Addressing the shortage of affordable housing in Oman: introductory remarks

Transcription

1 Affordable Housing Institute Addressing the shortage of affordable housing in Oman: introductory remarks Maysa Sabah Shocair Managing Director, GCC Region Affordable Housing Institute

2 Why AHI? 2 14-May-15

3 AHI s work in the region (examples) Mohammed Bin Rashid Housing Establishment Abu Dhabi Housing Authority Saudi Real Estate Development Fund Saudi Holding Company Book: Housing Markets and Policy Design in the Gulf Region Long-term affordable housing strategy. PPP for affordable housing development: policy options/ strategy. Assessment Benchmarking Modeling Business plan Business and financial product strategy Assessment of development opportunities in four countries Two day housing workshop at Cambridge University Benchmarking against Morocco.

4 What is affordable housing? Housing is usually considered affordable if it costs less than 30% of the gross household income of low and moderate income households.

5 Cash and non-cash housing subsidies in the GCC Non-cash subsidies Cash subsidies Loans Grants Land Utilities Units Purchase Build Repair Purchase Build Repair Oman x x x x x x x UAE x x x x x x x x x Bahrain x x x x x Kuwait x x x x x x x x KSA x x x x x x x x Qatar x x x x x Source: AHI Research

6 Long waiting lists Waiting Period/lists for government housing services in the GCC Bahrain 55,000 on Ministry of Housing's waiting list (2014). Dubai 11,000 on Mohamad Bin Rashid Housing Establishment's waiting list (2014). Kuwait Up to 20 years for land or house (2014). Oman 56,000 on Ministry of Housing's waiting list for Housing Assistance Program (2012). 26,000 on Ministry of Housing's waiting list for Housing Loan Program (2012). Saudi Arabia Around 15 years for land and 10+ years for a government loan (2013). Source: AHI Research

7 Housing for a young population

8 Problematic land allocation program Limited plots Granted un-serviced land Sale of granted plots Uncontrolled quality Inexperienced developers Incomplete neighborhoods Inefficient use of infrastructure Sprawl

9 Strong preference for villas Privacy Tranquility Size Outdoor areas Own and occupy for life Expandability Housing domestic help separately Social status Distrust shared space Land grants

10 Health of our cities depends on diversifying beyond villas Diverse housing types Lower average cost More affordable housing Social cohesion Healthier cities

11 National Housing Strategy integrated into National Spatial Strategy ONSS Project: 1. Highly significant plans and reports; 2. Design and implementation of a national GIS-based planning information system; 3. Introduction of new land use planning rules and processes; 4. Design and initiation of capacity building programs.

12 Public-private partnerships on supply-side Housing production: supply and demand value chains Supply Side Land Acquisition Trunk Infrastructure Site Layout and Configuration Development Site Infrastructure Construction Development Financing Sales Off-take Operations Demand Side Feasibility of Target Buyers Applicants Qualifications Underwriting Pre-sales Takeout Finance in Plane Construction Starts Completion Closing of Sales Funding of Buyer Loans Sales/Off-take Mortgage Financing Servicing of Loans Enforcement Demand Side

13 Main approaches to PPPs on the supply side 1 (mandate based) 2 (incentive based) 3 (incentive based) Inclusionary zoning Turnkey building Co-development Main goal Mandate mixing Subsidize build cost Enable entry Government role Oversee compliance Reduce risk, cost Set up partnership Main challenge Political resistance Land supply Complex structure Main benefit Not using public land Outsource risk-taking New players enter Examples US: Chapter 40B UK: Section 106 Ireland: Part V Abu Dhabi: Middle-income housing policy Turkey: TOKI US: CDCs Bahrain: PPP US: HOPE VI Turkey: TOKI Morocco: Al Omrane

14 Public-private partnerships on demand-side Housing production: supply and demand value chains Supply Side Land Acquisition Trunk Infrastructure Site Layout and Configuration Development Site Infrastructure Construction Development Financing Sales Off-take Operations Demand Side Feasibility of Target Buyers Applicants Qualifications Underwriting Pre-sales Takeout Finance in Plane Construction Starts Completion Closing of Sales Funding of Buyer Loans Sales off-take Mortgage Financing Servicing of loans Enforcement Demand Side

15 Main approaches to PPPs on the demand side Outsourcing Saving scheme Credit enhancement Main goal Leverage private capital Reduce dependency Improve funding access Government role Reduce risk Oversee, contribute Reduce risk Main challenge Agreements with banks Building saving culture Default Main benefit Serve more people Reduce reliance on gov. Leverage private capital Examples Dubai: Yusor Sharjah Bahrain Singapore: provident fund Dubai: Mathkhor US Morocco: FOGARIM

16 Offering choices and incentives If I had asked customers what they wanted, they would have told me, ʹA faster horse.ʹ Henry Ford A lot of times, people donʹt know what they want until you show it to them. Steve Jobs, Apple

17 Thank you.