A/67/286 45. Originally designed to target the poorest and most disadvantaged, capital-grant programmes have had difficulties reaching low-income households, mainly owing to the inability of low-income families to assemble significant down payments or to meet the monthly payments of market-rate loans. 70 In some cases, the subsidy was set so low as to prevent, a priori, the possibility of purchasing a housing unit without additional substantial credit or savings. 71 Even when able to meet the credit or savings requirement, many of the new owners could not afford to maintain the accommodation or pay the charges for their water and electricity, and were forced to sell their homes. 72 Capital grants can use means testing to determine eligibility; however, targeting mechanisms have proven very complex and costly, as they require accurate and updated information on income and household consumption, which is often in poor supply in developing countries owing to, inter alia, high levels of informal employment. Because reliable income and asset data are rare, some countries rely on proxy measures of income to determine eligibility and benefit levels, such as the ownership of a car or the volume of electricity consumed by a household. However, even the best proxy systems can suffer from substantial exclusion and inclusion errors. 73 46. Attempting to complement resources, some States have promoted the involvement of both private banks and non-governmental organizations (NGOs) in supplying low-income households with microcredit, in addition to the State subsidy. These programmes act as institutional and financial intermediaries between the poor and the State, enabling the poor to “bridge the finance gap” in order to be eligible for the subsidy. However, research indicates that the combination of housing microfinance and subsidies has not been successful. Problems emerge, particularly in instances where the same microfinance institution manages both the need-based subsidy and the demand-driven loan, as the amount of the subsidy is inversely related to the amount of the credit. 74 47. In some cases, administrative barriers or difficult requirements prevent lowincome households from benefiting from subsidies. Enrolment remains low when people find it difficult to travel to apply to the programme because of time constraints, transportation expenses or disabilities. Having to produce expensive documentation of their eligibility for the programme, such as birth certificates or proof of residency, also increases their transaction costs and, thus, restricts enrolment. 75 Inefficient land registration systems in many developing countries have sometimes created severe backlogs in title registration, circumventing the security of tenure of subsidy beneficiaries. 76 48. Despite substantial Government budgetary investment and specific targeting of low-income households, capital-grant subsidies have partially promoted only the affordability aspect of the right to adequate housing (by substantially reducing __________________ 70 71 72 73 74 75 76 12-45918 UN-Habitat, Financing Urban Shelter, p. 60. A mandatory savings component also limited the reach of Ecuador’s subsidy, which required a contribution of about 30 per cent, between savings and fees, from the household. UN-Habitat, Affordable Land and Housing in Latin America and the Caribbean, p. 55. Gilbert, pp. 31-32. World Bank, Thirty Years of World Bank Shelter Lending, p. 55; Council of Europe, p. 50. World Bank, Housing Finance Policy in Emerging Markets, pp. 405-406; UN-Habitat, Financing Urban Shelter, p. 95. See Katsura and Romanik. See South Africa Financial and Fiscal Commission. 15