UC Berkeley

Finding the means to scale up the provision of adequate and affordable housing is a global challenge. In Latin America, several countries have favored the implementation of a Direct Housing Subsidies (DHS) policy. The DHS policy has encouraged the involvement of private developers in housing provision, increasing housing construction and helping countries to reduce housing shortages. However, in the last decades, several issues related to design and construction quality of affordable housing developments built with DHS have been revealed. The inadequate location and excessive size of developments, in addition to the disconnect between the housing units’ design vs. resident needs, have affected the quality of life of subsidy beneficiaries. Thus, housing provision under the DHS policy has to address two main challenges. First, to increase housing construction in order to cut the remaining housing shortage. Second, to improve the quality of design and construction of affordable housing developments.

Literature dealing with issues on affordable housing provision in the region focuses on the macroeconomic aspects of the DHS policy. Studies emphasize the flow of resources and interactions among housing supply stakeholders so that low-income households have sufficient funds to purchase their house and private developers sufficient capital to invest in housing production. Despite the pivotal role that private developers and the construction industry play in housing supply, the potential benefits of improving industry efficiency in housing production have received little attention. In this aspect, the use of Lean Principles in the delivery of affordable housing may contribute to addressing housing constraints in terms of housing design and production efficiency.

This research explores the potential use of Lean in the delivery of affordable housing in Latin America by analyzing the DHS policy context and its implications for production systems. For this purpose, the research includes the analysis and comparison of three Case Studies of affordable housing provision in Latin America. The researcher defines a framework to analyze and compare the use of Lean Principles in the three Case Studies based on the fourteen Lean Principles described by Liker (2004). The researcher describes the approach for housing provision in each Case Study and provides insights about the outcomes of Lean implementations.

By analyzing and comparing the Case Studies the researcher reveals opportunities and challenges on the use of Lean Principles for affordable housing delivery under the DHS policy. The researcher found that the housing policy in which the production system takes place can help or hinder the implementation of Lean initiatives. It was also found that the excessive fragmentation of the construction industry and the increased number of stakeholders involved in the project delivery process are the main barriers for Lean implementation. In terms of construction cost and efficiency, the researcher found that Lean initiatives may drive value generation, cost savings, and reduction of delivery time to customers when implementing a house customization strategy. The research also shows that depending on the scale of the project, the building capacity of residents and the local economy can be incorporated into production systems design.

This research contributes to knowledge by 1) Providing a rational connection between issues in affordable housing provision in Latin American countries and the potential benefits of using Lean Principles. 2) Synthesizing literature on the use of Lean Principles and Practices for affordable housing. 3) Documenting Case Studies on the use of Lean Principles to deliver customized affordable housing. 4) Describing and proposing novel Information Technology tools to facilitate project planning and control. 5) Describing innovative approaches for affordable housing delivery from a Lean Perspective. 6) Revealing opportunities and challenges for implementing Lean in the context of Latin America and contributing to understanding how these can improve the efficiency of housing design and construction in the region. 7) Providing an analysis of how Lean Principles may be implemented in affordable housing in Latin America. 8) Proposing a new model of housing provision in Latin America that aims to combine the positive aspects of the Case Studies covered in this research.