Housing: Enabling markets to work with technical supplements

This policy paper discusses the evolving role of the World Bank in the housing sector and provides a new agenda for housing policy and institutional reform in developing countries. It explains the rationale for a new housing policy statement, presents a conceptual and analytical framework for understanding the housing sector, and defines the broad characteristics of a well-functioning housing sector.

The paper discusses what has been learned about how the housing sector actually works – housing demand, housing supply, the determination of key outcomes in the sector, and the linkages between the housing sector, poverty, the environment, and the broader economy. It outlines the key elements of an enabling strategy, which is necessary for governments to adopt in order to leverage their resources in bringing about a well-functioning housing sector.

Seven key instruments of an enabling strategy are discussed – three to stimulate the demand for housing, three to facilitate housing supply, and one to manage the sector in a manner than ensures that markets provide adequate and affordable housing for all.

Finally, the paper reviews the experience of the Bank in the housing sector over the past two decades and the evolution of Bank housing policy during this period. It articulates the major lessons learned and the implications of these lessons for future Bank lending and technical assistance.