Social Capital & New Houses
Creative Ways to Address the “Wicked Problem” of Living in Slums
I have just returned from an exploratory journey to the Philippines where I wanted to look into the possibilities that our company JALA could offer to turn around the life of people that live in slums, or in what in official lingo is called “inadequate housing.”
Since February I’ve been in conversation with Will Marcus, founder and managing director of Argo, who has made the tremendous need on the Philippines for the kind of solutions that Jala has been developing clear to me. It took a while before I really understood how exactly we could make a difference. The trip to the Philippines with him and the journey there has revealed the whole potential of what is possible. Consequently I’ve chosen to focus all of Jala’s activity for the next years on implementing, iterating and refining how as a social enterprise we can create economic flows that help communities, development agencies, private enterprises and social & environmental investors address issues associated with Inadequate Housing. (Globally, Inadequate Housing affects 1.6 Billion people, of which 1 Billion live in slums).
I’ve met wonderful people inside the slums and outside, people with big hearts and bright minds. And I have seen, felt and smelled the “grim beauty” that these people live in; grim because the circumstances are dire, and beauty because within these circumstance the heartful givens of real community and doing things with others are clearly visible. The part of a slum our strategic partner ARGO, who’s done preliminary master-planning, and JALA will focus on first is called, Sinagtala. This whole area has been destroyed by fire April 30th this year, and people live in makeshift abodes since.
We also visited the slums of Payatas whose inhabitants used to rag-pick the garbage dump nearby that has now been covered over by 3 meters of soil, destroying the basis of the local economy. We had a conversation with leaders of this community to explore possibilities there; this takes much more planning, consultation, work with the community — which partially is caught up in gut-wrenching loan-sharking schemes — and coalitions/alliances to move towards solutions that will move this community to a next level.
Will and I started our journey in Sorsogon City where we were guests of its former mayor Sally A. Lee. Here we looked into how to build low cost housing for 200 fisher families that have been uprooted from the slums they formerly lived in by a taiphoon and floods. Visiting the the people — some families had no choice but to squat a cemetery and live in some of the larger sepulchers, the majority lives in makeshift quarters between the cemetery and the sea — I was again touched by how wonderful people live in grim beauty. The bonds of community is all that’s left for them, a strength of the heart that I’ve come to regard as the true human capital: when everything is gone we still have each other. This is what we count on.
Here too there is a real opportunity to support this community move to the next level of life. I just wish we could work things out faster to empower these communities to make that move. The good news is that we now have found a way how this can be turned into a win-win for everyone involved and a big win for the environment: we have secured the fundamentals for a pilot to verify our basic assumptions, a way to support self-regulating communities with an anti-fragile economy that will support a brighter future for them and their children.
The so-called unbanked, the financially excluded, the poor do not have any credit whatsoever with financial institutions and banks. But they do have an abundance of social capital — also called social equity: the potential of individuals to secure benefits and invent solutions to problems through membership in a social network. Jala intends to leverage the Social Capital of the communities it engages with to become the Credit needed to fund adequate low cost housing and to upgrade the local economy.
Our first pilot will support people living in the recently burnt down slums in Sinagtala, Quezon City. Our strategic partner Argo Architects and it’s director Will Marcus master plans and organizes the construction of the housing at cost. JALA develops and implements the digital decentralized infrastructure and supports the community building work necessary to sufficiently de-risk the loans needed so that the people now living in squalor can build a future for their families, beginning with their own apartment in the 4 story, carbon neutral, water and energy self-sufficient housing Argo develops. This complex includes gardens for the children to play safely, retail and commercial spaces, jetties to fish and embark from, and a food cube (the white block) that will create job opportunities for at least one member per family living there.
JALA is working towards making the loans needed by these families to eventually buy these apartments inexpensive by making them attractive to impact investors — loans not only backed by social capital but also by local government programs (i.e. the Community Mortgage Program), by the mechanisms of the loan itself (“rent to own”), and a mutual internal insurance by the group of borrowers itself. The social capital is high because the loans do not go to individuals but rather to groups of 7–21 members with strong social bonds that embody their social equity. Argo and JALA have initially teamed up with the He Cares Mission and Father Ben who brings with him the support of the Catholic Church, and there already are other partners who have shown great interest in turning this initiative into a very successful pilot —the district mayor of the Barangay Bahay Toro, Dennis Caboboy, has voiced his desire to do something similar for a community of 6000 in his Barangay; and the mayor of Quezon City, in which this Barangay is situated, Joy Belmonte, has voiced her commitment to support us in making it all work out well.
We wish to turn the Sinagtala project into an example of what is possible when we marshal the power of community, social equity, the network of creative organisations and smart impact investors to tackle one of the wicked problems humanity faces.
JALA intends to make the social capital and dignity underpinning community relationships visible to those in the financial world that understand the importance of the link between social well-being, environment and a thrivable future for all. We do not dictate terms or outcomes; instead we engage in ways to help co-create and de-risk loans that make them attractive to the sorts of investment we can access. We build trust and active hope by showing the value of existing social equity to communities, stakeholders and investors, and we create credible receptacles for the finances so this social capital is upgraded, not eroded, over time.
JALA’s overall goal is to develop and iterate the digital decentralized infrastructure + financial instruments that can fulfill the Sustainable Development Goals 1, 6, 7,and 11 directly and consequently support a positive outcome for other SDGs as well. We wish to rise to the challenge that the World Bank has put out (but cannot fulfill and neither can banks for obvious reasons): “encourage innovative and more inclusive housing finance systems for people living in ‘inadequate housing and slums’”. In we hope to create a scalable way towards a hope future for all.
We are doing this as a social enterprise — in service of a broad coalition of partners that bring capacity, skills, influence, energy and most of all heart for these communities in need — aiming to achieve a significant social and environmental impact and a modest ROI of 3–5% p.a. for impact investors.
We need your good thoughts, energies and input; and we specifically would love to have more expert advise and energy of people who are well versed in impact investing, legal structures internationally and locally in the Philippines, traditional and non-traditional financial instruments, fundraisers, community builders, and partners to work with in all areas that are touched by our initiative. We would greatly appreciate your help in making this happen! Let us know if you’d like to be part of this adventure: click here and say “I’m in” or what you’re interested in.
