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Arup in conjunction with an El Salvadoran NGO named REDES have developed a form of low-cost, seismically-resistant and sustainable housing that uses cane, timber and cement mortar. This paper presents an evaluation of existing low-cost housing in El Salvador, an assessment of the seismic risk within the country, and a description of the new design proposed and its seismic performance. The seismic design approach is discussed, and findings from full-scale cyclic in-plane testing of a wall panel, out-of-plane shake-table testing of a section of wall and bi-directional shake-table testing of a complete room are presented. The testing indicates that this form of technology has some ductility, exceeds the design capacity both in-plane and meets Life Safety performance for the El Salvadoran code design level, as well as the criteria based on the latest seismic hazard studies. The paper proposes that this form of housing can be used in highly seismic areas.