations
in which, indeed, based on the date of completion, the dwelling had been built over a year earlier, but had never been
inhabited.
It was then established that a used dwelling would be one related to a credit transaction which proved that it had
been previously acquired by an individual and where, at the time the transaction was recorded, it could be proved that the
transaction took place between individuals, in order to prevent transactions between builders and individuals, regardless
of the date of completion and life of the property.
Authorization of the credit considers the property’s useful life; thus, the age of the dwelling is no limitation as long
as the property is a useful guarantee during the maximum period of a loan as established by the Institute (30 years).
In July 2007, the website <contactoinfonavit.org.mx> was launched to link sellers and buyers of dwellings on the
secondary market. It was developed on a commercial-oriented platform that allows the worker to easily and quickly find
information on the used dwellings on the market.
The portal makes it possible to search by type of dwelling, state, municipality (or political district in the case of
Mexico City), and by price range; each case comes with photographs and is linked to the Institute’s credit products. The
housing record is made up of properties that the sellers of used housing (individuals and brokers) register. At the start, it
had 7 thousand properties; by 2008 the number had trebled. The website has been visited by one million 200 thousand
users over a period of one and a half years.
The incorporation of real estate agents has been a key element in the strategy to make known
and promote the use of Infonavit’s different credit programs for the acquisition of used housing:
Crédito Infonavit, Infonavit Total, Cofinancing and Apoyo Infonavit. In 2008, the number of credit
transactions linked to the acquisition of used housing rose significantly as a result of the use of the
network of existing real estate developers and brokers grouped in the Mexican Association of Real
Estate Professionals (AMPI in Spanish), as well as the Mexico City Real Estate Agents Organization
(OCI in Spanish), among others.
To increase the participation of real estate agents in the network to place Infonavit loans, recruiting and training sessions regarding credit have been organized through the certified advisors program
under the Technical Norm of Labor Competency (NTCL in Spanish). Since July 2008, any credit transaction presented by a third party on behalf of a worker must receive guidance and information from
a consultant certified under the NTCL, published in the Official Journal of the Federation in November
2007, and updated on February 5, 2009.
Graph 41.
100,000
Credits for used housing,
2006-2009
80,000
60,000
40,000
20,000
0
2006
2007
2008
2009
Infonavit’s efforts both on a national and local level in the second half of 2007 and 2008 to promote the use of
credit for the acquisition of used housing can be grouped into three categories:
a)
b)
c)
Promotion of credit. The promotion task is performed directly by Infonavit, or else, with the aid of third parties,
for instance, real estate agents, associations such as the Mexican Association of Real Estate Professionals (AMPI),
brokers, or mortgage agents. The financial entities have also taken part in this task.
Promotion of incorporation of real estate agents and mortgage agents. These are the promotion tasks between the
members of the various real estate sale networks in the secondary market; the promotion of the Cofinancing and
Apoyo Infonavit credit products was particularly relevant, as many transactions on the secondary market took
place between affiliates whose salaries are over 11 times the MW.
Promotion of the secondary market.
The numbers of credit transactions for the acquisition of a used dwelling have been on rising. In 2006, the percentage
of the total lending goal was under 10% and the total credit barely amounted to 40 thousand transactions; in 2007, there
was an increase of nearly 41 thousand more transactions, for a record of 81 thousand. In 2008, the high percentage of
transactions for used housing in the Apoyo Infonavit product is worth noting. In some financial institutions, 75% of the
transactions with this product were related to the acquisition of a used dwelling.
In 2008, growth was also greater than the increase of the Institute’s overall lending target (around 10%) and than
the increase in transactions related to the acquisition of new housing. By the end of that year, credit transactions for used
housing totaled 94 thousand loans. For 2009, it is expected that the placement of loans for used housing will be quite
close to the figure recorded in 2008.
5.2.9.
Microfinance
Currently, only a small part of the population can obtain a traditional mortgage. A family purchases an
economic dwelling worth 118 times the MW and a built surface area of 40m2 if their monthly income
amounts to at least 4 GMW.
In recent years, a significant share of the families who have received a loan to purchase economic
housing gained access through implicit subsidies in the rate, or explicit upfront subsidies, which at times
represent over 20% of the value of the property.
This historical lack of access to housing has forced most families to build their dwellings without
support from the formal sector and using progressive construction methods. The main backwardness
is found among lower income persons without social security, who at times purchase or invade land
without services, or irregular plots and later finish building their dwellings, over periods ranging from
5 to 15 years.
Thus, families build an improvised and defective house and gradually substitute the temporary
materials for permanent ones and expand their dwellings. The next step is the uniting of families and
neighbors to demand that the municipal governments provide them with the basic services, such as
water, electricity, and sewage.
This process generates high public costs. Specifically, expanding and providing basic infrastructure
for informal settlements generally costs three times more than expanding the infrastructure network
in planned settlements.
These progressive housing constructions are a feature of most of the cities in Mexico. At times,
because there is a perception that low income persons do not demand financial services as they lack
the capacity to save or pay. Lower income households fall into the gap between traditional mortgage
financing and their housing needs.
This imbalance is the result of three problems that microfinance can solve:
n
n
n
A very limited offer of financial products.
Lack of funding sources that will make it possible to finance larger sums for longer periods.
Application of traditional risk assessment models that do not fit individuals who have no way to prove their income.
Very limited offer of financial products
Mortgage lending involves relatively large loans for long periods. Most traditional financial intermediaries grant loans only
for the acquisition of new housing. This does not solve the needs of lower income borrowers and limits the effective
demand for credit.
On the other hand, the use of popular finance institutions can expand the offer of products to finance stages of the
process of progressive housing: acquisition of a plot with services, construction of a base, expansion, and improvement,
among others.
The effective demand is large, as can be seen from the experience of financial intermediaries who specialize in the
sector. For instance, Financiera Indepartment and Banco Compartamos originated over 130 thousand microloans for home
improvement worth a total of over 1.30 billion pesos in 2008 with delinquency rates below banks’ and Sofols’ mortgage
portfolios, considered to have a lower risk.
On the other hand, there are families with moderate incomes who can have access to a traditional mortgage loan
but do not want it. Mortgages require fixed payments for a long period—something they deem too risky due to the
variability of their income. However, they can plan and take on short-term loans.
The Mexican experience shows that low income persons demand comprehensive financial services such as savings,
insurance, and credit. Likewise, low income families prefer to improve their existing dwelling, rather than buy a new one
somewhere else, where their friends, families, and neighbors would be too far away.
Lack of adequate funding sources
The recent experience showed that some intermediaries financed long-term assets with short-term debt to expand
their mortgage portfolios. In 2008, the financial crisis significantly limited the funding sources and the offer of mortgage
loans decreased.
This lack of long-term funding has prevented popular savings and lending entities, which have solid balance sheets
and ample experience, from offering mortgage loans so far, despite the high demand from their members.
On the other hand, microloans for housing have shorter maturities (1-5 years). These shorter-term assets adjust
better to their available funding sources. Based on interviews of several intermediaries, nearly a third of their loans are
used for home improvement and/or expansions of the dwelling. This means that a significant part of the lower income
population’s housing needs has been met through small loans with relatively short maturities.
Inadequate risk assessment models
In order to have access to a long-term mortgage loan, borrowers must prove that they have a stable source of income
and a legal deed of property. Lower income families have trouble meeting these requirements; they only have the
variable incomes the members of the household receive and, in most cases, they lack social security.
Due to their shorter maturities and smaller sums, microloans for housing have greater flexibility in terms of risk
assessment. For instance, in microfinance, the alternate forms of guarantee such as backing have a greater value to ensure
a small loan than an encumbrance on the property.
Challenges of the traditional mortgage financing paradigms
The dynamism of the housing market in Mexico over the last few years has begun to display its
limitations in terms of increasing access for the population without social security, which represents
the main backwardness and the greatest housing needs (table 37).
Recommendations
It is important to be familiar with the reality of a great part of the Mexican families and design
alternatives that will better fit their needs and economic capacity. The application of microfinance
to housing can be quite simple when it comes to the use of credits to make marginal improvements
to existing dwellings, that nonetheless have a high impact on people’s quality of life.
Microloans for housing are a complement for traditional mortgage loans; therefore, efforts
must be made towards the following points:
n
n
n
Increase the network of intermediaries with which development banking operates, emphasizing those who specialize in serving the population without social security, such as popular
savings and lending entities and microfinance companies.
Expand the product offer, incorporating funding for assisted self-production and acquisition
of plots with services..
Provide technical assistance to financial intermediaries who wish to participate in the housing
market.
These actions have been started, but the challenge lies in achieving their consolidation in
the next few years and reducing the need for subsidies for new housing without damaging the
quality of the mortgage portfolio.
Table 37.
Comparison of the
mortgage financing
models
Source: SHF, 2009.
Paradigm of the
Mexican model
The credits must be for a complete solution with
an important slant towards the acquisition of new
housing.
Large enough loans for a complete housing
solution must be long term and have a subsidy to
be affordable to the lower income population.
The design, planning, and construction must be
done by external technical experts to reduce the
cost of the project and ensure the quality of the
construction.
To build economic dwellings, it is necessary to
have economies of scale that only a few
developers can achieve.
Recent experience:
microloans for housing
Low income households are accustomed to a progressive construction
process.
Progressive construction loans at market rates can be more easily
tailored to households’ payment capacity.
The financing of the stages of a project with multiple loans at a shorter
term, instead of a larger loan with a longer term reduces the interest paid
by the household and the risk to the lender.
Households can manage parts of the technical process on their own and
still achieve an acceptable level of quality.
Households show a strong preference to make their own design
decisions.
The main role of the technical assistance is in the design and in the cost
allocation.
The financing model for economic housing follows
a similar paradigm to the US securitization model.
The model of housing financing for the lower income population follows
a similar paradigm to the microloan industry in many countries.
The interest rate is the key factor in households’
decision to take out a loan.
The access to capital for investment in housing, the simplicity, and the
speed in the disbursement are the main factors in households’ decision
to take out a loan. The interest rate is an important yet secondary factor.
The investment in housing is unproductive.
In many cases, an investment in housing generates additional income
directly (rent, a space for the microcompany, among others).
5.3.
Strategies that promote
efficiency in the sector
Mexico has soundness and certainty in its ONAVIS, financial intermediaries, and housing developers. This situation is clear
when reviewing the sector’s strategy to ensure its efficacy, congruence, and efficiency:
1.
2. 3. 4. 5. 6. 7. The National Program for the Modernization of the Public Registers of Property (PRP) for the 32 states to guarantee
the legal certainty of tenure of real estate property, through the legal records and their promotion, certifying the
legality of the transactions performed in this market.
The linkage of the urban and rural land register with the PRP to define the comprehensive operation and develop
the Record Modernization Program.
The predial tax integrated into the mortgage payments.
The Registro Único de Vivienda (RUV) (housing register), designed to reduce procedures and unify criteria.
The actions of the Mexican Mortgage Association (AHM in Spanish) in the granting of credits, funding, and as the
main investor in the housing sector.
The Total Annual Cost (TAC) which allow the user to select the loan with the lowest cost, derived from the National
Agreement in favor of families’ economy and employment, and
The social collection which provides aid to Infonavit workers, as explained below.
5.3.1.
Progress on the National Program on the Modernization of the Public
Registers of Property
The modernization of the Public Registers of Property, as well as the obligation to register real
estate property publicly, are fundamental conditions to offer legal certainty, boost the value of the
patrimony, guarantee its transfer without conflicts, and gain access to formal sources of financing to
help improve the quality of life for the Mexican society.
This premise constitutes the condition for the existence of the Program that is carried out by the current federal
administration in keeping with the stipulations of national objectives 3 and 17 of the National Development Plan 20072012, strategies 3.1 “Improve the regulation that protects property rights”, and 17.1 “Provide legal certainty of tenure
by homologating the Public Registers of Property, municipal and rural land registers, and the obligation to register real
estate publicly”.
As of fiscal year 2008, the office of the Legal Advisor of the Federal Executive Branch (CJEF in Spanish) took on
the commitment developed during 2007 by the Ministry of the Interior to direct, operate, and manage the Program, with
the assistance of CONAVI and SHF.
Through the publication of the Guidelines for the application of resources from the Program in the Official Journal
of the Federation, dated March 31, 2008, the Federal Executive Branch assigned 416.7 million pesos to the Program. It also
created the Evaluation Committee with the CJEF, CONAVI, and SHF, as an authority to analyze, evaluate, and authorize
the inclusion of the projects derived from the results obtained, as well as to analyze and evaluate the State Modernization
Programs (PEM in Spanish).
105 Office of the Legal Advisor of the
Federal Executive Branch and National
Housing Commission. 2008.
In fiscal year 2008, resources were authorized for 19 states—Aguascalientes, Baja California,
Chiapas, Chihuahua, Colima, Mexico City, Durango, Guanajuato, Jalisco, Morelos, Puebla, Queretaro,
San Luís Potosí, Sinaloa, Sonora, Tamaulipas, Tlaxcala, Yucatán, and Zacatecas—worth 345.2 million
pesos,105 which represented 83% of the allocated resources. Of those 19 states, seven began their
PEM in that year.
The 2007-2008 balance shows that 23 states have a PEM authorized by the Evaluation Committee. For 2009, it is expected that the nine states that lack a project will gain access to the benefits
of the Program.
In contrast, during 2008, the 19 states mentioned above managed to contribute 335.1 million
pesos to their corresponding modernization projects, and as a result of the actions performed and of
the promotion, it was possible to get the 32 states of the country to adhere to the Program.
One of the Program’s main pillars is still the application of the Methodology of diagnoses, baselines,
and periodical measurements, which has made it possible to find out how close the registers are to the
best practices proposed in the Modelo Integral de Public register, which are the recommendations
whose implementation by the public registers will enable them to progress on their modernizing process,
and on what components they must focus their attention and investments.
As a result of the participating states, the national average per component of the Modelo Integral
up to December 2008 (see graph 42).
72.36
Comprehensive vision of the state modernization program
Baseline results
National average by component.
Percentages
59.85
Legal framework
57.85
Recording processes
Graph 42.
51.49
Information technologies
Source: Diagnoses, baselines, and periodical
measurements, SHF, 2008.
42.97
Quality management
Nacional average. 51.16%
36.19
Professionalization of the recording function
52.26
Institutional policies
44.24
Document management and collection
Participation and linking with other sectors
33.83
Performance indicators
45.16
0%
10%
20%
30%
40%
50%
60%
70%
80%
During 2008, 24 studies were added to the 68 that had been carried out
previously, which has made it possible to identify the degree of modernization of the
records offices mentioned regarding the Modelo Integral de Public Register. At the end
of 2008, the 32 states were evaluated, achieving a progress of 51.16 percent.
52%
Graph 43.
50.78%
50.21%
50%
48.70%
51.16%
50.79%
50.17%
National average of the
progress on the program
Percentages
measurements, SHF, 2008
48%
46%
45.68%
47.39%
May
June
44%
43.63%
42%
40%
Annual
average
2007
July
August
September
October
November
December
2008
106 The modernization levels were
obtained using the Daleniuos & Hodges
method, which makes it possible to form
groups of states within which the variance is
minimal, yet maximum between groups.
Table 38.
Level of PRP Modernity
measurements. SHF, 2008.
The results achieved have made it possible to establish the status of the Public
Registers of Property, setting five levels of modernity: Satisfactory, Sufficient, Insufficient,
Critical, and Very Critical,106 as is summarized on the following table.
Level of modernization indexNumber of states
Satisfactory
Sufficient
Insufficient
Critical
Very critical
assessed
5
10
6
4
7
32
Stratum by % of progress
(80,100]
(56,80]
(32,56]
(24,32]
[0,24]
The proposed modernization actions, derived from the recommendations of the Evaluation Committee and based on the results of applying the methodology and follow-up of the PEMs carried out in
the states, are in line with the Modelo Integral of the Public Register of Property (PRP)..
Overall, the Program’s achievements are summarized in the following aspects:
n
n
n
n
n
n
n
n
Support from federal and state authorities to achieve their modernization.
Legal frameworks focused on the use of electronic signatures and the constitution of decentralized institutions with technical autonomy and their own resources.
Updating technological platforms.
Improvement of the processes.
Increase of the levels of service to the user.
Professionalization courses for the personnel.
Preservation of the document collection.
Geographical approach to users of the recording services.
The progress worth noting in 2008 was:
n
n
n
n
n
Querétaro: linked in an initial stage the recording functions in the geographical environment of
the state capital.
Querétaro and Morelos: obtained their ISO 9001:2000 quality certification in the substantive
processes they are developing.
México and Morelos: established institutes that include the Registration and Land register
functions.
Baja California: is carrying out the total digitalization of the historical collection and is establishing
itself as a paperless office.
Tamaulipas, Jalisco, Morelos and Baja California: are legally implementing the use of the electronic
signature.
107 Have an information base on the best
practices developed in the states that assist
the Evaluation Committee in its decisionmaking process.
In order to have an adequate management of the Program and a
timely supervision of the compliance with the actions committed in the
State Modernization Programs, the Evaluation Committee is currently using
the Project Management System, whose main goals are to: 107
n
n
Obtain a record, control, archive, and safekeeping of the information
generated on the Program..
Produce timely information that will enable the supervision of the
actions of the State Modernization Programs.
For fiscal year 2009, 374.4 million pesos were allocated, confirmed in the Program Guidelines,
published in the Official Journal of the Federation on January 14, 2009.
So far this year, the Evaluation Committee has authorized the transfer of 362.3 million pesos
distributed among the following states: Aguascalientes, Baja California, Chiapas, Chihuahua, Mexico
City, Mexico, Guanajuato, Jalisco, Michoacán, Morelos, Puebla, Querétaro, Quintana Roo, Sinaloa,
Sonora, Tabasco, Tamaulipas, Tlaxcala, Yucatán, and Zacatecas.
As a consequence of the results achieved, it is deemed pertinent to update the orientation and
scope of the Model through an element of performance indicators, in order to perfect and adhere it
to the best recording practices on an international level. For this purpose, CONAVI, in coordination
with the CJEF and SHF, is developing the Performance Indicators System, whose goal is to evaluate
the efficacy and operating efficiency of the PRPs, emphasizing the quality of the service, service times,
and costs per procedure.
Likewise, the socioeconomic evaluation of the Program is in progress, in order to determine the
social profitability of the investments made.
5.3.2.
Importance of the link between the urban and rural land register with
the PRP
In most of the states, the function of making the urban land registers is the responsibility of the
municipalities; however, of the 2,471 municipalities in existence according to the Population and
Housing Count, 2005 (this number could have changed due to the creation of new municipalities), a
relatively low number have the adequate human, financial, and technological resources for this task;
thus, they work jointly with state and federal authorities.
In face of the need to serve a growing population, the record systems take on a huge importance
as a base for the fiscal income from real estate property. They are also useful for the regularization of
land tenure and of human settlements.
Nowadays, the Modelo Integral de Public register states, in its eighth component, that PRPs must
obtain the data for the physical identification of the plots as a result of their link with the land registers.
This link must be made on various levels, from a simple homologation and use of shared identification
codes, to the integration of recording departments in a single body.
The Model does not suggest in any way the assimilation of the institutions, as they each have
their own method and principles and act in different fields. That is, while PRPs are general state bodies
and pursue the registration and publication of acts and contracts in order to provide legal security, land
registers are municipal and their goal is the full identification of the fincas, using technical-cartographic
elements and the corresponding tax collection.
Although there is a political will from the competent local authorities to link their recording and
recording institutions, this will has barely translated incipiently into practical actions for the exchange
of data between them. Thus, it is important to consider the following reflections:
n
n
n
The efforts made so far are insufficient as there is no efficient national urban land registers system; the consequences
are easy to see: low local collection, irregular settlements on invaded private plots, lack of land markets, and urban
disorder in most of the cities of the country.
Scarce use of the global positioning systems (GPS) which have been available in Mexico for several decades; these
tools are a great support to update plots and real estate recorded on cartography, and allows a metrical precision,
aided by sketches, satellite images, and aerial photographs, among others.
The lack of periodically updated urban record systems limits the possibility for local governments to have a source
of financing for their development, restricts citizens’ participation, and therefore, they do not contribute to the
transparency of public management. It is urgent to have a national program to build efficient and effective recording
institutions.
Thus, it is necessary to define a strategy that will favor the implementation of a Comprehensive
Framework Model for the Operation of State and Municipal Land Registers; for this purpose, it is feasible
to encourage the creation of a Federal spatial planning-public register-land register Linking Committee
that will establish general lines of action and that will have a relationship with state and/or municipal
committees or commissions defined for this purpose, in order to set the grounds nationwide for a
Comprehensive Land Register Modernization Program.
5.3.3.
The predial tax incorporated into the mortgage
108 <www.oecd.org>
Currently, Mexico is the member of the Organization for Economic Cooperation and Development
(OECD) with the lowest predial tax collection index as a share of GDP, standing at 0.3%; it is below
countries such as Turkey with 0.9%, and Hungary with 0.8%, among others. In contrast, countries
such as France, England and the United States collect over 3% of GDP through the predial tax.108
From a financial point of view, property taxes are seen as fees that taxpayers pay for the services
provided to the community, such as cleaning, security, and maintenance of public spaces (thoroughfares,
town squares, and parks), trash collection and disposal, cemeteries, markets, street lighting, police, and
firefighters, among others.
In the United States—one of the countries with the highest collection of this tax—a collection
system through the mortgage loans is used, in addition to other policies that encourage payment of
the predial tax, such as seizing the dwelling in case of default.
Thus, in over 85% of the dwellings acquired through a mortgage, collection of the predial tax is
included in the monthly payment on the credit. Due to the complexities implied by this for the financial
intermediary, in most cases, a third party is engaged—First American, Land America, Fidelity, among
others—who takes care of consolidating the information and the payments between the tax agencies109
and the financial intermediary, who manages the information on the credit portfolios, as well as the
land register base of the agencies, making the corresponding payments in a timely manner to then send
the payment receipt to the taxpayer.
In face of the challenges and difficulties to increase collection of the predial tax nationwide, the
Federal government, through ONAVIS like SHF, continues the efforts begun in 2008 with the program
that considers mortgage lending as a tool to collect in a lasting (till the end of the credit), efficient, and
automated manner the predial tax together with the mortgage.
109 The Tax agencies correspond to each
County—the equivalent of Mexico’s
municipalities.
This program emerged as a pilot program in that year with the signing of an agreement in the State of Mexico with
the municipality of Tecamac and Hipotecaria Su Casita; to date, work is still being done on the adjustment of the necessary
systems that will enable its operation.
However, due to the importance of this initiative, in 2009, there is a greater number of public (like Infonavit) and
private institutions (including different mortgage Sofols/Sofoms that will participate) that will join the efforts to help make
this mechanism a common practice nationwide, at least in the most representative municipalities of the country with a
high demand for housing, considered in the first stage of the project’s implementation.
For this reason, work is done jointly with municipalities, financial intermediaries, private entities specializing in the
collection, management, and dispersion of financial resources from the predial tax, as well as with the various institutions
responsible for granting mortgage lending in Mexico.
The mechanism proposes that the financial intermediary or credit institution will act on behalf of their borrowers
by making the payment of the predial tax to the municipality on fixed dates. The incentives for the local government lie
in the increased inflow of revenues, the greater certainty in the income they will collect, and the strengthening of their
capacity to plan works that will make it possible to satisfy the needs of the inhabitants under their jurisdiction.
Due to the operating and adaptation complexity of the technological processes of the pilot project, it became necessary to have the participation of a body or institution that would act as a consolidating intermediary of information and
payment services, that will achieve the successful implementation of the project, and that will coordinate this process in a
profitable and efficient manner. That is, an intermediary between the various municipalities and the financial intermediaries
that grant the mortgage on which the collection of the predial tax is included.
financial intermediary 1
municipality 1
consolidating
intermediary
municipality 2
municipality 3
financial intermediary...4
municipality...4
Figure 9.
Operating mode for
the collection of the
predial integrated into a
mortgage
Source: SHF, 2009.
Info on the mortgage loan
and predial tax
Info on property’s predial
consolidated payments
The project’s strategy considers that, for the first year of operation, it will be possible to work
with at least 60 municipalities which concentrate the most credits granted by the financial intermediaries.
Moreover, other ONAVIS are making progress on pilot projects to reach the most mortgage loans and
turn this program into a common practice that will make it possible to:
n
n
n
n
n
Encourage the maintenance and development of public services and thus improve the market
value of the dwellings and the appreciation of the developments.
Provide the municipality with financial resources on time and generating certainty on the availability of funds to carry out works to benefit the population.
Encourage a payment culture of the predial tax through the disbursement of mortgage loans,
preventing fines and additional taxes for the contributor.
Simplify payment of the predial for taxpayers.
Obtain financing for municipal public services.
In order to revert the historically low contribution of the predial tax to local finances, the Hipoteca
más predial, un sólo pago (mortgage plus predial, single payment) program will enable the municipalities
to have enough resources to provide their residents with more and better public assets, and it will
give borrowers the possibility to cover, in a single payment, their monthly mortgage installments and
the predial tax.
5.3.4.
Indicators analysis: Registro Único de Vivienda (housing register)
In order to become acquainted with the national housing offer and provide information that will simplify
the decision-making process and the strategic planning of the offer, it is essential to have a record of
the participating companies, classify it, and present in its many variations and prices.
Towards the end of 2005, an interinstitutional team was created to plan, formulate, and develop
the concept of the Registro Único de Vivienda (RUV) (housing register)—a joint effort of coordination
between FOVISSSTE, SHF, Infonavit, and the ONAVIS that cover the national spectrum of mortgage
credit allocation for workers.
The team concurred on the need to reduce procedures, have a state-of-the-art comprehensive
process, an unify the criteria to record sellers and housing offer. In October 2006, the RUV system
was released with the goal to answer these needs; up to 2009, the following benefits have been achieved:
n
n
n
n
n
n
Standardization of the criteria to register sellers and construction supervising companies, as
well as the housing offer through a sole registration office of housing offer with a simple and
transparent process.
A single process to register the companies and users of the housing development industry
that will enable them to access the various operating processes of the ONAVIS.
Elimination of redundant processes by having a homologated and updated list of sellers and
construction supervising companies for the sector.
Access to timely and complete information regarding the offer of new and used housing in a
reliable, comprehensive, and truthful database.
Promotion of a common language for the sector.
Centralized and automated operation of critical processes, such as authorization to register the
offer.
n
n
n
n
n
n
n
n
n
Identifying the various external players that participate in the process of granting the registration of the offer
to integrate them formally into the system.
Easy and transparent access to the information on housing.
Optimization of the use of the installed capacity to avoid timeouts or long subutilization periods.
A permanent office for the sellers and construction supervising companies through the website <www.micasa.
gob.mx> with coverage on the national level to register and display their offer.
Unification and standardization of the processes to register selling and construction supervisor companies and
the housing offer, the simplified registration procedures, and better service and response levels.
Expansion of the alternatives to individualize the dwelling with the same entry, as they can do this through any
of the ONAVIS, banks, and Sofols, based on the particular operating norms.
Publication of the housing offer registered in the RUV on the website <www.micasa.gob.m> if the seller
defines it so.
Use of state-of-the-art technology that ensures an optimal performance of the operating processes.
A construction inspection module including an automatic allocation algorithm based on an index of excellence,
in order to guarantee that these are the best suppliers of the inspection service.
MonthSellers Sellers Sellers Inspector
2006
2007
2008
2008
January
256
830
459
95
February
385
1089
435
145
March
431
853
272
198
April
247
681
985
110
May
400
1129
980
31
June
389
935
908
35
July
300
749
861
27
August
329
912
805
41
September
354
775
899
61
October
458
850
714
113
November
978
694
624
367
December
798
503
547
336
Total
5,325
10,000
8,489
1,559
Sanctions
2008
142
10
19
27
19
20
105
83
10
69
159
91
754
Table 39.
Company registration
applications, 2006-2008
Number
Projection for the registration of offers
Based on the historical record of offer and the progress on construction seen in the last few years, the available inventory for 2009
was estimated, up to April 12. The offer registered dating back no
more than 24 months was considered, with an estimated completion
date in 2009, and not considering dwellings that have a Sole technical
report (DTU in Spanish) prior to the fourth quarter of 2008.
Table 40.
Record of housing offer
with Infonavit 2006-20099
Offers
(number)
2006
2007
2008
Location
Date of payment
dwellings
2009
Total
2006
2007
(number)
2008
Total
Aguascalientes
33
358
284
153
828
1,856
12,564
Baja California
52
562
462
233
1,309
7,281
56,140 30,413 11,175 105,009
Baja California Sur
8
128
131
63
330
925
4,420
4,901
2,022 12,668
Campeche
9
49
52
14
124
213
1,977
2,640
1,121
121
723
710
242
1,796
4,114
Colima
25
227
193
86
531
1,790
5,558
5,551
2,092 14,991
Chiapas
24
137
110
39
310
686
5,823
6,983
2,000 15,492
Chihuahua
71
544
465
231
1,311
6,791
42,102 32,300
7,047 88,240
Distrito Federal
10
320
293
146
769
347
11,766 10,293
3,073 25,489
Durango
24
287
240
113
664
710
10,210
8,928
2,755 22,603
Guanajuato
55
505
415
204
1,179
3,907
31,810 22,867
8,051 66,635
Guerrero
19
101
78
29
227
2,072
Hidalgo
33
356
270
148
807
Jalisco
55
594
460
305
México
71
501
386
Michoacán
30
260
Morelos
15
Nayarit
Coahuila
9,226
2009
26,629 24,521
5,951
5,968 61,232
7,973
1,395 19,876
2,314
20,755 18,114
6,527 47,710
1,414
7,829
59,139 37,584 19,836 124,388
150
1,108
18,291
75,320 85,242 26,087 204,940
240
82
612
3,681
17,283 17,810
5,601 44,375
150
182
92
439
2,293
7,085 10,192
3,380 22,950
11
105
123
33
272
1,173
7,073
3,037 18,826
117
691
650
362
1,820
10,085
Oaxaca
11
75
65
27
178
218
Puebla
20
204
206
136
566
2,905
14,640 15,661
7,704 40,910
Querétaro
27
266
307
145
745
1,455
15,728 19,389
6,460 43,032
Quintana Roo
24
124
212
50
410
6,420
18,080 26,079
7,618 58,197
San Luis Potosí
37
395
327
222
981
1,179
Sinaloa
46
465
353
129
993
Sonora
54
454
384
194
Tabasco
18
101
102
Tamaulipas
53
523
Tlaxcala
2
Veracruz
Yucatán
Nuevo León
Zacatecas
Totals
8,436
4,531 28,177
7,543
67,269 65,110 27,605 170,069
4,112
1,616
8,608
9,222
5,068 24,495
2,324
20,133 17,384
8,027 47,868
1,086
3,415
23,900 22,793
9,999 60,107
49
270
2,171
414
120
1,110
6,560
102
94
39
237
43
45
354
305
113
817
4,150
22
252
275
83
632
759
4
169
165
59
397
225
1,146 10,082
8,953
4,091 24,272
108,182
9,026
2,662
4,373
5,347
1,563 13,454
45,888 45,760
9,389 107,597
2,347
2,225
854
5,469
29,341 25,329 10,032 68,852
12,507 13,899
4,144
3,072
3,040 30,205
1,298
8,739
675,588 617,013 215,9711,616,754
Average sale price
(Pesos)
2008
2009
Average built area
(m2)
Total
2006
2007
2008
2009
2006
2007
Total
258,166.95
346,054.55
384,532.44
307,909.16
346,671.37
51.84
62.06
62.37
51.87
59.85
345,750.13
364,831.06
460,950.49
390,428.05
394,070.44
51.83
50.26
54.43
49.97
51.55
663,333.77
681,507.23
831,542.15
520,538.81
713,544.44
92.33
80.58
83.22
62.05
79.47
218,341.66
342,727.32
290,612.39
465,623.24
338,306.01
50.17
64.28
56.39
74.97
62.29
225,465.04
255,326.67
275,156.66
309,735.02
266,564.13
57.24
57.70
58.22
62.84
58.38
290,494.55
300,842.78
319,202.84
301,952.86
306,560.59
53.47
54.83
53.55
52.08
53.81
334,132.03
326,344.69
293,333.07
486,806.42
332,525.00
60.39
63.19
55.86
71.78
60.87
325,628.78
298,304.94
305,727.69
291,909.66
302,614.10
47.91
49.97
50.53
48.27
49.88
504,482.71
617,709.02
857,359.51 1,055,354.81
765,706.92
51.78
64.48
69.75
80.24
68.34
261,092.14
227,790.81
244,372.06
233,702.53
236,106.84
57.59
52.56
53.22
49.22
52.57
320,653.08
326,893.10
457,471.48
349,922.08
374,119.97
61.45
56.74
57.60
55.71
57.18
371,299.40
396,512.99
498,653.63 1,925,845.21
542,193.37
59.32
63.37
66.08
69.21
64.45
396,584.88
263,044.71
299,347.65
299,400.69
288,278.39
59.41
55.50
58.35
55.32
56.75
347,461.38
336,733.00
384,273.09
353,968.90
354,521.14
55.80
53.54
57.62
54.19
55.02
310,275.46
358,028.68
338,414.38
407,207.28
351,868.37
54.16
56.23
52.53
59.30
54.90
244,367.53
299,638.46
348,125.53
277,269.30
311,690.58
54.79
54.22
54.73
52.81
54.29
453,856.90
441,773.73
495,769.85
454,559.39
468,841.26
62.29
61.25
63.53
54.87
51.43
450,478.23
369,424.66
367,997.68
361,653.24
372,649.47
67,25
56.16
61.52
53.65
58.59
316,291.18
303,250.26
329,263.81
336,338.09
319,353.37
57.24
56.16
60.51
58.69
58.30
340,605.36
323,868.03
325,606.76
336,778.97
324,160.93
65.91
56.54
51.20
54.02
54.65
264,962.09
298,647.95
402,035.52
355,277.83
346,498.64
52.45
58.17
58.34
60.53
58.27
445,019.09
379,170.56
426,564.14
836,959.65
471,466.42
66.22
60.98
59.91
64.60
51.22
462,692.34
404,704.50
4,662,382.01
361,371.89 2,313,362.09
50.76
54.56
53.37
52.15
53.29
343,557.77
345,812.61
326,541.86
334,748.49
336,159.77
71.62
64.69
60.80
60.44
62.68
485,441.02
429,400.72
400,062.17
368,774.63
411,300.33
53.77
64.47
60.06
61.64
61.87
285,125.23
282,334.38
317,720.71
283,725.26
296,143.07
57.20
51.08
55.26
51.65
53.11
316,336.86
626,294.43
383,175.91
339,744.51
446,366.52
54.46
68.33
67.97
62.99
65.33
275,407.61
252,862.82
282,810.27
448,706.35
284,063.17
56.59
48.81
48.83
47.23
49.16
264,883.72
244,016.49
229,554.91
285,635.95
244,796.03
76.17
58.25
57.53
60.28
58,41
272,419.54
278,757.76
284,861.58
316,167.04
286,071.86
50.80
53.55
51.98
58.55
53.53
266,190.61
267,900.92
298,277.02
299,524.60
285,017.98
63.76
62.07
64.61
60.55
63.13
218,857.02
296,731.35
316,437.65
278,344.88
298,922.72
45.93
58.97
57.97
52.23
57.28
5.3.5.
Actions of the Mexican Mortgage Association
With regard to its structure and the agents that make it up, the mortgage sector in Mexico has
special characteristics that set it apart from other countries and in better conditions to deal with
economic adversity.
It has solid housing institutions, such as Infonavit and FOVISSSTE, that continue to operate their
programs, with SHF, a development bank that caters to this sector, private financial intermediaries—
represented by banks and Sofols/Sofoms—guarantors, and homebuilders and housing developers; all
are key components of the productive chain, necessary to harmonize the housing offer and the lending
activity in the country.
Origination of mortgage lending
Banks and the Infonavit and FOVISSSTE funds reported an increase in the granting of mortgage
loans in 2008, measured both in terms of volume (number of loans) and in sum (value of the
portfolio originated). Although Sofols/Sofoms continue to have a large share, their levels of
origination have decreased—essentially a consequence of two situations: First, the highly adverse
funding conditions, in general terms, in the stock sector; and second, some Sofols/Sofoms showed
a decreased quality in their mortgage portfolios, which forced them to push origination to the back
burner with regard to their business priorities.
Table 41 shows the mortgage lending granted in 2007 and 2008.
Table 41.
Origination* of mortgage
portfolio in Mexico,
2007 vs. 2008
Source: AHM.
Sector
2007
2008
% variation 2007-2008
NumberValueNumberValue NumberValue
of credits
(mill. P$)
of credits
(mill. P$)
of credits
Bancos
Sofoles/Sofomes
Subtotal
Infonavit
Fovissste
Gran total
54,119
110,995
165,114
458,701
70,528
694,343
38,614
51,990
90,604
102,124
22,279
215,006
88,671
99,487
188,158
494,073
90,140
772,371
47,966
45,364
93,330
115,029
30,783
239,142
63.8
(-)10.4
14.0
7.7
27.8
11.2
24.2
(-)12.7
3.0
12.6
38.2
11.2
* does not include adjustments for Cofinavit, Apoyo Infonavit, Alia2, Respalda2 credits
Within this data, it is worth noting that 70% of the investment
in mortgage lending in 2008 was destined to the open market format; that is, these credits are not linked between financial entities
and housing funds. On the other hand, 30% was used precisely for
the joint programs of banks and Sofols/Sofoms with Infonavit and
FOVISSSTE. Sofols/Sofoms were particularly active in these joint
plans, devoting 39% of their funding to these programs; Cofinavit
stands out as the most important one.
Financing for the Mexican mortgage system
One of the most relevant strengths of the Mexican mortgage system is its financing structure, which
made it possible to increase the mortgage offer in 2008.
On the one hand, the Infonavit and FOVISSSTE funds, which together manage two thirds of the
Mexican mortgage portfolio, base their financing on the employer contributions made on behalf of their
corresponding affiliates, as well as on the revolvence of their existing portfolio. In addition, Infonavit
has added securitization as an important alternative source of financing—an effort begun in 2004 that
has managed to grow year after year, even in 2008. Overall, the Institute has securitized over 34 billion
pesos in mortgage portfolio.
Banks, whose market share is above 15% of the total mortgage portfolio, mainly in middle and
residential housing, fund their portfolio mostly through deposits, which has proven to be a stable
mechanism for credit institutions that are financially sound, as is the Mexican banking system.
On the other hand, Sofols/Sofoms are the entities that have been most affected by the deterioration of the financial markets—a problem that has been particularly critical for those that are not
part of a financial group. When dealing with the regulatory restriction to finance themselves through
the collection of deposits, beginning in 2003, this group of entities made important progress on the
diversification of its funding sources, particularly through debt instruments in all their formats: mortgage
securitization, bridge loan securitization, and both long- and short-term unsecured sotck certificates, thus
becoming highly relevant agents in the development of the country’s secondary mortgage market.
Although stock market funding turned out to be the most vulnerable link in the financing
structure of the Mexican mortgage system in face of the global financial crisis, the implementation of
various funding strategies by SHF helped to buffer the effects of the dysfunctional financial markets;
among these strategies, we should note:
n
n
n
Granting credit lines that have allowed Sofols/Sofoms to decrease in a gradual and relatively
orderly way their short-term stock market financing.
Funding for bridge loans—a product it had removed from the market in 2003.
Play the role of institutional investor, by providing liquidity to those issuers (including banks) that have opted for
securitizations.
LThe role SHF plays as lender of last resort not only made it easier for mortgage
Sofols/Sofoms to meet their liquidity needs in highly adverse times on the capital markets, thus avoiding payment default, but it has also enabled them to continue offering
credit to developers; this has also prevented the housing train from stopping, thereby
also preventing an even deeper crisis.
The aid SHF has provided not only to the entities in need of liquidity, but also
to securitizations as a whole, will help to restore the confidence in the mortgage
sector, while waiting for the economic situation to stabilize and the stock sector to be
reactivated.
Bridge loans
In 2008, the unpaid balance of the bridge loan portfolio (construction credit) grew 2.8% —a situation
that continues to draw attention in face of the unfavorable financial conditions that prevailed throughout
the second half of the year, causing a significant contraction in the liquidity that the corporate world as
a whole, including the housing developer sector, should have faced.
This result comes essentially from the participation of commercial banks, whose financing to
construction increased by 13.9%. Sofols/Sofoms, on the other hand, being the institutions with the
highest percentage of funding to housing construction in Mexico, reported a 4.4% contraction in the
funding for bridge loans as of the second half of the year. The unpaid balance of the bridge loan portfolio reported both by banks and Sofols/Sofoms, breaking down securitizations in the latter group the
current portfolio and the portfolio outside the balance sheet. (see table 42).
Table 42.
Unpaid balance of
bridge loans, 2008
Millions of pesos
Source: AHM.
TotalBanksSofols/Sofoms
Totals
January
February
March
April
May
June
July
August
September
October
November
December
84,753
85,682
83,201
85,660
86,202
86,805
86,947
88,095
87,663
88,591
88,502
87,660
33,472
33,918
31,591
34,346
34,780
35,065
35,451
36,110
36,723
37,486
37,680
38,112
En balance
51,281
51,764
51,610
51,314
51,422
51,740
51,496
51,985
50,910
51,105
50,822
49,548
33,608
34,338
34,062
34,256
33,912
34,380
34,989
35,623
35,572
35,872
35,968
34,375
off balance sheet
17,673
17,425
17,548
17,058
17,511
17,360
16,507
16,362
15,338
15,233
14,855
15,173
Mexican Mortgage Association in face of the crisis
Despite the situation faced by some of the real estate and housing markets abroad, it is possible to say
that the mortgage lending sector in Mexico is not in a systemic crisis, although it has naturally been
affected by the country’s economic conditions and by unemployment.
Despite the adverse economic situation, mortgage and lending activity in 2009 will continue to
be a key element of the national economy, generating jobs, and as one of the sectors with the highest
GDP contribution. It is an example of the joint and committed work of all the players of the industry
towards several common goals, including the National Pact for Housing to Live Better.
As a group that represents the entities involved in mortgage financing, AHM not only works
towards consolidating its presence on a national and international level, but also, in keeping with the
conditions and challenges of the global economy, its activities focus on developing a vision and sustainability for the industry towards 2012, in order to counter the effects of the crisis and encourage the
continuity of the country’s lending activity.
The effort includes the revision and reformulation of parts of
the mortgage model following four essential axes: a) offer of housing
and financial instruments; b) portfolio recovery and restructuring;
c) risk policies; and d) information.
In the first months of 2009, there was a significant lack of liquidity for bridge loans, which significantly reduced the progress on housing construction. Nonetheless, the timely actions taken by SHF,
as well as by Infonavit and FOVISSSTE, will bring about the liquidity that the system requires to ensure
the availability of housing.
Also in the same period, there was a contraction in housing demand from the market, namely
due to the population’s caution or rejection of risk and to the impact of the economic crisis, particularly
in terms of unemployment. Despite all this, the entities associated and affiliated to AHM claim that
this is still a good time to take out a mortgage and acquire a patrimony, as well as the importance of
restoring confidence.
2008 brought a positive balance to the Mexican mortgage system, which is particularly commendable considering the financial and economic environment, or comparing it to the results of the
US mortgage system in the same period.
Among the facilities and advantages that should be considered, it is worth noting the credit
availability in most of the country’s financial intermediaries and the possibility of taking out a fixed-rate
mortgage in pesos or in minimum wages, which protects borrowers from any spikes in inflation. Home
prices have remained stable, and mortgage interest rates have not seen important changes since early
this year. It is also important to keep in mind the existence of the payment protection or unemployment
insurance market, as they can be obtained together with the mortgage and thus ease the effects of a
possible job loss for up to 12 months.
Stimulating credit demand, as well as the liquidity for housing construction is one
of AHM’s main goals, as it shares a positive view on the sector for the next few years,
together with a gradual recovery of the industry, which should begin towards the end
of 2009 and throughout 2010.
The 25 members of AHM include banks, Infonavit, mortgage Sofols/Sofoms,
SHF, and other mortgage lending insurance companies. FOVISSSTE participates actively
in a special way, and as Affiliates we find institutions that are an important part of the
sector’s supply chain, such as the Asociación Nacional del Notariado Mexicano (national
notaries association), among others.
5.3.6.
The Total Annual Cost (TAC) and the Residual actual cost
(CER in Spanish)
The TAC is an indicator that makes it possible to compare the price of the mortgage
loans offered by various financial intermediaries. It is expressed in terms of annual percentages, and includes all the expenses the client must make when taking out a loan,
such as interests, commissions, and insurance, among others. The TAC is determined
only once, at the beginning of the loan, and it is calculated in the same way for all the
products of the same type (same currency or unit, same term), which makes it possible
to very easily distinguish the cost of the credits available on the market in order to assist
the client in choosing the product with the lowest cost.
The CAT calculation includes:
n
n
n
n
n
n
n
n
Initial credit amount..
Capital payments.
Interest payments.
Commissions:
n
Opening.
n
Investigation and socioeconomic study.
n
Cost of the valuation.
n
Any other expenses the client must make in order to take out the credit.
Expenses or premiums prior to, or during the life of the credit for:
n
Management.
n
Operation of insurance for life, disability, unemployment, damages, or theft.
VAT on commissions, premiums, and interests.
Discounts or bonuses and any other sum the client is entitled to receive for fulfilling the conditions
established in the contract.
VAT, when applicable.
The TAC mustn’t include the charges to be paid both by the person that buys cash and the one
buying on credit, such as:
n
n
n
n
n
Notary expenses.
Public Register of Property and Transfer of Title.
Tax deductions.
Infonavit employer contributions.
Advance payments.
Benefits of the TAC
The client chooses the credit with the lowest cost on the market,
and that will meet their needs and payment capacity. It is important
to mention that the TAC is an indicator exclusively for comparing
the cost of loans; thus, the client must consider, in addition to the
TAC, other factors in their choice, such as the sum of the monthly
installment and the periodicity of the payments.
Residual actual cost (CER) of mortgage loans
The CER is an indicator that makes it possible to find out the price of the remainder of the loan that
was taken out. This indicator is expressed as an annual rate and includes all the payments the client
must make in the period remaining on their loan. The CER is calculated after the credit is taken out
and as many times as necessary. For comparison purposes, the CER is reported on a monthly basis in
the borrower’s account statements.
It makes it possible to know the cost of the remaining period on the loan and use it for comparison purposes to estimate how much it will cost them to keep their credit with the current conditions,
or else choose to switch the loan to a different institution.
The CER calculation includes:
n
n
n
n
n
n
n
Unpaid balance on the loan.
Capital payment.
Interest payment.
Commissions in the life of the credit.
Insurance premiums.
Discounts and bonuses.
VAT, when applicable.
All the concepts used are denominated
in the same currency or unit.
CER benefits
It enables the client to have a parameter to decide to
change their current mortgage to another institution
that will offer a lower cost. However, it is important to mention that the CER is only an indicator
whose sole function is to compare the cost of the
remaining term of the loan; thus, in addition to the
CER, the client must consider other factors, such
as notary expenses for taking out a new loan and
commissions for advance payment of their current
loan, when applicable.
The CER must not include:
n
n
n
Costs and commissions already paid upon taking out the
loan.
Infonavit employer contributions.
Advance payments.
5.3.7.
Social collection
As a consequence of the economic recession in the United States, a large number of Mexican companies—particularly those related to the manufacturing industry and the automotive sector—have had to
cut production or shut down completely. Likewise, companies in the tourist sector were forced to stop
working due to the significant decrease in tourists as a result of the AH1N1 influenza virus outbreak
at the end of the first quarter of 2009. All this was reflected in an increase in the number of technical
stoppages, higher unemployment, and workers’ decreased purchasing power.
The federal and state governments have promoted a series of steps designed to boost employment and jumpstart the economy. On the other hand, following the National Agreement in Favor
of the Family Economy and Employment, Infonavit has implemented a series of actions in favor of both
workers and employers in order to help borrowers to meet their payments without neglecting the
flow of resources towards the housing sector. These measures promote the construction of new
developments and keep the economy running.
Figure 10.
Social collection
model
Source: Infonavit, 2009..
preventive
collection,
no omissions
administrative
collection,
0-3 omissions
specialized
collection,
9 omissions on
conciliating
body,
7-9 omissions
portfolio
recovery,
4-6 omissions
Solutions based on the borrower’s situation for:
1. security of their patrimony
2. returns on workers’ savings
3. more credits
4.00
4.0%
3.5%
2.75
3.0%
2.5%
2.0%
2.50
2.50
4.00
3.50
3.00
2.00
1.5%
2000 2001 2002
2003
2004
2005
2006 2007
205,346
2001
300,000
376,444
458,701
494,073
2003
2005
2007
2008
Credits
These are aids under the Garantia Infonavit plan, which reinforces the social collection model and
guarantees the financial sustainability of the Institute in the long run. Some of its advantages are that:
n
n
n
n
n
It places within the borrowers’ reach an alternative solution in the case of decreased income or
job loss. Workers who lose their job can obtain an extension or even search the job records
where over 120 thousand job offers are published each month.
The credits granted from 2007 on have an unemployment insurance that protects the borrower
for six months. To use this benefit, the borrower has only to claim the insurance.
Workers whose income decreased can request a reduction in their monthly installment. If the
company is undergoing a technical stoppage, borrower workers can obtain a discount of 25% for
as long as the stoppage lasts.
Borrowers who wish to pay off their loan can be offered a discount going from 5% to 30%, based
on the characteristics of each loan.
As of April 2009, when it was approved by the Institute’s Management Board, an incentive is given
to companies that hire unemployed Infonavit borrowers.
Garantia Infonavit
Figure 11.
Aid and coverage guarantee for borrowers
Garantia Infonavit
What benefits, aids, and solutions does the guarantee include?
Job loss
Variation in family’s purchasing power
Anticipated settlement
Punctual borrowers
extension
partial extension
l payment protection insurance (2008)
l payment protection fund (2009)
l employment opportunities
l reduction of payment due to technical stoppages
l reduction of payment due to variation in family’s purchasing power
l reduction of payment due to economic pressures and job stability
l automatic restructuring of debt on credits with job stability
l restructuring via “solution and new account” (33 different options)
l application of socioeconomic studies to determine family earning capacity
l disability, invalidity, or death insurance. (in the terms of Art. 51 of the law)
l 30% discount for loans originated prior to Jul/31/95
l Discount of up to 10% for loans over two years old
l lottery of 120 monthly installments
l 10% discount upon paying off the loan for punctual borrowers with a credit over 10 years old
l Promotions and discounts
l
l
Infonavit will grant borrowers an aid and coverage guarantee as long as they meet the requirements established to
apply for each of them.
In May 2009, over 160 thousand borrowers had opted for one of
the aids under the Garantia Infonavit plan. n
January February
Total extension
9,684
14,997
Partial extension
892
1,110
Solution and new account
10,026
16,055
Technical stoppages
479
2,846
Payment protection insurance
1,308
1,866
Settlement up to 10%
Settled loans due to death
75
263
Settled loans due to disability 61
27
Total
22,525
37,164
March
11,505
707
18,118
4,603
2,282
63
360
56
37,694
April
12,561
1,063
19,349
2,699
1,472
230
335
2
37,711
May
6,861
676
15,295
655
1,711
38
503
19
25,758
Total
55,608
4,448
78,843
11,282
8,639
331
1,536
165
160,852
Table 43.
Situation of the aids from
Garantia Infonavit
Number
5.4.
Key findings
n
n
n n
n
n
n
n
n
n
n
n
The reform made to SHF’s Organic Law eliminated the restriction that
prevented it from offering financing as of 2009.
Two loans were obtained through SHF—one from the World Bank, and
another from the Inter-American Development Bank—to support the
housing sector.
According to the preliminary close of the Programa Nacional de Financiamientos Hipotecarios 2008, 1,421,998 financings were granted under their
various formats, with an investment of 281.2539 billion pesos.
In 2008, 230,296 subsidies under CONAVI’s Ésta es tu casa program were
awarded. This was 75.9% greater than in 2007.
CONAVI’s subsidy goal, under its four formats, is 190 thousand for 2009. By
June, it had achieved 56% of the goal.
In April 2008, Seguros de Crédito a la Vivienda SHF. S.A. de C.V. was created;
it began operating on March 6, 2009.
SHF promotes two cofinancing programs—Cofinavit and CoFOVISSSTE—
which allow borrowers with incomes of 6 to 10 MW to obtain a dwelling
with a higher value.
Infonavit’s Green mortgage program has been well accepted by all the players.
The job is now to make buyers aware so that the devices installed in the
dwellings will be properly used.
Within used housing, over 30% of the properties for sale have some problem
with their escrituras, 25% have problems due to late predial payments, and
nearly 11% have problems of transfer de property.
According to SHF’s Base de Avalúos (BA), used housing is 27% larger than
new dwellings built in 2008. In terms of urban proximity, 6.7% of the used
dwellings were found in central locations whereas only 1.8% of the new ones
shared this location, and the price of used housing is between 10% and 40%
lower than for new housing in the main cities of Mexico.
From 2004 to 2008, there was a 97.8% increase in the number of mortgage
loans for the acquisition of used housing granted by Infonavit, FOVISSSTE,
banks, and Sofols, all together.
At the end of 2008, Infonavit’s credit transactions for used housing totaled
94 thousand loans.
n
n
n
n
n
n
The <www.contactoinfonavit.org.mx> website is a medium to link sellers
and buyers; at the end of 2008, it had close to 23 thousand properties to
be viewed.
In Mexico, it is estimated that for a family to acquire an economic dwelling
worth 118 times the MW, their monthly income must amount to at least 4
times the MW.
Microloans for housing are an essential instrument to improve the living
conditions of many families in Mexico.
Implementation of a Comprehensive Land Register Modernization Program
nationwide.
Housing funds—Infonavit and FOVISSSTE—manage two thirds of the mortgage portfolio in Mexico.
Garantia Infonavit has been an aid for over 160 thousand workers at the time
of unemployment or reduced income.
Section 6.
Development of the secondary market for
housing finance
6.1.
Current issues on the market
and their characteristics
SHF and Infonavit, together with various financial entities, have continued to work hard on the promotion of alternate financing plans that will make it possible to meet the growing demand for housing,
eradicate housing backwardness, and achieve greater accessibility to mortgage lending.
Mortgage securitization is one of the mechanisms that offers an alternate funding source and
has made it possible to support the growth of the housing market, which would be unsustainable using
the traditional funding mechanisms that existed prior to this very efficient alternative.
6.1.1.
Mortgage backed securities (BORHIS in Spanish)
Despite the impact on markets’ liquidity, in 2008 nearly 16.015 billion pesos were placed in Borhis and
Bonhitos,110 4.83 billion in other mortgage backed securities (MBS), and 14.443 billion in CEDEVIs,111 for
a total of roughly 35.288 billion pesos.
Between 2003 and August 25, 2009, the total sum accrued in public MBS, at their original value,
amounted to around 118.745 billion (considering the issues placed by Infonavit and FOVISSSTE).
Year
2003
2004
2005
2006
2007
2008
2009
BORHI + HiTo
596
2,749
2,859
12,497
22,430
16,015
7,425
64,570
Other issues
-
-
-
-
3,847
4,830
-
8,677
CEDEVIS
-
1,959
3,274
5,998
10,213
14,443
6,110
41,997
TFOVI
-
-
-
-
-
-
3,500
3,500
Total
596
4,708
6,133
18,495
36,490
35,288 17,034
118,745
110 Hipotecaria Total securities.
111 Housing bonds.
Table 44.
Sum issued (BORHIS , CEDEVIs,
TFOVIS, and other issues)
Millions of pesos
Source: SHF. Markets and Securitization
Development Department, 2009.
The following table shows the total current issues of BORHIS and their balance at nominal value,
adjusted to August 25, 2009:
Issues
Series A
Series B
Series A
Series B
Issue Sum Sum currency
issued in circulation
Pesos
Pesos
Subtotal
UDIS
UDIS
Subtotal
Total
31,809
1,065
32,875
28,652
1,460
30,112
62,987
26,521
924
27,446
22,349
1,448
23,796
51,242
Amortization
5,288
141
5,429
6,303
12
6,316
11,745
Table 45.
BORHIS Unsettled balance
Millions of pesos
Source: SHF, 2009.
From the beginning, BORHIS have based their functioning on clear-cut rules. However, in an
attempt to maintain the stability of the MBS market and considering the lessons learned in the last few
years, SHF, Infonavit, and the participating financial entities began to strengthen various tasks that are
important in the promotion of the development of the housing finance market:
1.
Market formation and liquidity in times of stress.
SHF participated actively in the purchase and sale of securities in:
a)
The primary market, encouraging:
n
Greater certainty in the markets before scenarios of lack of liquidity not related to a lack
of solvency in the sector.
n
Standardized financing mechanisms, congruent with orderly growth in the sector.
b)
In the secondary market, in order to provide investors with a liquid market at all times.
2.
Improvements to the BORHIS rules.
SHF worked with various authorities (SHCP, CNBV, Consar, CNSF) and financial entities that
participate in the housing market, seeking to strengthen the rules of mortgage backed securities;
the following stand out:
a)
Retention of capital from the managers of securitized mortgage loans in order to align the
incentives of all the participants in these transactions.
Minimum criteria that substitute managers must meet.
Collection flows inspection mechanisms.
Disclosure of information by an independent third party.
Addenda to the CNBV regulations regarding the issuance of financial instruments:
n
Improvements to investor information: quality and format of the monthly information on
each loan (Appendix T of the corresponding regulation).
n
Trustees and portfolio managers must adhere to the Securities Market Law.
n
Public calculators to value these instruments.
b)
c)
d)
e)
f)
Figure 12.
Principles of the payment
solution schemes
Source: AHM.
Allow payment solution schemes for the loans backing the bonds. For this purpose, via the
Mexican Mortgage Association (AHM), solution schemes are being developed that will be based
on the following principles:
Make sure that the client
needs the aid
Make sure that the client
intends to pay
Aid products must have a
significant cost for the client, so
that only a client in need will be
willing to sign on for the aid.
Aid products must have a
significant cost for the client, so
that only a client in need will be
willing to sign on for the aid.
Asegurar que el cliente
Ensure that the aid is more
profitable than the alternative
The benefit must be
proportional to the cost
incurred by the client.
The expected value of the loan
with the aid must be greater
than the expected value of not
aiding the client.
6.1.2.
FOVISSSTE mortgage securitization program
A key part of FOVISSSTE’s Strategic Mission 2006-2012 focuses on the creation of its first mortgage securitization program
worth up to 20 billion pesos, in several tranches. The resources obtained will be used to grant new loans and thus contribute
towards meeting the Fund’s growth goals: double the number of loans, increase coverage of the demand from the previous
7% to 43-50% of the active population, and promote a better quality of the financed housing by the end of 2012.
In order to materialize its first issuance of Stock Exchange Certificates (CBFs in Spanish) it was necessary to sort
out critical aspects of the Fund’s credit operations, including:
n
n
n
n
n
n
n
n
n
The systematization, automation, and transparency of the credit origination and mortgage portfolio management
processes.
State-of-the-art IT.
ISO certification of key processes, including the drawing of traditional credits.
Simplification and reduction of operating processes and procedures.
Raising the financing ceilings.
Strengthening the accountability mechanisms.
Supervision from the CNBV.
External auditing by Price Waterhouse & Coopers.
Evaluation of the portfolio by international rating agencies.
Issuing fiduciary
Trustor
Portfolio manager
Structuring agents
Legal advisor of the transaction
Common representative
Master manager
Independent auditor
Portfolio auditors
Member parties
HSBC México S.A., IBM, Grupo Financiero HSBC, División Fiduciaria
ISSSTE a través del Fovissste
Fovissste
Casa de Bolsa Banorte
Goldman Sachs
IXE Grupo Financiero
Merrill Lynch Casa de Bolsa S.A.
Chadbourne & Parke S.C.
Deutsche Bank México S.A., IBM, División Fiduciaria
Acfin
Pricewaterhouse & Coopers
Cibergestión
Table 46.
Elements in the makeup of
the first CBF issue
Source: Fovissste, 2009.
Characteristics of the FOVISSSTE portfolio
n
n
n
n
n
n
n
n
n
n
n
Stability in the jobs within the public sector
Collection through a biweekly direct discount on the paycheck
Employer contributions (5% SAR)
Balance of the housing subaccount applied as down payment at the beginning
ofthe life of the loan
Bimonthly contributions throughout the life of the loan
Low LTV level
Diversified portfolio
Good ratings as asset manager
Standard & Poor’s: above average (under review)
In the process of being rated by Moody’s
Structure of the full turbo CBs, which reduces the term of the issue
Section 6. Development of the secondary market for housing finance • 159 •
Results of the issue
On June 25, FOVISSSTE successfully issued 8.2 million TFOVIS 09U CBFs through the
placement of mortgage backed debt worth 3.50 billion pesos (823’852,300 UDIs), at
a fixed annual rate of 5.3% maturing in 30 years, in a year when demand amounted to
close to 5 billion pesos.
6.1.3.
Housing Bonds Program (CEDEVIs)
Infonavit’s mission in the CEDEVI program is to guarantee that the Institute will have
unlimited liquidity at competitive prices to channel financial resources to its lending
program and to the payment of its obligations as a pension fund, thus contributing
towards the fulfillment of its dual social responsibility.
Cuadro 47.
Current CEDEVI issues
Up to June 2009
Year Issue
Placement Maturity Term S
date
date
(years)
2004
CEDEVIS 04
19-Mar-04
19-Mar-16
12.0 2004
CEDEVIS 04U
12-Nov-04
20-May-22
17.5
2005
CEDEVIS 05U
15-Jul-05
21-Jul-25
20.0 2005
CEDEVIS 05-2U
7-Oct-05
22-Sep-25
20.0 2005
CEDEVIS 05-3U
9-Dec-05
22-Nov-27
22.0 2006
CEDEVIS 06U
28-Apr-06
20-Apr-28
22.0 2006
CEDEVIS 06-2U
19-Jun-06
20-Jun-28
22.0 2006
CEDEVIS 06-3U
13-Oct-06
20-Oct-28
22.0 2006
CEDEVIS 06-4U
13-Nov-06
20-Nov-28
22.0 2007
CEDEVIS 07U
26-Apr-07
20-Apr-29
22.0 2007
CEDEVIS 07-2U
16-Jul-07
20-Jul-29
22.0 2007
CEDEVIS 07VSM A-1
2-Oct-07
1-Oct-29
22.0 2007
CEDEVIS 07VSM A-2
2-Oct-07
1-Oct-29
22.0 2007
CEDEVIS 07-3U
1-Oct-07
20-Sep-29
22.0 2008
CEDEVIS 08U
11-Apr-08
22-Apr-30
22.0 2008
CEDEVIS 08-2U
11-Apr-08
22-Apr-30
22.0 2008
CEDEVIS 08-3U
12-Jun-08
20-Jun-30
22.0 2008
CEDEVIS 08-4U
12-Jun-08
20-Jun-30
22.0 2008
CEDEVIS 08-5U
29-Aug-08
20-Aug-30
22.0 2008
CEDEVIS 08-6U
29-Aug-08
20-Aug-30
22.0 2008
CEDEVIS 08-7U
24-Oct-08
21-Oct-30
22.0 2008
CEDEVIS 08-8U
24-Oct-08
21-Oct-30
22.0 2008
CEDEVIS 08-9U
23-Dec-08
20-Dec-30
22.0 2008
CEDEVIS 0810U
23-Dec-08
20-Dec-30
22.0 2009
CEDEVIS 09U
25-May-09
20-May-31
22.0 2009
CEDEVIS 09-2U
6-Jul-09
23-Jun-31
22.0 The crisis in the US mortgage market was mainly due to the origination of
high-risk or Subprime mortgages. There is a significant difference between them
and the credits originated in the Mexican market, particularly by Infonavit, as this
Institute has followed prudent credit-granting practices. Nonetheless, since the
US housing crisis began in 2007 and worsened in September 2008, the environment of the securitization market in Mexico has become more complex, both
because of concerns related to the credit risk, and to market risk volatility.
Despite the complex environment in the financial markets and surrounding
mortgage securitizations, Infonavit established itself as the leader in mortgage
backed securities in 2008.
Sum Currency
BenchmarkRating
coupon
placed
CEDEVIS
(bill.)
Pesos M5
1,209
751
UDIs
UDI Bono MxAAA S&P, AAA (Mex) Fitch
MxAAA S&P, AAA (Mex) Fitch, AAAmx Moody´s
9.150 *
5.650
1,164
UDIs
UDI Bono MxAAA S&P, Aaamx Moody´s
5.939
1,058
UDIs
UDI Bono 121220
MxAAA S&P, Aaa (Mex) Fitch
5.900
1,052
UDIs
UDI Bono 121220
MxAAA S&P, Aaamx Moody´s
5.660
1,201
UDIs
UDI Bono 121220
MxAAA S&P, AAAmx Fitch
5.800
1,004
UDIs
UDI Bono 121220
MxAAA S&P, Aaamx Moody’s
6.250
1,545
UDIs
UDI Bono 121220
5.090
2,247
UDIs
UDI Bono 121220
MxAAA S&P, Aaamx Moody’s
4.950
2,426
UDIs
UDI Bono 121220
4.350
2,700
UDIs
UDI Bono 121220
MxAAA S&P, Aaamx Moody´s
4.280
VSM
UDI Bono 141218
MxAAA S&P, Aaamx Moody´s AAA Global 5.410
Pesos MBONO 161215
MxAAA S&P, Aaamx Moody´s AAA Global 9.080
1,767
570
2,335
UDIs
UDI Bono 121220
4.560
1,346
UDIs
UDI Bono 101223
4.400
1,782
UDIs
UDI Bono 160616
4.780
1,693
UDIs
UDI Bono 101223
4.650
1,807
UDIs
UDI Bono 160616
5.220
800
UDIs
UDI Bono 101223
4.400
1,200
UDIs
UDI Bono 160616
5.380
1,956
UDIs
UDI Bono 101223
5.400
1,699
UDIs
UDI Bono 160616
6.610
1,080
UDIs
UDI Bono 101223
5.550
1,080
UDIs
UDI Bono 160616
6.250
2,021
UDIs
UDI Bono 141218
5.650
2,589
UDIs
UDI Bono 141218
5.700
Table 48
Total issues per year
Up to June
2004
2005
2006
2007
2008
2009
Total $1,959,369,406
$3,274,264,712
$5,997,717,043
$9,798,169,637
$14,443,443,969
$4,608,941,796
$40,081,906,564
In addition to the performance observed, another reason
why the market has made a difference between Infonavit’s issues
and those from other issuers is the institutional strategy to offer
greater transparency to the market in order to encourage a healthy
long-term development. Some of the actions the Institute has implemented to this effect are:
n
n
Table 49.
Market share
Percentage of MBS issuance,
2003-2009
Infonavit (Cedevis)
36.1
Fovissste
3.3
Mortgage Sofols
35.6
Banks
24.9
n
Introduction of the Master Servicer figure in the 2008 issues,
which regards the management, control, monitoring, support,
and issuance of reports on the performance of the asset
portfolio, which focuses on solving investors’, rating agencies’,
and authorities’ need for information (among others).
CEDEVI calculator, which will be used by investors to obtain
the market value of the securities and thus promote the
development of the secondary market.
Since 2007, Infonavit has had a SQ1- primary servicer rating
from Moody’s; this rating was confirmed in 2008, and is the
highest one awarded in Mexico, reflecting the Institute’s
operating strength.
6.1.4.
2009 Outlook
Currently, Infonavit has operating capacities to place an issue on the market every 2 or 3 months; thus,
should the proper conditions exist on the markets, it could be making 4 to 6 issues a year. In May,
despite the financial crisis and the complicated environment, the Institute placed its first 2009 CEDEVI
issue worth 2.021 billion pesos; in early July, it placed its second issue worth 2.588 billion pesos. Both
are a sign of investors’ confidence in the country’s economic recovery and in Infonavit’s performance.
Following the sum placed through these issues, the Institute has obtained resources worth 40.081 billion
pesos since the program’s beginning in 2004.
The Institute has generated the operating capacities to manage the issues and the portfolios
backing them. In face of the possible risks of an economic slowdown, Infonavit will continue to watch
the healthy behavior of these portfolios, always stressing its commitment to borrowers through the
social collection model, so that there will be some adequate restructure product that will allow them
to protect their patrimony in the case of job loss and as long as the borrower is willing to pay.
In addition to maintaining the CEDEVI issuance program, the 2009 strategy of obtaining funding
through markets seeks to develop alternate financing mechanisms via the market to channel resources
to credit granting that will make it possible to:
n
n
n
n
Expand the investor base.
Optimize the Institute’s funding cost.
Face the possible changes in regulation.
Satisfy the demand for new investment instruments with a better risk profile.
One alternative is the issuance of covered bonds, which is the most used mortgage financing tool
by European credit institutions, and it could eventually mean to Infonavit an incursion into a market
where over 200 billion dollars are issued. The US financial authorities have recently been boosting the
development of this market as a means to achieve the return of mortgage financing to the country, and
it is possible that, in the future, this type of instruments will gain preeminence over the securitization
model. Some of the main characteristics of the covered bonds are that:
n
n
n
n
n
n
They have been issued since the XVIIIth century in Germany, and currently they are issued in
over 30 countries, mostly in Europe.
They are bonds issued by financial institutions and backed by a collection of mortgage loans, as
in the securitizations of financial assets.
In this case, mortgages remain in the balance sheet of the issuer, and their flows are destined to
the payment of the bonds in case of issuer insolvency.
The payment of the bond’s interests is made directly from the issuer’s treasury with flows generated by its credit portfolio, and the payment of principal is made upon the bond’s maturity,
typically refinancing the issue.
Contrary to securitizations, they make it possible to make issuances in various currencies and
terms; thus, they can be placed among a broader and more diverse investor universe.
The size of the covered bonds market is greater than the one of securitizations.
Benefits for Infonavit
n
n
n
Broad investor base to achieve institutional goals.
Given the instrument’s credit quality, it can reduce the funding cost on the
market.
Investing the resources in mortgages at a higher average rate than the bonds
would pay will make it possible to generate additional resources for the National
Housing Fund.
The Covered bonds programs that have begun more recently worldwide (England, Canada, and the US) have limited the maximum amount of financing that can be
obtained to 4% of the issuer’s total assets offered in guarantee, as long as the rights of
the depositors of the financial institutions are protected. If Infonavit were able to issue
covered bonds, this limit would be equivalent to roughly 20 billion pesos.
6.2.
HiTo (Hipotecaria Total)
Since December 2007—date of the first securitization—and up to August 25, 2009, over 2,740 mortgage loans have been securitized through HiTo. The sum of each issue and the balance up to August
25 are shown in the following table.
Table 50.
Unpaid balance of
BonHitos
Figures in millions
Source: SHF, 2009.
Ticker
Sum securitized
Sum in circulation
UdisPesosUdisPesos
BONHITO_F8531
15 59 10 44
BONHITO_F9531
16 69 10 44
BONHITO_F5532
166 701 162 689
BONHITO_F1026
179 755 172 733
Total
376 $1,584 354 $1,510
Through HiTo, a new form of issuances began in 2008 with the Macrocredhito product, which
takes advantage of the Borhi infrastructure and makes it possible to securitize previously originated loans
in bulk, contrary to the traditional HiTo model, which securitizes each loan individually.
Likewise, in order to offer a product that will allow financial intermediaries to use SHF’s connection
channels, HiTo has been working on a platform that will merge the current origination operating scheme
with the securitization process, thus making it easier for them to enter into HiTo and benefit a greater
number of borrowers.
6.3.
Bridge loan securitization
Beginning in July 2008, the bridge loan securitizations market has declined due to a lack of liquidity, and
has been affected in the last few months by the degradation of construction loan backed securities as
there is no guiding model for this market.
Likewise, both investors and rating agencies have expressed the need to have a follow-up of
quality in the assets of these structures, as well as the supply of periodical information to follow up and
invest in them, as is done for Borhis and Bonhitos.
In 2009, the placement of roughly 700 thousand individual loans was mainly ensured by the
Infonavit and FOVISSSTE programs; however, there is a risk of being unable to meet that demand due
to reduced financing for construction loans and a slowdown in the housing train.
In order to regain liquidity and promote financing plans for this market, the standardization and
improvement of the criteria to securitize bridge loans is proposed: the BORHI-Puente, which will have
strict eligibility criteria, including:
a)
b)
Structure. The enhancers are reinforced and the originator keeps a stake in the performance of the structure by
retaining the documentary evidence. Likewise, the transfer of flows directly into the trust is ensured:
n
No currency exchange risk.
n
AAA rating.
n
Substitute manager.
n
No portfolio buyback or substitution mechanisms.
n
Anticipated amortization clauses.
n
Initial LTV and retention of the documentary evidence.
n
Partial credit guarantee or GPO.
n
Reserve of one month of interests.
n
Minimum interest surplus in basis points, net of expenses.
n
Flow transfer directly from the developer to the trust.
Collateral. With strict eligibility criteria that will ensure asset quality:
Current loans related to mortgage activities and limited for the acquisition of land and infrastructure.
n
Maximum LTV of 65% .
n
Setting of concentration limits geographically and by developer.
n
Disclosure of information by an independent third party.
n
Periodical audit of the trust’s information and flows.
n
c)
Periodical information. Adequately disclosing the flows of the structure.
In accordance with CNBV regulation.
n
If the trust’s information and flows are not adequately disclosed, there will be a serious penalty, per the
Securities Market Law.
n
In order to follow up on these instruments, the CNBV and BMV have worked on defining the requirements
that this new type of security must meet, as well as on the appendix for reporting monthly information on
these transactions. n
n
6.4.
Key Findings
n
n
n
n
n
n
In 2008, SHF placed nearly 15.956 billion pesos on the Borhis market and 4.889
in other mortgage backed issues, totaling around 20.845 billion pesos.
Up to August 25, 2009, the sum of public mortgage backed issues, at their
original value, totaled around 118.745 billion pesos from SHF, including those
issued by Infonavit and FOVISSSTE.
On June 25, FOVISSSTE successfully placed its first issue with 8.2 million
TFOVIS 09U CBFs.
Infonavit’s Housing Bonds program has placed slightly over 40 billion CEDEVIs
from 2004 to June 2009.
From December 2007 to August 2009, SHF has securitized over 2,700
mortgage loans through HiTo.
The placement of roughly 700 thousand individual loans is ensured, based
on SHF’s considerations.
Section 7.
Conclusions
7.1.
Achievements
n
n
n
n
n
n
n
n
n
n
n
n
On March 13, the National Pact for Housing to Live Better was signed, representing
an investment of 180 billion pesos in the construction or improvement of 800
thousand dwellings, in addition to its traditional role of creating and maintaining
jobs and the demand for goods from various branches of the economy.
Financing through securitizations grew a real 103.3% from 2005 to 2008; the latter
year showed an increase of over 50%.
The creation of proposals for homologating typologies of housing has begun, in
an effort to unify the various classifications.
Currently, SHF is working in coordination with financial intermediaries and housing
developers to serve the families residing in rural areas.
The SHF home price index for Mexico was published, with results both on a national and state level. Thus, Mexico is part of the OECD countries that have this
essential information for the housing sector in particular and the financial sector
in general.
Up to 2008, 20 states had a housing law and program supported by CONAVI.
Both instruments are indispensable to the planning and operation of actions to
serve the housing demand.
The Group for the Promotion and Evaluation of Integrated Sustainable Urban
Developments is working on the creation of financing, capital, and/or guarantee
structures that the projects approved as DUIS could receive for the construction
of primary infrastructure.
Over the last year, the DUIS Group has registered 32 projects nationwide that
await evaluation, and some others awaiting incorporation. This translates into one
million 800 thousand dwellings, on a surface of 46 thousand hectares.
Beginning in 2010, Sedesol will apply the Guidelines on Equipping, Infrastructure,
and Integration with the Environment, derived from Article 73 of the Housing Law,
to promote a territorial ordinance policy.
Sedesol´s Program to Rescue Public Spaces renewed 1,855 public spaces between
2007 and 2008. The goal for 2009 is to recover 850 spaces in 290 localities.
Sedesol is developing the Manual for the incorporation of the atlases of hazards and
risks into the planning of urban development, as an aid to prevent natural disasters
in the cities.
In 2008, CONAVI presented the Specific Program of Sustainable Housing Development—the only one of its kind worldwide, as it will benefit the CO2 emissions
reduction certificates or Carbon Bonds and actively incorporate the housing sector.
A management methodology was designed, and in April 2009 it was submitted
to the UN for approval.
n
n
n
n
n
n
n
n
n
n
81.9% of the total financings and subsidies for housing recorded in 2008 were
granted by: Infonavit, FOVISSSTE, FONHAPO, SHF, and CONAVI.
For 2009, the goal of subsidies under Ésta es tu casa is 190 thousand actions. By
June, 56.8% progress had been made on the program.
From 2004 to 2008, Infonavit reported a 97.8% increase in the number of mortgage
loans for the acquisition of used housing.
At the end of 2008, the 32 states in the Program for the Modernization of the Public
Registers of Property were evaluated.
SHF’s Hipoteca más predial un sólo pago program will allow the municipalities to
have enough resources to provide their residents with more and better public
assets, and borrowers with the possibility to cover in a single payment both their
monthly installment and the predial tax.
Up to May 2009, over 160 thousand borrowers had opted for one of the Garantia
Infonavit aid plans.
From 2004 to 2008, Infonavit has securitized over 34 billion pesos in mortgage
portfolio.
In 2008, SHF placed on the market nearly 15.956 billion in BORHIS and 4.889
billion pesos in other mortgage backed issues. Up to June 22, 2009, the sum of
public MBS issues, at their original value, amounted to roughly 105.092 billion pesos
(including the ones made by Infonavit).
On June 25, Fovisssste successfully placed its first issue of 8.2 million TFOVIS 09U
CBFs by issuing mortgage backed debt worth 3.50 billion pesos (823,852,300
UDIS) at a fixed annual interest rate of 5.3% and maturing in up to 30 years, in a
year which reported a demand of close to 5 billion pesos.
In May 2009, Infonavit placed its first Cedevi issue of the year for a total of 2.021
billion pesos; early in July, it placed its second issue worth 2.588 billion pesos.
7.2. Challenges
General challenges
n
Improve the planning and coordination of housing programs and policies, with a long-term view, quantifiable goals,
and performance measurement criteria.
Consolidate institutions that promote accessibility to housing nationwide, that will help to reduce transaction and
information costs in all the segments and contribute to the ordinance of the land market.
Efficiently cater to the housing needs of the low-income population and/or those working in the shadow economy,
where development banking programs can have a greater impact.
Order the urban growth and align it to the expansion capacity of the infrastructure and urban services.
Generate reliable and timely statistics and indicators regarding the sector to reduce the costs of information.
n
n
n
n
a.
Challenges
of normativity
and regulation
n
n
n
n
n
n
n
n
n
Reduce transaction and information costs in the building and marketing of
housing to increase its accessibility to all the segments of the population.
Regulate and improve the practice of valuating real estate, with internationally
accepted standards, certifications, and supervision mechanisms.
Implement the supervision of the sector, particularly regarding nonbank financial
intermediaries, to prevent solvency risks for the institutions and the system.
Promote investments in ecologic housing and consolidate the DUIS plan as an
alternative for urban development that reduces construction costs, improves
the wellbeing of their inhabitants, and offers sustainable housing solutions.
Have reference documents that will define with precision the guiding axes of
long-term housing policy, such as the National Program of Urban Development
and the Code of Housing Construction.
Authorities should promote citizen participation in the processes of effective
planning, involving the different social and private sectors, from the design and
management to the execution of programs, projects, and actions.
Strengthen the registration of companies and housing offer, via the RUV, on
a central, regional, and state level. Spread the benefits, processes, and advantages among the various sellers, inspectors, chambers, and personnel of the
technical departments of the Regional Districts that make up Infonavit, in order
to improve its operation.
Encourage all the states to include in their websites their urban development
plans.
Consolidate in the credit procedures the process of construction inspection via
the borrower’s approval, as a reliable valuation of the dwelling’s inhabitability
conditions.
Section 7 Conclusions • 169 •
b.
Challenges
in urban
infrastructure
n
n
n
n
n
n
n
c.
Challenges in
the reordering
of the land market
n
n
n
n
n
n
n
n
n
Promote the investment and maintenance of the urban services by state governments, in order to guarantee the quality of the public infrastructure prior to
granting permits for the construction of developments.
Encourage a greater participation of the private sector in the development of
infrastructure, with reliable and precise information on the projects, including
risks, profitability, and valuation, and greater openness to institutional investors.
Update the normativity and strengthen the management capacity of the state
and municipal institutions of water and sanitation; urban solid waste management;
and public transportation.
Promote non-motorized mobility through the construction of adequate pedestrian and cycling infrastructure in the new urban developments and promote it
in the existing areas in the cities.
Shut down the clandestine and open sky garbage dumps, and build sanitary
landfills that will make it possible to properly dispose of urban solid waste.
Through Infonavit, develop an Municipal Housing Competitiveness Index, Incomuv,
in order to favor a gauging culture, to allow a sustainable development of housing
and its environment.
Succeed in having sustainability and efficient resource utilization criteria included
in national regulation, as in the case of Mexico City and Sonora.
Consolidate the alternatives and programs that will allow the development of suitable land for
housing.
Design plans that will contribute to improve the registration and management of land banks and
make more transparent their use or the transformation process (habilitation, conversion to land
for development).
Creation of urban records with georeferenced information systems to record the uses and destination.
Continue with the modernization of the Public Registers of Property (PRP) and make progress
on their integration with the municipal land registers.
Reinforce the plans of offices for the issuance of construction permits or licenses, homologating as
much as possible the procedures and mechanisms to grant them.
Take advantage of the available urban land and regulate urban growth to generate appreciations
and prevent the depreciation of the real estate stock.
Generalize mechanisms that will increase the land’s added value (auctions, trusts, purchase and
sale, and land banks, among others).
Encourage the construction of vertical housing and redensification with a mixed use in markets
outside the capital.
Generate the territorial policy of human settlements at the local, state, and metropolitan level,
linked to sectorial public policies.
d.
Challenges of
sector financing
n
n
n
n
n
n
n
Make more efficient the development banking that caters to the sector, integrating
programs and concentrating efforts on the lower income population.
Generalize and promote, throughout the country, the carbon bond market as
an additional and complementary instrument of financing for ecologic housing.
Promote the development of new financing plans, to reduce the cost of funding
and attract the participation of both local and international institutional investors,
also contributing towards satisfying the market’s demand for issues with a better
credit risk profile.
Minimize information asymmetries in the used housing market, via websites where
sellers and buyers can have access to the properties that meet their needs using
specific filters.
Strengthen guarantee programs for the lower income sectors or those in the
shadow economy, which at times the private sector cannot adequately serve.
Through the Vivir Infonavit program, benefit 500 thousand ecologic dwellings.
Update the regulation of nonbank financial intermediaries, to favor investment in
the sector, without generating capitalization or solvency risks for the system. n
Section 7 Conclusions • 171 •
Methodological appendix
Appendix A.
Figure A.1.
DWF project in Central
Vietnam
Images of the
project showing the
meteorological impacts
on the region, the
typologies, the plans
and works, a reinforced
public building and
dwellings before and
after the intervention
Photos: DWF, provided by ECLAC..
Methodology appendix • iii •
Appendix B.
Table B.1.
Participation of the
building companies by
level of activity by state:
active, inactive, low
Condition of activity of the
building companies by state
Percentage participation
(2007-2009)
INEGI.
State
Nacional
Aguascalientes
Baja California
Baja California Sur
Campeche
Coahuila Colima
Chiapas
Chihuahua
Distrito Federal
Durango
Guanajuato
Guerrero
Hidalgo
Jalisco
México
Michoacán Morelos
Nayarit
Nuevo León
Oaxaca
Puebla
Querétaro
Quintana Roo
San Luis Potosí
Sinaloa
Sonora
Tabasco
Tamaulipas
Tlaxcala
Veracruz Yucatán
Zacatecas
2007
54.1
57.3
61.4
48.2
51.7
57.2
58.6
48.3
63.6
53.7
44.2
59.2
40.8
48.0
62.1
49.2
46.4
51.5
62.6
67.5
35.8
55.9
55.3
46.3
54.5
42.9
56.5
46.9
46.7
35.8
57.8
55.2
53.8
Active
2008
51.7
56.3
60.6
45.6
49.4
52.3
48.6
41.3
59.9
52.1
43.0
56.1
38.2
48.4
60.2
46.4
46.8
52.5
60.7
64.9
32.6
55.4
54.0
41.4
55.2
39.5
51.0
44.7
44.3
33.8
52.9
54.3
53.7
*/ Average percentage for the first four months of the year.
• iv • Current Housing Situation in Mexico 2009
2009 /*
49.5
48.6
56.7
43.9
48.6
49.9
48.3
40.1
56.0
49.5
40.9
52.0
34.5
47.5
58.1
46.3
40.6
53.0
52.4
62.4
32.0
54.1
51.3
38.7
52.8
40.2
49.7
43.6
42.7
30.4
54.6
51.0
56.3
2007
41.7
37.3
35.1
43.8
43.5
40.7
28.3
50.0
32.2
43.8
50.9
36.4
50.5
44.4
33.1
50.0
50.5
48.5
32.6
29.7
58.9
35.7
38.9
49.6
41.0
52.6
40.2
49.2
49.1
54.6
39.4
40.2
42.7
Inactive
2008
43.0
36.8
35.1
46.2
45.8
42.3
34.4
55.6
35.6
44.6
52.1
38.3
50.9
42.5
33.5
52.8
48.6
47.5
34.4
32.2
61.8
33.7
39.3
49.7
38.1
54.0
44.6
49.6
50.4
54.3
43.2
39.8
42.7
2009
44.2
42.6
37.2
43.1
46.6
43.6
33.5
58.2
39.6
46.3
52.8
41.1
54.2
43.2
35.5
52.7
53.0
47.0
42.7
34.3
59.7
34.4
39.2
50.4
38.4
53.1
45.8
49.3
49.8
57.8
40.8
41.0
38.2
2007
4.2
5.4
3.5
8.0
4.8
2.1
13.1
1.7
4.2
2.4
4.9
4.4
8.7
7.6
4.9
0.8
3.1
0.0
4.8
2.8
5.3
8.4
5.8
4.1
4.5
4.5
3.4
3.9
4.1
9.7
2.8
4.6
3.5
Written off
2008
5.3
6.9
4.3
8.2
4.8
5.4
17.0
3.1
4.5
3.3
4.9
5.6
10.9
9.1
6.3
0.8
4.6
0.0
4.9
2.9
5.6
10.9
6.7
8.9
6.7
6.5
4.4
5.7
5.3
11.9
3.9
5.9
3.6
2009
6.3
8.9
6.2
13.0
4.8
6.5
18.2
1.7
4.4
4.3
6.3
6.9
11.3
9.4
6.4
1.0
6.4
0.0
4.9
3.3
8.3
11.6
9.5
10.9
8.8
6.7
4.5
7.1
7.5
11.9
4.6
8.0
5.5
Appendix C.
anthropologists with the assistance of
communicators specializing in group
psychology.
In the case of semiurban
housing (90m2 of
construction), two open
areas—the front and
back yards—which will be
important for intrafamily and
neighborly coexistence.
Based on the ethnographies,
the ideal housing model is
close to the current model of
the parents’ home, functional
for nuclear families.
Ideal suburban and rural housing112
Figure B.1.
Semiurban housing
ideal model of suburban
and rural housing
backyard
Open area
Door
to the
outside
Kitchen
bathroom
The bathroom, located within
the dwelling.
División con media pared o barra
bedroom
Dining room
There must be a
multifunctional room.
hallway
The kitchen must be physically
outlined with a half wall or a
bar.
An average of at least 2
bedrooms must be offered.
bedroom
Living room/entrance hall
Door
to the
outside
FRONT
Rural housing
Backyard
Open area
In the case of rural families, the ideal
model must have a balance of outer
and inner spaces for coexistence,
keeping in mind that these are
relatively large lots where extended
families live together.
Porche
Roof without walls
Door
to the
outside
Kitchen
Division with a half wall or bar
Closed
multifunctional room
(storage room,
warehouse, etc.)
Open area
The basic housing unit considers
a construction of 90 m2, which is
perceived as adequate, according
to the observations and interviews
performed; nonetheless, the open
space must surround the construction
to enable contact with the outside,
generate an open atmosphere, and
keep close to nature.
The bathroom is not
conceived within
the dwelling, as it is
considered insalubrious.
Bathroom
Multifunctional space
Door
to the
outside
FRONT
Open area
112 Carried out by social
The multifunctional
room must serve
equally as an entrance
hall, den, dining room,
or bedroom.
Entrance hall
Roof without walls
Methodology appendix • v •
Appendix D.
Distribution of the land bank by
developer and by state
Table D.1.
Distribution of the land
bank by developer
and by state
First quarter of 2009.
StateAra
Aguascalientes
-
Baja California
3.26%
Baja California Sur
-
Campeche
-
Chiapas
-
Chihuahua
0.36%
Coahuila
-
Colima
-
Durango
-
Distrito Federal
0.09%
Guanajuato
1.37%
Guerrero
3.21%
Hidalgo
1.56%
Jalisco
4.56%
Estado de México 
35.79%
Michoacán 
0.02%
Morelos 
2.84%
Nayarit 
1.77%
Nuevo León 
9.78%
Oaxaca 
-
Puebla 
2.48%
Querétaro
1.74%
Quintana Roo 
28.10%
San Luís Potosí 
-
Sinaloa 
0.03%
Sonora 
1.69%
Tabasco 
0.02%
Tamaulipas 
-
Tlaxcala
-
Veracruz 
1.14%
Yucatán 
-
Zacatecas
-
• vi • Current Housing Situation in Mexico 2009
Geo
-
10.13%
-
-
-
-
3.64%
-
-
2.29%
1.71%
8.49%
-
7.95%
30.78%
-
4.65%
-
5.28%
1.51%
3.23%
6.42%
-
-
-
-
-
6.95%
-
6.47%
-
-
Homex
-
7.8%
12.1%
-
4.1%
3.0%
3.3%
-
1.1%
-
1.3%
1.1%
0.4%
22.2%
12.8%
0.8%
1.2%
-
8.9%
0.2%
0.7%
1.5%
5.1%
-
2.1%
0.7%
0.6%
4.5%
-
4.5%
-
-
Urbi
0.31%
50.28%
-
-
-
7.25%
-
-
-
7.03%
-
-
-
17.61%
-
-
-
-
3.15%
-
-
-
1.54%
-
5.75%
7.04%
-
-
-
-
-
-
Appendix E.
Attributes of the sample in the study
Transaction costs in the production of social
and economic housing
E.1.
Sample
200 developers classified as small, medium, large, and national were considered, based on the following
criteria:
1.
2.
3.
Number of active and sold projects.
Number of cities where they have operations.
Presence in the state since 2000 with over 200 units sold per year, and current projects for the
social and economic segments at the time of the interview.
Graph E.1.
Size of the developer
by region
Percentage share
on the market
100%
15.4
80%
33.4
10.5
14.3
16.1
34.8
15.8
19.0
26.9
5.3
29.1
4.8
60%
22.2
3.2
23.1
30.5
40%
68.4
20%
4.3
61.9
51.6
44.4
34.6
30.4
0%
Bajío
Center
National
Metro
Large
North
Medium
South
Tourist
Small
Based on their size, developers participate diversely in each region.
Thus, the:
n
n
n
n
National ones are present in all the regions, and have an average share of 48.6%.
Large ones have a greater market penetration in the Center and Bajio.
Medium ones have a significant presence in Bajio, South, and Metro—areas where they have,
on average, a 30.3% market share; they are also present in the other regions but in a lower
percentage.
Small ones stand out in the South, North, Center, Tourist, and Metro regions.
Methodology appendix • vii •
E.2.
Description of the procedures
n
n
n
n
n
n
n
Land use license authorizes the use of land and indicates the regulations for the use of the
constructions; response times for obtaining this procedure range from 5 to 30 working days,
depending on the state and municipality.
Municipalization is the procedure that must be done once the housing complexes are finished
so that they can be incorporated into the municipality where they are located.
Construction permit is the document granted to the corresponding institution to begin building
on the plot or hectare; the cost varies from one state to another, as do the response times.
Bridge loan is a loan requested by the developer from a financial institution.
The Delimited housing record is carried out by topographer technicians, who indicate on the plot
the borders of the property.
Authorization of the environmental impact is the resolution stating that the work or construction
to be carried out, following the corresponding laws, will have no unfavorable effects on the
natural resources or the environment. Within this procedure, the report prior to the land use
license is performed; response time takes roughly 30 working days, and the cost varies based
on the classification and magnitude of the work.
Infonavit’s Sole technical report (DTU) is a printed document where an inspector company
guarantees the completion of the dwellings with the architectural, urban and infrastructure
specifications and characteristics agreed upon, as well the supply of services; that is, the DTU
indicates whether the dwelling is inhabitable.
• viii • Current Housing Situation in Mexico 2009
Appendix F.
Attributes and models of the SHF Price Index
F.1.
Attributes of the SHF Price Index
Type of variable Characteristics of the dwelling (9)
n Built surface area
Independent n Commercial surface
variables
n Bedrooms
n Bathrooms and half bathrooms
n Parking spaces
n Levels
n Elevator
n Type of property
n New or used
Geographic Temporary
(4)
ID (2)
n Urban proximity
n Difference: year of
n Population density
construction completion = age
n Degree of development of the state
n Days of quarter
n Urban equipping
location
F.2.
Statistical models
F.2.1. Hedonic method used
The hedonic model to construct the housing price indices is the result of the following mathematical expression:
Paño,tipo = e
Xaño, tipobaño,tipo+eaño,tipo
(1)
Transforming equation (1) into natural logarithms, we find: 113
X
b
+e
ln (Paño,tipo ) = ln e año,tipo año,tipo año,tipo
(2)
= X b
+e
(3)
(n*k) año,tipo
(n*k) (k*1)
año,tipo
k
ln (Paño,tipo ) = S bi Xi
+eaño,tipo
i =1
año,tipo
Where:
P =
vector of housing prices.
X
=
matrix of attributes. Its dimension is n*k.
(4)
Where n is the number of valuations and k is the independent variables or covariables.
b
=
vector of hedonic coefficients that determine the degree of influence of each of the covariables on the price.
e = vector of remainders.
ln (•) =
natural logarithm.
Methodology appendix • ix •
113 The logarithmic
transformation simplifies
the interpretation of the
results and improves
the model’s bondad de
ajuste.
F.1.2. Mixed method
The relationship between the HM and the VR is presented below:
P2010 = Pt e a0 + at
Where:
P 2010 =Current price of the dwelling.
Pt =Purchase price t semesters ago.
a0, at =Parameters that reflect the percentage change accrued on the value of the property in t semesters.
The rate of appreciation between two consecutive semesters results from:
ln (Pt - l ) - ln (Pt ) = ln a0 + a
e t-l
ea +at
0
= at - l - at
The estimation can be made using parametrical methods that explain the appreciation of the price of
the dwellings between the purchase dates as a function of a group of dummy variables that indicate
the time when the dwelling was bought and sold.
F.1.3. Mixed method
The relationship between the HM and the VR is presented below:
T
K
i=l
j=l
= S aiTiempo + S
ln (Pt - l ) - ln (P2010 ) ~
% change in prices
Repeat sales
bj Xj + e
hedonic method
Where:
P2010 =
Pt -1 =
a0 , a1 =
Current price of the dwelling.
Purchase price in the semester t-1.
Parameters that reflect the percentage change accrued on the value of the property in t semesters
1 if the dwelling was purchased in semester t.
Tiempo =
0 in another case..
X
b
e
=
=
=
Variables over k different attributes of the dwelling.
Vector of coefficients that determine the degree of influence of each covariable on the price of the dwelling.
Vector of remainders.
• x • Current Housing Situation in Mexico 2009
F.2.
Statistical results
All the estimated models showed a high explicative capacity, as can be seen by the adjusted determination
2
coefficient, R2 , 84% average, and the indicator ( x /gl )114 with values close to one, as can be seen on
the following table. On the other hand, the residuals are homocedastic and show no autocorrelation
(see graphs F.1. and F.2.).
114 x 2 refers to the Chi Square
distribution, whereas gl are the degree
of freedom of the random variable.
Quotient x 2 / gl is an indicator of the
adjustment index. The more it tends
towards one, the better the adjustment.
Year
Determination
coefficient
2005
84.87
2006
84.97
2007
84.14
2008
83.88
2009*
84.01
115 The Golfeld-Quandt test was used.
Adjustment
index X2
value /gl
1.0001
1.0000
1.0000
1.0001
1.0003
Table F.1.
Statistical results
116 For the analysis of the serial
autocorrelation, the Kolmogorov Smirnof
test was performed.
7
6
* first trimester
Frequency (%)
5
Graph F.1.
Dwellings nationwide
Distribution
error-estimation
4
3
2
1
0
-1.9
8
-1.6 -1.3 -.07 -.04 -0.1 0.2 0.5 10
9
7
Graph F.2.
8
Standalone homes,
houses in a condominium,
apartments, and others117
Distribution error-estimation
6
7
5
Frequency (%)
Frequency (%)
-1. 4
3
6
5
4
3
2
2
1
1
0
-1.605 -1.335 -1.065 -0. 795 -0.525 -0.255 -0.015 0.285 Estimation error
0.555 -0.825 -1.095 1.365
12
0
-1.245 -1.035 -0.825 -0. 615 -0.405 -0.195 -0.015 0.225 0.435 0.645 0.855
Estimation error
1.065
117 For the content of the others item
line, see reference 58, in subsection 2.9.
of this Report (page 65)..
35
11
30
10
9
25
Frequency (%)
Frequency (%)
8
7
6
5
20
15
4
10
3
2
5
1
0
-1.92 -1.68 -1.44 -1.20 -0.96 -0.72 -0.48 0.24 Estimation error
0
0
0.24 0.48
0.72
0.96
-1.08
-0.84 -0.60 -0.36
-0.12 0.12 Estimation error
0.36 0.60 0.84 1.08
Methodology appendix • xi •
-0.8 -1.1
Table F.2.
SHF home price index
for Mexico
Base 2008.I = 100
National
State
Aguascalientes
Baja California
Baja California Sur
Campeche
Coahuila
Colima
Chiapas
Chihuahua
Distrito Federal
Durango
Guanajuato
Guerrero
Hidalgo
Jalisco
México
Michoacán
Morelos
Nayarit
Nuevo León
Oaxaca
Puebla
Querétaro
Quintana Roo
San Luis Potosí
Sinaloa
Sonora
Tabasco
Tamaulipas
Tlaxcala
Veracruz
Yucatán
Zacatecas
I
81.32
2005
II
III
83.88
84.62
IV
86.15
I
87.67
2006
II
III
89.32
89.74
IV
91.60
82.44
85.28
85.01
75.72
83.70
81.68
86.15
85.65
76.75
84.51
84.31
79.96
78.42
82.51
78.20
82.84
77.65
81.20
82.37
85.14
77.54
82.11
79.44
78.44
81.44
83.84
75.12
85.48
81.25
77.17
82.76
87.23
84.83
87.42
87.39
77.99
86.23
84.20
88.79
88.18
81.41
87.07
86.75
82.13
80.67
84.76
80.21
85.02
79.54
83.59
84.86
87.41
79.39
84.12
81.37
80.80
83.87
86.34
77.50
87.95
83.57
79.55
85.30
89.97
86.35
90.13
89.35
79.22
87.53
85.67
90.39
89.69
84.01
88.32
88.80
85.92
82.12
87.25
84.24
87.52
83.12
85.05
86.33
89.82
83.09
87.11
84.50
82.34
85.32
87.65
79.05
89.59
85.65
81.09
86.70
91.08
88.92
90.77
89.45
81.99
89.80
87.45
90.29
90.77
85.81
89.89
89.67
86.13
84.60
88.71
84.47
88.35
83.46
87.78
88.49
89.57
85.62
88.86
86.29
85.76
87.71
89.01
82.67
90.40
86.98
84.12
88.41
91.97
90.55
92.19
91.07
83.60
91.56
89.14
92.11
92.53
88.18
91.66
91.25
87.38
86.14
90.20
85.78
89.82
84.82
89.44
90.21
91.18
86.93
90.37
87.53
87.41
89.43
90.73
84.35
92.08
88.47
85.77
90.19
93.82
92.99
94.68
93.47
85.86
93.94
91.34
94.57
94.89
89.48
93.96
93.78
89.86
88.35
92.71
88.26
92.30
87.37
91.62
92.43
93.83
89.50
93.13
89.85
89.63
91.79
92.85
86.67
94.36
90.62
88.00
92.83
96.28
Source: SHF, SHF home price index for Mexico.
• xii • Current Housing Situation in Mexico 2009
85.15
88.22
87.98
78.28
86.56
84.68
89.22
88.63
83.00
87.42
87.26
83.35
81.06
85.35
81.42
85.78
80.52
84.04
85.31
87.97
80.44
84.84
82.44
81.25
84.24
86.78
77.94
88.44
84.24
80.07
85.56
90.19
91.20
92.63
91.75
84.37
92.40
89.84
92.92
93.36
87.85
92.52
91.77
87.28
86.81
90.50
85.67
90.32
84.91
90.18
90.97
91.73
86.98
90.75
87.78
88.08
90.22
91.54
85.05
92.82
88.93
86.48
91.04
94.67
I
95.73
2007
II
III
96.40
96.41
96.28
98.12
97.79
91.71
96.27
95.06
94.04
97.69
96.55
96.76
96.85
91.93
91.78
96.64
94.10
94.93
93.73
94.59
95.81
94.06
94.27
97.72
94.39
92.81
95.63
96.84
90.91
97.88
95.68
92.07
96.01
98.34
97.29
98.99
98.83
92.85
97.38
95.96
95.16
98.78
96.01
97.82
97.81
92.34
92.72
97.12
94.33
95.87
94.11
95.49
96.75
94.91
94.69
98.48
95.14
93.68
96.70
97.77
92.03
98.83
96.35
93.12
97.36
99.44
96.93
98.98
98.59
92.36
96.96
95.76
94.70
98.43
97.01
97.45
97.56
92.69
92.47
97.19
94.77
95.75
94.33
95.29
96.50
94.66
94.96
98.35
95.37
93.47
96.30
97.56
91.58
98.62
96.44
92.82
96.67
98.95
IV
97.17
I
100.00
2008
II
III
100.91
101.52
IV
102.69
2009
I
104.92
98.07
99.58
99.58
93.68
98.21
96.76
96.01
99.59
97.35
98.64
98.59
92.90
93.43
97.77
94.85
96.55
94.67
96.22
97.52
95.63
95.21
99.15
95.64
94.45
97.52
98.51
92.91
99.57
96.97
93.96
98.32
100.37
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.04
101.40
100.28
99.33
99.47
100.00
99.42
99.67
101.45
99.49
100.51
103.00
100.10
101.67
103.35
100.99
102.75
100.07
99.88
100.57
102.86
101.55
102.19
100.05
99.63
99.85
99.42
100.15
101.26
99.68
98.97
99.29
102.46
102.86
102.68
102.42
102.50
102.58
102.54
102.62
102.69
102.53
102.49
102.87
102.52
102.51
103.08
102.74
102.98
102.64
102.62
102.56
103.06
102.77
103.03
102.58
102.52
102.67
102.51
102.65
102.82
102.60
102.31
102.32
105.07
105.53 103.66 100.06 104.48 106.48 104.37 105.36 105.95 107.75 106.94 108.73 103.54 104.24 104.03 107.19 103.68 105.69 104.62 105.70 105.57 103.51 105.65 102.87 105.46 104.12 100.43 105.60 107.84 102.10 105.08 107.14
100.81
101.99
100.95
100.12
100.23
100.72
100.14
100.38
102.06
100.24
101.26
103.52
100.87
102.27
103.63
101.62
103.02
100.77
100.57
101.19
103.16
101.99
102.74
100.73
100.35
100.53
100.16
100.84
101.87
100.40
99.80
100.12
Methodology appendix • xiii •
Table F.3.
SHF housing price index
for Mexico: Nominal rates
of appreciation
2006.I - 2009.I
% var. vs. the same quarter
of a year earlier
2006
2007
IIIIIIIVIIIIIIIVIIIIIIIVI
National
7.80
6.49
6.06
6.33
9.20
7.92
7.43
6.08
State
Aguascalientes
7.86
6.73
7.10
7.69
8.27
7.44
6.28
5.46
Baja California
6.43
5.46
5.00
5.05
8.11
7.37
6.85
5.18
Baja California Sur
5.22
4.21
4.28
4.61
9.33
8.52
7.45
6.54
Campeche
8.27
7.18
7.78
8.39
11.86
11.07
9.48
9.10
Coahuila
7.29
6.19
6.74
7.32
7.20
6.35
4.93
4.55
Colima
7.07
5.86
6.09
6.62
8.70
7.65
6.59
5.93
Chiapas
4.81
3.74
4.15
4.62
4.15
3.31
1.92
1.52
Chihuahua
5.99
4.93
5.33
5.80
7.62
6.75
5.43
4.96
Distrito Federal
11.80
8.31
5.85
6.50
12.51
8.88
10.43
8.80
Durango
6.37
5.28
5.84
6.39
7.64
6.72
5.33
4.99
Guanajuato
6.36
5.19
5.16
5.61
8.00
7.19
6.31
5.13
Guerrero
7.71
6.39
4.72
4.58
6.74
5.67
6.19
3.39
Hidalgo
7.88
6.78
7.10
7.59
8.48
7.64
6.52
5.75
Jalisco
7.51
6.43
6.04
6.26
8.94
7.66
7.39
5.46
México
8.02
6.95
5.22
4.77
11.40
9.96
10.62
7.47
Michoacán
6.66
5.65
5.29
5.46
7.45
6.73
6.02
4.60
Morelos
7.48
6.63
5.45
5.10
12.30
10.96
11.09
8.36
Nayarit
8.11
7.00
7.30
7.72
7.75
6.77
5.68
5.02
Nuevo León
7.42
6.31
6.63
7.06
8.28
7.25
6.08
5.50
Oaxaca
5.20
4.32
4.27
4.47
5.02
4.09
3.20
1.92
Puebla
10.41
9.51
8.13
7.72
10.10
8.93
9.18
6.37
Querétaro
8.22
7.42
6.97
6.92
9.97
8.98
8.37
6.46
Quintana Roo
8.62
7.57
6.49
6.34
9.39
8.69
8.64
6.44
San Luis Potosí
9.33
8.19
8.41
8.85
8.23
7.17
6.12
5.38
Sinaloa
7.70
6.63
7.10
7.58
9.04
8.13
6.75
6.24
Sonora
6.16
5.08
5.49
5.92
8.80
7.77
6.57
6.10
Tabasco
10.05
8.83
9.11
9.64
9.97
9.11
7.68
7.20
Tamaulipas
5.76
4.70
4.94
5.32
8.28
7.33
6.26
5.53
Tlaxcala
7.05
5.87
5.57
5.81
9.99
8.90
8.45
7.01
Veracruz
9.00
7.82
8.00
8.53
9.45
8.57
7.33
6.77
Yucatán
6.83
5.74
6.41
7.07
8.60
7.94
6.18
5.91
Zacatecas
5.44
4.27
4.98
5.71
6.92
6.00
4.52
4.25
Source: SHF, SHF home price index for Mexico.
Appreciation (+), depreciation (-).
• xiv • Current Housing Situation in Mexico 2009
2008
2009
IIIIIIIVIIIIIIIVIIIIIIIVI
4.46
4.69
5.31
5.68
4.92
3.87
1.91
2.26
9.04
3.88
5.19
6.34
2.37
3.57
3.35
3.26
8.78
8.95
3.48
6.27
5.34
6.69
5.72
4.37
6.32
6.08
2.33
5.94
7.74
4.57
3.27
9.99
2.16
4.52
8.62
4.15
1.69
2.83
2.44
1.47
6.98
2.14
4.21
4.48
0.90
5.67
1.71
2.76
11.55
7.97
4.68
9.56
5.33
9.18
4.80
3.24
5.97
8.62
3.11
7.42
6.79
3.03
2.12
8.03
1.33
5.10
7.04
1.66
(-)0.15
4.00
3.04
2.40
8.40
3.37
5.18
5.74
1.98
5.20
2.86
3.80
11.69
9.08
5.22
9.35
6.13
9.22
5.74
4.21
6.89
8.64
3.70
7.73
7.77
4.21
3.04
9.37
2.24
5.63
8.18
3.24
1.18
4.47
3.29
3.11
9.33
4.36
6.01
6.81
3.04
5.48
3.94
3.95
10.73
9.73
4.85
8.68
6.42
8.79
6.68
5.23
7.25
8.24
3.66
7.73
8.61
5.12
4.22
10.34
3.09
6.03
9.19
4.06
1.94
5.07 5.53 3.66 0.06 4.48 6.48 4.37 5.36 5.95 7.75 6.94 8.73 3.54 4.24 4.03 7.19 3.68 5.69 4.62 5.70 5.57 3.51 5.65 2.87 5.46 4.12 0.43 5.60 7.84 2.10 5.08 7.14
Methodology appendix • xv •
Appendix A.
List of graphs
section 2
Graph 1. Graph 2. Graph 3. Graph 4. Graph 5. Graph 6. Graph 7. Graph 8. Graph 9. Graph 10. Graph 11. Graph 12. Graph 13. Graph 14. Graph 15. Graph 16. Graph 17. Graph 18. Graph 19.
Graph 20. Graph 21. Graph 22. Graph 23. Graph 24. Graph 25. Graph 26. Graph 27. Graph 28. Graph 29. Graph 30. Graph 31. Graph 32. Graph 33. Global economic activity indicator
Economically active population and rate of open unemployment
Overnight call rate, US target rate, and exchange rates in Mexico
Mexico: production in the construction industry
Mexico: value of the production of the construction industry
Mexico: index of the cost of residential construction
Mexico: activity situation of building companies by size
Mexico: Employment and remunerations in the construction industry by occupation
Bridge loans and dwellings built
Mexico: estimate of the construction industry, 2009
Dwellings in expanded backwardness, 2009
Expanded backwardness based on the situation of the dwelling and affiliation
Households without social security by minimum wage range
Housing classification, ceiling rates
Mexico: dwellings by age
Mexico: dwellings by number of rooms
Adjusted disposable income by state and nationwide
Comparison of IPC and IH
Companies in the IH: market capitalization distribution
Comportamiento del precio de las actions of thes empresas del IH
Type of housing built by each developer
Extraordinary costs for social type housing
Extraordinary costs for economic type housing
Slow procedures
Prices of standalone houses, condominium houses, and apartments, 2005.I-2009.I
Price trend of housing in selected countries, 2005.I-2009.I
Socioeconomic characteristics of the residents
Satisfaction with the dwelling
Satisfaction with the housing complex and the city
Negative aspects regarding delivery of the dwelling
Persons to whom the borrowers turned
Obstacles in obtaining a loan
Acquaintance with mortgage insurance
section 3
Graph 34. Graph 35. Graph 36. Travel times
Average distances to the urban center, by age of the complex
Composition of the sale price per m2 of construction
section 5
Graph 37.
Graph 38.
Graph 39. Graph 40. Graph 41. Graph 42. Graph 43. Most frequent irregularities in used housing
Used and new housing by urban proximity
Distribution of the used housing market
Index of Absorption, used dwellings, 2007-2008
Credits for used housing, 2006-2009
Baseline results
National average of the progress on the program
Methodology Appendix
Graph E.1. Size of the developer by region
Graph F.1. Dwellings nationwide
Graph F.2. Standalone homes, houses in a condominium, apartments, and others
• xvi • Current Housing Situation in Mexico 2009
section 1
Figure 1.
Axes of the Vivir Infonavit strategy
section 2
Figure 2. Figure 3. Figure 4. Table 1. Table 2. Table 3. Table 4. Table 5. Table 6. Table 7. Table 8. Table 9. Table 10. Table 11. Table 12. Table 13. Table 14. Table 15. Table 16. Table 17. Table 18. Table 19. Table 20. Table 21. Appendix B.
List of tables and
figures
Composition of the PEA, 2009
Geographic coverage of the six developers traded on the BMV
Participating states and cities
Number of financings for housing, 2004-2008
Builders of dwellings with backwardness
Dwellings with expanded backwardness by state, 2009
Distribution of backwardness based on position at work
Distribution of backwardness based on income level
Distribution of backwardness by size of the locality
Market segmentation by income levels
Total quarterly average current income
Housing demand, 2009
Housing classifications and typologies by institution
Homologated classification proposal
Dwellings and households in Mexico, 2000-2008
Household typology, 2000-2008
Financing plans
States classified based on the ADI
Housing developers: land banks
Extraordinary costs by use
Quantification of extraordinary costs
Factors that determine expansions or remodeling of the dwelling
Housing Quality Index by category, 2008
Objectives by axes of the Vivir Infonavit program
section 3
Figure 5. Figure 6. Figure 7. Example for 60 dwell/ha.
Distance from the housing complexes to the city center. Guadalajara metropolitan area
Stages of Approved Projects (DUIS)
Table 22. Table 23. Table 24. Urban Development Plans in cities of the National Urban System
Solid waste generation in Mexico, 2008
Efficient firewood stoves installed in 2008
section 4
Table 25.
Table 26. Table 27. Factors to analyze the price formation in the formal and informal markets
Habitat Program, land acquisition
Inventory of OREVIS’ land banks, 2005
section 5
Figure 8. Figure 9. Figure 10. Figure 11.
Green mortgage
Operating mode for the collection of the predial integrated into a mortgage
Social collection model
Garantia Infonavit
Methodology appendix • xvii •
Table 28. Table 29. Table 30. Table 31. Table 32. Table 33. Table 34. Table 35. Table 36. Table 37. Table 38.
Table 39. Table 40. Table 41. Table 42. Table 43. Profile of the National Housing Institutions
National Mortgage Financing Program 2008
National Mortgage Financing Program 2009
Financings: annual variation 2008-2009
Main characteristics of the Alia2 and Respalda2 loans
Credits from the cofinancing programs
Monetary income, 2008
Expenses on remodeling by level of monetary income
Average transaction costs
Comparison of the mortgage financing models
Level of PRP Modernity
Company registration applications, 2006-2008
Record of housing offer with Infonavit 2006-2009
Origination* of mortgage portfolio in Mexico, 2007 vs. 2008
Unpaid balance of bridge loans, 2008
Situation of the aids from Garantia Infonavit
section 6
Figure 12. Principles of the payment solution schemes
Table 44. Table 45. Table 46. Table 47. Table 48. Table 49. Table 50. Sum issued (Borhis , Cedevis ,TFOVIS, and other issues)
Borhis Unsettled balance
Elements in the makeup of the first CBF issue
Current Cedevi issues
Total issues per year
Market share
Unpaid balance of BonHitos
Methodology Appendix
Figure A.1. Images of the DWF project in Central Vietnam
Figure B.1. Ideal model of suburban and rural housing
Table D.1. Table F.1. Table F.2. Table F.3. Distribution of the land bank by developer and by state
Statistical results
SHF home price index for Mexico
SHF housing price index for Mexico: Nominal rates of appreciation 2006.I - 2009.I
• xviii • Current Housing Situation in Mexico 2009
AHM
ABM
AMFE
ANNM
AMPI
IEA
Banobras
BA
Banxico
BID
BMV
Borhis
BSHF
CACEV
Canadevi
CAT
CBFs
Cedevis
CEPAL
Cetes
CEV
CER
CMIC
CNBV
Comegei
Conacyt
CONAE
Conagua
Conavi
Consar
CNSF
CJEF
Corett
DES
DOF
DTC
DTU
DUIS
DVD
DWF
EUA
ENIGH
FAO
Fide
Fonadin
Fonhapo
Fovi
Fovissste
GEI
GPI
Asociación Hipotecaria Mexicana
Asociación de Bancos de México
Asociación Mexicana de Entidades Financieras Especializadas
Asociación Nacional del Notariado Mexicano
Asociación Mexicana de Profesionales Inmobiliarios
Agencia Internacional de Energía
Banco Nacional de Obras y Servicios Públicos, S.N.C.
Base de Avalúos
Banco de México
Banco Interamericano de Desarrollo
Bolsa Mexicana de Valores
Bonos Respaldados por Hipotecas
Building and Social Housing Foundation
Consejo Asesor del CEV
Cámara Nacional de la Industria de Desarrollo y Promoción de Vivienda
Costo Anual Total
Certificados Bursátiles
Certificados de Vivienda Económica
Comisión Económica para América Latina y el Caribe
Certificados de la Tesorería
Código de Edificación de Vivienda
Costo Efectivo Remanente
Cámara Mexicana de la Industria de la Construcción
Comisión Nacional Bancaria y de Valores
Comité Mexicano para Proyectos de reducción de emisiones y captura de gases de efecto invernadero
Consejo Nacional de Ciencia y Tecnología
Comisión Nacional para el Ahorro de Energía
Comisión Nacional del Agua
Comisión Nacional del Sistema de Ahorro para el Retiro
Comisión Nacional de Seguros y Finanzas
Consejería Jurídica del Ejecutivo Federal
Comisión para la Regularización de la Tenencia de la Tierra
Derechos Económicos y Sociales
Diario Oficial de la Federación
Determinación Técnica de Calidad
Dictamen Técnico Único
Desarrollos Urbanos Integrales Sustentables
Discos de video
Development Workshop France
Estados Unidos de América
Encuesta Nacional de Ingreso y Gasto de los Hogares
Food and Agriculture Organization
Fideicomiso para el Ahorro de Energía Eléctrica
Fondo Nacional de Infraestructura
Fideicomiso del Fondo Nacional de Habitaciones Populares
Fondo de Operación y Financiamiento Bancario a la Vivienda
Fondo de la vivienda del Issste
Gases de Efecto Invernadero
Garantías de Pago por Incumplimiento
Appendix C.
Acronyms and
abbreviations
Methodology appendix • xix •
GPO
GPS
HIC
HiTo
IA
ID
Icavi
IGAE
IH
Implanes
IMSS
Inafed
INE
INEGI
Infonavit
INPC
IPC
LTFCCG
LTV
MML
MDL
mdp
NTCL
NOM
OCDE
OCI
OIT
OMS
Onavis
ONG
ONU
Orevis
PEA
PEM
Pemex
PIB
PCMV
PDZP
PNDU
PSV
PUEM
RH
RPP
RUV
SAR SCV
Sedesol
Semarnat
Sener
Garantía de Pago Oportuno
Sistemas de posicionamiento global (por sus siglas en inglés)
Coalición Internacional para el Hábitat
Hipotecaria Total
Índice de Absorción
Ingreso Disponible
Índice de Calidad de la Vivienda
Índice Global de la Actividad Económica
Índice Habita
Institutos Municipales de Planeación
Instituto Mexicano del Seguro Social
Instituto Nacional para el Federalismo y el Desarrollo Municipal
Instituto Nacional de Ecología
Instituto Nacional de Estadística y Geografía
Índice Nacional de Precios al Consumidor
Índice de Precios y Cotizaciones
Ley de Transparencia y de Fomento a la Competencia en el Crédito Garantizado
Siglas en inglés (Loan to Value)
Matriz del Marco Lógico
Mecanismo de Desarrollo Limpio
Millones de pesos
Norma Técnica de Competencia Laboral
Normas Oficiales Mexicanas
Organización para la Cooperación y el Desarrollo Económico
Organización de Corredores Inmobiliarios de la Ciudad de México
Organización Internacional del Trabajo
Organización Mundial de la Salud
Organismos Nacionales de Vivienda
Organizaciones No Gubernamentales
Organización de las Naciones Unidas
Organismos Estatales de Vivienda
Población Económicamente Activa
Proyecto Estatal de Modernización
Petróleos Mexicanos
Producto Interno Bruto
Programa de Competitividad Municipal en Materia de Vivienda
Programa para el Desarrollo de Zonas Prioritarias
Programa Nacional de Desarrollo Urbano
Producción Social de Vivienda
Programa Universitario de Estudios Metropolitanos
rezago habitacional
Registro Público de la Propiedad
Registro Único de Vivienda
Sistema de Ahorro para el Retiro
Seguro de Crédito a la Vivienda
Secretaría de Desarrollo Social
Secretaría del Medio Ambiente y Recursos Naturales
Secretaría de Energía
• xx • Current Housing Situation in Mexico 2009
SHCP
SHF
SM
SMMDF
SMG
SMGM
SNIIV
Sofoles
Sofomes
SSDUOT
SUN
Udis
UNESCO
UAM
UNAM
ZMVM
Secretaría de Hacienda y Crédito Público
Salarios Mínimos
Salario Mínimo Mensual del Distrito Federal
Salarios Mínimos Generales
Salarios Mínimos Generales Mensuales
Sistema Nacional de Información e Indicadores de Vivienda
Sociedades Financieras de Objeto Limitado
Sociedades Financieras de Objeto Múltiple
Subsecretaria de Desarrollo Urbano y Ordenación del Territorio
Sistema Urbano Nacional
Unidades de Inversión
Organización de las Naciones Unidas para la Educación, la Ciencia y la Cultura
Universidad Autónoma Metropolitana
Universidad Nacional Autónoma de México
Zona Metropolitana del Valle de México
Methodology appendix • xxi •
Appendix D.
Bibliographic
references and
websites
Bibliographic references
Ambrose, B. and Anthony B. Sanders (2004) Legal Restrictions in Personal Loan Markets. Journal of Real State Finance Finance and Economics.
Vol. 30. No. 2.
BBVA, Bancomer. Enero. Situación Inmobiliaria México 2009. Servicio de Estudios Económicos.
______ Septiembre. Situación Inmobiliaria México 2008. Servicio de Estudios Económicos.
Comisión Nacional de Fomento a la Vivienda, Conafovi. (2006). Uso eficiente de la energía en los desarrollos habitacionales. Colección Guías
Conafovi. México.
Cutts A. and W. Merrill (2008) Interventions in Mortgage Default: Policies and Practices to Prevent Home Loss and Lower Costs. Fredie Mac
Working Paper 08-01.
Daphnis, Franck y Bruce Ferguson. Editores Microfinanzas para vivienda. Una guía para la práctica. Kumarian Press. 2004.
Fondo de Población de las Naciones Unidas. (2010). Estimación del Programa de las Naciones Unidas para la Población.
Fontela M. y González F. (2007). Housing Demand in Mexico, Journal of Housing Economics (18).
Frausto, O, Perdigón, M:T. (Octubre-diciembre de 2005) Sistema de información de Indicadores UN-Habitat. Ciudades 68. RNIU, Puebla, México.
Fundación Cidoc y Sociedad Hipotecaria Federal, (Noviembre de 2008). Estado Actual de la Vivienda en México, 2008, México.
García Conde (2009). La crisis inmobiliaria y el Subprime Lending. La vivienda Mexicana en el año Subprime. Conavi y Centro Urbano.
Goodman A. y Thibodeau (2008), Where are the speculative bubbles in US housing markets? Journal of Housing Economics. (17)
Housing Demand in Mexico (September 2007), Department of Economics. University of New Mexico. Albuquerque, NM 87131.
Internacional Energy Agency, World Energy Outlook, (2008) Paris. France.
Instituto Nacional de Estadística y Geografía, II Conteo de Población y Vivienda, 2005.
______, (junio 2009), Encuesta Nacional de Empresas Constructoras.
______, (varios años), Encuesta Nacional de Ingresos y Gastos de los Hogares (ENIGH).
Leung, C. (2004). Macroeconomics and housing: a review of the literature. Journal of Housing Economics (13).
Mancilla, Elizabeth (1996). Prevención y atención de desastres en México en Allan Lavel, et.al. Estado, Sociedad y Gestión de Desastres en América
Latina. La Red. Mexico.
Pence M. (2006). Foreclosing on Opportunity: State Laws and Mortgage Credit. Review of Economics and Statistics. Vol. 88, No. 1: 177-182.
Rueda, S., (1996), Hábitat y calidad de vida. Ciudades para un futuro más sostenible. Universidad Politécnica de Madrid. Ministerio de Vivienda.
Secretaría de Desarrollo Social, Sedesol, Ley General Asentamientos Humanos, publicada en Diario Oficial de la Federación, 21 de julio de 1993.
______, Sedesol, Lineamientos del Programa de Modernización, en Diario Oficial de la Federación, 14 de enero de 2009.
______, Sedesol, Programa Nacional de Desarrollo Urbano 2009 – 2012. México. (En prensa).
Secretaría de Medio Ambiente y Recursos Naturales, Semarnat (2009), Programa Especial de Cambio Climático, 2008-2012. Versión Consulta
Pública. 19 de marzo de 2009.
______, Semarnat (2006), Tercera Comunicación Nacional ante la Convención Marco de las Naciones Unidas sobre el Cambio Climático. Semarnat.
INE. México.
Sociedad Hipotecaria Federal, SHF (2008), Estudio para la promoción del dinamismo de la vivienda usada. México.
Valladares, R., Chávez, M., Moreno, S. (2009), Elementos de la Habitabilidad Urbana. México.
Websites
Asociación Mexicana de Entidades Financieras Especializadas A.C.
www.amfe.com.mx
Asociación Mexicana Hipotecaria
www.ahm.org.mx
Banco de México
www.banxico.org.mx
Biblioteca CF+S Ciudades para un futuro más sostenible
www.hábitat.aq.upm.es
Comisión Nacional Bancaria y de Valores
www.cnbv.gob.mx/default.asp?com_id=0
www.conavi.gob.mx/
Consejo Nacional de Ciencia y Tecnología
http://www.conacyt.mx/
Fondo de la Vivienda del ISSSTE
www.fovissste.gob.mx
Fondo Nacional de Habitaciones Populares
www.fonhapo.gob.mx
Inside Mortgage Finance
www.imfpubs.com
• xxii • Current Housing Situation in Mexico 2009
Instituto Nacional de Estadística y Geografía,
www.inegi.org.mx/inegi/default.aspx
www.Infonavit.gob.mx
Organización de las Naciones Unidas, United Nations Population Division
www.esa.un.org/unpp/index.asp
Organización para la Cooperación y el Desarrollo Económico
www.oecd.org
Premios Mundiales del Hábitat
http://www.worldhabitatawards.org
www.shf.gob.mx
Secretaría del Trabajo y Previsión Social
www.stps.gob.mx/
Secretaría de Desarrollo Social,
www.sedesol.gob.mx
Universidad Autónoma de Yucatán
www.uady.mx
Unidad de Microregiones (Sedesol)
www.microrregiones.gob.mx.

Current Housing Situation in Mexico 2009

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