- Assign property rights to decrease investment risk
Organization: Bairro Legal
Location: Brazil
Mosaic principle: Enable long-term investment
Mosaic barrier: Dearth of complementary goods (e.g., land and infrastructure)
The city of São Paulo, Brazil is home to 10 million people, more than a third of whom live in informal and/or illegal settlements, subject to eviction or forced relocation. Many of these settlements lack basic amenities such as water, electricity, and sanitation, and are without secure tenure, and residents are reluctant to invest in their homes and neighborhoods. The result is that they are in extremely poor condition, unhealthy and even dangerous. From 2001 to 2004, the municipality of São Paulo's Bairro Legal program succeeded in providing secure tenure to 45,000 families and preempted the eviction of another 13,000. A key element of the municipality's strategy was conflict mediation between squatters and landowners to avoid, where possible, recourse to legal action (eviction or expropriation). The municipality also offered various types of assistance for legal acquisition of land including legal help with the titling process–both directly and through partnership with the local bar association–and second, microcredit at below-market rates through special agreements with Bradesco, Brazil's largest private sector bank. Despite its accomplishments and widespread acclaim from the international community, the program was discontinued with the change of administration in 2005. For more information, check out www.cohre.org/library/COHRE-HRB-Dec04.pdf
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- Invest in services and infrastructure to unlock latent housing demand
Organization: Orangi Pilot Project
Location: Pakistan
Website: www.urckarachi.org
Mosaic principle: Enable long-term investment
Mosaic barrier: Dearth of complementary goods (e.g., land and infrastructure)
Orangi is the largest informal settlement in Karachi, Pakistan with a population of 1.2 million people. In 1980, a participatory needs assessment revealed that the community's number one priority was to obtain sewerage services. The government refused to connect the settlement because of its informal status, so the Orangi Pilot Project supported community members to design a new, low-cost system which they financed and constructed themselves. Seventy-two thousand latrines and 1.3 million feet of pipes were installed. Since then, OPP has diversified to provide support for other environmental improvements and community services such as schools and clinics, incorporating financial support from the Pakistani government and other donors. Collectively, these community improvements have spurred residents to invest in improving their homes; OPP is helping to meet the demand by working with small, local building materials manufacturers to improve quality and efficiency. Twenty-five hundred housing units are built or improved each year in Orangi. OPP's methodology has been replicated in 245 settlements in 12 cities, benefiting hundreds of thousands of families.
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- Mobilize low-income families' purchasing power through experience-based learning and demonstration projects
Organization: Shack/Slum Dwellers International (SDI)
Location: Global
Website: www.sdinet.org
Mosaic principle: Enable long-term investment
Mosaic barrier: Low individual purchasing power
Shack/Slum Dwellers International is a global network that facilitates housing delivery by building self-reliance within low-income communities. This concept, which originated in India in the 1970s, has been implemented successfully in 14 countries and encompasses a total of 5.6 million members, mostly women. The organization is based on a basic strategy of organizing communities: daily savings groups, which are federated at the neighborhood, regional, and national levels. Country federations use a set of methods that enable action among their members, who are accustomed to have little sense of control over their problems, by showing what is achievable. Primary activities include exchanges, in which members from different neighborhoods, cities, and countries learn from and become inspired by each other's experiences; community-designed house exhibitions, which encourage discussion and joint decision-making about the designs, materials, and construction processes that are best suited to members' needs; and enumerations in which members undertake demographic surveys of their settlements in order to negotiate with government officials and others. The result is that communities are mobilized to start building assets and empowered to initiate and manage changes that they prioritize.
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- Market program by speaking to the poor's aspirations—housing as patrimony—to catalyze savings
Organization: Cemex/Patrimonio Hoy
Location: Mexico
Website: www.cemexmexico.com/se/se_ph.html
Mosaic principle: Enable long-term investment
Mosaic barrier: Limited access to housing finance
In most Mexican communities where incomes are low and cultural norms may mitigate against saving for the future, people tend to build their homes incrementally, as and when money becomes available. To build even one additional room can take up to four years. Cement giant CEMEX's Patrimonio Hoy (Assets Now) model addresses the financial constraints of low-income families by building a system for saving and planning ahead. PH marketing emphasizes "patrimony"–an asset and a legacy to pass down to one's children–as opposed to construction materials. Its offer is tailored to the reality of how the poor build their homes, one room at a time, and with their own labor. PH makes it attractive with a "total housing solution" that encompasses financing, cement, other building materials, technical assistance, storage, and quality customer service. Since its creation in 1998, more than 130,000 families have improved their living conditions, built rooms faster, and at an average of 80 percent of previous costs. The program exemplifies how a company successfully translated the social innovation of microfinance to the construction material industry, expanded their core business model to overcome the main barriers faced by their potential customers (e.g., access to financing), and found cost-effective ways to serve this market.
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- Enable asset-building and create design that meets low-income communities' preferences
Organization: Housing Stock Market Exchange
Location: Sri Lanka
Mosaic principle: Enable long-term investment
Mosaic barrier: Inadequate current product offerings
In Colombo, Sri Lanka, the high cost of land forces low-income residents to squat illegally on public or private land. The squatter has physical occupancy of the land, but his opportunity cost is high because he cannot obtain services or invest in his house as long as he is there illegally; the landowner has legal title to the land but his opportunity cost is also high because he cannot realize the value of the land as long as the squatters are there. The crux of the Stock Market Housing Exchange, the brainchild of Ashoka Fellow Darin Gunesekera, is a deal in which squatter and landowner trade in their main items of value: physical occupancy and title, in order to unlock these opportunity costs. The land is sold and former squatters receive the rights to condominiums in a new building financed by the proceeds of the sale. The landowner receives the difference between the sale price of the land and the cost of the new construction. A key feature of the Housing Stock Market Exchange is that the former squatters choose the new building's design: bidding developers submit proposals and the winner is selected by vote. The Colombo building houses 670 families totaling more than 4,000 people and plans for replication in India and Brazil are being explored. For more information see this profile.
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- Build critical mass and empowerment for communities to negotiate with government
Organization: South Africa Homeless People's Federation (SAHPF)
Location: South Africa
Website: www.utshani.org.za/SAHPF.htm
Mosaic principle: Leverage resources that are abundant at the local level
Mosaic barrier: Dearth of complementary goods (e.g., land and infrastructure)
With its goal to put home ownership within reach of all its members, the 80,000-member South African Homeless People's Federation has helped more than 150,000 squatters–mainly women–pool their savings, resulting in 15,000 new homes and the securing of more than 1,000 hectares of government land for development. The Federation, an alliance of the Utshani Fund and People's Dialogue, is an umbrella organization committed to the broader issue of community development in which the very process of bringing members together into savings schemes is intended to build their capacities for managing their own development needs. In that sense, housing only became a means to an end: sustainable urban development. The first step in the Alliance process was to support the growth of a network of town-based grassroots savings schemes (nsukuzonke). This involved exchange programs between the communities and between them and partner organizations overseas (mainly Asia). The focus of this stage was the basic systems, relationships, and institutions that would enable low-income communities to take responsibility for the urban development process. Adequate housing emerged as the number one priority for Federation members. The partnership between the Federation and the government has produced significant changes that include the increasing shift in government thinking on how to provide shelter to the poorest; the role of savings that develops in communities a borrow-and-repay ethic; reforms of the regulatory environment for urban development; and a move toward better coordination between land and housing policies.
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- Target already-organized communities
Organization: Baan Mankong
Location: Thailand
Website: www.achr.net/bmkguide.htm
Mosaic principle: Leverage resources that are abundant at the local level
Mosaic barrier: Dearth of complementary goods (e.g., land and infrastructure)
There are approximately 8 million people living in low-quality, often insecure housing conditions in Thailand. 70-80 percent of people cannot afford conventional housing, either through the market or through government housing programs. In 2003, the Thai government introduced a Shack/Slum Dwellers International-type approach to policy with the inauguration of Baan Mankong or "secure housing,"–a program initiated by Ashoka Fellow Somsook Boonyabancha–a program intended to improve living conditions for 300,000 families by 2008. Implemented by an independent government agency called the Community Organizations Development Institute (CODI), its strategy for delivering low-income housing on the required scale is to channel funds to community-based organizations that plan and carry out projects themselves. Two types of funding are available: a per-household subsidy for non-housing infrastructure, and subsidized loans for housing. Slum upgrading approaches, rather than construction of new homes, are supported wherever possible in recognition of the large investments poor people have already made in their homes. However, very few conditions are imposed in order to allow communities to find the best and most efficient solutions to their problems.
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- Use "sweat equity" to reduce labor costs and create new skills
Organization: Mutirões
Location: Brazil
Mosaic principle: Enable long-term investment
Mosaic barrier: Low individual purchasing power
In Brazil, low-income communities have a long history of banding together in the form of social movements to press the government to provide land, services, etc. At the same time, unwilling or unable to rely completely on the state, these communities have come together after work and during weekends to construct their homes and neighborhoods themselves through mutual self-help projects called "mutirões"–a phenomenon that occurs in many developing countries. In spite of a more lengthy process, the community approach reduces costs. It is also instrumental in teaching self-management and numerous administration skills to the community. While mutirões are not new, the practice of leveraging them as a matter of public policy to help meet the growing demand for low-income housing is relatively recent. In São Paulo, Bairro Legal arranged for designated communities engaged in mutirão to receive microcredit for building materials. Two banks partnered with the municipality to provide the financing.
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- Scale informal economies
Organization: Campamentos Unidos
Location: Mexico
Mosaic principle: Leverage resources that are abundant at the local level
Mosaic barrier: Low individual purchasing power
With urbanization, increasing numbers of people have to create their own jobs. The poor, lacking training and access to credit or other support, are the worst hit. Out of the wreckage wrought by the 1985 Mexico earthquake, Ashoka Fellow Antonio Paz Martinez built a community organization, Campamentos Unidos (tent dwellers united), for the poor who lost their homes. In time, a number of other products grew out of Campamentos Unidos' initial concentration on helping the tent dwellers build new homes. CU figured out that once self-help construction cut out the roughly 50 percent of the cost of a new home that is labor, a significant way to lower the cost of such housing further is by reducing the bill for building materials. A new group to make low cost aluminum window frames was formed, thus proving how the virtuous circle of lowering costs can lead to more community self-help housing and on to yet lower costs. With the building of affordable housing as its springboard, the model is now upgrading homes and is increasingly becoming a broad-based network that is helping the "victims" of the earthquake to come together in small informal networks of producers, to help each other achieve economies of scale. For more information, please see this profile.
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- Aggregrate training and resources in a umbrella group to serve multiple co-operatives
Organization: COMBINE (Community-Based Information Network)
Location: Indonesia
Website: www.combine.or.id
Mosaic principle: Leverage resources that are abundant at the local level
Mosaic barrier: Low individual purchasing power
Using the community-based approach that views communities as essential actors in their own development, Ashoka Fellow Dodo Juliman Widianto has innovated "cooperative housing groups" within low-income communities in Indonesia. This method of collective finance has put home ownership within the means of those who would otherwise be condemned to the exigencies of life in an urban slum. To support the grassroots housing finance services, he founded an umbrella, partnership organization that brought together 22 groups of development consultants, CSOs, and community-based organizations from across the country, with members being well versed in land and financial management, negotiations with government bodies, and housing construction processes. The umbrella body plays the role of intermediary and facilitator among all of the actors, and serves its members as the primary forum for dialogue and exchanges of information, skills, and technology. At the grassroots level, it trains community groups in housing issues and construction techniques; at the political level, it is the premier organization acting to influence national public policy on housing issues.
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- Invest in customers' income-generating potential
Organization: Yayasan Kerja Pemukiman Rakyat (YKPR)
Location: Indonesia
Mosaic principle: Leverage resources that are abundant at the local level
Mosaic barrier: Limited access to housing finance
In Indonesia, where government efforts to support low-income families have mostly focused on infrastructure alone, Ashoka Fellow Ratna Refida's YKPR focuses on total human settlement–providing housing in such a way that it forms the basis for improvements in children's health and education, increased household incomes, and strengthened community ties. Community mobilization and financing are key components of the program. YKPR organizes at least 25 families to apply collectively for credit from the government housing bank, and then allocates the money and coordinates repayment on a quarterly basis which accommodates the seasonal nature of farming and fishing communities' incomes. Credit is "three-way," intended to cover land acquisition, house construction, and income-generating investments to help cover repayments on the loan. The government housing bank now considers them more reliable than its traditional clients and makes additional efforts to achieve customer satisfaction–for example, collecting loan repayments at customers' doorsteps. Although the model was developed for rural areas, this is also applicable to urban settings.
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- Build systems to capture savings for all types and sizes of incomes
Organization: VSSU
Location: India
Website: www.vssu.com
Mosaic principle: Leverage resources that are abundant at the local level
Mosaic barrier: Limited access to housing finance
In rural India, where a majority of the population depends on agriculture for their livelihoods, incomes are low and often seasonal and/or informal in nature. As a result, access to formal financial services is extremely limited. The alternatives are local moneylenders, which charge exorbitant interest rates, and nonprofit microfinance institutions, which do not offer poor clients the full range of services available to their middle and upper class counterparts. In this context, the key innovation of Ashoka Fellow Kapil Mondal's Vivekananda Sevakendra-O-Sishu Uddyan (VSSU) has been to fill the gap in finance available to the poor by mobilizing their own savings. The organization has 11,000 clients and has provided US$1.8 million in loans since 1997. VSSU targets villagers of all income levels in the Indian state of West Bengal, using convenient services like door-to-door daily, weekly, or monthly collection and incentives like gifts for spouses. VSSU's savings accounts bear interest, and after 18 months savers become eligible for short-term loans and insurance products–presenting the poor with a range of financial options similar to those available to higher-income market segments.
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- Facilitate community-led design
Organization: SPARC
Location: India
Website: www.sparcindia.org
Mosaic principle: Leverage resources that are abundant at the local level
Mosaic barrier: Inadequate current product offerings
In most Indian cities, sanitation is an urgent priority. Public toilets are too expensive for poor families, and individual household toilets are infeasible for a wide variety of reasons. Municipal governments have responded by contracting out construction of shared toilet blocks in slum settlements. However, there are far too few to meet demand, and those that exist suffer from poor quality construction and inappropriate design–for example, some have limited water supplies and no access to drainage. SPARC, an Indian affiliate of Shack/Slum Dwellers International, supported women's savings groups within its network to visit government-sponsored toilet blocks, observe the problems, and identify solutions. They developed new designs for community-managed toilet blocks that would be bright, well-ventilated, with large storage water tanks to keep toilets clean and allow washing after use; separate entrances and facilities for men, women, and children; adjoining rooms where caretakers and their families could live (thus reducing ongoing maintenance costs); and in some cases community spaces on top (bringing pressure to keep the toilets clean). To counter initial skepticism that women could suggest viable alternatives to existing design, SPARC sponsored the construction of demonstration blocks. Their success has inspired widespread replication. 391 toilet blocks with a total of approximately 8,000 seats have been constructed to date.
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- Utilize local materials and building techniques
Organization: Appropriate Development, Architecture and Planning Technologies (ADAPT)
Location: Egypt
Mosaic principle: Leverage resources that are abundant at the local level
Mosaic barrier: Inadequate current product offerings
Between 1966 and 1986, 80 percent of the housing built in Egypt was shanty housing built by local masons or the residents themselves. The "slum upgrading" market is thus a significant center of demand for quality construction materials and techniques. Ashoka Fellow Hany El Miniawy set up ADAPT in low-income communities to meet this demand in a sustainable way. ADAPT is working with low-income communities to meet this demand in a sustainable way. The organization uses local ingredients common to the ancient Egyptians, along with treated waste products like rice straw, cement dust, and iron-fabric leftovers to produce environmentally-friendly building materials that are high quality (certified by the Egyptian government) and low cost (30 percent below standard alternatives). ADAPT involves local youth in the material innovation and production processes and trains them in design and construction–for example, using the traditional Kasbah layout with small alleys for women, central courtyards, and double walls and ceilings to make indoor spaces cooler. These youth then act as catalysts, spreading their skills in their communities. Two of ADAPT's early settlements in Algeria, totaling 220 units in 1985, have expanded to more than 20,000 units through this mechanism.
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- Harness the effectiveness of existing informal systems
Organization: Saiban
Location: Pakistan
Mosaic principle: Radically lower the cost of the entire housing delivery process
Mosaic barrier: Dearth of complementary goods (e.g., land and infrastructure)
In Karachi, Pakistan, the traditional "sites and services" approach to affordable housing in which the state sells individual plots of land fully-serviced with water, sewer, electricity, and other amenities is ill-suited to the reality of low-income households that are typically unable to shoulder large up-front costs. The result is that the bulk of the new housing stock in the city is constructed informally. Saiban's key strategy is to leverage these informal systems and make them more efficient. The organization finances the purchase of unserviced plots of land, and leaves housing and infrastructure to be developed incrementally as money accumulates to pay for them–as occurs in the informal sector–but improves on this process by providing secure land tenure and organizing residents to plan and negotiate for addition of services. Security in Saiban settlements is higher; costs of living are lower; and services are obtained years faster than in comparable informal settlements. Read more at www.acumenfund.org/pdf/saiban_study.pdf
- Design new electricity distribution channels for slums through cooperatives
Organization: Peoples' Electricity Cooperative
Location: India
Mosaic principle: Radically lower the cost of the entire housing delivery process
Mosaic barrier: Dearth of complementary goods (e.g., land and infrastructure)
A firm believer in the participatory approach to service management systems, Ashoka Fellow Ashok Bharti is in the process of creating an alternative distribution mechanism for basic civic services to reach the country's slum dwellers. A cooperative acts as the regulatory body in the slum, managing distribution and collection, and liaising with the Regulatory Commission and the electricity company as a representative of the clients. The organization's efforts are focused on two broad areas–social and technical. They bring the community together to spread information about how such a cooperative is beneficial; demystify the technology required to set up the service channels; and identify community leaders to negotiate with stakeholders, service providers and the government.
Self-help groups are initiated to strengthen the cooperative spirit and encourage saving toward electricity charges so that clients do not default on payments. The groups are also intended to streamline the process of collecting the cooperative's fees and charges for the service. On the technical front, participatory appraisal to assess the electricity consumption needs of each household is being carried out along with a study of actual consumption of power, leakages, inefficiencies, and assessment of electric load. For more information about Ashok Bharti, see this profile.
- Aggregate demand to reduce transaction cost
Organization: ICICI Bank
Location: India
Website: www.icici.com
Mosaic principle: Radically lower the cost of the entire housing delivery process
Mosaic barrier: Low individual purchasing power
ICICI, India's second-largest commercial bank, has brought financial services to the rural poor in a viable, low-cost manner by working through networks of self-help groups rather than traditional branch offices. To reach profitability, the number of self-help groups had to be expanded exponentially without increasing the cost of managing these groups. ICICI therefore created a pyramid model where one bank staff member can serve over 14,000 low-income clients who are aggregated into self-help groups, which in turn are overseen by promoters (elected members of the self-help groups who are paid by the number of groups created). The groups must save for one year before they can collectively apply for a commercial loan, which is collateralized by the entire group. They can also lend to each other through group savings, and are paired with non-profit organizations that provide healthcare, education, and local development projects. ICICI currently works with over 8,000 such groups. The bank expects to add 50 million more customers over the next 2-3 years.
- Reduce the risk of housing finance by building credit history and income generation opportunities
Organization: Grameen Bank Housing Program
Location: Bangladesh
Website: www.grameen-info.org
Mosaic principle: Radically lower the cost of the entire housing delivery process
Mosaic barrier: Low individual purchasing power
In Bangladesh, with approximately 70 percent of the population at the "bottom of the economic pyramid" by global standards, access to formal financial services is severely constrained. However, Bangladesh is also home to Grameen Bank (GB)–a microfinance pioneer having seeded an industry that now serves over 50 million people worldwide. Its key innovation was to substitute peer support for traditional forms of security, such as proof of income or collateral, by lending through solidarity groups. Contrary to conventional wisdom of financial institutions, Grameen ventured into giving loans to the shelterless to build houses for themselves based on the philosophy that investment in shelter for the poor is productive. Rather than a consumption item burdening the poor, it is a vital investment to increase productive capacity and overall well being of a family. Its strategy for providing housing microfinance is two-pronged: leverage the same organizational infrastructure it uses for income generation loans, and restrict eligibility to members who have effectively developed credit histories for four years. This reduces the cost and risk of associated with a housing loan product, making it commercially viable. Approximately US$200 million has been disbursed for housing and over 621,341 houses have been constructed.
- Mobilize low-income families' purchasing power through experience-based learning and demonstration projects
Organization: Shack/Slum Dwellers International
Location: Global
Website: www.sdinet.org
Mosaic principle: Enable long-term investment
Mosaic barrier: Low individual purchasing power
Shack/Slum Dwellers International is a global network that facilitates housing delivery by building self-reliance within low-income communities. This concept, which originated in India in the 1970s, has been implemented successfully in 14 countries and encompasses a total of 5.6 million members, mostly women. The organization is based on a basic strategy of organizing communities: daily savings groups, which are federated at the neighborhood, regional, and national levels. Country federations use a set of methods that enable action among their members, who are accustomed to have little sense of control over their problems, by showing what is achievable. Primary activities include exchanges, in which members from different neighborhoods, cities, and countries learn from and become inspired by each other's experiences; community-designed house exhibitions, which encourage discussion and joint decision-making about the designs, materials, and construction processes that are best suited to members' needs; and enumerations in which members undertake demographic surveys of their settlements in order to negotiate with government officials and others. The result is that communities are mobilized to start building assets and empowered to initiate and manage changes that they prioritize.
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- Expand eligilbility for public funds
Organization: First Place Fund for Youth
Location: United States
Website: www.firstplacefund.org
Mosaic principle: Shift public policy through advocacy
Mosaic barrier: Low individual purchasing power
In the United States where each year more than 25,000 teenagers "age out" of the foster system only to find themselves with no place to live, no sustainable income, and limited educational prospects, Ashoka Fellow Amy Lemley's organization First Place helps former foster youth secure their "first place" by providing micro loans. Through its community-housing programs and alliance-building initiatives, First Place is transforming the foster care system in the United States at the local and state levels by demonstrating the power of her public-private partnerships model. Based on a peer-to-peer reinforcement model that was borne out of the Grameen Bank example, First Place covers the first month's rent and the security deposit that is paid directly to the landlord. The organization acts as a master tenant, contracting with the landlord and then subleasing to the young people. Ten youth form a "lending circle" and share reciprocal responsibility and mutual support, with each member required to complete a rigorous economic literacy curriculum before receiving a housing loan. For two years the lending circle is collectively responsible for the loan repayment of each lending circle member and for preventing loan default. First Place also supports these youths through an Emancipation Training Center that provides services like educational and vocational counseling, life skills instruction, transportation and grocery vouchers, advocacy support, and community-building events.
- Introduce "social leasing"
Organization: National Association of Intranquil Tenants
Location: Brazil
Mosaic principle: Shift public policy through advocacy
Mosaic barrier: Limited access to housing finance
Ashoka Fellow Maria Elisa Jardim Barbosa's National Association of Intranquil Tenants is seeking to provide poor Brazilian citizens with housing stability. The Association has co-opted a network of organizations–ranging from community organizations, neighborhood associations, tenants groups, consumer defense groups, church groups, to unions and lawyers' collectives–to press for a national housing policy to address the country's acute urban housing problems and inequity. Simultaneously, it is also advocating the introduction of housing subsidies and social leasing that take into account the realities of all individuals who have no property. They have successfully brought the government and businesses together to build low-income housing. The incurred costs are later paid off by the tenants, the arrangements for which are formalized through a long-term leasing contract. For more information see this profile.
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