Iraqi housing woes: government acts with 52 new cities

Shafaq News/ Iraq needs to build 3 to 3.5 million housing units to tackle the rapidly growing population, which increases by approximately 2-3% annually. The government is working on creating 52 new residential cities in central and southern governorates, offering various housing loans. These efforts are seen as crucial steps to address the challenges millions nationwide face. For about five years, authorities have been striving to solve the housing crisis by launching plans tailored to Iraq's population of over 43 million. They're also making accessing loans with affordable interest rates for citizens. The initiative targets the poor and middle class, who struggle to purchase houses due to sky-high prices caused by years of poor planning and widespread corruption. Further, the struggle to afford homes for the population has almost doubled since 2003, forcing millions tо settle down іn slums. According tо the Ministry оf Planning іn 2021, 3 million citizens live іn 4,000 slums and irregular settlements, with over 1,000 slums only іn the capital, Baghdad. Skyrocketing Prices Abu Hussein, 55, a renter in Babil governorate, highlights the struggle of most citizens who cannot buy houses. "Most citizens can't afford to buy homes, whether it's land plots, which have skyrocketed unnaturally, or residential complexes, whose prices have also inflated disproportionately," he told Shafaq News Agency. "Those with limited incomes, including the middle class, cannot purchase homes because of the inflated prices and unreasonable down payments, which can exceed 50 million dinars," Abu Hussein added. The Iraqi Ministry of Construction and Housing has announced plans to establish 52 new residential cities nationwide to address the housing crisis and high property prices. The ministry spokesperson, Istabraq Sabah, emphasizes that while the housing crisis won't be resolved quickly, the government's focus on new residential cities is a crucial step forward. 52 New Housing Developments "We've started with the Al-Jawahiri City project in Baghdad, laying its foundation stone on December 27, 2023. It's a sustainable city with over 30,000 housing units and comprehensive services, including education, industry, and healthcare. Prices will be somewhat subsidized, and the government won't tolerate speculation," Sabah told Shafaq News. "We've also begun the Ali al-Wardi City project. However, This isn't just in Baghdad, in Nineveh governorate, we've initiated the Al-Ghazlani Residential City project, aiming for 28,000 units," he added. "Similar projects are underway in Babil, Karbala, Najaf, Amarah, Al-Anbar, and Saladin, totaling around 52 new developments under the Ministry of Construction," revealed Sabah. Free Housing Quotas for the Poor "For the Al-Jawahiri City project (with 7,121 dunams,) the government has decided to provide 10,000 serviced residential plots of land to be distributed to citizens of different categories," explained Sabah. In the Al-Ghazlani project, the government has mandated that 15% of the 28,000 housing units be provided free. This means the investor or contractor will give 4,200 housing units for free, which will then be distributed to people experiencing poverty either at low cost or for free. "Similar agreements have been made for other residential cities, with negotiations for a percentage of free quotas. These could be land plots or different types of housing units," clarified Sabah. Discussing the impact of these initiatives, Sabah said, "These efforts will significantly reduce the housing crisis, with around 190,000 housing units planned in just a few cities." Apart from residential cities, the Housing Department also constructs housing complexes, with thousands of loans the Real Estate the Housing Fund disbursed monthly under the Ministry of Finance to purchase housing units. "These loans, along with the Housing Fund and complexes constructed by the Housing Department, are practical solutions that will help close Iraq's housing gap estimated at around 3 to 3.5 million units," according to the spokesperson. "Addressing this need for over 3 million housing units will take time, but the current government is taking tangible actions within its means," emphasized Sabah. Trading in Housing Market Economic expert Karim Al-Helou stresses the importance of "preventing people who already own a home from buying more properties just to trade them. This speculation only worsens the crisis." Speaking to Shafaq News Agency, Al-Helou explained that there are different ways to address the housing crisis. "For instance, in Germany, social housing assistance is designed to help households that would otherwise struggle to secure suitable accommodation in the housing market. It is affordable and can be rented or purchased through installments," he said. The German project includes, in particular, low-income households and families and other households with children, lone parents, pregnant women, the elderly, the disabled, the homeless and others in need. Al-Helou also suggested that lands for housing projects are often given free to investors. "Housing units should be allocated to those who don't own a home, and flipping them should be stopped to prevent price hikes due to speculation," he warned. Government Task Force for Housing Solutions In a routine session on March 7, 2023, the Iraqi Cabinet decided to form a high-level task force to tackle the country's housing crisis, focusing on assisting the poor and those with limited incomes. Led by the Minister of Construction, Housing, Municipalities, and Public Works, Bengen Rikani, the team also includes the Minister of Environment, the President of the Advisory Board, the Chairman of the National Investment Commission, the Mayor of Baghdad, the Governor of the relevant governorate, the Head of Legal Affairs at the Cabinet Secretariat, and the Director General of the Regional Development Department at the Ministry of Planning. According to a statement from the government's media office, the team's responsibilities include planning and overseeing the establishment of new cities, ensuring a balance between supporting housing projects for low-income groups, encouraging private sector involvement, and improving government services. "The team is also tasked with developing economic systems and quality standards suitable for the local context, regulating land distribution and investment, facilitating investment processes, proposing financing models, and enhancing governance for these cities," the official statement explained. Empowered by the Cabinet, the team can approve urban development plans, negotiate with developers and investors, and explore innovative partnerships with the private sector. Additionally, it will review project standards, assess investment requests, and form technical teams to oversee the development of new cities. New Government Departments for New Cities Iraqi Prime Minister Mohammed Shia al-Sudani's media office announced on April 13, 2023, the formation of new government departments dedicated to overseeing new cities. "These departments include municipal offices in Ali al-Wardi (Baghdad), Al-Salam (Najaf), Al-Mutanabi (Wasit), and New Diwaniyah (Diwaniyah)," a statement said. The Prime Minister stressed the importance of establishing fully equipped new cities with proper infrastructure and economic models, emphasizing the need to avoid distributing land without services, which could lead to flawed urban development.