department of housing

Department of HousingCOMMONWEALTH OF PUERTO RICO

JORGE RIVERA JIMÉNEZSecretary

Departament of Housing

Strategies to Overcome the Barriers to Affordable Housing

America’s Affordable Communities InitiativeAFFODABLE HOUSING PUBLIC POLICY FOR

PUERTO RICO.

America’s Affordable Communities InitiativeAFFODABLE HOUSING PUBLIC POLICY FOR PUERTO RICO

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.


Barriers to Affordable Housing in Puerto Rico:

GAP BETWEEN FAMILY INCOME AND HOUSING COSTS.

•For 2005, the housing affordability ratio was 4.9, while is projected that it will be 6.7 by the year 2025.



REDUCTION OF CREDIT ALTERNATIVES

•Crisis in the mortgage industry and in the financial markets.



RISING DEVELOPMENT COSTS

•Land Value•Construction Costs (materials, labor and transportation)



BURDENSOME AND LENGHTY PERMITTING PROCESS

•Many government agencies involved.



AVAILABILITY OF LAND


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.



“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.



“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.



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.



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.



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.



“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.



“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.



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.

Department of HousingCOMMONWEALTH OF PUERTO RICO

JORGE RIVERA JIMÉNEZSecretary

Departament of Housing

department of housing

Documents

housing units

housing costs

housing demand

puerto ricobarriers

puerto ricoinitiatives

puerto ricointroduction

housing affordability

average income