Saudi Arabia’s Affordable Housing Challenge 2020 - Navigating potential disconnect
Real estate development is inherently a local enterprise. Specific market dynamics in a submarket often determine how development projects get built. Policy objectives however, are determined at a national level. Therefore, when national policy concerns real estate development projects, there is the potential issue of a ‘’policy disconnect’’ between national objectives and local market dynamics. International best-practice has revealed that the best solution is a combination of local involvement and a multi-tiered policy structure.
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It is imperative for a successful policy objective that local and regional government agencies involved in housing and real estate development are consulted and invited to have input in the process. This ensures that all issues are considered and that where possible, local concerns are injected into the national policy objective discussion. It is similarly essential that any affordable housing policy is organized in a multi-tiered structure:
• In the first tier, Broad-based national level policy objectives serve as the ‘’guiding principles’’ and outline the vision, mission and objectives of the affordable housing program, as well as long-term expected results and the overall funding and budget structure for the affordable housing program.
• In the next tier, regional government bodies can be tasked with creating and tracking the program’s Key Performance Indicators (KPIs), housing typologies, assessing detailed citizen demand for housing, and monitoring the performance of local government bodies
• In the final tier, local government bodies can be tasked with implementing projects in-line with local market realities, managing private-sector involvement, selecting the appropriate development model typologies, and monitoring project execution
With this multi-tiered structure, national housing policy can be effectively executed on a local scale.
Read Part 2 of our Saudi Arabia Affordable Housing Challenge 2020 Research report here
For more details please contact Kaveh Samsamy, Partner, Development Management