Perspectives on Affordable Housing in Guatemala 

Irayda Ruiz Bode, FAICP

Senior International Infrastructure Planning Consultant, Guatemala, the World Bank

President - Federación Iberoamericana de Urbanistas. 

December 1, 2023

Housing is one of the most important assets for most Guatemalan families.  However, owning a safe and functional house this is a reality for just over half of its population. According to VII Census data, more than 1.5 million families do not have a house that meets these minimum habitability conditions or do not even have a house at all. For these families, the climate, diseases, poverty, and crime are a threat to their daily lives. Creating conditions for this situation to change is everyone's responsibility. Although the Government must play a leading role in enabling access to housing for all Guatemalans, the active participation of the private sector and many sectors of civil society is necessary.

To measure the problem of access to housing, the level/degree of housing deficit has traditionally been used as a situation indicator, in quantitative and qualitative terms. The quantitative deficit is presented as a statistical aggregate of the total number of inadequate and overcrowded housing. The qualitative deficit is a statistical aggregate of the number of homes with certain qualities that are considered not appropriate for habitability. The total deficit is the sum of both.

According to Census 2018 in Guatemala, there were 3,942,852 homes distributed throughout the country.  Of these, 1,6 million (40.57%) were part of the national deficit, distributed between 642,240 (40.14% of the total deficit) part of the quantitative deficit and 957,760 (59.86% of the total deficit) part of the qualitative deficit.

By making projections based on information from the Census and refined with data from the different Living Conditions Surveys – ENCOVI, an important change in the trend can be established. The deficit has increased, at an annual rate of 2.49%, and its distribution has varied significantly, increasing the percentage of homes with qualitative problems. For 2022, the total deficit was projected at 2.2 million, distributed between 1,753,620 of the qualitative deficits (79.71%) and 446,380 of the quantitative deficit (20.29%), with a strong increasing trend that revolves around the 35-38 thousand more solutions that are added year with year.

In recent years, important initiatives to face housing deficits were carried out seeking coalitions to mitigate the affordable housing gap in Guatemala.  Relevant to be mentioned is the Approval of Housing Law (decree 9-2012 of Congress of the Republic) and the subsequent activation of the National Housing Council (CONAVI) in 2016. The oversight of CONAVI is under the office of the Vice-President in coordination with the Vice Ministry of Housing. 

CONAVI is made up of more than 45 organizations with broad stakeholder representation including grassroots organizations, national government agencies, academic, and business sectors, and the National Association of Planners “Creamos Guate”. The first achievement of CONAVI was to play a leading role in a) approving the first National Policy for the Comprehensive Improvement of Neighborhoods (PMIB) 2018, and b) updating the National Housing Policy (PNV) 2020, which identifies 3 strategic axes and 22 prioritized actions.

For Guatemala, as in other free market countries revitalizing the housing sector, requires a broad participation of civil society and the private sector. According to the National Housing Policy, investors in the real estate sector need to have favorable conditions and incentives to finance social housing, and they need guarantees that there is a market capable of purchasing this product. Demand, on the other hand, requires mechanisms to access this market, through the promotion of savings, social subsidy programs, and access to credit. With almost 70% of the population employed in the informal economic sector, and a growing number of families depending on remittances coming from relatives working in the US, as their main sources of income becomes very clear that those realities must be part of the equation to guarantee conditions for acquiring a home.

This National Housing Strategy establishes a series of proposals for initiatives and actions focused on promoting the housing market, especially that of social interest, involving all sectors of society, not only aimed at supply and demand but also the institutions and the territory.  In de last five years there has been an increased involvement of local governments in creating Municipal Housing Authorities that often work under public-private partnerships.  Those initiatives although promising are still too recent to claim high impact. 

The National Policy adopted in 2020 calls for action to take advantage of two key elements that characterize Guatemala: the country's urbanization process and the beginning of the demographic bonus. In the next 20 years, Guatemala will go from being 55% urban to 70-75% urban. More than 6 million people will arrive in the main cities of the country, such as Quetzaltenango, Retalhuleu, Cobán, Zacapa, Huehuetenango, and others. Planning the territory and creating conditions for these families to access decent housing must be one of the country's priorities. Failure to do so will have terrible consequences in increasing poverty, health, and violence rates. In addition to urbanization, the demographic bonus will mean that the majority of the population will be of age to acquire or need a home, further increasing demand, and making the sector grow.

Solving problems of the past and present, and preparing for the challenges and opportunities of the future will allow Guatemalans to have a better country and for citizens to have better living conditions. Housing plays and will continue to play a leading role in improving these conditions. 

CONAVI advocates strengthening the role of Government as it has been extensively documented that both the conditions and legal framework to promote supply and the conditions to strengthen demand must be generated by the State. The public sector needs to promote a process of institutional strengthening, improving those units that act as enabling bodies and creating new ones. 

On January 14, 2023, there will be a change in the government of Guatemala, a political opportunity for a change arises in which it is important to reflect on proposals for transition and the beginning of new management cycles. CONAVI members are actively involved in presenting its PNV and PMIB to seek challenges and opportunities facing one of the national problems with the greatest lag and institutional weakness, this being the issue of planning, production, and financing to address the housing deficit in Guatemala. Guatemala has a unique window of opportunity to change the negative trends of the housing deficit. The actions to use that window must start now.