Public housing lacking but Sear Rithy could be first to shift the goalpost

Source: Phnom Penh Post

evicted-community
Evicted members of vulnerable communities, such as those from the Dey Krahorm community who lost their homes in 2009, are in need of social housing projects. Heng Chivoan

The government is dragging its feet when it comes to finalising the national policy on public housing, and while there is little consensus on a specific solution that would solve the dwelling needs of Cambodia’s poorest, there is no denying the array of challenges that lay ahead.
When compared to some of its Southeast Asian counterparts, public, affordable and social housing schemes remain non-existent in Cambodia.

Affordable or low-cost public housing was a key topic on the agenda of last week’s three-day City for All conference held in Phnom Penh, organised by the Czech development NGO People in Need (PIN).

The conference, which discussed the range of challenges facing Cambodia’s urbanisation, comes at a pivotal time given Phnom Penh’s rapid urbanisation and the increasing need to provide housing solutions for the nation’s poorest. The event was also held just a week after MLMUPC’S director of the housing foundation and housing loan department, Tep Kosal, conceded the government “can’t afford” to develop subsidised housing projects.

While Kosal assured headway was being made on the national public housing policy – which would provide a framework for the government to work with developer’s, investors and banks in providing affordable housing – a timeframe for its completion or implementation remains unclear.

The consensus on any policy governing the provision of affordable and adequate housing for low income families in Cambodia at the City for All conference was that it was in a development phase; however one speaker voiced his belief that the government should have well and truly made some material progress by now.

Tarek Genena, a merger and acquisition specialist at independent corporate advisory firm Delta Capital Partners, which specialises in the Greater-Mekong Sub-region (GMS), made some interesting and valid points on the challenges facing Cambodia’s housing needs.

“A lot of what is typically desired in other countries may not be typically desired here in Cambodia,” he said.

“People usually want to be on the highest floor, the penthouse, but in Cambodia it’s the bottom.”

Genena said there was an additional layer of difficulty when it came to the housing needs of the urban poor in Cambodia due to the fact they are located in high value landed areas.

“Because the urban centre is where a lot of the low income housing is being discussed, we have a unique problem here in that the poorest of the poor want to live on the most expensive land and so the land that they hope to redevelop into low-income housing is typically housing where you would have luxury housing,” he said.

“Now when you ask these families would you like to move 100 kilometres away, nobody wants to go 100 kilometres away. Finding a solution for this is a little bit of a challenge.”

Genena noted that Cambodian’s aversion to living in high floors was problematic as low-income housing is generally comprised of high density housing developments.

“So when we look at developing a model for Cambodia it’s hard to conceptualise going up more than five or six floors,” he said.

As the Cambodian government attempts to find a solution to the shortage of low-cost housing in the country, Genena said two persistent issues that will need to be overcome involve making a deal with the government on land and the cost of funding.

“The other bigger challenge in this housing model for low-income people is getting 1,500 families to speak with one voice,” he added.

“That is a big challenge because you cannot develop low-income housing for the poor if there are 100 different opinions on what the housing should look like or who gets what or where they should be.”

In highlighting some of the public housing developments around the world, Genena pointed to the Pune Nirvana Hills Slum Rehabilitation project in India which improved the living standards of 13,500 people who were displaced, poor and vulnerable.

“I would say that this was a successful project. It brought together both government and development banks as well as some private financing sources like Deutsche Bank and they made it work,” he said.

While that specific project adopted a private development model, Genena believes the most likely model for developing a social housing scheme in Cambodia will be the adoption of a land trust model which involves a private, non-profit entity acquiring and holding land for the purpose of providing secure and affordable access to land and housing.

“One of the benefits of the land trust model is the community really has more control of its destiny,” he said.

Furthermore, Genena said more clarification was needed on the definitions and classifications of Cambodia’s poor.

“Defining who is poor, who is vulnerable and what constitutes low income versus low capacity. All of those things need to be more realistically analysed so we can determine where resources are allocated to reach the most vulnerable,” he said.

“This city needs creative solutions to problems and it needs to have not only a low income housing policy at the government level but it needs to have a private developer model and the private developers are moving into this space.”

One such private developer that looks primed to make some headway on public housing in Cambodia is Sear Rithy, chairman of Worldbridge Group. The firm, together with a Singapore-based construction company, are attempting to spearhead a $100 million public housing project which, if and when it comes to fruition, will be the first affordable housing scheme in Cambodia.

While the joint venture has completed its master plan, Rithy is currently waiting for the government to support the project and finalise the national public housing policy before moving ahead.

“I am looking for the incentives from the government,” he told Post Property late last week.

“I need from them the reduction of property tax, the power, road infrastructure and the water supply. If I don’t get these incentives it becomes my cost.”

The government’s failure to provide any assistance will be the nail in the coffin for Rithy’s plans to develop a housing project for households earning $500 and under a month.

“If I have to pay for all of this, then the affordable homes will become higher priced.”

Rithy admits he has been unsuccessful in his attempts thus far to talk about his project with the Ministry of Land Management Urban Planning and Construction (MLMUPC), but has discussed the project with the Ministry of Economy and Finance.

“The Ministry of Finance are very supportive,” he said.

With the public housing project having been in the works for six years now, Rithy says he cannot continue to wait around for the government’s blessing.

“If this December, the government still does not confirm, I will go ahead myself. We cannot wait anymore. I can assure you that by the first quarter of 2017, we will go ahead. But from what I’ve been told, the government will support it.”

A spokesperson for the MLMUPC declined to comment on the national housing policy’s anticipated completion timeframe, instead asking for Post Property’s request to be put in writing in the form of a letter.

However Tep Kosal confirmed there is currently no deadline for the completion of the policy.

Public housing lacking but Sear Rithy could be first to shift the goalpost

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