September 13, 2016

Low Cost Housing—Equitable and Transparent Policies

Pic3 72The biggest & most densely populated commercial city of Myanmar, Yangon, was just a mere 80 square kilometers wide in 1988 and by 2014, the total area reached 306 square kilometers. Around 6 million people are now living in Yangon. Now Yangon faces high costs of living, very high demand of low cost living spaces and the plight of the homeless population as well as several other social issues. Ever since 1988, migrant workers from ethnic and up country have been steadily streaming into Yangon over the years due to availability of employment, raising the population growth rate from 0.7 to 2.3 percent. With current growth rate, the people crammed into this city will reach 12 million by 2040. By then, Yangon must transform into a mega city to meet the inevitable demands brought on by essential modern needs from local people as well as foreign investors such as office spaces, adequate clean water supply, uninterrupted electricity, efficient sewage and drainage systems, affordable housing, pleasant recreation places & gardens and smooth transportation. For that, Yangon needs now to address its current problems and must plan & solve them very quickly in advance. For migrant workers, renting a place by themselves is impossible. Some share a flat or a house with co-tenants of multiple families while some rent what can only be described as “a space for putting your back lying during the night” in makeshift hostels. The life in a hostel is depressing and troublesome. It is very costly to live in Yangon, many migrant workers said. The information from several sources mentions that at least 25 to 30 percent of Yangon’s population are squatters. As most of the squatters are on government owned lands, they were often forcibly evicted out but every attempt simply served to chase them away to another squatter area. The so called affordable housing projects, meant to give homes to squatters and low income poor families, are given rights of purchase via lucky draws but priced beyond the reach of the middle class in Yangon with apartments going for more than Ks 10 Millions which leaves only the wealthy and property agents to buy out the apartments. Unless practical & affordable arrangements (such as 10 to 20 years soft instalments) are made for the low income homeless citizens, it will never work out and all low cost apartments will just go into the hands of the cronies. There is another solution that was made itself known when
criticisms erupted on the high price point of the affordable
housing projects; rental housing projects. A total of 12.534 acres were reserved by the Yangon Regional government with a budget of Ks 20 billion. The rental rates were targeted to be at Ks 30,000 to 50,000 per month but have yet to be approved by the government.
There has been several ongoing low cost housing projects in Yangon, Mandalay & other cities in all overthe country by particularly Ministry of Construction and Regional & State governments. “The Mirror Daily” Myanmar language newspaper mentioned in its 14th August 2016 issue that 32 blocks of 4 storey buildings, with a total of 864 apartments are nearing completion. Those low cost apartments will be sold to the low income (basic level communities & families) according to a senior official from Urban & Housing Development Department. Low income communities are eagerly awaiting when and how the government will sell in accordance with which pre-subscribed conditions, rules, regulations, limitations, standing orders etc. according to the “The Mirror Daily” Myanmar language newspaper.
One, therefore, wonders what types of regulations, rules & conditions will be applied to the buyers of the apartments of “low cost housing project” which are being impemented in several parts of Mynamar. In October 2015 Myanmar Times reported that Ynagon need 75,000 new apartments each year. That figure is very likely to be real, given the fact that 300,000 people migrate to Yangon annually and existing population who have been renting houses & appartments will surely aspire to own an apartment for their families. In addition young people who are definitey the key work force& prime movers of the economy, manufacturing & service industries both in public and private sectors will need proper homes particularly having been married and have started the family life. Due to skyrocketing rent prices of houses & apartments in Yangon and other big cities, families are forced to move to more and more remote sub-urban quarters where rents are less costly than places which are closer to city center, work sites, factories,  & offices. Studies revealed that almost 30 to 40% of monthly salaries have to be used for renting an apartment for the middle income young working people. All men in the street & working people are expecting a proper single government policy and transparent regulations covering the whole country for the hosuing development sector. The framework for the policies have to incorporate the following points but not limited to :-
1.    To reduce the stress and burden of the cost of housing for all families
2.    To subsidize the development of housing by only state/government budget
3.    To include all modern utilities, social, economic, educational, transport, communication, emergency relief, health, recreational facilities in all low cost housing clusters
4.    To give priority to sell to the families who do not own a house or apartment (the payments terms should be very flexible for instance 10 to 20 years, so that it will encourage the buyers to work hard to pay monthly instalment without fail)
5.    To make government owned apartments available for renting, to the families or government/private sector workers, traders, businessmen, students etc. in the cities and towns where they are assigned and/or studying/working/making business etc.
6.    To ban rich people who have already owned houses and apartments to buy the low cost housing apartments with intentions to make profit in future by price speculating (The penalty of such people if found guilty must be very high)
Reducing the stress on public housing is an essential component of the current government policy of “facing towards the actual needs of the people”. Housing is the single most important social need for everybody. Therefore the housing policy is on the highest list of government’s policy in all countries of the world. Increase world population and urbanization are putting pressure to add more and more housing projects in the world including Myanmar. Although a small island nation, Singapore housing programme has been exemplary for not only Asian countries but also many countries in the world. From a backwater fishing and petty trading island in 1950s & early 1960s, the island has grown to one of the most advanced and efficient economy in Asia. Infrastructure has been made the most advanced along with public housing, communication, shipping, banking and trading in parallel with free port policy. Housing Development Board (HDB) of Singapore is the focal government agency which has developed, managed and implemented what is now one of the most successful public housing programmes in the world. Between 1960 and 1965, the HDB built 54,430 housing units. Due to land constraints, high-rise and high-density flats were chosen. By 1965, HDB was able to overcome the worst of the housing shortage by providing low-cost housing to the lower-income group within the planned period of five years. Several reasons contributed to the success of the HDB. Firstly, the HDB received very strong support from the government, which allocated a large amount of funds to public housing. The HDB was also equipped with legal powers such as the power to resettle squatters. Since the ultimate objective is for every family to own an apartment, no one is allowed to own additional apartment. However, if one person becomes rich and wants to buy a more expensive condominium, he is allowed to do so as long as he returns his previous apartment to HDB or sells back to another private person who still needs an apartment. Another interesting thing is the link of marriage register office and HDB. All newly wedded young couples are entitled to apply for an HDB apartment and HDB will allocate the applicants in months not years, since many more HDB apartments are being built or old apartments vacated by people who move to higher end residences such as condominiums. It is an excellent policy as far as universal public housing scheme is concerned in a country. The most important matter to learn is that HDB flats are funded, built and totally owned by the government and private construction companies participated as construction contractors only not as developers who might invest and speculate the prices of apartments as has been happening in many countries including Myanmar. Therefore the government needs to allocate more budget for low cost housing projects in all over the country.
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