5) Description of housing product/service offering: Our main product is the recovery of available housing space in inner city areas. This kind of renovation of houses in ruins is orientated towards the lower income class, in many cases first-time-buyers, generally young people, who shared a living space with their parents or family. Although this kind of apartments is not designed for the marginalized population, it lowers the pressure on suburban squatter settlements and therefore leaves space for the more needed ones. We consider it of major importance to reactivate the historic city centers in developing countries to contribute to the preservation of traditional urban structures. Densification and recovery of neglected buildings is one option which could achieve this.

6) Description of innovation: Pacific Architecture has a general approach to the housing problem in urban areas: construction of dwelling space, investigation of traditional housing typology in the city and collateral actions to foster the urban structure. Besides having a design and construction department, PA is partner and sponsor of the DUC, Center for Contemporary Urban Development (www.duc.cl). The main mission of the DUC is to facilitate the communication between planners, politicians and the population, to carry out investigation projects and to offer a place for exhibitions related to urban matters. Besides the DUC, PA is sponsoring a Civil Rights Movement, “Ciudadanos por Valparaíso”, whose mandate is to reveal irregularities in urban development and stimulate positive tendencies. All the experience of these organizations converges into the housing projects designed and built by PA. In the moment, PA is co-financing a study about the “Cités of Valparaíso”, precursors of social housing types, and a campaign carried out by Ciudadanos por Valparaíso to enhance the traditional commerce in the center: several shops are distinguished with a sticker “Lugar Valioso” (valuable space), statistical surveys are carried out and a city map, indicating these shops, was printed and delivered for free to the different shop owners. We believe that a single project can not ensure that the investment done by its owners converts into a mid terms assets, helping them to increase their capital and in consequence their living quality, if it is not accompanied by major improvements in the “barrio” (area). To promote this, PA is co-financing these two organizations. The innovation of this approached is to go far beyond the solution of the immediate housing problem by creating an environment which ensures the insertation of the project into the urban fabric and guarantees an investment which maintains or increases its value in the future.

7) Benefits to clients: Before being able to offer the product to possible clients we look for an appropriate object. This should be a building in ruins, or with non – residential use or, at least, not occupied. It is a key option for us not to intervene in buildings which are completely or partly used. After acquiring the building, we develop a conceptual project with a pre – approval by the building authority and offer the project on the market. Usually our clients get notice of a new project by posters in the “barrio”, adds in local newspapers and flyers in strategic locations. After assembling a group of 4 -6 possible clients we organize meetings to introduce these families to each other and to evaluate their possible capacities to buy an apartment. About one third of our clients already have participated in meetings of earlier projects, but not qualified for the loan at this time. The rest are people from the surrounding, friends or relatives of former clients and a few “newcomers” who have heard about the projects in the media.

8) Key operational partnerships: As mentioned above, part of our success lies in the close relation to a Study Center and a Civil Rights group, incorporating their experience and advices into our projects.

DUC: Study Center for Contemporary Urban Development, a non profit organization sponsored partly by PA, which is a forum and meeting place for every-one interested in urban matters. These meetings, exhibitions and, above all, investigation projects, are the basis for the design of the different projects. Ciudadanos por Valparaiso: A Civil Rights Organization and grass-roots movement, is represented by a small committee, who directs the movement, and approx. 300 members. All campaigns are supported (by signing petitions) by up to 5000 citizens. Two of their campaigns were absolutely vital for our work, the “Lugar Valioso”, the fostering of the traditional commerce, and the “Que nadie nos tape la vista” campaign, demanding a new Master Plan for the city. After a city wide campaign, 6000 signatures and a proposal for the Master Plan by Paz Undurraga, Spokesperson of CpV, the city council finally commissioned the new Master Plan limiting the height of the buildings in 90% of the town to 4 stories. Both results have been of enormous value for us and our clients, because it is our conviction, that the dwelling, especially if it is the first of a family, must increase in value to offer better opportunities in the future. Ministry of Housing: by state subsidies Bank: by granting loans to our clients

9) Financial model: This housing model is produced entirely by the private sector. The only subsidy is by the state supporting the creation of housing space. The key to affordable living space in this case lies in the acquisitation of cheap inner city houses (ruins) and an intelligent constructive intervention.

          • Costs as percentage of income: 10%

          • Financing: At the time of delivery, the client should count with a small savings, the subsidy and a bank loan for 15 – 25 years. The dividend of the loan can not exceed 25% of the declared family income, which in many cases is an obstacle difficult to pass, especially for clients working in the informal sector. A major advantage for the inhabitants of inner city housing is the reduced cost of commuting between the center and the suburbs, saving expenses in transport and increasing the available leisure time.

10) Effectiveness

          • Project outcomes: In the last years we built 7 projects with a total of 77 units. The outcome of this initiative has been a re- valorization of inner city housing in Valparaíso, proving that affordable housing does not need be situated in the suburbs. The strong participation of the future owners creates an identification with the site, relation with the neighbors and a cost efficient and a custom-tailored solution. The incorporation of DUC and Ciudadanos por Valparaíso guaranties a solid foundation of the concept. The concentration of 3 projects in the same area initiated the remodelation of its public space by the government, complementing the private initiative.

          • Number of clients in past year: In the year 2005 we built 2 projects with 11 and 20 units each for app. 110 persons.

          • Percentage of clients that are poor or marginalized: 60%

          • Potential demand: The demand, as soon as it is proven that inner city housing is cost efficient, is enormous, especially for lower income groups. This concept can be developed in any city with a deteriorated city center. In Valparaíso, which is an extreme example, 18% of the inner urban land is either empty or in ruins, which could be developed and offer housing to all kinds of population. Considering the total urban population, about 10% could find their new homes in this kind of recycled dwellings. In Valparaíso, with a population of 300.000, there is a market share of up to 30.000 dwellings, with about 15 – 20 units per building.

11) Scaling up strategy

          • Stage of the initiative: Scaling Up stage.

          • Expansion plan: Continue in Valparaíso in the same scale and starting to open up new areas in other cities in Chile, Peru and Venezuela.

12) Origin of the initiative: This initiative started in 2000 after moving always further from the city center to find affordable land for social housing projects. Once, at a distance of more than one hour, we took the decision to start again in the very city center, at a time when Valparaíso applied for “World Cultural Heritage” at the UNESCO. The individuals behind the idea are the family, it’s another quality of life being able to work at walking distance of your home.

Contact Information:
Michael  Bier
Ashoka Fellow
Architect, Director
Pacific Architecture Chile
(Planning and construction firm)
pach@entelchile.net
Chile
Tel: xx56 - 32 - 22 16 420
Email: pach@entelchile.net
Website: www.pach.cl, www.duc.cl, www.ciudadanosporvalparaiso.cl