Putting the Comparative International Lens Into Practice: Why Secretary Donovan Traveled to Chile

Putting the Comparative International Lens Into Practice:
Why Secretary Donovan Traveled to Chile

Ana Marie Argilagos, Deputy Assistant Secretary, Office for International and Philanthropic Innovation.In January, HUD Secretary Shaun Donovan traveled to Chile at the invitation of Minister Rodrigo Pérez Mackenna, his counterpart at Chile’s Ministry of Housing and Urban Development (MINVU).

One goal of the visit was to identify lessons from Chile’s long-term disaster reconstruction efforts that could be applied to U.S. recovery efforts in regions affected by Hurricane Sandy in 2012. A devastating earthquake and tsunami hit Chile in 2010, affecting more than 80 percent of the country’s urban population and destroying or severely damaging more than 300,000 homes. Through cross-sector partnerships, MINVU has successfully reconstructed or repaired nearly all of the damaged homes.

Secretary Donovan toured reconstruction sites near tsunami-devastated Concepción and, in the capital city of Santiago, joined cabinet-level officials in a discussion about interagency cooperation following disasters. Through these experiences, the following lessons stood out:

• The Chilean government’s “program-in-a-box” approach helped speed up disaster recovery interventions;
• Customizing preexisting programs helped meet local constraints and needs; and
• Innovative interministerial coordination and accountability models were used tackle complex recovery challenges.

As Secretary Donovan told local media in the town of Dichato, a small fishing village ravaged by the tsunami, “It is important to share experiences and learn from each other. We must make an effort to reconstruct differently, as in the coastal zone of Dichato. I'm impressed with what I have seen and I congratulate those who have participated in this reconstruction.”

To follow up on the lessons learned during the visit, HUD’s disaster recovery teams will participate in a videoconference with technical and political staff members at MINVU.

Secretary Donovan’s trip coincided with the launch of South America’s first rental housing voucher program, whose tagline is “Chao Suegra,” or “Goodbye Mother-in-Law.” Chao Suegra was inspired in part by HUD’s Housing Choice Voucher Program (HCVP), which MINVU staff learned about during visits and consultations with HUD. Secretary Donovan met with the voucher team at MINVU during his visit.

Chao Suegra aims to make rental housing affordable to young households (those with a head of household between 18 and 30 years old) by offering them flat monthly subsidies to temporarily rent rather than buy a home. The program is an effort to develop the formal rental market and offer subsidies that better meet the needs of younger households as they grow and adjust to the demands of the labor market. Eligibility for the program is determined by a “social vulnerability score” that is measured using a government-issued survey. The subsidy lasts a maximum of 5 years and is intended as a demand-side bridge to ownership. Considerable flexibility is built into program; tenants can miss a payment three times before they are ineligible to receive the subsidy.

Staff from HUD’s Office of Policy Development and Research (PD&R), led by Economist Danilo Pelletiere, will monitor the Chao Suegra program for the next 2 years. Specifically, the researchers will focus on five features of the Chao Suegra program that HCVP lacks and that might have important policy implications for HUD:

• A flat payment structure, which may reduce payment error and remove earnings disincentive.
• Time-limited duration, which may reduce dependency and allow the program to reach more households.
• Administration through private banks, which may streamline overhead, encourage asset-building, and ease portability.
• Program eligibility determined by a vulnerability scale, which may better target households with the greatest need.
• Payment flexibility, which may address income volatility, prevent eviction, and limit a household’s financial disruption due to wage reduction, unemployment, or illness.

The Volume 16, Number 1 (2014) issue of Cityscape will feature an article by Danilo Pelletiere and IPI Fellow Lauren Ross about Chao Suegra and its relevance for U.S. housing policy.

HUD’s work with our Chilean counterparts illustrates how PD&R can use examples from abroad to enhance HUD’s programs and the capacity of its grantees. The lessons learned during this trip exemplify how viewing international urban policy initiatives through a comparative lens can help the United States build stronger, more resilient communities.