Making Finance Available for Housing Needs by Brian G. Field, Managerial Adviser on Urban Planning and Development. The European Investment Bank (EIB)

1. HHOOUUSSIINNGG FFIINNAANNCCEE
PPrrooppeerrttyy BBuubbbblleess oorr SSoocciiaall && EEccoollooggiiccaall RReessiilliieennccee
Making Finance Available for Housing Needs
Brian G. Field
Managerial Adviser on Urban Planning and Development
The European Investment Bank
“Housing Finance - Property Bubbles or Social & Ecological Resilience – It’s a Choice”
Housing Europe and Finance Watch Conference, Royal Library of Belgium, Brussels,
5th November, 2014.
Regional and Urban Development Division
1

2. 2
PPllaannnniinngg,, SSuussttaaiinnaabbiilliittyy
&&
TThhee UUrrbbaann AAggeennddaa
Sustainable development has finally moved from the
periphery to the mainstream of the urban agenda.
Regional and Urban Development Division

3. 3
TThhee LLeeiippzziigg CChhaarrtteerr
Innovation and
education
High quality policies
public spaces
Local economy and
labour market policies Efficient
SUSTAINABLE
COMMUNITIES
Infrastructure networks
and energy efficiency
Improve physical
environment
Regenerate deprived
neighbourhoods
Training for
children and the
young
affordable
transport
Regional and Urban Development Division

4. SOCIAL
SKILLS
DEMOGRAPHIC
4
IInnvveessttmmeenntt iinn
SSuussttaaiinnaabbllee CCoommmmuunniittiieess
INFRASTRUCTURE KNOWLEDGE
SUSTAINABLE
COMMUNITIES
ENVIRONMENT
REAL ESTATE
LOGISTICS
TANGIBLE INTANGIBLE
CITY ASSETS
Regional and Urban Development Division

5. 5
OOvveerrccoommiinngg FFrraaggmmeennttaattiioonn
IInntteeggrraatteedd PPllaannnniinngg
An integrated approach to urban development for the
effective improvement in the socio-economic conditions of
regions requires; the identification of cooperating elements
of infrastructure investments with the evolution of social
capital that should be developed simultaneously in the
areas where applied.
Regional and Urban Development Division

6. 6
PPrroobblleemmss iinn FFiinnaanncciinngg UUrrbbaann PPrroojjeeccttss
Even where underlying investments are sound, in the post
crisis environment, projects can face difficulties in accessing
finance:
Heightened degree of risk aversion by
commercial banks
Deteriorating credit rating/debt ceilings
Difficulties for smaller private-sector providers
to access finance
Regional and Urban Development Division

7. 7
EIB – Supporting projects promoting EEUU oobbjjeeccttiivveess
EU’s financing arm, established by the Treaty of Rome in
1958
EIB’s shareholders are the 28 EU Member States
Promoting EU objectives
Providing long term loans to the private and public sector,
in a broad range of currencies
Total lending in 2013: EUR 68bn
Total lending in 2014: EUR 66bn
(EUR 79.1bn in 2009)
Large increase a consequence of the financial crisis
(after a specific mandate from ECOFIN)
Regional and Urban Development Division

8. Regional and Urban Development Division 8

9. 9
OObbjjeeccttiivveess aanndd IInnssttrruummeennttss
((aa rreessppoonnssee ttoo tthhee ffiinnaanncciiaall ccrriissiiss))
Objectives
Broadening the financing base
for infrastructure investments
Increasing awareness and
deepening the financial sector
servicing such development
needs
Harmonising and coordinating
resources
Instruments
Medium to long-term senior loans
Subordinated loans
Letters of credit
Guarantees
Mezzanine debt instruments
Local debt securities
Equity
Technical Assistance support
Regional and Urban Development Division

10. 10
TThhee TTeerrrriittoorriiaall AAggeennddaa
An Action Plan for Cities 2014-2020
Traditional Lending
Structured Finance
Financial Engineering
Technical Assistance
Networking/Partnering
Targeted investment
in more sustainable
urban regeneration
and renewal
Regional and Urban Development Division

11. 11
TThhee FFoouurr KKeeyy EElleemmeennttss
Traditional Lending.
Increase lending by encouraging greater use of
framework and global loans, as well as project-specific
investment loans.
Structured Finance.
Taking more risk by extending the scope of the
Bank’s Structured Finance Facility (SFF) to include
urban investments.
Financial Engineering.
Support the use of new financial instruments such
as JESSICA and JEREMIE.
Technical Assistance.
Provide technical assistance to support bankable
projects, e.g. JASPERS, ELENA etc.
Regional and Urban Development Division

12. 12
A Policy Bank with aa BBaallaanncceedd PPoorrttffoolliioo
Regional and Urban Development Division

13. 13
Social and Affordable HHoouussiinngg PPrroojjeeccttss
Challenges and Objectives:
 Promoting social inclusion and urban regeneration by
providing access to decent housing
 Increasing need for social and affordable housing
especially in large cities and agglomerations
 Poverty alleviation and job creation via the provision of
housing for low income households
Regional and Urban Development Division

14. 14
Social and Affordable HHoouussiinngg PPrroojjeeccttss
Complexity of the Housing Sector requires:
 Sound legal and policy framework
 Defined technical housing quality standards and services
 Adequate implementation capacity of housing providers
 Strong involvement of private sector to ensure efficient
delivery and good standards
 Sound public governance and management
 Long-term maintenance and quality control
 Long-term financial sustainability
 Locally adapted solutions/neighbourhood involvement
 Accompanying measures to foster social inclusion
Regional and Urban Development Division

15. 15
EIB CCOONNTTAACCTT IINNFFOORRMMAATTIIOONN
Brian G. Field
Urban Planning and Development Adviser
European Investment Bank
100 boulevard Konrad Adenauer
L-2950 Luxembourg
Tel: +352 4379 83063
Fax: + 352 4379 62599
Email: b.field@eib.org
Regional and Urban Development Division