5) Description of housing product/service offering: The project was to regenerate a neighborhood that was the worst crime and drugs infested inner city area of Colombo, the capital city. The idea was to provide these persons with modern good housing. Further to provide them with a share in the commercial assets in the area. These acts would make these now shanty and slum dwellers to enter the economic mainstream.

The methodology was to create a stock exchange or listed share that the families would gain as payment for the slum or shanty land they would give up in vacant possession. This share would translate into the new house for them and a share in the new regenerated area.

This latter was achieved by giving the family an apartment and also attaching by condominium plan commercial space at ground floor level to that condominium apartment. In this way the family would have an income that was applied to maintenance and maintaioning of common property of all the families. This gave a stake in the neighborhood to the families. By keeping the area good, they could reap the benefit of higher lease rentals and so better improvements for their own apartment building. This process was completed and at this popint of time, the families have been in the new homes for over four years and the area is managed well by their management association.

It must be appreciated that our scheme was simply to financially enable the slum and shanty dwellers to get this condominium. This was by means of a process we call the Social Real Estate Investment Trust or S-REIT. We are not involved in construction or housing. We simply enable the slum and shanty dwellers to raise the finance so that they realize their condominium and continuing income generating asset.

This is possible because the ground cover that they vacate is much more than is needed for a large apartment building. The liberated land has value and its sale value finances the scheme.

We do not stand in the way of market forces but enable it only.

So our project is self financing and self sustaining. At the start we specifically state no donors and no NGO bodies may get involved. We only have a deal with the land owner, several State Agencies. The rest is common sense.

6) Description of innovation: Our innovation is that we stand aside and let the markets work.

All other models are based on intervention and planning, and usually force-feeding, by the project doers and others.

We take the poor people’s situation to the same level s that of the well to do. There are no NGO bodies or donors telling rich people how to use toilets and where to live. So also in our case. We simply enable people to realize the value of the land on which they are living.

We started by persuading and training government welfare officers to become marketing personnel who marketed our idea to the poor - they sold their real estate and also sold them new modern apartments of their preference. Government's role then changed in the market economy to one of ensuring transparency of new development plans for homes for poor. The people chose the designs and construction of their homes. The scheme created for slum dwellers an entitlement to the land they occupied which they transferred to a trust. They received in exchange entitlement certificates which could be redeemed by exchange for title to a new apartment in a new building. This was a condominium apartment where the former slum dweller now owned his new apartment and also a share of the common areas that include commercial shops so they become stakeholders in regeneration. The scheme changed the practices of the developers who found they had to compete for the preference of the poor using models and advertising in a transparent bidding process of development proposals. The scheme gives the poor the same economic choice situation as the middle class and helps integrate society since the resulting housing provides the same middleclass environment.

7) Benefits to clients: As explained above, delivery is integrated into the model. We do not build and deliver. We only enable the people to do it all.

8) Key operational partnerships: The initiative needs to sets of partners. Without them NOTHING is possible. So they have to sign up contractually before we start anything.

These are the people, firstly. That is all the persons or households in a slum or shanty block, a geographically clear separate “estate” or multi unit area must all sign in with no exceptions. This is up to them. We are not involved. No NGO nor Donor nor State participation takes place for this event. Actually there is no practical problem in this.

Secondly all the landowners of the blocks involved including the block on which the new building shall come up must sign in. this happened to be State Agencies in our first project. In our current project it has started with private landlords coming in first.

There are and should be no other partners. We do only transparent work.

9) Financial model: The Model is entirely based on a Financial Principle that what the people lack is a capital market and that the market system will provide the best deal for all.

          • Costs as percentage of income: 300

          • Financing: This is a self sustained program that is financed by the Market and any sponsors who make money at the end of the project like in any financial investment.

10) Effectiveness

          • Project outcomes: The project is now closed. We are planning a further project on the same lines. 4,000 persons were housed in modern housing and the State and Utilities also benefited. Besides other investors, commercial suppliers etc at normal terms.

          • Number of clients in past year: The last year we have not had a program in operation.

          • Percentage of clients that are poor or marginalized: 100

          • Potential demand: The program will benefit any poor people community in an urban area in a normal developing country or a forward thinking developed country. It cannot be applied in situations where the Authorities have ossified thinking or who are suspicious of open markets. This situation is more prevelant in developed countries than developing ones and so this project has greater applicability in developing countries.

11) Scaling up strategy

          • Stage of the initiative: Scaling Up stage.

          • Expansion plan: Look for clients within the constraints of my travel budget.

12) Origin of the initiative: The initiative was an idea I had; supported and promoted by the person who is now married to me.

Contact Information:
Darin  Gunesekera
Ashoka Fellow
President (& Technical Director)
Capital Markets for the Marginalized
(Corporation that does not distribute profits)
81, 1/A, Isipatana Mawatha, Colombo 5, Sri Lanka
Sri Lanka
Tel: 94-11-2581811
Email: wiroshermes@yahoo.com