While cities in developing countries are expanding at a spectacular pace, decent housing for middle classes is missing. As a result, millions of people with a fixed job and a regular income are forced to live in slums. Rick Holt, C.E.O. of social start-up INURBA, explains how he plans to improve living conditions in emerging economies.
Can you explain why the growing middle classes in emerging economies are still largely living in slums?
‘There are a number of obstacles for people who want to move from the slums to a decent home. Most importantly, there are just not enough houses that the new middle classes can afford. The housing market has not adapted to the rapid rise of income growth in developing countries. Entry-level homes have not been built, because of a lack of construction funds. Besides, affordable mortgages are non-existent. In Ghana, the interest rate on a mortgage is generally 30%. In some other countries it is even higher.’
INURBA has the ambitious mission to ‘significantly improve’ the housing situation of the emerging middle classes in the developing world. How do you want to realise this?
‘We aim to take all obstacles away that prevent people from buying a house. We will design and build affordable houses with access to basic infrastructure, such as clean drinking water, an underground sewage system, and electricity. We have estimated that the sales price of these houses can be as low as €10.000 euro. With the help of our partner, the Dutch International Guarantees for Housing Foundation (DIGH), we have set up a financial system that gives home buyers access to mortgages with an interest rate that will vary between five and ten percent.’
Have you been involved in community development for a long time?
‘I have had a rather unusual career. After flying fighter jets for the U.S. Army in my twenties and working for multinational corporations for 15 years, I set out to develop Fairview Village in 1990. Fairview is a planned-community outside Portland, Oregon. Fairview has been my attempt to show that it is possible to develop an alternative to the homogeneous suburbs usually built on the outskirts of U.S. cities. I believe that a healthy community has people in its midst from all social backgrounds, ages and economic levels. Fairview has been a huge success: the project has won seven major housing awards and was selected by the Urban Land Institute as a ‘Great Planned Community’.’
In what way is Fairview Village different from other planned communities in the US?
‘Fairview is designed for people to meet. You don’t need a car – from most houses you can walk to the town center within 5 minutes. We also kept schools small and tied to local neighborhoods in order to bring people closer together. To host an economically diverse population Fairview offers a variety of housing options: apartments, single-family houses and row houses. Finally, economic sustainability was created with a well-supported main street full of local businesses.’
To what extent can you use this model in developing countries?
‘Naturally, the communities that we will develop in Ghana and Nicaragua – the first two countries where INURBA will be active – will not physically look like Fairview Village. But, the vision behind the projects that INURBA will develop is similar to the idea behind Fairview Village. We want to build healthy neighborhoods where people would like to live.’
What does a healthy neighborhood in a developing nation look like?
‘Western companies and NGO’s have often tried and still try to plant modular container-like houses on the outskirts of cities in the developing world. These design don’t include the necessary community infrastructure. In my view, that’s how you create a future slum. In all projects that INURBA will undertake we design an urban plan with as much focus on housing as on infrastructure. Clean water, proper sanitation systems, and access to electricity will determine our future success. These essential facilities support health, hygiene, safety, and security in the community and make it a pleasant place to live.’
Can you build a house for €10.000 euro that actually looks attractive?
‘We think we can. In fact, esthetics are very important. Like us, a Nicaraguan will not buy a house he thinks is ugly. The good news is that attractive designs do not necessarily need to be more costly. You just need to look for smart solutions. In Nicaragua we initially wanted to build with bamboo, a strong and sustainable building material. However, the local people prefer Spanish-style white walls, so we decided to plaster the bamboo construction with inexpensive mud. You also need to build culturally and in climate sensitive manner. In Ghana, they don’t want to have a kitchen in the house, because Ghanaians think cooking smells make the whole house stink. So, in Ghana we will design houses with outdoor kitchens.’
When do you plan to start building the first community à la INURBA?
‘The first project is likely to be realised in Nicaragua. Our local foundation has been formed, we have found a good local partner, and construction financing is available through DIGH. DIGH solicits funds through local banks and provides guarantees through public housing bonds. DIGH will also administer the projects. Provided that operational finance will be in place, we will start building in the autumn of 2012. Throughout 2013, we will construct 200 houses. By 2014 we want to have built 400 houses.’
Is INURBA a non-profit organisation?
‘No, we are a commercial for-profit organisation. We seek a good balance between profit and social impact. We aim for a return on investment of 8% on a yearly basis, after we reach scale in year four. Our profits will be used to expand our activities both geographically by starting projects in new countries as well as socially by developing projects for lower middle class home buyers.’
INURBA and the OS HOUSE project
INURBA is the follow-up of the Open Source House Project, a competition for architects to design a house made of sustainable materials, launched by Dutch company Enviu. Enviu’s goal was to solve the lack of quality homes for the growing middle classes in emerging economies in a sustainable way. The response was enormous: over 3100 architects participated in the contest, posting 250 home designs online. After the competition Rick Holt got in touch with Enviu. Together they devised a business plan to realise their common dream.
Visit the INURBA website: http://enviu.org/our-work/inurba/