DYNAMIC INVESTMENTS

Colombia 2016 | INFRASTRUCTURE & CONSTRUCTION | INTERVIEW

TBY talks to Elsa Noguera, Minister of Housing, City, and Territory, on the My House Now program, foreign investment, and plans for the future.

Elsa Noguera
BIOGRAPHY
Elsa Noguera received a degree in economics from the Pontifica Universidad Javeriana, and holds an MA in business management and finance from the Universidad del Norte. She also holds a diploma in international business from the Universidad Americana (Washington). Her professional career started in the banking sector and later moved to the educational field within the banking and financing segment. She then entered the public sector as treasurer for the government of the Atlantic. Later, Noguera came to the Council of Barranquilla as Tax Secretary for Alejandro Char. She is currently Minister of Housing, City, and Territory.

The government is active in getting low-income households on the housing market. Can you explain the initiatives?

This is the year of housing and the national government made 150,000 subsidies available for families wishing to own a housing unit as well as a series of plans tailored to the socioeconomic characteristics of Colombian households. First of all, My House Now is for savers and helps households earning up to two minimum wages to acquire priority interest housing. Urban priority interest housing is worth up to the equivalent of 70 minimum wages; therefore, the government assigned subsidies for up to 30 minimum wages to cover the down payment and 5% rate of interest on the mortgage. Secondly, My House Now is part of a scheme that aims to reduce paperwork and procedures, facilitating the acquisition low income housing to households with incomes between two and four minimum wages. The government provides a subsidy of up to 20 minimum wages for the initial fee plus a housing subsidy interest rate of 4%. Thirdly, My House Now subsidizes interest rate on priority interest housing and low income housing, whereby we grant a subsidy to the interest rate of loans of 5 or 4%.

Foreign investment in Colombia has an increasing impact on national GDP. What opportunities would you highlight within the construction sector for international investors?

The arrival of foreign capital to non-speculative investments like the construction of housing benefits the housing market and the national economy. In a turbulent economic environment, business confidence figures kept growing and construction is one of the economic sectors where foreign investment continues to grow, witnessing 14% growth in 2015.

With programs like My House Now, Colombia has endeavored to develop social housing. How would you assess its impact on the housing market and what are the plans for the near future?

Government housing programs have had a positive effect, making the housing market dynamic and creating jobs. Sales have grown by 6.9% and permits to build housing rose by 5% in the last 12 months, all driven by these programs. Employment in the sector climbed to 3.1 million people and we project to close 2016 with at least 3.4 million people. In the next few years, we will continue to generate economic growth with the development of our plans, with which we intend to build 450,000 housing units with direct support from the national government. The offer is varied and subsidies are intended to cover various population segments, from the most vulnerable sectors to consolidated middle class families.

The year 2016 is set to be the year the armed conflict will end. How can the peace process influence the construction sector?

Housing plays a key role in peace building. During the post-conflict process, we will find institutional challenges and cities, municipalities, local authorities, local communities, and departments must be ready to take on the tasks and responsibilities necessary to sustaining peace. These processes need to emphasize social inclusion and adapt to the new conditions of our democracy. Former armed actors and victims will become urban actors; therefore, cities will take on the challenge of inclusion and reconciliation, and housing is part of this. The government has sought to ensure the housing rights of the victims of the armed conflict. People are the most vulnerable in urban areas, with investments of about COP2.2 billion through the Free Housing Program framework for the care of housing for victims of the internal armed conflict, benefiting about 60,000 households in more than 220 municipalities and 28 regions and Bogotá. Much of the tensions in the country lie in the huge gap between rural and urban Colombia. Our main challenge is to integrate rural areas with large urban development poles. This is critical and as a government we have made closing regional gaps an explicit objective of the National Development Plan 2014-2018.