Housing markets in Latin America do not supply fully serviced dwellings for all the population. The formal mechanisms of housing production and financing do not reach all segments of the population while informal mechanisms produce solutions that are either substandard or expensive. Government activities do not fully compensate for the market failure. Low-income households face multiple constraints to accessing formal housing solutions. Insufficient income denies poor households access to formal housing markets while government regulations prevent them from solving the problem informally. Public housing programs are most of the time unable to compensate for these problems and often introduce distortions that further impede efficient solutions. The problem is growing.

Recent estimates suggest that 2.5 million dwellings would be required annually to satisfy the needs of new households and simultaneously improve the condition of households currently living in substandard dwellings. In contrast, less than 1.5 million new dwellings are added annually to the stock. 2 In sum, in spite of the resources devoted to housing, that range from 2 to 8 percent of the Gross National Product depending on the country, Latin America still faces a mounting problem to safely house its population.