The policy of housing and urban development implemented in recent years has opted to promote mechanisms that foster more compact and dense city schemes, with a better location with respect to facilities and employment centers, as well as more sustainable housing with better quality of life for its inhabitants, and savings associated with their consumption in terms of electricity and water.

The Federal Mortgage Society (SHF) is the housing development bank of the Federal Government in Mexico. During the last years, it has promoted a series of initiatives with the purpose of guaranteeing better conditions both in homes and their environment.

 

Credit: Federal Mortgage Society (SHF). SHF logo.

 

SHF identified the difficulty of housing developers to carry out the urbanization tasks for housing, especially when seeking the integration of sustainability criteria in the developments. In this sense, it is necessary to establish that the provision of equipment and infrastructure corresponds to the municipalities, but given the financial conditions that most of them have, they end up being built by private agents who need to make additional capital efforts in order to ensure the minimum operating conditions for the projects, since in the market there is no financing product for urbanization. This situation has an impact on the final price of homes, and in some cases, generates pertinacious incentives, since the criteria under which such facilities and infrastructure are built are not the most appropriate.

 

Credit: LaPolítica. Urban Development.

 

Consequently, during 2017 the SHF designed a financing product for sustainable urbanization through the Housing Operation and Bank Financing Fund (FOVI), in order to ensure the provision of equipment and infrastructures “walls in” of the housing developments, as well as ensuring that the materials, construction systems, and technologies, would guarantee sustainability in terms of energy and water consumption use efficiency, as well as with respect to other socio-economic externalities associated with the inhabitants of the housing developments.

Aligned with this, SHF received support from the Inter-American Development Bank (IDB) with resources from the International Climate Initiative (IKI) of the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) of Germany to develop a methodology and impact assessment tool that helps mobilize financing in this type of development.

One of the great challenges of this project is to create awareness of sustainability in the developers; and to quantify the mitigation of Greenhouse Gases (GHG), in order to develop the ability to participate in a carbon market that economically encourages this sector.