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Department of Housing

Department of Housing. COMMONWEALTH OF PUERTO RICO. JORGE RIVERA JIMÉNEZ Secretary Departament of Housing. America’s Affordable Communities Initiative AFFODABLE HOUSING PUBLIC POLICY FOR PUERTO RICO. Strategies to Overcome the Barriers to Affordable Housing. Introduction:

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Department of Housing

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  1. Department of Housing COMMONWEALTH OF PUERTO RICO JORGE RIVERA JIMÉNEZ Secretary Departament of Housing

  2. America’s Affordable Communities InitiativeAFFODABLE HOUSING PUBLIC POLICY FOR PUERTO RICO. Strategies to Overcome the Barriers to Affordable Housing

  3. Introduction: • 3.9 million inhabitants with an average income of $20,425.00, one third of the U.S. average. • 45.4% of the population lives under the poverty line. • 1,434,322 housing units, 81% of them are single detach family houses. • 74% of them are owned by its resident. • The average value of the units is $98,000.00. • The housing demand is approximately 19,000 units a year. • Only 50% of the population can afford housing units of more than $90,000. • Construction costs are expected to increase in the following years. America’s Affordable Communities InitiativeAFFODABLE HOUSING PUBLIC POLICY FOR PUERTO RICO

  4. Barriers to Affordable Housing in Puerto Rico: GAP BETWEEN FAMILY INCOME AND HOUSING COSTS. America’s Affordable Communities InitiativeAFFODABLE HOUSING PUBLIC POLICY FOR PUERTO RICO • For 2005, the housing affordability ratio was 4.9, while is projected that it will be 6.7 by the year 2025.

  5. Barriers to Affordable Housing in Puerto Rico: REDUCTION OF CREDIT ALTERNATIVES America’s Affordable Communities InitiativeAFFODABLE HOUSING PUBLIC POLICY FOR PUERTO RICO • Crisis in the mortgage industry and in the financial markets.

  6. Barriers to Affordable Housing in Puerto Rico: • RISING DEVELOPMENT COSTS • Land Value • Construction Costs (materials, labor and transportation) America’s Affordable Communities InitiativeAFFODABLE HOUSING PUBLIC POLICY FOR PUERTO RICO

  7. Barriers to Affordable Housing in Puerto Rico: • BURDENSOME AND LENGHTY PERMITTING PROCESS • Many government agencies involved. America’s Affordable Communities InitiativeAFFODABLE HOUSING PUBLIC POLICY FOR PUERTO RICO

  8. Barriers to Affordable Housing in Puerto Rico: • AVAILABILITY OF LAND America’s Affordable Communities InitiativeAFFODABLE HOUSING PUBLIC POLICY FOR PUERTO RICO

  9. Initiatives and Strategies to Overcome Barriers to Affordable Housing in Puerto Rico. • Law 124, Subsidies to the Development and Acquisition of Affordable Housing. • Subsidies and incentives for developers and families. • Prize of the houses under this program is cap at $125,000.00. • offers developers tax credits on profits per unit, special planning and construction parameters, exemptions in payments of impact fees, among other things. • To families and individuals offers reduce interest in mortgages, subsidies of 5% of the purchasing prize and subsidies for the monthly payment. • Since 2001, more than 100,000 units have been developed under this program. America’s Affordable Communities InitiativeAFFODABLE HOUSING PUBLIC POLICY FOR PUERTO RICO

  10. Initiatives and Strategies to Overcome Barriers to Affordable Housing in Puerto Rico. America’s Affordable Communities InitiativeAFFODABLE HOUSING PUBLIC POLICY FOR PUERTO RICO • “La Llave para tu Hogar” (“Key to your Home”), Subsidies for the Acquisition of the First Time Home. • Subsidies to families for the acquisition of their first home. • From $5,000.00 up to $40,000.00. • Since the establishment of this program, the Department of Housing has provided these grants (an average of $8,600.00 per family) to more than 22,000 families. Investment of over $272 million.

  11. Initiatives and Strategies to Overcome Barriers to Affordable Housing in Puerto Rico. • “El FHA Boricua” (“The Puerto Rican FHA”), Mortgage Insurance for Moderate Income Housing. • New mortgage insurance program for families with income of a maximum of $130,000.00 to buy homes from $120,000.00 to $300,000.00. • 270 families have received this benefit, representing an investment of $42 million. America’s Affordable Communities InitiativeAFFODABLE HOUSING PUBLIC POLICY FOR PUERTO RICO

  12. Initiatives and Strategies to Overcome Barriers to Affordable Housing in Puerto Rico. • Tax Credit for the Acquisition of Housing. • New tax credit of $25,000 for the acquisition of housing. • Since its implementation last year, more than $7,000 families have been able to purchase their homes. • investment of more than $110 million. America’s Affordable Communities InitiativeAFFODABLE HOUSING PUBLIC POLICY FOR PUERTO RICO

  13. Initiatives and Strategies to Overcome Barriers to Affordable Housing in Puerto Rico. • Participation with the Private Sector in the Interim or Construction Financing of Affordable Housing. • Program to participate in the interim or construction financing of affordable housing projects with private lending institutions. • Investment of $100 million. • Approximately 2,500 housing units. America’s Affordable Communities InitiativeAFFODABLE HOUSING PUBLIC POLICY FOR PUERTO RICO

  14. Initiatives and Strategies to Overcome Barriers to Affordable Housing in Puerto Rico. America’s Affordable Communities InitiativeAFFODABLE HOUSING PUBLIC POLICY FOR PUERTO RICO • Law 173, Incentives for the Development of Housing for the Elderly. • Subsidies for rental units for the elderly. • 3,800 units with an investment of $456 million. • 1,000 additional units during this year.

  15. Initiatives and Strategies to Overcome Barriers to Affordable Housing in Puerto Rico. America’s Affordable Communities InitiativeAFFODABLE HOUSING PUBLIC POLICY FOR PUERTO RICO • “Comunidades Especiales”, Construction and Rehabilitation of Homes in Informal Urban and Rural Communities. • Direct construction of new housing units or rehabilitation of existing ones in the most needed rural and urban communities of Puerto Rico. • 4,300 units have been built or rebuilt with an investment of more than $238 million, since 2005.

  16. Initiatives and Strategies to Overcome Barriers to Affordable Housing in Puerto Rico. • “El Nuevo Modelo de Permisos”, (“The New Permitting Process Model”). • Complex and lengthy process that adds additional costs and delays to the development of housing projects. • Participation, giving comments, evaluations and endorsements, of many governmental agencies. • Government of Puerto Rico established last year a new permitting process model. Developer submits a project for evaluation and approval in one single place and there, all the agencies involve or with jurisdiction in the development process evaluates the project. America’s Affordable Communities InitiativeAFFODABLE HOUSING PUBLIC POLICY FOR PUERTO RICO

  17. Initiatives and Strategies to Overcome Barriers to Affordable Housing in Puerto Rico. • Public-Private Partnerships and Land Banks for the Development of Affordable Housing. • The public sector would acquire land, obtain all the necessary entitlements (permits and approvals) and invest in major infrastructure and then will make that land available to the private sector to develop the housing projects. • Land Bank for the development of affordable housing. America’s Affordable Communities InitiativeAFFODABLE HOUSING PUBLIC POLICY FOR PUERTO RICO

  18. Department of Housing COMMONWEALTH OF PUERTO RICO JORGE RIVERA JIMÉNEZ Secretary Departament of Housing

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