The Propose Housing Strategy In Kuwait – Facts And Solutions:
Housing is a basic social requirement. At a basic level, it fulfils the shelter and the comfort requirements. At a societal level, housing clusters create neighborhoods that build up into communities. Housing is also the single biggest source of wealth for households in general. Little wonder then that government around the world attach top most priority to the citizen’s housing provisions. In Kuwait, the government has taken the noble initiative of providing housing to all citizens.
Housing provisions have fallen short in Kuwait over the last 20 years due to multiple factors. There are now 108,288 pending applications for housing and our projections show that the demand for housing will be 342,960 houses over the next 20 years. Such a massive expansion of housing supply calls for a sound and well thought out strategy that considers all aspects of the issue.
The housing strategy is one of the most complicated policy to formulate. It involves consideration of a number of related policies matters. Infrastructure such as road network, electricity, water, telecom, etc. are to be considered along with their funding sources. Legal framework, development control regulations, mortgage laws, roles and responsibilities of the public and private sectors, etc.
are some other considerations.
Key Elements and the Objectives of a Holistic Housing Strategy:
We have set the following objectives of the housing strategy that connects all the segments of the economy and leads to the development on various government and private institutions to make it sustainable:
1. With rapid increase in Kuwaiti population, the housing applications are increasing fast. The waiting period has increased to 18 years and it is likely to increase further. Thus, the key objective of the housing strategy is provide a housing solution to all Kuwaiti families over the next 20 years.
2. Examine the average house sizes in Kuwait and rationalize if these are not in line with the other countries.
3. Experience in several countries across the world shows that reliance on public sector alone cannot solve the social housing objectives. Thus, the second objective is to devise ways to involve private sector to develop social housing in order to speed up the housing supply.
4. With the involvement of the private sector, it is critical to ensure that companies do not indulge in manipulation of the market in any manner. Thus, the housing strategy must suggest all necessary steps to safeguard against this risk.
5. There are a number of subsidies attached to social housing program and overtime these subsidies are becoming unsustainable. Thus, the housing strategy must suggest methods to gradually reduce the subsidies burden and pass it on to households and private sector.
6. Develop energy management strategies to progressively reduce the energy consumptions in the economy.
7. To ensure the long-term sustainability of housing market, it is critical to develop domestic mortgage financing industry. Thus, the housing strategy must include a stage wise formula for the development of mortgage financing market in Kuwait.
8. The energy consumption is a big annual subsidy burden on the government and the housing strategy must suggest methods for energy management.
9. Increase in housing supply likely to have a multiplier effect on several sectors of the economy that will increase the requirement for commercial areas such as office space, retail space and industrial space and investment areas to house the expat population. Thus, a holistic plan needs to be created in order to realistically achieve the housing policy targets.
10. Identify multiple sources of funds for the government to finance the expansion in housing supply without putting undue burden on oil revenues.
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