Analysis of the housing problem in Peru and its solutions

Abstract

On analyzing the housing situation in Peru, we shall find problems that are common to all Latin American countries but which are dramatically enlightening here due to their grave nature: the mushrooming slum areas, serious shortage of housing and even more serious shortage of services. Whole districts of houses put up by the inhabitants themselves, half-completed and lacking drinking water. The shortage continues to worsen and the solutions escape our limited capacity for investment, which is more and more restricted by the tremendous burden created by the foreign debt. The state carries out building works substituting private initiative; it has set about constructing housing estates, which, due to the creation of subsidized competition and the absorption of resources, have practically paralysed private contributions, which used to be greater; and work to lay on drinking water infrastructure, which only the state has the capacity and duty to solve, is being neglected. We have a Rent Act which, by imposing limits and controls on rent, has created a situation of virtual standstill in this field. And inspite of the fact that only by means of an adequate law could important investment be attracted, we lack the maturity and political authority to do this. We shall analyze these and other problems related to housing in Peru and we shall look at some original proposals for their solution, such as a Materials Bank, which is enjoying great success only four years after being set up, or the Mutual Benefit Societies for Leaseholders, designed to increase the number of owners and so provide the system with the necessary political guarantee. We shall see how in order to be able to attend to one of the most deeply-felt needs of the population, within our limited capacity for investment and our political limitations, the scope of the State would need to be clarly defined and private investment propitiated by means of a comprehensive, coherent national plan for housing on a long-term basis.