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Panama 2017 | CONSTRUCTION & REAL ESTATE | INTERVIEW

TBY talks to Mario Etchelecu, Minister of Housing, on its myriad responsibilities in real estate development, upcoming projects, and its targets for the year.

Mario Etchelecu
BIOGRAPHY
A graduate of ULACIT, Mario Etchelecu has a strong professional background in real estate and construction. Since 1999, he has been the General Manager and President of Bienes Raices COT. He has managed more than 28 residential and eight commercial projects in Panama, realizing over 5,500 housing units and 400 commercial units.

What have been the results of the large-scale urbanization in the country and how is the Ministry of Housing positioned in this development?

The Ministry of Housing brings together several institutions that have to do with real estate development, the public sector, and the private sector in Panama. The related institutions include the Ministry of Public Works, the Institute of National Aqueducts and Sewers, the Transit Authority, the National Environment Authority, and the Ministry of Health, which all have something to do with the development of infrastructure within Panama City and throughout the country. Within the Ministry of Housing lies the Vice Ministry of Territorial Ordering, where approvals for preliminary projects—be they state projects or private initiatives—are given. From that perspective, the Ministry of Housing plays a key role because this initial process depends a great deal on private developers. If that body is not alert and responsive, developers lose a great deal of time, which translate into a loss of opportunity and money. In addition, there is the issue of territorial ordering, which also involves, within the Ministry of Housing, the territorial ordering of cities so that developers have clear regulations on what they can or cannot do in a particular area of the country; this was not the case with previous administrations. This is an area created in the 2009-2014 administration and started to have greater relevance in the development of the country because we are bringing order to cities. The ministry has also been a project manager in general to help both private companies and the government reduce the housing deficit; it also plays a key role here. We have created what is called the Solidarity Housing Fund with funding from the Panamanian state budget that provides assistance to families buying their first home. When we arrived at the administration in 2014, the aid given to such families was USD5,000. In December 2014, we modified the terms of the benefits and raised it to USD10,000. In addition, up until 2014, the sale value or mortgage of a house was USD40,000 and we subsequently raised it to USD50,000, which represents greater benefits. We also expanded the range of development projects.

Which are the most representative projects that are being developed in the sector?

When the government took office, there were approximately 147,000 families that did not have a house, were living in rentals, living with their parents, and so on. This is why the government of President Varela has promoted important housing projects. For example, the conditions of the Solidarity Fund for Housing have been improved, from 74 promoters to over 525. In addition, we have increased our initial goal to build 25,000 housing solutions within five years up to 100,000 houses. This is extremely important because it will not only give a boost to the economy but will encourage both public investment by the government and private investment to reduce the country's housing gap.

What are your goals and targets for 2017?

At the end of 2016, the Ministry of Housing had managed more than 55,108 housing solutions throughout the country. The goal for 2017 is to add 26,000 more housing solutions to that figure so that by the end of this year we have managed over 80,000. To manage means that we have complied with all the administrative procedures and that the housing solutions are in different stages. We also seek to increase project investment from the government from USD1.6 billion to more than USD2.1 billion at the end of the year. This would be a historic investment because over five years the average investment in housing was between USD300 and USD400 million, and we have multiplied that investment by five. In 2017, we hope to leave 81,000 homes managed throughout the country to reach the goal of 100,000 homes by 2018. Finally, we expect to deliver 40,000 completed homes to the beneficiary families by the end of this year.