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The Next 4 Billion

The Next 4 Billion The Next 4 Billion — The Housing Market Allen Hammond, William J. Kramer, Rob Katz, Julia Tran, Courtland Walker Housing is one of the larger base of the pyramid (BOP) markets—larger than transportation, smaller than energy. The market encompasses major spending items—rent, mortgage payments (or imputed rents), and repairs and other services. But the BOP housing market is perhaps uniquely handicapped by informality. Both lack of legal title to housing in squatter settlements—Hernando De Soto’s “dead capital”—and lack of access to mortgage financing for the BOP limit its potential size. Despite these barriers, both private sector approaches and policy reforms—sometimes catalyzed by NGOs—are showing how to tap this market in ways that provide significant benefits for BOP households. In Asia especially, where mortgage markets are undeveloped and land prices high relative to income, the market potential—and the need—is huge (Bestani and Klein 2006). How large ...

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