HOUSING CLUSTER IN THE METROPOLITAN AREA OF THE CITY OF PUEBLA

Berenice DominguezBerenice Meneses

Sara NolascoMiguel Angel Lezama

Arturo VieyraJose Angel Raynal Gutiérrez

ABSTRACT

The Housing Industry in Puebla has not been an important actorin the development of the Housing Industry in Mexico, in spiteof its market size, potential, geographical location, benevolentweather and favorable resources. This essay pretends toanalyze the industry, its competitiveness, and the factors thatpromote or stager its evolution, in order to identify the requiredsteps to form a housing cluster in Puebla and to transform thelocal industry into a relevant competitor in Mexico.

HOUSING INDUSTRY IN LATIN AMERICA

• Housing deficit in the continent

is around 22.2 millions houses.

• Most countries have problems

with poor urban development.

• There is a big deficit (17.2%)

that is getting worst with

population growth (8.7%

projected from 2011 to 2020).

Projected Population Growth

Tho

usa

nd

so

f p

ers

on

s

HOUSING INDUSTRY IN LATIN AMERICAPoverty vs Households deficit

% h

ou

seh

old

sd

efic

it

% poor households

HOUSING INDUSTRY IN MEXICO

• Mexico has an estimated

deficit of 4.1 million homes

(17.3%).

• 3.4 million homes require

Government’s subsidies.

• National Housing Commission

(CONAVI) coordinates the

efforts between the various

financial institutions that

promote housing.29

26.1

17.3

8.1

4.1

3.4

2.9

8.8

9.2

4

0.7

Total Households

Not EAP

EAP

No Housing

Fund

HousingFund

NotenoughIncome Enough

Income

NeedsHome

HasHome

PotentialBank

BorrowerNeeds

Gov. Help

Total Households in millions

HOUSING INDUSTRY IN MEXICO

• National Housing Organisms (ONAVIs)

CONAVI

INFONAVIT

SHF

AHMABM

Sociedad Hipotecaria

Federal

AsociaciónHipotecariaMexicana

Asociaciónde Bancosde México

Fondo de la Vivienda de los Trabajadores

Afiliados al ISSSTE

Instituto del Fondo de la Vivienda para los

Trabajadores

HOUSING INDUSTRY IN MEXICO

• The Housing Industry is

consolidating, with 10 companies

owning 30.58% of the market in

2010 (compared with the 21.3%

market share from the 10 biggest

companies in the U.S. in 2010).

• Four of this 10 companies

compete in Puebla.

• Puebla’s housing companies do

not compete outside the state.

FIVE FORCES ANALYSIS - PUEBLA

Rivalry1. Low rivalry due to deficit.2. Prices tend to increase over time.3. Competition is for credits and

subsidies in low income houses.

Suppliers1. Land owners enforce terms and

prices.2. Construction suppliers have low

bargaining power.

Buyers1. Sophistication is increasing.2. Price sensible to credit capacity.3. Low fidelity to marks.4. Customization is valued.

Substitutes1. Self-construction limited by credit options.2. Mobile houses are not accepted.

Potential Entrants1. Land acquisition and financing is a barrier.2. Market is attractive for competitors from other

regions.3. Low start up costs.

VALUE CHAIN ANALYSIS

Licenses Procurement

Design and Projects

Marketing

Financial Planning, HR, other Adm.

Land Construction Sales Service

support activities

primary activities

VALUE CHAIN FLOW CHART

VentureCapitals

Land

Edification

and

Infrastructure

Sales

Service

Design Marketing

LicensesProcurement

Specializedcredit

institutionsONAVIs

CommunityAdministration

CLUSTER MAP

Housing Development Companies70 in CANADEVI

4 Large Companies from other states

Land Construction Sales & Mkt

Government

Urban Planning

Departments

Infrastructure

Ministers

Enviromental

Ministers

Universities

BUAP

ITESM

UPAEP

UDLAP

IBERO

UVM

ANAHUAC

Related Clusters

Contractors

Cement &

Concrete

Producers

Steel

Distributors

Other

Materials

Distributors

NotariesValuation

Agents

Real State

Brokers

Quality

Control Labs

Quality

SupervisorsDesign Firms

Advertising

Companies

Enviromental

Firms

Institutions for Collaboration

CANADEVIRelated Clusters

Assoc.

Equity Financing

Venture Capitals

Private Investors

Debt Financing

ONAVIs

“Bridge” Credits (SHF)

DIAMOND ANALYSIS

DIAMOND ANALYSIS – F.C.

• Fourth biggest Metropoli (2.5 million

people)

• Known as the “Gate to the

Southeast”

• State’s GNI is 3.6% of Mexico’s GNIand ranks 7th among states, but GNI

per capita ranks 25th.

• 31.1% of the population is below 14

years old.

• Ranks among the worst in water and

sewage services.

• Has an ancient tradition ofconstruction workers and enough

university level professionals.

DIAMOND ANALYSIS – F.S.R.

• Puebla has its own chapter in the National

Chamber of Housing Developers

(CANADEVI) with 70 members.

• CANADEVI represents the industry with the

ONAVIs and the Goverment, most of its

agenda is about defending the industry

interests and promoting the sustainable

development of urban areas.

• Four of the Six biggest housing companies

have operations in Puebla (Geo, Ara,

Homex and Sadasi).

DIAMOND ANALYSIS – D.C.

• The demand in the area of Puebla is

estimated in 150,000 houses among

private workers (INFONAVIT), and

around 300,000 including bureaucrats

and independent workers.

• Less than 10% of this demand is

covered each year. INFONAVIT is the

main ONAVI financing house sales.

• This demand grows at a rate of 4.5%

each year.

0

5,000

10,000

15,000

20,000

25,000

30,000

> 2 vsm 2 a 2.6

vsm

2.6 a 4

vsm

4 a 7 vsm 7 a 11 vsm > 11 vsm

Potential demand by income

(only Infonavit) 2011

Puebla Cuautlancingo San Andrés Cholula

San Pedro Cholula Amozoc

DIAMOND ANALYSIS – D.C.

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

13,000

14,000

15,000

2011201020092008200720062005200420032002200120001999199819971996199519941993199219911990

Cre

dits

Number of credits for New Houses in Puebla 1990-2011

INFONAVIT FOVISSSTE

SOFOLES BANCA

SHF SHF PROSAVI

CONAVI OTROS

DIAMOND ANALYSIS – D.C.

0

2

4

6

8

10

12

2011201020092008200720062005200420032002200120001999199819971996199519941993199219911990

Nu

mb

er

of

cre

dits

for

1,0

00 i

nh

ab

ita

nts

Credits for New Houses per capita (only Infonavit) 1990-2011

BAJA CALIFORNIA CHIHUAHUA

PUEBLA QUERETARO

SINALOA TAMAULIPAS

DIAMOND ANALYSIS – R.S.I.

• Strong suppliers chain that compete

fiercely.

• Puebla has chapters in most

professionals associations.

• Lacks from an Institute for Urban

Development Planning (IMPLAN).

DIAMOND ANALYSIS – G

• The metropolitan area expands in 38

municipalities from Puebla and

Tlaxcala with no coordination among

them.

• Land development is sometimes

limited by water and sewage

infrastructure.

• Land property is fragmented, most

owners are “ejidatarios”, with lots

below 3 acres.

DIAMOND ANALYSIS – CH

• Safer city.

• The 2nd best public university and

seven well recognized private

universities.

• Has all the ammenities of a big city.

• Good weather, no heating or air

conditioning systems required.

• Growing investments in the

automotive industry.

Drug-related murders

REFERENCESORGANISMOS NACIONALES QUE DEFINEN LA INDUSTRIA DE LA VIVIENDA

Comisión Nacional de Vivienda www.conavi.gob.mx

Instituto del Fondo Nacional de la Vivienda de los Trabajadores www.infonavit.gob.mx

Fondo de Vivienda de los Trabajadores del ISSSTE www.fovissste.gob.mx

Fondo Nacional de Habitaciones Populares (Fonhapo) http://fonhapo.gob.mx/

BANCOS E HIPOTECARIAS

Sociedad Hipotecaria Nacional www.shf.gob.mx

Asociación de Hipotecarias de México www.ahm.org.mx

Asociación de Bancos de México www.abm.org.mx

CAMARAS

CANADEVI. www.canadevi.org, www.canadevipuebla.com.mx

DESARROLLADOR SOCIAL DE VIVIENDA

Hábitat para la Humanidad México, A.C., www.habitatmexico.org/

INSTITUCIONES PARA LA COLABORACIÓN - IFC´s

Consejo Nacional de Evaluación de la Política de Desarrollo Social

http://web.coneval.gob.mx/Paginas/principal.aspx#.UHcnecWR-So

Organismos en gobiernos estatales. http://solucionesdevivienda.conavi.gob.mx/guiageneral/orevis

Banco Mundial. www.obrasweb.mx/vivienda/2012/10/04/el-banco-mundial-respalda-viviendas-ecologicas-

de-urbi

Consejo Nacional de Organismos Estatales de Vivienda, A.C.,www.conorevi.org.mx/default.aspx

Fideicomiso privado constituido por empresarios mexicanos.www.provivah.org/

Fundación HOGARES, www.fundacionhogares.org/quienes_somos/misionvision/

Provive, www.provive.mx/index.html

Compartamos Banco, www.compartamos.com/wps/portal/Compartamos

CONAVI concentra información del sector vivienda en su página: http://sniiv1.conavi.gob.mx/sniiv/cgi-

bin/sniiv/sniiv2.html

GRACIAS…