International human rights law recognizes that everyone has a right to an adequate standard of living, but rights to adequate housing are rarely guaranteed, especially for those living on the margins of society.
“Millions around the world live in life- or health-threatening conditions, in overcrowded slums, and informal settlements or in other conditions which do not uphold their human rights and their dignity,”according to United Nations, which recognizes that a home is more than four walls and a roof.
There are up to 10 million people in rural Mexico — most of them agricultural workers and their families — who need a new home or home improvements in order to meet internationally recognized standards for adequate housing. In areas like Campeche, many families huddle together in a single bedroom — tin roof above, dirt floor below. “They live in shacks, carton or stick shacks,” said Raffaella Piazzesi.
But not after Piazzesi and her team from the for-profit housing development company ¡Échale! a tu Casa show up in town. Since 2006, they’ve built and sold 30,000 new homes and made 150,000 home improvements.
The ¡Échale! story is one of positive social disruption. It begins in 1997 after Hurricane Nora ripped through southwest Mexico. The Mexican government asked ¡Échale! — then a not-for-profit — to help with reconstruction by providing houses for one of the affected communities, providing disaster relief and effective charity work.
“It was pretty successful,” Piazzesi said. “We did the homes, people were happy, everyone was happy. We wanted to do another program with other people affected by the same hurricane, but the government decided their help had stopped. They didn’t want to continue giving away houses.”
So ¡Échale! went ahead without help from the Mexican government. They raised the funds needed to continue providing displaced and underserved people with housing solutions. Rather than building temporary, prefab houses, they created more long-term solutions: houses made of cement, steel, and their own eco-friendly, sun-baked Adoblocks.
Business was good. But when ¡Échale! sent a team to check-in with some of their families, what they found surprised them.
“Some of the houses were literally abandoned,” Piazzesi said. “Others were not treated right. People did not see the great benefit they had by having a house, because it was handed down to them as charity. We didn’t like that.”
The company regrouped, nine years after its first housing project.
“The way that we were working, and the impact we were having, was great — but it was really small,” Piazzesi said. “We were not growing fast. So that’s when we decided to spin-off as a for-profit.”
Profit is often considered a four-letter word in the development sector. But since ¡Échale! switched to a for-profit model — focusing its operations on offering the best houses possible at the lowest prices rather than fundraising — the company has made three times the impact, Piazzesi said.
There was a hidden benefit, too.
“When we started charging for houses, we started seeing a completely different mindset from the participants,” she said. “They saw it as something they were creating, not as something given to them — it was their work, their effort, their home. It was amazing to see.”
¡Échale! does more than just sell housing units, it uses a holistic approach to build communities, Piazzesi said. The company’s staff, architects, and engineers get to know their customers on a personal level — they move in next door during the construction process.
Staff advise rural farming families about the benefits of owning a home with a foundation, especially for families with children, and the comforts of services like running water, sanitation, and energy (solar power is a new option).
Once there is enough interest from the target community, ¡Échale! hosts a design and financial training workshop. The company showcases a basic model and allows the participants to add or remove key elements before they settle on a single blueprint to be used throughout the community. ¡Échale! home buyers are also trained to build their own doors and windows, while they master the construction process with Adoblocks, produced on-site with local resources like adobe, sand, and cement.
New homes cost between $6,000 and $12,000 a piece, and customers are asked to pay 10 percent of the total cost up front. That’s quite an investment for families who earn, on average, $8,800 per year.
Traditionally, ¡Échale! home buyers would qualify for a government subsidy, disbursed by third-party financial intermediaries that charged interest rates as high as 80 percent. Four years ago, the Mexican government capped those rates at 30 percent, but, as Piazzesi explained, “they still charge commissions and fees, making the actual effective annual interest rate somewhere between 60 and 70 percent — it’s huge.”
¡Échale! has designs on disrupting that system. They just launched their own non-profit finance company with pro bono support from American Express, to provide their hard-working customers with bigger housing credits and lower interest rates, helping them pay off their homes in a more timely manner.
“We’re not profiting from these credits,” Piazessi said. “We just charge an interest rate to be sustainable. The idea is that with this financial arm, we will be able to reach those who cannot meet the harsh conditions that other financial intermediaries impose, and we’ll be able to grow faster and reach new markets.
“Customers are excited that a ‘friend’ is the one that lends them the money — someone they already know and trust.”
When asked what the established (profiteering) financial intermediaries think about ¡Échale!’s latest program, Piazzesi laughed. “We don’t really know,” she said. “We haven’t asked them.”
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