The TECHO program provides basic, pre-fabricated, transitional houses to extremely poor families living in informal settlements (slums) in Latin America regardless of whether or not they own the land on which they live. The aim of this program is to increase the well-being of these families. The program was started 19 years ago in Chile and now works in 19 Latin American countries. This NGO has built almost 100,000 houses with the help of an army of volunteers. Every year, more than 30,000 youths throughout Latin America volunteer to work with TECHO. We evaluate the program in three Latin American countries: El Salvador, Uruguay, and Mexico.
TECHO targets the poorest informal settlements and, within these settlements, households that are lodged in very substandard dwellings. TECHO serves "irregular settlements," which are defined as communities in which a majority of the families are living on plots of land that they do not own. These settlements are plagued by a host of problems, including insufficient access to basic utilities (water, electricity and sanitation), significant levels of soil and water contamination, and overcrowding. The typical housing units in these informal settlements are no better than the surrounding dwellings, as they are rudimentary units constructed from discarded materials such as cardboard, tin and plastic, have dirt floors and lack connections to basic utilities such as water supply and sewerage systems.
The TECHO housing units are 18 square meters (6m by 3m) in size. The walls are made of pre-fabricated, insulated pinewood or aluminum panels, and the roofs are made of tin to keep occupants warm and protect them from humidity, insects, and rain. Floors are built on top of 15 stacks that raise them up to between 30 and 80 centimeters of the ground in order to reduce dampness and protect occupants from floods and infestations. Although these houses are a major improvement over the recipients' previous dwellings, the amenities that they offer are limited, as they do not include a bathroom or kitchen or plumbing, drinking water hook-ups or gas connections. The houses are designed to be low in cost and easy to construct; they can be placed on a plot of land next to an existing house or as a new unit
that replaces the existing one. Units are modular and portable, can be built with simple tools, and are set up by volunteers working in squads of from 4 to 8 members. The cost of a TECHO house is less than US$1,000 -- with the bulk of the cost being accounted for by the acquisition, storage and transportation of the building materials, since there are essentially no labor costs. The beneficiary family contributes 10% of that amount (around US$100). In El Salvador, US$100 is approximately equivalent to 3.3 months' per capita baseline earnings, while in Mexico and Uruguay, it is roughly equivalent to 1.6 and 1.4 months, respectively. Importantly, added to the fact that the TECHO house is heavily subsidized, there are no exact substitutes of TECHO houses on the market that households could be investing in incrementally. TECHO do not offer the house in the market and only offer it to a group of selected slum dwellers that are in the poorest conditions within slums. Hence, even if households did not face credit constrains to get access to housing improvements, they could not get access to TECHO houses neither in the form nor at the price offered by TECHO. This consideration is relevant for interpreting the results of our study. Finally, the houses are also easy to disassemble and move to a new location. It is important for the houses to be movable because most of the families in these makeshift settlements do not have formal title to the land that they live on. TECHO managers were concerned that upgrading the value of the land by building permanent housing might induce both public and private owners to try to force residents to move in order to reclaim the improved land. However, making the housing mobile does away with that incentive.