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  • Tran Tuan Anh

Assessing the Effectiveness of Programs that Provide Credit for Storm-Resilient Housing

Overview and takeaway points:

In 2011, the Da Nang Woman’s Union started a program to help low income families fortify their houses, so that when typhoons and flooding occured, these households will be more prepared. Often a house is the single most valuable asset a family owns, and they can suffer great economic loss if that house is damaged in a typhoon or flood, both of which occur frequently in Da Nang.

ISET senior scientists, in collaboration with Hue University, have conducted a survey to investigate the effectiveness of this resilient-housing project, along with similar projects initiated by other NGOs and local governments.

This Rapid Assessment Survey concluded that:

  • Some survey participants indicated that because they now have more secure housing, their adult children feel more comfortable sending home money for other investments – for example computers.

  • This assessment survey has indicated that, helping the poor in housing improvement is a multi-dimensional approach that requires both financial support and technical and institutional assistances. Both financial and technical input is needed to fully support households in building climate-resilient houses.

  • Housing reconstruction initiatives are more attractive to local households if they are given the opportunity to reuse and recycle some building material, thus bringing down the total cost of rebuilding or fortifying their house. Resilient housing initiatives conducted by NGOS offered participants more flexibility than government resilient housing initiatives. (NGO initiatives allow households to recycle some housing material, while government initiatives were more rigid in their building requirements.)

  • While local-level governments had created good policies for supporting local people in fortifying their housing, this information was not widely known or utilized by NGO-led housing initiatives.

  • In some cases, organizations encouraged but did not require participants to follow safety measures in housing construction. This means that some local households who participate in the housing fortification credit schemes could still be at-risk to future climate hazards.

  • Some households who wanted to participate in the program did not have legal documentation to prove they owned their homes. Some programs were more flexible about demanding legal documentation, which allowed these households to move forward with housing fortification.

  • Participants in the housing fortification programs often received support and help from their inner-circle of relationships. Friends and relatives would often help participants with construction, and, thus, help reduce the labor cost significantly.

  • All the surveyed households feel more secure and prepared for the next rainy and stormy seasons.

Full Report:

Earlier this month, the ISET team, in collaboration with the Hue University of Economics, conducted a rapid assessment survey to examine the efficiency of storm-resilient houses to the resilience of households and communities. The assessment consisted of two focus group discussions (FGD), 15 participants per group, and six in-depth household interviews, focusing on two climate-exposed wards of Da Nang City, Vinh Trung and Hoa Minh, where the Nordic Development Fund (NDF) has supported poor households for their housing improvement through the Women’s Union channel. The FGDs saw the participation of a wide range of local stakeholders, from the ward people’s committee leadership board, cadastral (land) unit, and fatherland front committee, to women’s union, quarter heads, local builders and beneficiary households.

Geographically, Hoa Minh belongs to Lien Chieu District and is next to the sea while Vinh Trung, belonging to Thanh Khe District, is located more inland and closer to the city center. Proportion of poor households in Hoa Minh is higher than in Vinh Trung and nearly 70 % land of Hoa Minh is used for relocation/resettlement purposes while most of residential land in Thanh Khe is the long-standing existing residential areas. Due to being located near the sea, many households in Hoa Minh are highly exposed to typhoon and storm surge and make housing of the poor in Hoa Minh, in general, more vulnerable to climate hazards compared to their counterparts in Vinh Trung.

It was found that there is a difference between the governmental and non-governmental housing projects in Da Nang in terms of building safe homes for the poor. In the governmental projects, it is usually not flexible in reusing old elements or materials for newly built houses. This makes the governmental housing projects not attractive to low income people even the amount of grant is higher than other projects such as the NDF project (50 million compared to 30 million VND). In the NDF project, people may reuse the old items (e.g. existing foundation blocks or roof frames) if they are still in good quality to reduce construction cost and minimize their cash contribution, an important aspect to enable and motivate poor households to improve their home. On the other side, if the house is required for new construction, all old materials and elements are not allowed to use in the new house. Therefore, as affirmed by FGD participants, regardless of the amount of grant/subsidy, the attractiveness of housing projects for the poor is also dependent on the flexibility in considering and reusing old materials/elements to reduce construction cost. The important point here is to identify which existing materials or elements can be reused.

The FGD in Vinh Trung shows that there is a policy issued by the Thanh Khe district government in 2016 in which poor households are likely to receive free assistance from the district-level urban management department and ward-level cadastral (land) unit in preparing housing design drawing files for applying building permit. Cost of applying building permit may be also exempted for the poor if they are assessed to be extremely difficult without financial capacity, as said by the ward-level cadastral unit representative. It is a good policy to support the poor in improving their homes. However, this policy has been unknown to Women’s Union so that this resource was not mobilized in the NDF project where part of beneficiary households is the poor. Meanwhile, this policy has not been initiated in Lien Chieu District, as deduced from the FGD in Hoa Minh.

The above finding indicates that some districts in Da Nang have released good policies to support the poor in upgrading their homes and escaping from poverty. However, the issue of information exchange and sharing at the local levels, particularly amongst local administrative units, are not really effective so that such resources are unknown and, then, unused in recent low-income resilient housing projects. In cases that this resource was utilized, the cost of technical support per household would be reduced and, therefore, the project has more financial resource to invest in other necessary purposes, such as extending the grant size for household, adding more safety-related measures, or purchasing risk/damage insurance. This reduced cost is also significant to safe housing microfinance programs for the poor and low income if preferential credit schemes are initiated in combination with technical assistance.

In previous housing projects for the poor, information/guidelines for housing design were usually disseminated to in-need households through quarter heads and local mass organizations such as Women’s Union. In most cases, safety-related measures are encouraged but not required to follow in housing construction. This makes housing of the poor in these two wards particularly and in Da Nang generally still at-risk to future climate hazards. As recommended by the FGD participants, there should be a requirement of using safety-related measures housing construction when financially supporting the poor to ensure that their rebuilt/renovated houses are resilient to the future climate. As said by the homeowners interviewed, there have been not many houses of the poor in their neighborhood built with the inclusion of safety-related measures (i.e. storm shelter inclusion, wall and roof consolidation elements). Explained by them, it is mainly because of lacking fixed technical requirements right from the beginning, lacking easy-to-understand and locally applicable technical guidelines, and lack of specific mechanisms for construction monitoring and quality control during the construction process.

The NDF project is the only one project up to now requiring the compulsory use of safety-related standards in housing construction in Thanh Khe District. This is the feature that makes the NDF project different from previous housing projects for the poor within the district area. In previous housing programs, financial aspects were paid more attention than technical ones, even in the areas prone to climate hazards (i.e. typhoon, flood), as said by the district WU representative.

In the six surveyed houses built by the NDF project for climate resilience, the most common technical principles used for these houses is (1) the construction of a ‘storm shelter’ by upgrading an existing room inside the house (figure 4), (2) the wall reinforcement by adding reinforced concrete posts and beams inside walls, and (3) the roof protection by anchoring roof frames to the walls underneath and roof covers to roof frames. Within the inclusion of these elements, it generally generates an increase of 15-25% of total construction cost, as stated by the interviewed homeowners. Affirmed by them, these technical principles are easy to understand by local masons and, thus, easy to be incorporated in housing construction if they are trained and advised how to apply in practice.

It was also found that there is a portion of poor population in Da Nang who has no formal land document, locally known as the red book (sổ đỏ). This will affect the work of building permit application before undertaking housing construction or renovation. In regulation, building permit is only granted to the land that have the red book. However, there is a flexibility in the building permit granting process to help the poor households without red book be able to get building permit. Specifically, the ward cadastral unit will check the legality of their land, whether its location is conformed to the city/district’s current planning, and grant a written agreement letter to confirm the residential status of the land for reporting to the district urban management department, the body granting building permit. This department will base on this letter to grant building permit for the poor households who have no red book.

The support from local governments for the poor is also spreading to other works relating to construction activities. Housing of the poor living in the central business districts such as Thanh Khe is usually located in densely constructed areas with narrow lanes/alleys and the transportation of materials to the site is quite difficult and easy to disturb neighboring households. In some cases, the ward urban rule team, locally called “đội quy tắc đô thị”, will check construction activities and if the transportation of materials affects the public, the household will be fined or, more heavily, stop the construction. However, for the poor groups, the local authority had worked with these urban rule teams to ask their assistance in allowing the construction of poor people’s houses. In addition, the ward fatherland front committee also works with local material shops (e.g. steel, cement, brick sellers)[1] to ask them to offer a cheaper cost for poor people’s housing construction. In most cases, local material shops are willing to offer a lower price than the market price for this group, as said by one ward authority representative. Also, if any poor households want to develop economy alongside housing improvement, the ward authority will work with the Vietnam Bank for Social Policies to ask them to offer preferential loans for people’s livelihood/economic development. The fundamental motto in helping the poor is “to provide them with the fishing-rod rather than fish-product”, as highlighted by Dr Phong Tran, Technical Lead of ISET.

The household interviews saw the strong engagement of family members, family’s relatives, and friends in housing construction work. 5 out of 6 houses visited received a ‘free’ labor contribution from the owners’ brothers, sons and relatives and, thus, help reduce the labor cost significantly. All the surveyed households feel more secure in next rainy and stormy seasons since they have a safer home to live and protect their family. Thanks to having a better/more durable accommodation, the family members (e.g. sons, daughters) who have worked in other cities/provinces have sent money back to support their parents in purchasing more valuable items such as TV, computer, fridge, or kitchen appliances. It can be claimed that the overall target of housing support for the poor is not only the provision of the house itself but also the facilitation/enabling of other forms of assistance to fully help the family escape from poverty, improve living conditions and reach a sustainable development.

In short, this assessment survey has indicated that, helping the poor in housing improvement is a multi-dimensional approach in which financial support should be incorporated with technical and institutional assistances to fully support them in building climate-resilient houses and, more importantly, sustaining their savings/investment for other wellbeing/development purposes of the family.

[1] These shops have been known by the ward fatherland front committee in the previous housing programs with similar helps.

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