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UN-HABITAT: PROGRESS REPORT OF THE EXECUTIVE DIRECTOR
Report of the Executive Director on the implementation of resolution 18/12
Housing situation in the occupied Palestinian territories and
establishment of a human settlements fund for the
Palestinian people in the occupied Palestinian territories
2. Fieldwork in the occupied Palestinian territories was carried out in October and November 2002 by two teams of consultants, supported by a non-governmental research institution with extensive experience in the Middle East. Backstopping by UN-HABITAT staff included one joint mission with the consultants as well as headquarters support. Information was gathered mainly through consultative meetings with a wide range of stakeholders and a review of published reports and other written material. The stakeholders interviewed included: ministries of the Palestinian Authority; public and private organizations; Palestinian, Israeli and international non-governmental organizations; bilateral organizations; United Nations agencies and the World Bank.
3. The present report draws on the fieldwork carried out by the consultants and on other information available to the secretariat. It comprises two sections: Part One, which provides an assessment of the housing situation and housing needs in the occupied Palestinian territories; 1 and Part Two, which describes a special human settlements programme for the occupied Palestinian territories to be financed by a technical cooperation trust fund. 2 Part Two has benefited from the proceedings of an expert group meeting convened by UN-HABITAT in January 2003 to discuss the proposed human settlements fund. The expert group meeting was attended by international experts on human settlements from UN-HABITAT and other organizations. Part Two has also drawn from the outcome of a meeting of government representatives held on 20 February 2003 (see paragraph 53 of Part Two).
5. As a result of conflict and governance problems, human settlements conditions have continued to deteriorate. Restrictions on population movements and military operations in the occupied Palestinian territories have contributed to Palestinian unemployment. Poverty has deepened, with 55 per cent of the population in the West Bank and 70 per cent of those living in the Gaza Strip defined as poor. 6
6. The existing conflict in the occupied Palestinian territories has had a negative impact on human settlements and a large number of houses and related infrastructure networks have been destroyed 7 . Since the start of the second intifada around 40,000 dwellings have either been damaged or destroyed. 8
7. There is a serious human settlements problem exacerbated by conflict, poverty and the lack of Palestinian institutional capacity. It is estimated that around 59,000 new houses are needed to reduce overcrowding whilst another 71,000 dwellings require renovation or extension. The actual housing shortfall is even wider as account must be taken of the dwellings destroyed or damaged as a result of ongoing hostilities, as well as those pulled down because they do not have a building permit. The housing deficit will take many years to redress unless the recent level of housing production, averaging less than 10,000 9 dwellings a year, is substantially raised.
8. The economy of the occupied Palestinian territories has hitherto depended to a large extent on the Israeli economy, with 96 per cent of Palestinian exports destined for Israel and labour flows into Israel (pre-intifada) accounting for up to one-quarter of total Palestinian employment. When security measures eased in 1998, 1999 and during the first part of 2000, the Palestinian economy experienced a 5 per cent yearly growth in gross domestic product, illustrating the potential impact of a conflict-free environment. 10
9. Increasingly, the Palestinian state budget is used for salary expenses, and the proportion devoted to investments has declined. At the same time, donor focus has shifted from development to emergency issues. In spite of budgetary support by donors, the Palestinian Authority continues to face a financial deficit, estimated at $371 million in 2001. 11
10. Industrial production dropped by at least 65 per cent in the first years of the intifada(2000-2001) resulting in a loss of $556 million. 12 Moreover, imports have declined sharply, severely reducing the Palestinian Authority’s tax revenue. Exports of agricultural products have fallen by 30 per cent of their potential value and manufactured goods for export had fallen by 24 per cent of their value by the end of 2001. 13
11. Municipal authorities have also experienced financial stress. Financial transfers from the centre were never substantial but their levels have now dropped sharply. At the same time, local revenue sources have been eroded by the adverse political and economic environment.
* In its resolution 56/206 of 21 December 2001, the General Assembly transformed the Commission on Human Settlements into the Governing Council of the United Nations Human Settlements Programme (UN-HABITAT), a subsidiary organ of the General Assembly. This session has been designated as the nineteenth instead of the first session of the Governing Council to signify the continuity and relationship between the Governing Council and the Commission on Human Settlements.
HOUSING SITUATION IN THE OCCUPIED PALESTINIAN TERRITORIES
a. The current housing situation with emphasis on the problems related to land, building permits, house demolition, housing costs, residential densities, access to infrastructure services, and environmental degradation;
b. Shelter delivery processes, including incremental housing construction in the occupied Palestinian territories, the need for a housing policy, and a description of the main housing institutions;
c. The key housing challenges;
d. Suggestions for the way forward.
A. Current housing situation
1. Demographic trends
15. The average household size in 1997 was 6.4 persons with households in the Gaza Strip larger (6.9 persons) than in the West Bank (6.1 persons). There is generally little variation in size within both the West Bank and the Gaza Strip, but refugee camps have larger households than villages and towns. 18
16. The demographic characteristics of the occupied Palestinian territories have been greatly influenced by Israeli policies and the expansion of Israeli settlements. 19
Table 1: Population and households, projections for the years 1997-2010
Source: Tiltnes, A. A. and Magembe E. 20
2. Impact on Palestinian settlements
18. The motives underlying the establishment of Israeli settlements have varied over time with the earliest settlements in the Jordan Valley created for security reasons. Some settlements were set up for historical reasons, others to meet the growing demand for cheap housing, and yet other settlements for other reasons. But whatever the underlying rationale, settlements have been located in areas that separate Palestinian population clusters. The many bypass roads that have been built during the past decade have reinforced this trend. 25 These bypass roads, whilst constructed to serve as safe passageways between settlements, major cities, and communication hubs in Israel as well as between the larger settlements, have impeded free Palestinian mobility and fragmented the West Bank. 26
19. The growth of settlements has had a severe impact on the housing situation in the occupied Palestinian territories and has been recognized by the United Nations Special Rapporteur as a violation of human rights norms, particularly economic, social and cultural rights. Israeli settlements growth has also been largely responsible for the depletion of water resources, giving rise to an inequitable distribution of water, and brought to the fore the critical issue of water rights for the Palestinian people. 27 It has been observed that: “Since the Intifada the water situation for Palestinians has deteriorated further. Closures have rendered it extremely difficult to truck water to villages that depend on the provision of water by tankers. Some households find themselves waiting two or three weeks to get water into their cistern”. 28
a. Constrained urban development in the occupied Palestinian territories and the physical expansion of Palestinian cities;
b. Increased the demand for land in the existing urban centres, and thus raised land prices;
c. Made it difficult for low-income households to obtain land and improve their housing standards; and,
d. Raised residential densities. 29
21. Restrictions on the issuance of building permits to Palestinians are a particularly serious problem since houses built without approval are demolished, thus severely reducing housing supply. The severity of these restrictions depends on the zone in question. The Gaza-Jericho (Oslo I) Agreement (Cairo, 1994) and Interim (Oslo II) Agreement (Taba, 1995) divided the occupied Palestinian lands into different zones, giving the Israelis and Palestinians varying degrees of jurisdiction. The Gaza-Jericho Agreement defined the Gaza Strip and the West Bank town of Jericho as Palestinian autonomous areas, but Israel retained the responsibility for security in certain areas of the Gaza Strip (so-called ‘yellow areas’). The Interim Agreement divided the West Bank into three zones of control: “In six West Bank cities (in addition to Jericho) the Palestinian Authority gained civil and internal security control (Area A); in 420 villages the Palestinian Authority was made responsible for civil affairs, while Israel retained security control (Area B); in the remaining territory (Area C) Israel retained its exclusive control. […] In all, Area A amounted to just under 2 per cent of the West Bank, Area B 26 per cent and Area C made up the remaining 72 per cent.” 30 By 1999, the area under Palestinian civil and internal control (Area A) had risen to 17.2 per cent.
22. For towns and villages in Area A, building permits are the responsibility of the Palestinian municipalities and are usually issued provided that the applicant has title to land. However, because land titling in the West Bank and Gaza is far from complete, legitimate owners cannot always document their ownership status. In Area B, it is more difficult to get building permits while it is extremely difficult to do so in the Israeli-controlled Area C. Israeli settlers, however, easily get permission to expand and receive rights to land for agricultural use and for security reasons. 31 Building licenses are generally expensive, and will cost at least $6,000 to $10,000 and upwards to $25,000 in Jerusalem. 32
23. The effect of restrictions on construction is well illustrated by the account in Box 1, narrated by the head of a village council:
Building restrictions in Beit ‘Inan: Naji Jamhour, head of the village council 33
25. In April-May 2002, a donor-led damage assessment exercise estimated at 40,000 the number of private dwellings damaged or destroyed since the start of the second intifada. Of this number, 2,800 housing units had been totally destroyed in military activities whilst the rest had sustained moderate or serious damage.35 The number of damaged dwellings has continued to grow.
26. Dwellings are also demolished through administrative orders if they have been erected without formal approval, yet building permits are difficult to obtain. Insurmountable problems arise where new master plans are applied retroactively, and subsequently used as a basis for declaring dwellings non-compliant and therefore due for demolition. 36 Since 1987, 2,450 Palestinian houses have been demolished in the West Bank (including East Jerusalem) on the grounds that no building permits had been obtained. As a result, 16,700 Palestinians have lost their homes. 37 In 2002, it is further reported, 28,000 Palestinian dwellings in Jerusalem were under the threat of “administrative” destruction. 38
27. A notably punitive practice is the demolition of dwellings without prior notice. Indeed, it is reported that in most cases of demolition for lack of a permit “….authorities wait until construction is complete before coming to destroy the home, inflicting the heaviest possible material loss to the victim”. 39
28. The extent of damage, in financial and physical terms, has been documented by the Ministry of Planning and International Cooperation (MOPIC) and the Palestinian Central Bureau of Statistics (PCBS), based on unpublished data from the Ministry of Housing and Public Works (MOHPW ) (table 2).
Table 2: Number of damaged buildings in the occupied Palestinian territoriesfrom 28/9/2000 to 20/8/2002 by governorate/district, building type and estimated value of damage
30. As the housing deficit is widened further by the effects of conflict, the Palestinian Authority might find it extremely difficult to meet its future housing needs if insecurity persists. It is estimated that dwelling output is down by 8,000 to 10,000 units a year as a result of the downturn in construction, itself the result of conflict. Yet around 15,000 dwellings are needed each year to meet household formation alone. The overall estimate of need is even higher as it must take account of the current housing deficit noted above.
31. Housing supply is also suppressed by inappropriate rent legislation which impedes housing transactions and turnover. The Jordanian Renter and Owner Law (No. 62) of 1953 is still applied in the occupied Palestinian territories. According to paragraph 4-1 of this legislation, the courts cannot issue a decision to force a tenant out of a rented dwelling even if the contract date has expired. Such a decision can only be taken where:
a. The tenant has not paid rent within 30 days of receiving an order from the owner or from the court;
b. The tenant has damaged the house or allowed others to do so;
c. The tenant has used the dwelling for illegal purposes;
d. The tenant has rented the property or part of it to others, or left the property vacant for more than six months;
e. The owner needs the property to live in, and the tenant has found another comparable house for a similar rent in the same area, and the court has found it acceptable;
f. The owner wants to carry out substantial renovations such as rebuilding the house, and has informed the tenant in a written statement six months in advance ; and
g. The tenant has built his own dwelling.
33. Notably, closure policies have seriously constrained the movement of personnel and raised the costs of supplying construction sites with building materials. In turn, the incentive to invest in housing and the construction sector has fallen sharply: the manufacture of construction materials has in recent years dropped to 65 per cent of capacity; and costs of delays and inflation in the cement industry have amounted to a $230 million loss for Palestinian companies. 44
35. More than 80 per cent of households in the occupied Palestinian territoriesown their dwellings. Although 90 per cent of households in camps own their houses, they do not have title to land, as camp lands are typically granted by the Palestinian Authority to UNRWA.The type of housing initially set up for refugee households in the camps (erected after the 1948 Arab-Israeli war) to replace tents were “shelters”, or small, detached dwellings. Most of the refugees who later moved into the camps have either purchased or built their own dwellings. UNRWA does not own the original camp houses, but refugees are free to use them as long as UNRWA has possession of the land upon which such housing is built. The stock of refugee housing in the camps has changed considerably over time and, where they have had the means and authority, camp refugees have replaced or modified their houses, and built additional dwellings.
37. Room densities are somewhat lower in the West Bank (1.8 persons per room) than in the Gaza Strip (2.1 persons per room). On the whole, there is little variation in room densities across urban and rural localities. Nonetheless, living conditions in refugee camps are particularly cramped, as plots are small (and external space is limited), while pathways between houses are narrow. The continuing demolition of dwellings and the widening housing deficit may be expected to result in higher densities as the prevalence of doubling up by households increases.
39. The impact of occupation on social services has also been adverse. It has been reported that health services are deteriorating, and high levels of mental stress have been noted. 46 The same source observes that attendance at Gazan mental health clinics has doubled since 2000. In a survey of 760 families in the Gaza Strip, almost nine out of ten reported a family member with psychological difficulties”. 47 It is also reported that school dropout rates are rising and that people are increasingly unable to pay the taxes that finance the building of schools and support education. 48
1. Incremental housing construction
a. Addressing the problems of house overcrowding and high densities;
b. Regulating and rationalizing land use;
c. Strategies to address land ownership rights, tenancy rights and mortgage lending;
d. Guidelines and principles for national and international resource mobilization and the growth of housing finance;
e. Improving access to basic services such as clean water, sanitation and solid waste disposal.
44. Public institutions with central roles in human settlements are: MOHPW, which has sponsored housing construction in the past, especially in Gaza; the Ministry of Local Government (MOLG), which is responsible for master planning; and municipal authorities, whose responsibilities include infrastructure services, physical planning, issuance of building permits and facilitating shelter delivery. MOPIC has an indirect remit for human settlements through its national and regional plans. Yet another important body is the Palestinian Economic Council for Development and Reconstruction (PECDAR) whose remit includes infrastructure projects such as roads, electricity grids, water and sewerage networks, and public buildings.
45. A number of civil society bodies are involved in shelter delivery, with the Palestinian Housing Council (PHC) playing a key role. The Housing Council is a not-for-profit organization established in 1992, since when it has provided soft housing loans to low-and middle-income households. It has financed up to 1,178 apartments in the Gaza Strip, 408 houses in the West Bank, 231 houses in rural areas, and 2,000 housing units in East Jerusalem. Its financial support comes primarily from international donors who have so far provided over $95 million for housing development. The Housing Council has drawn criticism for not targeting low-income households. Other civil society bodies include:
a. The Cooperative Housing Foundation International, an American non-governmental organization funded by the United States Agency for International Development (USAID). Acting through local commercial banks, CHF has made 4,300 housing loans (1995-2002), successfully targeting households with modest incomes;
b. The Welfare Association, a humanitarian organization established in 1983 and registered as a not-for-profit foundation in Switzerland. This organization specializes in fund management and has a diverse and substantial project portfolio. Its housing projects target small-scale renovation of houses in the core of old Palestinian cities, especially East Jerusalem;
c. The Waqf , a well-established and renowned religious institution in the occupied Palestinian territories. Its main contribution is land for housing, typically leased out for long durations for a small charge;
d. Housing cooperatives.
46. International agencies such as the United Nations Development Programme (UNDP) and UNRWA have concentrated their efforts on water and sanitation, house repair and job creation. UNRWA reconstructs housing damaged during natural or manmade disasters, and rehabilitates dwellings of destitute families. The Bretton Woods institutions have focused on housing finance (World Bank and the International Finance Corporation (IFC)) and on the wider financial sector International Monetary Fund (IMF). The World Bank and the IFC have sponsored special institutional vehicles for mortgage finance in partnership with the private banking sector. These vehicles consist of the Palestinian Mortgage Housing Company (PMHC) and its two subsidiaries, the Palestine Housing Finance Corporation (PHFC) and the Palestine Mortgage Insurance Fund (PMIF). PMHC acts as a refinancing facility for PHFC (which issues mortgage loans) and for commercial banks involved in mortgage lending. PMIF insures mortgage loans. These financial intermediaries have had only a limited impact so far, owning a mortgage portfolio of a mere 100 houses and 50 loans in the pipeline (November 2002). This shortcoming points to the need for a funding mechanism which is able to address the housing needs of low-income households (see paragraph 113, programme element 6).
a. Expansion of Israeli settlements and building of bypass roads;
b. Closing off of land for military and other purposes;
c. Confiscation of Palestinian land;
d. Severe limitations on the granting of building permits;
e. House demolition;
f. Deteriorating access to basic services, especially water;
g. Environmental degradation.
48. Other challenges include the need to:
a. Introduce an appropriate balance between emergency and development activities;
b. Build institutional capacity especially at the municipal level;
c. Strengthen coordination among public sector, private sector, civil society and international institutions;
d. Formulate a housing policy;
e. Expand the scope and outreach of formal housing finance;
f. Develop an appropriate regulatory regime for housing finance and housing markets.
50. Against this background, there is a need for the donor community and other international organizations, such as UN-HABITAT, to provide policy and capacity building support, building on previous policy initiatives in the occupied Palestinian territories. All national and local governmental as well as non-governmental institutions with an interest in human settlements should participate actively in the process. Naturally, MOHPW would assume the key coordinating role.
a. Technical assistance: UN-HABITAT should provide long-term technical assistance for shelter delivery, and also sensitize the Palestinian leadership and the international community to the social and economic importance of housing, and its potential to contribute to peace-building and political stability;
b. Land titling : Current constraints notwithstanding, support should be given to the Palestinian Authority to facilitate land titling and registration of apartments ;
c. Planning and building regulations : A framework should be agreed to optimize both the preparation of regional and local master plans and the granting of building permits;
d. Social housing strategy : Support should be provided to the Palestinian Authority for purposes of formulating a social housing strategy which responds to the housing needs of vulnerable groups;
e. Regulatory regime : Laws and regulations governing the operations of financial institutions ought to be reviewed so as to expand the scope and outreach of micro finance for housing;
f. Institutional capacities : Institutional capacities should be assessed with a view to:
i. Strengthening funding mechanisms for human settlements development in the occupied Palestinian territories; and
ii. Promoting coordination and cooperation between ministries and other agencies involved in human settlements development, as well as between central, regional and local levels.
PROPOSED ESTABLISHMENT OF A HUMAN SETTLEMENTS FUND FOR THE
PALESTINIAN PEOPLE IN THE OCCUPIED PALESTINIAN TERRITORIES
53. This part also draws from the outcome of the meeting of Government representatives and other participants called by the Executive Director on 20 February 2003 to review the technical report on the establishment of a human settlements fund for the Palestinian people in the occupied Palestinian territories. The Executive Director briefed the meeting on the preparatory processes leading to the preparation of the working document before the meeting. A detailed presentation was made by a representative of the Executive Director. Several representatives expressed views on the report. The need for a special human settlements programme financed by a technical cooperation trust fund of earmarked contributions, was supported by several representatives who indicated their intention to make financial contributions to such an initiative. Two representatives expressed the view that a human settlements programme in the occupied Palestinian territories is only likely to receive support if it is based on acceptance by all the parties involved.
a. The existing institutional framework for human settlements;
b. The case for intervention predicated on the need to address existing gaps and constraints;
c. The case for a special human settlements programme for the occupied Palestinian territories;
d. The objectives, strategies, and priorities of the special programme;
e. Design of the special programme;
f. Sustainability of the special programme;
g. Operationalizing the special programme;
h. Main recommendations.
58. As there is no official housing policy the Palestinian Authority finds it difficult to coordinate the housing sector and to establish priorities. But the Palestinian Authority is now preparing a policy paper to define its housing mandate, emphasizing its role as facilitator and coordinator.
60. It has recently been decided that MOLG should be decentralized, with the head office focusing on regional plans while district level offices will work with the municipalities on the preparation of local plans. 54 In common with other ministries, MOLG operations are hampered by the present restrictions on mobility, lack of resources and politically unpredictable circumstances.
61. Municipal authorities (and village councils) are regulated by means of the (Jordanian) municipal law of 1966. Municipal responsibilities include the supply of infrastructure services such as electricity, water, and sewerage systems. This mandate has been granted to all municipalities, applying to a lesser extent to village councils as these are not as well resourced.
62. The municipal tax base has diminished as a result of adverse economic and political circumstances and sharply declining transfers from the central Government. Municipalities have therefore been forced to rely almost entirely on their own income sources, in particular the sale of water and electricity. But in the face of deepening poverty, people have found it increasingly difficult to pay their bills, squeezing municipal budgets further. Yet additional financial resources are required to extend infrastructure services and to raise the quality of provision. The quality and coverage of urban services (water, sewerage and electricity) are inadequate and service networks are in need of major rehabilitation.
63. Prior to 2000, local governments in the occupied Palestinian territories received relatively little attention from the international donor community. The situation seems to be improving, partly as a consequence of a pragmatic donor response to Israeli closures and restrictions on mobility. Although donors have started to address some of the emergency needs it is still important to map the existing gaps.
64. Besides delivering infrastructure services, municipal authorities are in charge of land-use planning, issuing building permits, approving upgrading and renewal plans, and facilitating new construction. As in many other similar settings, municipal authorities have not been able to provide these services in an integrated manner.
65. Municipal authorities differ substantially in their capacity and competence. The cities of Gaza, Nablus and Ramallah have a high level of capacity for service delivery, land-use planning, and design review and approval. These municipalities are also able to articulate their priorities in discussions with donor agencies. But few others have this broad range of competence and the need for capacity-building stands out. Generally, lower levels of the Palestinian Authority do not appear to have benefited from the institution-building that has been carried out at the central level since the Oslo peace accord. Yet local authorities need to become more deeply involved in planning and decision-making in order to consolidate and improve the Palestinian Authority’s development efforts. The United Nations Development Programme (UNDP) reports that the Palestinian Authority has not yet created “mechanisms to enable local councils to fulfill their potential role in the development and administrative processes”. 55
66. Rapid urbanization has brought the housing challenge to the fore but there is a tacit understanding that housing supply is a private matter. 56 Even so, the policy of restricting building permits has intensified the housing pressure in the already built-up areas. Urbanization has also underscored the critical role municipal authorities ought to play in land-use planning, making it clear that sustainable urban development is not possible without Palestinian control over land and land use.
70. The objective of PMHC is to create a privately owned and commercially viable financial infrastructure to facilitate the flow of private capital for housing delivery. Its funding comes from a long-term loan by the World Bank and IFC. This financing arrangement makes it possible for borrowers to obtain fixed-interest-rate loans of long duration, thus protecting them from the risks associated with loans whose interest rate changes periodically (i.e., variable interest rate loans) to reflect changing conditions in the financial market.
71. PMIF provides cover against loan defaulting, insuring loans over their full term on a commercially viable basis. Insurance reduces the lender’s risk and encourages investments in the Palestinian mortgage market. Loan insurance also allows the participating lenders to reduce lending rates, to extend loan periods, and to use higher loan-to-value ratios. 57 Additionally, Palestinian borrowers face more relaxed collateral requirements than are traditionally found in the occupied Palestinian territories.
72. By design, PMHC does not deal directly with the public leaving it to private banks to manage lending activities. Banks re-finance their mortgage lending with loans from PMHC at an annual interest rate of 5.5 per cent. In turn, banks now commonly charge annual interest rates ranging from 8.5 per cent. To qualify for a loan a borrower is required to have a monthly household income equivalent to about $850. 58
73. PMHC has a staff of nine full-time employees. Its portfolio of about 100 loans has an insured value in excess of $5 million and an additional $3 million has been committed to cover 50 new loans (November 2002). This loan portfolio is not significant in light of the substantial need for housing in the occupied Palestinian territories. Although PMHC has the potential to expand its mortgage lending, its activities have slowed substantially with the onset of heightened conflict and economic recession.
75. Commercial lending is strict, to ensure sustainability, and the poor do not have access to housing finance from the banking sector. Indeed, commercial banks are not yet an important channel for housing finance although their role is expected to expand through the intervention of PMHC.
76. All commercial-bank liabilities (savings and deposits by households and firms) are short term, and long-term deposits are generally not available. Because of the current state of insecurity and economic uncertainty, there is inadequate confidence in the banking system, making it difficult for banks to attract long-term deposits.
79. In the Gaza Strip, apartment buildings financed by PHC have been used to house the Palestinian police force and civil servants. This particular programme has drawn criticism for not targeting low-income households. But, in cooperation with the Welfare Association, PHC recently provided 85 poor families (in old city centres) with grants averaging $2,800 for the rehabilitation of their houses.60 PHC officials have also expressed interest in site and service projects, a better means of targeting the poor (because of the low project cost per beneficiary).
80. Lending criteria require title to land, evidence of a building permit, and a minimum income as defined by PHC. There is also a loan ceiling. Whilst these conditions enhance financial sustainability, they also tend to exclude low-income households from receiving financial assistance.
81. After the outbreak of the second intifada, many people found it increasingly difficult to repay their loans. This setback and the lack of enforcement of loan recovery through the legal system have weakened the financial position of PHC.
83. To obtain a loan, an applicant must:
a. Own the dwelling and the land on which it is built;
b. Have a steady income exceeding a certain amount ($200-$800 per month depending on the loan size;
c. Operate a bank account for the direct deposit of salaries with the bank managing the loan on behalf of CHF; and,
d. Produce two guarantors with regular income and a bank account in the same bank as the applicant. CHF gives fixed interest (9 per cent annually) loans up to 10 times the applicant’s salary, with repayments limited to not more than one third of salary. It has achieved a 99 per cent repayment rate, and links this success to applying strict criteria for borrower selection, and diligent follow-up with beneficiaries and banks. In common with other lenders, CHF has suffered from the lack of enforcement of legal claims but its use of strict lending conditions and transparent loan recovery methods has moderated losses.
84. CHF’s lending concept fits in well with the traditional process of incremental house building in the occupied Palestinian territories. Its loans are typically small and of short maturity, but repeater loans can be obtained. These loans have been very popular and although borrowing has dropped somewhat since October 2000, there is still a substantial demand. Following its success in the Gaza Strip, the CHF home improvement loan programme is now expanding to the West Bank. This kind of lending has great potential in the Palestinian situation and can be highly beneficial, especially in the short and medium term.
86. There is neither an umbrella organization for housing cooperatives nor a regulatory framework. Typically, a cooperative is wound up after individual units have been built and purchased, leaving behind no mechanism for post-sale management. Since each cooperative operates independently, there is practically no transfer of experience from one cooperative to another. Housing delivery would benefit were cooperatives to live beyond the initial construction, making it possible for experience to be transferred. The proposed special programme for human settlements development in the occupied Palestinian territories, discussed later, could act as a vehicle for institution building of housing cooperatives (for low-income shelter) and knowledge transfer.
1. United Nations Relief and Works Agency
1. Housing finance
a. The lack of enforcement of orders issued by the courts with regard to evictions and other claims by property owners;
b. A limited supply of land for new construction;
c. An inadequate system of issuing land titles and building permits;
d. The inability of municipalities to enforce planning regulations as a result of their extremely limited control over land.
A. The case for intervening
a. Severe capacity constraints which limit the ability of central and local authorities, civil society organizations and the private sector to address human settlements problems. Although impressive progress has been made in institution building since the Oslo Agreement there are critical capacity gaps which undermine programme implementation and coordination;
b. The inability of municipal authorities to respond adequately to the challenges of human settlements planning including land management, land-use planning, zoning, environmental planning, and other aspects of urban management;
c. The lack of a clear human settlements focus among the large number and variety of non-governmental organizations and international agencies in the occupied Palestinian territories. Indeed, hardly any of these agencies address urban planning and management issues at the municipal level, nor do they support innovative shelter-delivery schemes for the poor;
d. The lack of an effective framework for delivering land to Palestinian households, making it difficult to assure land and housing rights. Notably, there are major obstacles which severely limit access to land and obstruct the granting of building permits;
e. The limited remit of the specialized housing finance institutions, which does not go beyond mortgage lending. This narrow mandate and the demanding conditions which typically govern mortgage lending do not enable these institutions to address the shelter needs of the poor;
f. The lack of an integrated approach to human settlements as interventions tend to be sectoral;
g. The limited use of participatory approaches to human settlements development and management.
95. It is proposed that a special human settlements programme, described below, should be implemented in the occupied Palestinian territories to address these gaps and constraints.
a. It allows intervening agencies to work with and through existing organizations, avoiding the high costs associated with creating new institutions;
b. Start-up programme costs can be kept low, allowing activities to be phased in and scaled up progressively as experience is acquired and resources mobilized;
c. The occupied Palestinian territories would be able to draw on the extensive programmatic experience of UN-HABITAT in conflict, post-conflict and stable environments;
d. Exit strategies, once objectives have been accomplished, would not be difficult to formulate and implement.
97. In view of the rapidly changing conditions in the occupied Palestinian territories, it would not be prudent to create in the interim, a financially autonomous institution to address human settlements challenges. Indeed, it would be more cost-effective to take advantage of existing institutions and structures for purposes of channelling both financial and programme assistance to the occupied Palestinian territories. In the circumstances, it is recommended that a special human settlements programme, financed by a technical cooperation trust fund of earmarked contributions, should be formulated to respond to the human settlements challenges facing the occupied Palestinian territories. An initial funding of $5 million is proposed for the trust fund. The trust fund would draw its resources from donors and would be designed to grow with the gradual expansion of the special human settlements programme. In the longer term, as the political and economic environment evolves, other options could be explored, including the establishment of a full-fledged Palestinian reconstruction fund for human settlements.
98. The special human settlements programme would:
a. Act as the driving force for elevating human settlements issues on the development agenda;
b. Act as the principal instrument for ensuring a coherent and effective response to human settlements issues;
c. Build local capacities, especially at the municipal level, to respond to human settlements challenges.
99. The programme would collaborate with international agencies (within and outside the United Nations system) as well as with local public and private organizations to accomplish a wide range of human settlements activities such as:
a. Supporting policy formulation and implementation;
b. Supporting the efficient delivery, via municipal authorities, of infrastructure services: water supply, sewerage, solid waste and drainage;
c. Developing a sustainable housing market by promoting shelter delivery through the private sector;
d. Supporting housing reconstruction and rehabilitation;
e. Supporting efforts to address the housing needs of the poor and other vulnerable groups.
a. Work with partners to assist in mobilizing domestic and international financial resources for human settlements development and management in the occupied Palestinian territories;
b. Build the capacity of local institutions, enabling such institutions to find solutions to human settlements challenges.
103. The occupied Palestinian territories is faced with the pressing need to respond to both emergency and development problems in its human settlements. 61 In the circumstances, the proposed programme will have to devise a strategy which responds appropriately to both emergency and development issues. Since current support by the international community is skewed in favour of emergency needs, the programme could concentrate its efforts on development interventions but in coordination with the ongoing and proposed emergency operations of other organizations.
104. This overall strategy, which responds to both emergency and development challenges, will need regular testing and validation in the context of actual - and rapidly changing - conditions in the occupied Palestinian territories. For example, while the programme might not have a direct role in the replacement of destroyed infrastructure, as there are other agencies more directly concerned with such a task, it could contribute indirectly by building the capacity of municipal authorities to respond to infrastructure needs. There could also be a solid case for demonstrating, in collaboration with UNRWA, how to upgrade destroyed settlements. These arguments point to the need for the proposed programme to remain adaptable, responding flexibly and quickly to field conditions, while at the same time maintaining a development focus.
105. The main advantage of the approach recommended here, which blends immediate responses with development activities, is that it has the potential to quickly demonstrate the impact of the programme without undermining the programme’ s development goals. Notably, immediate responses would provide an entry point, build credibility and enhance resource mobilization. One example is targeted training in urban planning and management, which could be followed by full-fledged capacity-building (including demonstration projects) programmed to start when conditions in the occupied Palestinian territories permit.
a. Capacity-building for good governance at central and municipal levels to support:
i. Sustainable environmental planning and management including the preparation of local plans for Palestinian neighbourhoods;
ii. Formulation and implementation of strategies to accelerate land delivery;
b. Institutional coordination of human settlements activities;
c. Supporting the sustainable delivery of shelter affordable by the poor;
d. Mobilizing resources to support human settlements interventions.
107. Among the many needs there are two that stand out. The first is the limited capacity of local authorities to deal with human settlements development. It will therefore be critical to build municipal capacity to respond to human settlements challenges especially through land delivery, land-use planning, service delivery and urban management.
108. The second area of need is to develop sustainable mechanisms for delivering affordable housing to households with low incomes. The main strategies will be to:
a. Support the acceleration of land delivery through policy and legislative reforms as well as technical assistance to improve cadastres and land registration;
b. Implement upgrading pilot projects and disseminate the lessons learned;
c. Support the informal housing finance sector, applying lessons of micro finance from similar settings, as well as lessons from ongoing interventions by housing cooperatives.
109. To uplift living conditions in the occupied Palestinian territories, other bottlenecks and issues which will need to be addressed include imperfections in the housing market stemming from institutional, legal and political constraints, and the needs of vulnerable groups such as children, single mothers and the elderly.
110. While the need for physical infrastructure services is substantial, such activities are presently supported by a range of international agencies including the European Union, the World Bank and UNDP. There are unmet needs, however, and a careful mapping of current assistance levels would reveal potential areas of intervention by the special human settlements programme, with a focus on municipal services and shelter.
112. Initially, a two-year programme is proposed with subsequent phases anticipated subject to the outcome of an evaluation to be carried out at the end of the first phase. Programme design would be guided by the following factors:
a. The need to start with limited but visible interventions;
b. The need to develop interventions which respond to different scenarios within the relief to development paradigm;
c. The opportunity which “Area A” offers as an initial area of operational focus, in view of the Palestinian Authority’s planning latitude in that zone. This geographical focus would enable the Palestinian Authority to acquire experience to be replicated in other areas as conditions change.
113. The programme’s proposed initial fund allocation is as set out in the following table:
114. The development objective of the institutional capacity-building component is to strengthen the current Palestinian institutional capacity for human settlements management. The immediate objective of this project element is to review and assess the current institutional capacity, identify where capacity gaps exist, and build capacity through institutional reform and training of staff. Project beneficiaries are central and local authority policy makers. The ultimate beneficiaries will be Palestinian local authorities in the “Area A” zone.
115. The development objective of creating institutional coordination mechanisms is to rationalize the institutional frameworks for human settlements interventions with a view to maximizing the impact of the programmes of the various central and local entities involved in human settlements development. The immediate objective is to integrate the various programmes of external assistance entities - both in the relief and developmental spheres - with the activities of Palestinian public and non-governmental agencies at the central and local levels. The ultimate beneficiary will be the Palestinian Authority through enhanced coordination, effectiveness and impacts of central and local level human settlements interventions.
116. The development objective of the third programme component is to build up a solid socio-economic database at the central and local levels as a tool for decision-making. The immediate objective is to enlist academia, local authorities and interested representative groups from civil society in the establishment of local urban observatories and a national urban observatory with a view to collecting a comprehensive set of relevant socio-economic data (cross-section and time series data) and create broader-based consultative mechanisms for enhanced human settlements decision-making processes. The ultimate beneficiaries will be the Palestinian Authority, governorates, and local authorities through improved decision-making processes informed by reliable local and central level data.
117. The development objective of the fourth programme element is to help the Palestinian Authority develop coherent frameworks for housing and human settlements interventions through related housing and human settlements policies, anchored in other macro-level policies. The immediate objective is to pave the way for the development of draft policies for the “Area A” zone. The ultimate beneficiaries will be the Palestinian Authority through the development of housing and human settlements policies that will guide future intervention in the housing and human settlements sectors.
118. The development objective of establishing an institutional framework for a geographical information system (GIS)-based cadastre for “Area A” territories is to enable the Palestinian Authority to create and maintain a comprehensive, complete and accurate cadastre. The immediate objective is to provide the Palestinian Authority with an accurate tool for land management in the “Area A” zone. The ultimate beneficiaries are the Palestinian people at large, through the provision of title deeds and the commensurate access to formal housing credit facilities on the basis of collateral.
119. The development objective of implementing housing and settlements upgrading pilot projects is to address the enormous backlog in housing and human settlements upgrading. The immediate objectives are: to help reduce the accumulated caseload of upgrading needs in “Area A” through pilot projects that develop local level capacity and upgrading methodologies; and, to mobilize resources to support micro finance for housing. The ultimate beneficiaries will be the Palestinian people at large through a scaling-up of the pilot projects to cover increasingly larger parts of “Area A”.
121. Programme and financial management will be conducted in a transparent and efficient manner, and will be subject to the United Nations internal and external audit procedures in accordance with the relevant policies, regulations and practice.
123. UN-HABITAT should initiate preparatory work and other actions, as recommended below, with a view to mobilizing international donor contributions to support the special human settlements programme. In this regard, member States will play a key role in moving this process forward through their financial contributions to the programme.
(a) UN-HABITAT should formulate the proposed special human settlements programme in full cooperation with the Palestinian Authority and other stakeholders, with priorities focusing on:
(i) Building capacity for good governance at both central and municipal levels;
(ii) Promoting security of tenure including development of legal rights to land and housing;
(iii) Resource mobilization to support the delivery of shelter affordable by the poor ;
(b) UN-HABITAT should establish the proposed technical cooperation trust fund;
(c) UN-HABITAT should mount an intensive campaign among United Nations Member States and the broader international donor community to raise financial contributions for the programme. The campaign should include:
(i) Launching an immediate appeal to raise seed capital for the trust fund, from amongst those countries which have already expressed interest in supporting the programme;
(ii) An appeal to financial institutions, especially in the Middle East, to secure additional funding for the programme through its trust fund;
(d) The proposed special human settlements programme should expand gradually in step with the availability of resources and the growth of implementation capacity.
1Based on Tiltnes, A. A. and Magembe (2003) “Housing Situation and Housing Needs Assessment in the Occupied Palestinian Territories”. Report to UN-HABITAT. See Information Document ……, available in English.
2Based on Ruden A. (2003) “Proposed Human Settlements Fund for the Palestinian People”. Report to UN-HABITAT. See Information Document ……. , available in English.
3Tufakji, K. (2000) “Settlements: A Geographic and Demographic Barrier to Peace” Palestine-Israel Journal, Vol. 7, No. 3&4, pp. 52-58
4ICBS (2002) Statistical Abstract of Israel 2002, No. 53 Jerusalem: Israel Central Bureau of Statistics; A higher figure (more than 160 settlements) has been cited by Graham, S. (2002) ‘Clean Territory’: Urbicide in the West Bank.
5PASSIA (2002) The Palestine Question in Maps, 1878-2002, Jerusalem: PASSIA (Palestinian Academic Society for the Study of International Affairs)
6UNSCO (2002) The Impact of Closure and other Mobility Restrictions on Palestinian Activities, 1 January 2002 – 30 June 2002, October, Office of the United Nations Special Co-ordinator (UNSCO).
7United Nations (2002a) Humanitarian Plan of Action for the Palestinian Territory. UN’s Technical Assistance Mission, October 2002.
8United Nations ibid.
9Tiltnes, A. A. and Magembe op. cit.
10World Bank (2002a) Long-Term Policy Options for the Palestinian Economy, July, Jerusalem: World Bank West Bank and Gaza office.
11Development Studies Programme (2002) Palestine Human Development Report 2002. Birzeit University
12PCBS, and Industry and Labour Statistics, cited in McDowall, D. (2003) Losing Ground: Israel, poverty and the Palestinians. Christian Aid.
13World Bank (2002b) Fifteen Months – Intifada, Closures and Palestinian Economic Crisis: An Assessment. March 2002.
14Tiltnes, A. A. and Magembe op. cit.
15PCBS (2000) Population, Housing and Establishment Census 1997 – Pocket Book, January, Ramallah: Palestinian Central Bureau of Statistics, Table 3.
16Projections are based on an average growth rate of 3 percent a year: 2.6 percent for the West Bank and 3.75 percent for the Gaza Strip.
17Development Studies Programme op. cit.
19Kothari, M. (2002) “Report of the Special Rapporteur on Adequate Housing as a component of the right to an adequate standard of Living”. Report of visit to the occupied Palestinian territories, 5-10 January 2002: 10 June 2003, E/CN.4/2003/5/Add.1 2002:
20Source: Tiltnes, A. and Magembe, E. op. cit.
21Tufakji, K. op. cit.
22PASSIA op. cit.
23ICBS op. cit. Table 2.7
24(a) According to the Palestine Human Development Report, for instance, the number of settlements (at the end of 2000) was 150 in the West Bank and 17 in the Gaza Strip; and the number of Israeli settlers, at the end of July 2000, is put at 390,039. See Development Studies Programme op. cit. (b) As already pointed out , Graham, S. op. cit also put the total number of settlements at more than 160.
25Chazan, N. (2000) “Towards a Settlement without Settlements”, Palestine-Israel Journal, Vol. 7, No. 3 & 4: pp. 46-51; Shtayyeh, M. (2000) Scenarios on Jewish Settlements in the West Bank and Gaza Strip, Al-Bireh: The Palestinian Center for Regional Studies (PCRS); interview with experts at Peace Now.
26Chazan, N. op. cit; Shtayyeh, M. op. cit. ; interviews with Peace Now.
27Kothari 2002 op. cit. p.10
28McDowall, D. (2003) Losing Ground: Israel, poverty and the Palestinians. Christian Aid.
29Salman, N. (2000) Urban development challenges in the Middle east Arab ountries: Concepts and spatial strategies with reference to land use and housing towards a sustainable city development: Bethlehem/Palestine, Stuttgart: Fakultat 1, Architektur und Stadtplanung Stadtebau-Institut, Universtaat Stuttgart SCBS 200, Statistical Abstract 2001, Syria’s Central Bureau of Statistics; field interviews.
30PASSIA op. cit. pp. 74-77.
31LAW 1998; interview with staff of Peace Now.
32JCSER (2001) Occupied Jerusalem, a new Soweto?, August, Jerusalem: Jerusalem Center for Social and Economic Rights; interview with senior representatives of PHC.
33McDowall, D. op. cit.
34Giacomelli, G. (2001) Question of the Violation of Human Rights in the Occupied Arab Territories, Including Palestine. Update to the mission report on Israel’s violations of human rights in the Palestinian territories since 1967. Report submitted by the Special Rapporteur to the Commission on Human Rights.
35United Nations (2000a) op. cit.
36Kothari (2002) op. cit.
37Kothari, ibid. p. 6
39Kothari, ibid. p. 7.
40iltnes, A. A. and Magembe, E. op. cit.
41McDowall, D. op. cit. p. 58
42World Bank (2002b) op. cit.
43World Bank (2002a) op. cit.
44World Bank (2002c) “One year of Intifada,” Jerusalem, February 2002, p.23, cited in Kothari op. cit. p.14
45Interview with staff at Gaza Municipality.
46McDowall, D. op. cit.
47McDowall, D. ibid.
48Development Studies Programme op. cit.
49Graham, S. op cit.
50Submission by the Executive Assistant to Israeli State Prosecutor Yehuda Shaefer, 17 January 2001, cited in Kothari op. cit. p. 9
51UNEP (2003) “Desk Study on the Environment in the Occupied Palestinian Territories” Note by the Executive Director. UNEP/GC.22/INF/31
52Interview with the deputy minister.
53Ruden A. op. cit.
54Interviews; MOLG staff.
55UNDP (2002) Arab Human Development Report, New York: United Nations Development Programme, Regional Bureau for Arab States, p.65
56Interview of executive staff, Gaza Municipality
57This is the ratio of the loan to the value of the house
58Interview, Arab Bank
59PHC (2002) “The Palestinian Housing Council: 10 years of achievements: 1992-2002”
61A special United Nations task force recently went through all present emergency issues in Palestine. Shelter and other questions related to housing were well documented but within the framework of UNRWA interventions and the housing needs in refugee camps; emergency shelter and housing issues in other areas in the West Bank and Gaza Strip were not dealt with. This shows the need for support to the sector.