Tag Archives: Ecosystems

Moving Forward: Alternative Forms of Subsidy in the GCC

By: Maysa Sabah Shocair, Managing Director, GCC Region


All GCC countries use a combination of non-cash and cash housing finance subsidies. Non-cash subsidies include: (i) making land available for housing either through land grants or directly producing residential projects on allocated land; (ii) housing grants to needy groups including families with limited income, families with special needs, and divorced, widowed, or unmarried women, and (iii) subsidizing water and electricity. On the other hand, cash subsidies include: (i) grants to purchase, build, repair, or expand a house given to those with limited income; (ii) interest free housing loans to buy, build, repair, or expand a house, ranging in value from USD 52,000 in Oman to USD 350,000 in Qatar with a repayment period ranging from 25 years in all GCC countries, with the exception of Qatar, which offers loans up to 35 years.


However these subsidy programs are not getting people into housing fast enough, resulting in long waiting periods and extensive waiting lists for government housing services. Indeed, government subsidy programs in most GCC countries are facing many challenges, including: (i) increased demand for housing due to local population growth; (ii) rising cost of housing, mainly due to rising cost of land reflecting the increased demand for housing from the growing expatriate population; (iii) lack of coordination between different government entities which is negatively impacting housing supply and affordability; (iv) complexities and red-tape involved in the present subsidy programs; (v) lack of clear eligibility and priority rules leading to friction (when some are denied and others helped), game playing (where some maneuver themselves to become eligible), and political subterfuge (where those who should not be eligible use personal connections and favors to try to wriggle into eligibility); and (vi) specific challenges to each program to be discussed in detail in another blog.

housing crisis 

Moreover, these subsidy programs heavily promote home ownership at the expense of rental housing. Even in countries such as Bahrain and Kuwait, which provide rental apartments, governments are unintentionally stigmatizing rental housing by offering rental assistance to the “least fortunate”, such as those who have been on waiting lists for more than 5 years, divorced or widowed women, or to households with very low incomes. However, quality affordable rental housing is an integral part of a well-diversified housing stock because it better serves many households, including: (i) young couples just starting out, who need a place of their own but lack the assets to buy a house and may not know how large their family will be; (ii) singles who wish to live independently but may be married in the future; and (iii) older couples whose children are grown and who no longer want the responsibility of maintaining and improving their home.


housing 2

housing brochure

Villa housing units

Furthermore, housing authorities are advocating living in villas by predominantly building villas, allocating apartments, in the rare event that they are built to the “least fortunate”, granting land to build villas, and mandating large residential plots. Although the desire for a villa is universal, the health of our cities and hence of our economies and nations, depends on diversifying beyond villa, mainly because (i) villas are ecologically stressful, adding to our rate of land and energy consumption; (ii) higher density resulting from greater diversity of housing types can lower average costs and incentivize developers to enter the affordable housing market; and (iii) diversifying housing types enhances social cohesion by allowing people in different stages of their lives to move to larger or smaller homes without leaving their community.

Governmental resources must be made to go farther through reforming the current subsidy programs and exploring new ones. Reforming current subsidy programs may include initiatives such as: (i) revising eligibility and priority rules, which need to be available only to those who cannot succeed in the open market, based on principles of ‘common sense equity’, clearly state who is in-or-out, and self-adjust with changing economic conditions; (ii) reinventing the land grant system. For example it could be a grant of a plot of land sufficient to hold a villa within a preapproved subdivision, to be built by a private developer according to specifications, with a loan on favorable terms. People who own a plot could have the option to turn it back for cash or credit.

sheik zayed apartment sheik zayed housing

Products of the Sheik Zayed housing program

Governments can promote rental housing through programs, such as: (i) a supply-side program, probably through non-profits or religious associations.  For example, Waqf land is grossly underused in the GCC and could be the source of land for rental or charitable housing; (ii) a demand-side housing subsidy that eligible households may use to pay part of their rent on accommodation found in the marketplace.

Moreover, governments can encourage diversifying beyond the villa, through strategies such as: (i) redefining the subsidy. Instead of asking “would you like a villa or an apartment?” ask “You have this amount of subsidy, how would you like to spend it?” Those who spend less can reserve the money for future use, or receive cash rebates. In other markets, when faced with such a choice, some voluntarily consume less; (ii) letting people move into apartments via rent-to-own and start enjoying their new home while saving to buy it. This will help those not in a position to purchase a home to do so and build equity; and (iii) letting people stay on a waiting list for a villa, while moving them into an attractive apartment now.

Other tools that governments may want to consider include non-cash tools, such as: (i) limiting density, which creates a renewable and monetizable commodity that government or the private sector can sell or trade; (ii) providing trunk and on-site infrastructure, a tool to improve the quality or affordability of housing and offer significant value to the developer or owner; (iii) assuming risk or enhancing credit to encourage private banks to participate. Governments can take the credit risk associated with lending to affordable households or properties through purchasing loans originated by others, insuring loans originated through approved intermediaries, and guaranteeing a government or private sector entity; and (iv) exempting eligible projects from government imposed fees to reduce overall costs and increase affordability.


Cash tools include: (i) soft debt – a government entity lends money to a developer or property owner, and takes a subordinate lien position to other lenders to encourage the development of new affordable housing; (ii) hard equity – to encourage the development of affordable housing, the government gains an ownership stake in the property, or the organization developer/ operator and seeks an economic return on its capital; (iii) operating subsidythis can be on the supply-side when given to property owners who then charge residents low rents or on the demand-side when given directly to householders or residents to help defray their costs; and (iv) re-directive subsidy – government can capture revenue from another income stream and direct it to housing, through, for example, payroll deductions, ore revenues from transportation or utilities. 


In other nations that we have looked at successful policy instruments have evolved during an extended period of trial and error that led to the evolution of a mixed system of low-income housing policy with a much diminished national role in program design and outcomes, an ascendant role for local governments and the private sector, and the opportunity for the recipients of housing vouchers to scout the private market for the best deal they can find. The permanent nature of housing inspires caution on the part of policymakers.  Homes can be the physical and enduring expression of policy, and as a result, every city in the world has some properties that are the reminder of a previous experiment that either failed or outlived its utility. Thus, giving stakeholders clear information and access to technical expertise can help them proceed with confidence.

oman housing 1 oman housing 3 oman housing 6

Housing in Oman

Housing and Public Space, Part 2

By: Siddharth Nadkarny, AHI Associate

[Continued from last week’s Part 1.]   

By the 1950s, as Mumbai grew northwards, the gaothan was enveloped by ‘urban’ development – four to five storey tall multifamily residential buildings. Formalized codes regulating floor area ratios made it easier to build more than what already existed on the small plots in the gaothan. For a neighborhood with a growing population, this should have translated into larger houses when the next round of rebuilding took place. However, the introduction of better public infrastructure around the gaothan – roads, schools, open spaces, piped water and sewerage connections – helped keep the balance between the private home and public space. While larger families had to be accommodated in shared bedrooms, or smaller subdivided areas within the house, the access to a larger quantum of public space and infrastructure maintained or increased living standards. This is evident in the size and type of built form staying fairly constant in the gaothan right up to the 1990s.

But in the 1990s, this seemingly happy balance begins to change. The usual allocation of space for public activities during each phase of rebuilding houses comes to a stop. By the early 2000s, the public space network is severely reduced.

So what was Lorenz’s butterfly that changed the ecosystem here? The slow reaction of public infrastructure to changes in the population of the neighborhood. It was actually the result of a flying elephant – changes in economic policies at the national level that brought in more investment in housing at the local level. Pressure to allow more area per plot resulted in changes to FAR codes all over the city. In the neighborhood of the gaothan, four and five storied apartment buildings transformed into nine stories. The resultant higher population led to a competition for public infrastructure and the emergence of privatized open spaces, controlled by citizen groups that fiercely protect their turfs.

The change in FAR codes made it easier and more profitable to redevelop small plots within the gaothan as well. Combine this with the reduced availability of urban infrastructure, and the balance in the ecosystem shifts to favor a more conventional land use-ownership relation. Houses that got rebuilt in the gaothan in this phase did not look anything like before.

New buildings – Note the “pitched roof” in the first image, the fig leaf for contextual design

The guarding of private resources manifested in seemingly mundane devices like water pressure boosters and electric generators that prioritized the private at the expense of the public. The infrastructure coming into the gaothan did not change much, and the protection of private resources reduced its share amongst others who did not get a booster or a genset. This started a domino effect with most houses being rebuilt along the same lines and more damagingly, resulting in the loss of large parts of the public space network. Perhaps a proportionate augmentation of public infrastructure to maintain the balance would have prevented this transformation.

Parts of the network lost to the public

Severely reduced public space network

What happened to community capital exchange? Somewhere down the line, the unsaid negotiations that protected public space didn’t happen anymore. This could be a chicken-and-egg kind of situation, but my sense is that the shift in private v/s public came first, and that broke down the negotiations.

This point is clear by talking to residents. Now, as anyone who’s done this before knows, older residents tend to have a ‘how-green-was-my-valley’ longing for an imagined past. Confirmation was talking to residents who were about ten years old in the 1990s, old enough to remember how good things were, yet young enough to not forget how bad they were either. These conversations clearly identified a trend when residents who were in their teens in the 1990s remembered seemingly mundane events and activities (‘playing football’, ‘sitting on our bikes’) in spaces (‘mad mr.x’s yard’, ‘next to the big red house’) that stopped when these spaces got rebuilt (‘he sold his house and that building came up’, ‘they put a fence and we had to stop hanging out there’) to protect the private. Reduced playtime couldn’t have been due to TV, video games or computers – these only emerge in the late 1990s or early 2000s in the gaothan.

Unfortunately, the limitations of internet attention spans do not let me discuss other aspects of this transformation – changes in demographics, income levels and perception of living quality – that further establish the radical change in the gaothan’s ecosystem. To summarize, the loss of the public space network has increased dependence on private public spaces (normally accessed by paying a fee for use), increased flooding within the gaothan and further reduced space in the gaothan by the spillover of activities from the private-public space into the actual public space. Residents who chose to stay in the gaothan are paying more for the same level of infrastructure and services they had twenty years ago. In this ecosystem, the grass WAS greener a while ago.

Housing and public space, Part 1

By: Siddharth Nadkarny, AHI Associate

“Housing is an Ecosystem”. Anyone remotely involved with development hears this phrase so often that calling it a cliché is an understatement. The conventional understanding is that housing is a vital cog in the machine of a city, a neighborhood, an individual’s life. It also implies that for a particular context, housing transforms, and is transformed by, other urban systems.

An important part of this urban ecosystem, one that affects and gets affected by housing, is public space. These two elements are like yin and yang: the first is concerned with the private, the other with the public and their interaction sets up lifestyles, standards of community interaction, land use conventions and property ownership rights. The spatial configuration of housing and public space plays an important role in this interaction. 

Case in point: Çatal Hüyük, one of the oldest cities excavated. Archaeological evidence suggests a dense city of two to three story houses, built to work and live comfortably under the burning sun. It was also a layered city, where the terraces of closely packed houses were pedestrian pathways, small public plazas, maybe even a mini-stadium for CH’s hippest rock band. A ladder from the roof led to an underworld of privacy, where perhaps the band’s music didn’t let someone sleep in peace.

Çatal Hüyük’s public realm – “Don’t make me come up there!”

One can imagine this straightforward response to climate would have affected other aspects of urban living too. Apart from the similarly sized, self-built houses suggesting an egalitarian society of individuals, I haven’t come across information that explains other systems in the city. Looking at the imaginations of how space was used in ancient Çatal Hüyük, I wonder if you could you sit on a rocking chair on your terrace and shoo pesky kids away with “Git off mah lawhn”? To put it differently, was the house considered private property? What part of it? What about the land the house occupied? What about the terrace? Being uninhabited for a few thousand years, it might be difficult to ascertain exactly how Çatal Hüyük’s unique form of housing affected its urban ecosystem. But it seems fairly clear it could not have had conventional, clearly demarcated understandings of public v/s private that provides structure to contemporary urban space.    

There is a living example this blog post documents. Pali is a former agricultural settlement in a tony suburb in northern Mumbai, India. Colloquially called a ‘gaothan’ or hamlet, the neighborhood would probably be better described with an oxymoron – an urban village. The gaothan was settled in the late 17th/early 18th century, well before Mumbai became the behemoth it is now. With the intent of maximizing agricultural land, houses were packed closely together without a lot of space left over for infrastructure or open space. By this time, formal property systems were already in place in the region, either through local chieftains or British colonizers and all land within the boundary of the village was owned by different individuals in the village.

Part of a City & Town Survey map, 1940s, indicating property lines and built form in Pali Gaothan. All plot numbers correspond to private individual ownership

By this time, formal property registration systems were already in place in the region, either through local chieftains or British colonizers and all land marked within the boundary of the village was owned by individuals who lived in the village, except for a minimal network of pedestrian pathways. But roads are not the only public space in any community, and soon the formal property ownership and rights system was supplemented by an informal system of congregation spaces and spaces for incorporating physical infrastructure, all located on private, individually-owned land but having informal public rights. These were not just spaces to hang out, but spaces that worked as drainage channels during heavy rains, spaces where light poles were installed to illuminate public pathways and in some cases, the only access points to some parts of the gaothan.

Open space on parts of two different private plots

Corner of private plot (marked with posts) preserved for religious gatherings

Another tidbit marked by a grotto, opening up the public pathway to create space

Individually owned plot shared by neighbors as access space

While these seem small bits and pieces of public space for a neighborhood with over a thousand residents, they add up to a surprisingly large network spread across the neighborhood.

Take public pathways

Add some private plots that are publicly accessible

A smidgen of private plots partially accessible to the public

And voila! Public space network is ready to serve.

How does this public space network operate? The network is not formalized with an easement, owned/maintained by a community group nor has any formal administrative body staking claim. It’s not a restriction on land use – for those private plots where houses stand, the built form is organized in a way that this public space is accessible, but there are no rules governing housing footprints, whether formal or informal. It’s not communally owned – Spaces are maintained by the individual owners and allowed for public use, but no one other than the owner can modify them. It’s not an easement – The exact location and sizes of spaces within each plot have changed as houses have been built and re-built, but the extent of this private-public space in the neighborhood has stayed fairly constant. It’s not a building incentive – having a space on your plot doesn’t entitle you to build more than normal. For that matter, it’s technically not even public space – owners do end up policing space to stop activities they don’t like.

The lack of public infrastructure in the gaothan necessitates this strange network of space, both public and private unless you decide to choose one or the other depending on the context – Schrodinger’s Cat for land use, in a way. This was not a Randian utopia of noble superheroes – it is natural that individuals sought to maximize house areas. What seems to have prevented this is an unwritten code of disbursing community capital. Any improvement that added to the public space network earned the resident brownie points in the tight-knit community. Allowing a celebration or a prayer on your land added to your clout within the community. Future generations seeking to rebuild these houses tried to hold on to this community capital, which meant that even rebuilt houses retained public space in some form. The other incentive was the exchange of community capital – if you let others use your space, someone else reciprocates by letting you use theirs.

Sacrificing a few square feet of housing on your own plot of land gained you access to a substantially higher area in other parts of the gaothan. The incentive to access more space balances the incentive to build a larger house. Until it stayed an (overlooked) rural settlement, this ecosystem of formal land ownership and informally regulated land use worked well to retain public infrastructure.

[Continued next week in Part 2.]

Land title and affordable housing development in Africa – Part 2

By Evans Essienyi, AHI West Africa Associate

Last week I asked the question: Is the ‘clean and clear title’ and freehold as understood in the global North truly a prerequisite for a good affordable housing ecosystem? And what are the ways in which more complex forms of tenure can be developed and financed?

NO. Neither a freehold nor a clean and clear title is a necessary requisite for a good affordable housing ecosystem. In my view, the two components of the affordable housing ecosystem – microloan for incremental building and large scale investment by developers in affordable housing is not impeded in any way by the absence of freehold or a clean title.

Microloans for households for incremental building do not require the land as security for the loan. Micro lenders employ strategies such as regular visits, site inspection, and group lending to secure their loans. This means loans can be made to low-income people for home improvements and new constructions in the face of communal land ownership with minimal risk to the lender.

Investments in large scale developments are not subject to increased risks as a result of communal land ownership. In most Sub-saharan countries, long term leases for  large tracts of land for development can be obtained for 99 years; this about twice the life span of most housing projects. The 99-year leases are also renewable.

Also, large scale affordable housing developers can negotiate Joint Venture (JV) partnerships with communal land owners for the land to serve as a contribution from the land owners in return for an equity stake in housing development. This arrangement has the potential of increasing the success and sustainability of the housing project.

It is clear that a clean and clear title is not a necessary requisite for a good affordable housing ecosystem in the global south.

Evans Essienyi is a building technologist and real estate developer experienced in structuring low income housing projects, designing affordable houses, financing options and project development in developing countries, especially Ghana. In the USA, he was elected a Legatum Fellow at MIT, dedicated to creating innovative, sustainable, for-profit enterprises that promote prosperity in low-income countries.

Land title and affordable housing development in Africa – Part 1

– in need of reform, or simply a more nuanced understanding?

By Evans Essienyi, AHI West Africa Associate

Affordable housing is an emerging priority in Africa. In particular, Sub-Saharan Africa is undergoing fundamental and profound changes in demographics as the 21st century moves towards its second decade. In 1983, just 21% of sub-Saharan Africa’s population of 400 million was urban, by 2003, 36% of its 700 million people lived in cities and towns. From 1990-2003 urban growth rates increased by 4.6% per annum, almost twice as much as overall population growth rates, (Stephen Giddings, 2007). At this rate of urbanization, urban managers in Africa have huge problems to grapple with; one of the most pressing being the provision of adequate affordable housing. Most analyses conclude that the development of adequate affordable houses at scale in Sub-Saharan Arica is hindered in three main categories: policy and regulatory, physical and technological and housing finance.

In my experience, the absence of clean and clear title impedes the assembling of large tracks of land at the scale require for massive housing developments. Land Tenure in most sub-Saharan Africa is Customary.  Customary land is land which is owned by Indigenous communities and administered in accordance with their customs and traditions. For example, in Ghana traditional land-owning authorities (stool chiefs, clan heads and skins) hold allodial (absolute ownership) title to land on behalf of their people. Thus outright ownership of land is still a rare form of land tenure in Ghana (Asumadu, Kwame Dr. May 2003).

Land in Kenya is slightly more complex, and is owned by four different kinds of groups: the government, county councils, individuals and groups (Kameri-Mbote, Patricia Dr. 2005).

In Southern Africa, the two principal forms of land tenure systems are customary and statutory tenure (ECA/SA/EGM. Land/2003/2). None of these forms of tenure allows clean and clear title for ownership.

Question for thought: Is the ‘clean and clear title’ and freehold as understood in the global North truly a prerequisite for a good affordable housing ecosystem? And what are the ways in which more complex forms of tenure can be developed and financed?

Continued in Part 2 next week

Evans Essienyi is a building technologist and real estate developer experienced in structuring low income housing projects, designing affordable houses, financing options and project development in developing countries, especially Ghana. In the USA, he was elected a Legatum Fellow at MIT, dedicated to creating innovative, sustainable, for-profit enterprises that promote prosperity in low-income countries.