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  HOME | Central America

Growing Housing Shortage an Intractable Problem in Crisis-Hit Nicaragua

MANAGUA – Nicaragua has been racked since April 2018 by a deadly socio-political conflict, but it also is plagued by a silent crisis that has proved difficult to resolve – a severe and growing housing shortage.

It is difficult to assess the true scale of the problem because the most recent official statistics date back to 2014, when authorities put the housing deficit in Nicaragua – a Central American country with 6.4 million inhabitants – at 957,000.

The precariousness of many of the dwellings is an additional aggravating factor, since between 30-35 percent of people who have a home need to improve or expand it and carry out maintenance work, the program manager at the Nicaraguan chapter of the United States-based international non-governmental organization Habitat for Humanity, Nancy Arostegui, told EFE.

Habitat’s figures indicate that 60 percent of houses built in Nicaragua are considered inadequate due to the poor quality of the construction work, the risks associated with the terrain, the legal status of the land and the lack of access to public services, among other reasons.

Arostegui said the housing situation in Nicaragua ahead of Monday’s observance of World Habitat Day 2019 is “absolutely critical,” though adding that the problem “is not irreversible.”

Around 5,000 new homes were being built annually in Nicaragua prior to the onset of socio-political unrest in 2018, a welcome increase in supply for families that can acquire them but an insufficient amount considering that the housing shortage grows by roughly 20,000 homes each year, Arostegui said.

There also is a socioeconomic imbalance, with the new homes not only insufficient in number but built mainly in middle-and upper-class areas.

Although the government offers subsidies that allow prospective home buyers who meet certain conditions to obtain lower mortgage rates (of 7.13 percent for homes valued at between $14,251 and $50,000) and exonerate them from property registration fees and other costs, Nicaragua has yet to meet its target of 6,000 units sold in a calendar year.

That is due to public policies that prioritize prospective buyers with “solid incomes,” a difficult bar to meet in a country where 70 percent of people work in the informal sector.

Arostegui said policy changes that ensure those with the greatest difficulty acquiring a home have access to subsidies would go a long way in reducing Nicaragua’s housing shortage.

“They have to conduct a public policy review to see really where the gaps are and where to create those mechanisms, so as to adequately channel the subsidies and reach more people with greater needs and less purchasing power,” she said, though adding that other subsidies benefiting those in better economic circumstances should not be completely eliminated.

Widespread anti-government protests that began with demonstrations against a pension-overhaul plan and grew into a wider movement demanding the ouster of leftist President Daniel Ortega have taken a heavy toll on the tourist sector and other areas of the economy and led to some 400,000 job losses, a new scenario that has prompted a need for “productive housing.”

“The home has become not only the space where I sleep and live, but also my workplace. So homes need that dual role,” Arostegui said.

To that end, Habitat for Humanity Nicaragua, which finances around 1,200 home improvements per year, is focusing its efforts on buildings that can serve as a house and business at the same time, according the program manager, who said the NGO sees the home-building trend heading in that direction.

But the problem is even more complex because a home is not adequate unless it is located in an orderly city, and Nicaragua’s notorious shortfalls in that sense are a much more evident socio-economic challenge.

 

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