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Factors Impacting the Availability and Affordability of Housing in Costa Rica

Found in Central America, Costa Rica lies on an estimated 19,730 square miles extending along a 185-mile coastline in the northeastern of the Caribbean Sea. Nicaragua bounds it on the north and Panama on the southeast. Furthermore, it has a 630-mile southeast coastline along the Pacific lined with beautiful sandy and breath-taking white beaches. Costa Rica has an annual growth rate of 2.4 percent, and one-third of its population is below 15 years old, with the total of 5,047,561 million people (World Bank, 2020). The need for housing is ever-increasing, and as such, it is a constant challenge that has exacerbated, making its availability and affordability a significant challenge, especially among the minorities. Therefore, this paper looks at inequalities among minorities, poverty, and effects of climate change as critical factors impairing housing affordability and availability in Costa Rica.

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How Inequality Affects Minority Groups

As mentioned above, providing adequate amenities and housing among minorities in low-income and informal settlements in developing countries has remained a continuous challenge. Many a time, this problem is evident in both urban and semi-urban settlements in these countries. Moreover, social exclusion has made housing accessibility by these groups a taunting task. According to Cheng Lo (2018), 1.2 million residents account for one-fourth of the total populace which lives in dearth, while 6.7 percent of the population is in abject poverty levels. Furthermore, Lidth et al. (2016) state that 22.4% of the Costa Rica population lives below the poverty level. Moreover, 7.8 percent consist of single women who are household heads, which brands it grim for such groups to get financial credit to build or purchase affordable houses. Although the state has made steps to alleviate the inherent social housing challenges through the provision of subsidies, it has been hard for disadvantaged minority groups to access them. On the one hand, the government subsidy facilities are limited, while on the other hand, they are rare, affecting the low-income groups whose financial options are limited.

In Costa Rica, unfavorable stringent building and construction requirements for informal settlements have made construction unaffordable and unrealistic for minority groups. Most of them throughout the country are facing a menace of building and owning homes because of the severe Costa Rica policies. There are many procedures and steps which house construction companies have to go through to start building. These steps require a substantial amount of money and time. Due to the above conditions, it has been estimated that five thousand structures or homes fail to materialize or being built yearly. According to Habitat for Humanity (2017), in 2017, bureaucratic procedures generated an average delay of 7.4 months in the private sector construction of projects. However, in the social interest construction sector, it took 14 months. Besides, it is highlighted that another set of data from the Central Bank indicated that the building and construction industry decreased by 10 percent due to excessive bureaucracy and inadequate bank financing (Humanity for Habitat, 2017). Furthermore, inherent unemployment and meager incomes have made most minority groups unable to afford the available housing opportunities.

Notably, women are taking a great share compared to men in the power sharing formula. Latest research shows that 43.5 percent of minority households are headed by women in Costa Rica (United Nations, 2020). This has led to them being among the highest proportion in the minority groups. In other words, single families that are led by mothers are contributing to the highest households in Costa Rica that are poor. Female-headed families have been on the increase since the 90s, despite numerous government efforts to curb this phenomenon. This has been ridiculed and highlighted as paradoxical given to Costa Rica’s high score on gender indicators like GDI and numerous other incentives introduced by the government to promote public expenditure and gender equality. Although such initiatives were geared towards the elevation of female-headed households, nothing much has been achieved to date. Therefore, it is hard for such groups to build homes or access government funding to facilitate such ventures.

Furthermore, inadequate housing and its affordability affect women in the Caribbean, especially Costa Rica. Impediments to women in getting decent shelter include systematic structural discrimination in the form of practices and set laws that are not supportive of women’s equality on housing and land. Furthermore, there is a large number of children and women who suffer due to forced evictions. Simultaneously, inadequate solutions and policies geared towards minorities have remained a major obstacle to affordable housing for such groups. Duncan (2015) argues that the Caribbean’s housing policy has often ignored and overlooked the significant correlation between housing and gender equality. At the center of all these, there is a need to listen to the interests of older women who happen to be the heads of various households throughout Costa Rica.

Poverty Levels

A household in Costa Rica is teemed or classified as low when its per capita income does not meet the basic family survival needs like clothing and shelter. When it cannot afford basic food, it qualifies to be extremely poor. Although it is considered to be among the least poor states found in Latin America and the Caribbean, its poverty eradication regarding economic growth has retarded since 2010. Its national poverty rates have been increasing steadily from 2017 to 2018 in rural and urban areas. Alarmingly, poverty rates increased to 21.1 percent in 2018, whereby 23,617 households became poor in addition to 12,371 homes which became extremely poor (World Bank, 2020). Consequently, extreme poverty indicators rose from 5.7% to 6.3% in 2018 (World Bank, 2020). In 2019, there was a slight decrease in poverty, but the country lost its position to Uruguay as the best egalitarian country in the Caribbean and Latin America (World Bank, 2020). The unemployment rates are increasing while its economic status is declining. Towards the last quarter of 2019, unemployment reached 12.4%, with approximately 16 thousand new people looking for employment in addition to the unemployed population in the previous year.

Arguably, it is hectic for low-to-medium households to afford rent in Costa Rica. World Bank (2020) highlights that a report on urban development and housing in Costa Rica in 2012, which was released in 2013, showed that accommodation was an expensive venture for the middle and low-income or poor Costa Ricans. Therefore, there was a need for cheaper housing since developers had over-priced by emphasizing exotic development with enclosed private security with swimming pools. This was a specific prerequisite for the upper class and super-rich only. The disconnect between the demand and supply brought in Habitat for Humanity, an American International NGO, and Plycem- a company from Mexico specializing in building material. Together with the local banks, they wanted to offer housing solutions for the poor in Costa Rica, adding to the fact that there was a significant deficit. Habitat launched a program of giving out microloans to poor households without necessarily accessing typical traditional housing loans. The loans did not require any collateral but a co-signer, and they had conditions for less than three months. However, this did not augment the deficit since the house was exorbitant, too.

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There are four institutionalized housing subsidies in Costa Rica for those who are not legible for loans to use. They can use regular donations or a combination of typical loans and grants known as ABC- a combination of savings (A), subsidy or bobo (B), and loan or credit (C). There are various allocation percentages by the government of the day. For instance, in 2004 and 2005, 16% and 6% of subsidies were used to upgrade slums, respectively (United Nations, 2015). Moreover, there are fully subsidized aids for elderly and disabled people, donations for emergencies or elderly persons and allocations of grants aimed at slum eradication.

Another alternative is the Urban Poor Funds that are available for low-income dwellers in slums. For the poor, in making housing investments, the funds can support their aspirations, and, in the end, they can realize their dreams. These funds are meant to improve the inhabitants’ immediate surroundings while creating development opportunities for them and their kin. The Urban Poor Funds acts as capital and an incentive for the community in that area, thus bringing about climate change.

Effects of Climate Change

Costa Rica is located between oceans, making it susceptible to climate change effects that are likely to result from its precarious position. It has been observed that from 2001 to 2008, storms have negatively affected the country (Rana et al., 2018). This has critically caused both economical and human impact in Costa Rica. It has a dry season that runs from May to the start of December, although it is the wettest month. It has both the lowest elevation at eastern and western coast points while Cerro Chirripo, a volcanic mountain, has 3,810 m elevation and the highest point. Besides, 12% of its population is poor, while the extreme poor consist of 4.7 percent (World Bank, 2020). Additionally, according to the country’s meteorological institute, it has warned of severe weather conditions for the coming months and probably years caused by El Nino. These combined factors make the country subject to disasters due to climate change. Arguably, human beings are vulnerable, but certain conditions and factors increase this condition. These include poverty, race, economic assets, and social status. Many of the settled areas are susceptible due to population density in mountainous or sensitive coastal slopes in slums.

There are various causes of climate change, but the primary factor is gas emissions cause climate change. There are three channels in housing among nations that contribute towards these missions. They include production and manufacturing, transportation and use of gas by occupants, and electricity. Of the total emissions, transportation accounts for more than 13 % in which three-quarters are from road transport (Mahlknecht et al., 2020). In Costa Rica, the most massive emission emanates from fuel combustion. The building industry, whether commercial or infrastructural, both combined produce around 30% of the emissions globally (Mahlknecht et al., 2020). This is prominently dominant in the Caribbean countries where there are many building activities, and, steel and cement constitute 3 and 4 percent emissions, respectively (Mahlknecht et al., 2020). Many buildings require newly produced materials, and these emit gases to the environment. Plant construction material production and waste produced from them plus wastewater are then directed to treatment facilities and landfills.

In combating climate change, various strategies ought to be implemented or followed. Firstly, resilient and useful site for housing selection is a prudent plan that can enhance eradication of climate-related havoc. Secondly, in disaster mitigation, land selection for the building is an efficient device for dropping the vulnerability to macroclimate change that is likely to bring disasters. It includes familiarization or education on land use, zoning, planning, buffer zones, and acquisition. In line with this, there are three options in local planning techniques. These include; selecting sites that are less vulnerable to currents and waves, like low land hillsides, floodplains, and wetlands (Mahlknecht et al., 2020). Another option is to avoid such areas or barriers like dykes, or one can build around them but take precautions by using resilient and flexible designs.

The second strategy is building regulations in which the focus shifts to public housing, where construction codes are marked and observed. These are important as they enhance sustainability and resilience against likely disasters. Building codes can specify the construction materials since they will ensure that the standard approved building materials are only used. However, Chant (2009) asserts that this might work to the disadvantage of the minority groups who cannot afford the prescribed standards as required. Therefore, there is need for a regular revisiting and changing the codes to keep up with climate change. Consequently, housing bodies can work with construction departments to eliminate unnecessary fees like permit applications and transfer fees that are likely to increase costs in low-income projects. These have been some of the concerns of low-income dwellers in informal settlements, especially in the Caribbean.

Other strategies geared towards reducing vulnerability to bad weather are campaign awareness against floods and other disasters. This is through public awareness that can ensure that physical property damage is minimized and owners, and residents act swiftly whenever such tragedies occur. Furthermore, through the financial instruments, one can benefit from housing since public agencies are instrumental in structuring and regulating financial markets. The organizations help in support of low-income households and their counter parts-developers. As mentioned earlier, it is a challenging task since some sustainable strategies are likely to add cost to initial construction design (Habitat for Humanity, 2017).

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Conclusion

In summary, poverty, inequality, and climate change are the main factors that make housing a problem among minorities in Costa Rica. However, there is a need to link climate change to housing since climate contributes immensely to housing inadequacy. It impacts the affordability of housing and results in the minority groups being susceptible and vulnerable, thus making them more impoverished. Disaster awareness campaigns are geared to making the populations prepared to take action during emergencies. Moreover, for those are poor and ineligibles for normal loans, they can use ordinary subsidies, or a combination of typical loans and grants known as ABC or loans for disability to build houses.

References

Cheng Lo, R. (2018, March). Costa Rica: building a national strategy for the transition from the informal to the formal economy through social dialogue. International Trade Union Confederation – Building Workers’ Power. Web.

Duncan, J. (2015). Causes of Inadequate Housing in Latin America and the Caribbean. Habitat for Humanity. Web.

Habitat for Humanity. (2017). Housing poverty in Costa Rica. Habitat for Humanity GB. Web.

Lidth, J. M., Schutte, O., & Quesada, F. (2016). The vacuous cycle of social segregation and spatial fragmentation in Costa Rica greater metropolitan area. Habitat International, 54.

Mahlknecht, J., Gonzalez, R., & Loge, F. (2020). Development of performance indicators for water-energy-food security and its application in Latin America and the Caribbean. Web.

Rana, S., Renwick, J., McGregor, J., & Singh, A. (2018). Seasonal prediction of winter precipitation anomalies over central Southwest Asia: A canonical correlation analysis approach. Journal of Climate, 31(2), 727-741. Web.

United Nations. (2020). Inequality in A Rapidly Changing World. World social Report. Welcome to the United Nations. Web.

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United Nations. (2015). United Nations human settlements programme 2015. Sustainable Development Knowledge Platform. Web.

World Bank. (2020). Country Profile. Data Bank | The World Bank. Web.

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StudyCorgi. "Factors Impacting the Availability and Affordability of Housing in Costa Rica." April 23, 2022. https://studycorgi.com/factors-impacting-the-availability-and-affordability-of-housing-in-costa-rica/.

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StudyCorgi. 2022. "Factors Impacting the Availability and Affordability of Housing in Costa Rica." April 23, 2022. https://studycorgi.com/factors-impacting-the-availability-and-affordability-of-housing-in-costa-rica/.

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