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Government eyeing low-cost housing

Garment workers sit outside their rented rooms in Phnom Penh. The government yesterday put forward ambitious plans to meet the demand for low-income housing as urban populations skyrocket.
Garment workers sit outside their rented rooms in Phnom Penh. The government yesterday put forward ambitious plans to meet the demand for low-income housing as urban populations skyrocket. Pha Lina

Government eyeing low-cost housing

An estimated 7.9 million people in Cambodia will be living in urban areas by 2030, up from 4.5 million in 2014, with officials at a forum on national housing yesterday announcing ambitious plans to meet the demand for some 55,000 affordable new homes each year.

In 2014, Cambodia adopted a National Housing Policy to promote housing development, and it’s now drafting a policy on affordable housing, which it hopes to adopt by the end of this year, though some observers raised concerns about how those plans will ultimately play out.

“The Ministry of Land Management is paying more attention to seek ways for providing affordable housing for low-income people across the country to have housing with comfort, dignity and safety,” Land Management Minister Chea Sophara said yesterday.

He added that the ministry is working with the Ministry of Economy and Finance to “establish affordable housing prices and incentives on tax and regulation” to encourage the private sector to shoulder the task.

By 2030, Sophara predicted, an estimated 800,000 urban homes will need to be added to the 2015 housing stock to meet the demand of an expected national population of 19 million.

“For Cambodian citizens to own a house, they need to spend a lot of years working,” said Ung Luyna, a member of the Supreme National Economic Council and deputy director of the Ministry of Economy and Finance’s General Department of Budget.

Affordable housing pertains to low- and middle-income families who wish to own a home, while “social housing” refers to rentals subsidised by the government.

As currently planned, the policy will target people whose salary ranges from $200 to $400 per month, Luyna said.

Prospective homeowners would need to prove that they don’t already own a home, or that their home is affected by a public investment project or is dangerous to live in. They must also have a full-time job.

Land Management Minister Chea Sophara speaks at a housing forum yesterday in Phnom Penh.
Land Management Minister Chea Sophara speaks at a housing forum yesterday in Phnom Penh. Heng Chivoan

Whether clients would apply through the government or through private companies has yet to be determined. Tax incentives would be available for companies willing to work on any housing project with units priced from $15,000 to $30,000, he said.

Luyna added that an inter-ministerial group would be established to monitor developments, with a mechanism in place for people to file complaints, he added.

Soeung Saran, executive director of housing rights NGO Sahmakum Teang Tnaut, praised the plan “if it can be implemented accordingly”. “But I think it only benefits the middle class,” he said, noting that to get a loan from a financing agency, families need to have some sort of assets to qualify.

Saran said the government also needs to be careful in making sure it only selects trusted companies to carry out the affordable housing projects.

According to Ly Chanphakdey, director of the Department of Regulation and Housing Cooperation at the Ministry of Land Management, the government already has two ongoing affordable housing projects in Kandal under the National Housing Policy.

One of them consists of 2,297 flats and is being developed by Worldbridge Homes Co Ltd, while the second 5,340-unit project is being carried out by B & BM Development.

For each project, units would sell for less than $30,000 when completed, with owners being offered reduced interest rates, he added.

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