This paper is intended primarily for those governments in Latin America that have public rental housing (PRH). Although there is currently not a great deal of PRH in the region, it is one of the most affordable housing solutions for low-income populations in some Caribbean countries. Still, the governments that own public housing face a number of problems owing to the fiscal and administrative burden it represents. The challenges presented by PRH have been experienced widely by many countries at various levels of development. The majority have faced the dilemma of deciding how to preserve the positive attributes of their PRH, while mitigating its negative impacts on the State, tenants, urban areas, and society as a whole. This paper aims to: (i) identify positive and negative features of PRH; (ii) identify the alternatives other countries have found in their search for a solution to the problems associated with PRH, (iii) identify the lessons learned from implementing those alternatives; and (iv) analyze which elements might be drawn from these lessons to guide the design of affordable housing policies in the Latin American region. In short, the aim is to highlight the major challenges and options for governments that have PRH, and what can be done in view thereof.

The term “public rental housing” (PRH) refers to housing owned by the State, which usually rents it at subsidized prices and looks after its maintenance and administration. PRH constitutes an affordable housing option for low-income groups. However, this affordability comes at the expense of a sizable share of the public budget and depends on the administrative capacity of the State. The experience of several countries shows that the State is often inefficient when it comes to managing and maintaining the rental developments it owns, largely because of fiscal constraints and limited administrative capacity. This translates into decaying living conditions in PRH developments, thus helping to perpetuate poverty in the countries of Latin America. PRH has been a housing solution used widely by several countries throughout the world, especially during the period following World War II. In recent decades, many of these countries have sought alternative solutions that preserve the advantages of having an affordable housing stock, yet enable the State to delegate responsibilities to the private sector and civil society so as to reduce the budget and operational burden.