Iraq needs billions to meet mass housing shortage
After another sleepless night drenched by winter rains, Nahla Kadhim spent the morning scooping water off the floor of her two room shack in the Iraqi capital's northeastern slum of Sadr City. The makeshift hovel is made of bricks and cinder blocks, topped with a piece of corrugated metal. A tangle of electricity wires hangs on the walls. The windows have no glass, and the kitchen has no door. It has no running water or a sewage system. Kadhim, her husband, and their 10 children are squatters. They are among two million Iraqis who were displaced during the highpoint of Iraq's deadly sectarian strife in 2006 and 2007. Around 600,000 people were driven out of their homes by violence or fear in Baghdad alone, the United Nations says. Some of those displaced found shelter with relatives. Wealthier ones rented or bought new homes. But Kadhim's Shi'ite family had little money when they fled from a Sunni area north of the capital to the sprawling Baghdad slum of Sadr City. In the absence of affordable public housing, they squatted on public land and built their ramshackle house.
"I swear, last night we had to sleep standing up (because the floors were so wet)," said Kadhim, 50.
"We're tired. We're poor. We need God's help and the government's help," she said. "I just want them to pay attention to us and our children and find us a place to live."
As it emerges from the sectarian warfare triggered after the 2003 US led invasion, and the three decades of economic decline under Saddam Hussein's dictatorship that preceded it, Iraq faces an acute housing shortage. The government's five year plan says two million new homes are required and some experts put the shortfall at three million. Billions of dollars are needed to build them and despite its vast oil wealth, Iraq has nowhere near enough funds. Those numbers are bound to rise; the national population of around 30 million is growing by about three percent a year, said Mahdi al Alak, head of statistics at the Ministry of Planning.
"This is a human tragedy which should be resolved," said Salam al Khafaji, deputy minister of migration and displacement, adding the exact number of displaced who ended up as squatters in someone else's home or on public lands was hard to gauge.
Iraq hoped for a tide of foreign investment as the bloodshed subsided in the last two years, but bureaucracy, red tape and outdated land ownership laws have put off investors. Continuing violence as a stubborn Sunni Islamist insurgency keeps up a steady stream of bombings and shootings is also a deterrent to foreign investors.
The government has offered many projects for investment. The National Investment Commission, or NIC, in early 2010 said it was looking for bidders to build one million new housing units, valued at an average of $50,000 each, for a total value of $50bn. It then considered raising its target to two million houses due to what it said was a high level of interest from foreign companies. But despite much public fanfare and the grandiose aspirations, progress on the ground has been thin.
Amman based Iraqi firm Amwaj International unveiled a $238mn housing and hotel project in the heart of Baghdad last May during a high profile ceremony attended by Prime Minister Nuri al Maliki, but construction has yet to start. In November, the NIC said it signed a memorandum of understanding with a South Korean group to build 500,000 housing units. The Korean companies, however, said they had done nothing of the sort. Emirati companies have won contracts to build homes in Baghdad and in southern provinces. Iraq awarded a $30bn housing project to the Abu Dhabi based Bloom company to build a whole new town near Kerbala in southern Iraq. That project has been on the drawing board since 2009.
The companies say legal snags are the problem.
Iraq's parliament in 2009 passed laws allowing foreign investors to buy land, a measure seen as vital to ensuring that the country could meet its housing needs. But the law did not set out how to determine what price to put on public lands sold or leased to private investors.
"The investor can't start digging or put one brick on the ground if the land is not registered in his name," an Amwaj executive said on condition of not being identified.
Officials said regulations for public land sales and rentals will be issued by the Iraqi cabinet soon. Iraq finally received a new government on December 21 after nine months of political bickering and factional horse trading after an election.
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