May 16, 2005
Venezuelan government launches effort to solve housing crisis

Published by Reuters
By Silene Ramírez

"Thousands of would-be Venezuelan home buyers are lining up to receive loans and subsidies from a government that is telling them, 'You don't need to win the lottery to have a house of your own.'

Following initiatives to improve health and education for the poor, left-wing President Hugo Chávez has launched his Housing Mission to try to provide homes for more than a third of Venezuela's 26 million people who lack a decent place to live.

The chronic housing shortage is an embarrassment for the populist leader who promised when he took office six years ago that he would use Venezuela's oil riches in a self-styled revolution to eradicate poverty in all its forms.

'The housing problem is one of the most serious that Venezuela faces. Our revolution has provided some answers but they're really not enough,' Chávez said recently.

Under legislation introduced this year, the government is offering low-interest credits and subsidies that can cover up to half the price of thousands of low-cost homes it is promising to build (...)

The president has announced plans to build half a million homes between this year and next and has promised that in 17 years the housing problem will be solved.

'Just as we say 'Homeland or Death,' it's 'Homes or Death,'' he told his ministers recently.

Hopeful home buyers have been mobbing the offices of the state mortgage bank Banco Hipotecario Latinoamericano, which is offering the subsidized long-term home loans.

'At last our dream of having our own home can come true. We're being given facilities we never had before,' said Isaura de Rojas, 31, who lives with her husband and two children in a rented house in Caracas' poor Catia neighborhood (...)

Under the Housing Mission, the government is offering subsidies and low-interest credits for buyers of houses costing up to a maximum of 52 million Bolívars ($24,186) each.

These benefits are open to families whose monthly income does not exceed 1.62 million Bolívars ($756) -- about 80 percent of Venezuela's families -- and can vary according to the income level of the prospective home-buyer.

A 540-square-foot (50-square-meter) apartment in Caracas' wealthy suburbs can fetch as much as 200 million Bolívars ($93,000), while a house in poor neighborhoods may cost 38 million Bolívars ($17,670).

'Where am I going to find a house at that (52 million Bolívar) price? There's nothing in Caracas, only slum houses or small things in ugly places. I have four children. Where am I going to put them?,' said Claudia Andrade, 41, a waitress.

Housing Minister Julio Montes said private builders should fall in line with the government policy and adjust their costs so they can sell houses for around 52 million Bolívars each. If they ask for more, they will be 'out of the market,' he said.

To bypass private builders, the government is channeling oil income into ventures with Chinese and Iranian companies to build more than 70,000 homes. It is also financing community housing cooperatives whose members will build their own homes.

Chávez says state oil company PDVSA is making a 'gigantic' contribution, but he does not give a total figure.

Montes admitted it was difficult to find low-price homes in Caracas and nearby satellite cities, where a quarter of the Venezuelan population lives. He invited home buyers to check out other locations.

'I can't leave Caracas. It's where I work,' said Andrade, who came to the capital when she was 18 to 'seek my fortune' (...)

The government has roped in private banks by putting a 11.36 percent cap on the interest rates they charge on home mortgages. It also ordered banks to allocate at least 10 percent of their total credit portfolios to housing (...)".