{"id":3002,"date":"2011-12-14T11:24:32","date_gmt":"2011-12-14T11:24:32","guid":{"rendered":"https:\/\/rajaalmarzoqi.com\/rajaalmarzoqi\/?p=3002"},"modified":"2024-12-15T17:29:52","modified_gmt":"2024-12-15T17:29:52","slug":"ministry-of-housing-and-addressing-the-defects-in-the-kingdom","status":"publish","type":"post","link":"https:\/\/www.rajaalmarzoqi.com\/?p=3002","title":{"rendered":"Ministry of Housing and Addressing the Defects in the Kingdom"},"content":{"rendered":"
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The royal decree to support housing by establishing 500,000 housing units was an attempt to deal with the housing shortage in the Kingdom and the inability of market mechanisms to deal with it due to low savings, high housing costs and weak supply market. The Housing Authority, which was transformed into the Ministry of Housing, and which had previously been merged on the recommendation of the Administrative Development Committee about five years ago, was assigned the role of studying the future and the ability of market mechanisms to achieve a balance between supply and demand and the future need for the ministry. This cancellation and establishment within a few years and the economic costs that followed are a natural result of the government decision relying on government agencies, weak spending on research and development and the lack of independent think tanks. In any case, I expect that establishing a ministry or government agency that addresses the market imbalance in providing housing is necessary due to economic circumstances. However, the work of the ministry, its assigned role and its mechanism of work will determine its benefit and the goal for which it was established. Therefore, there are some considerations that I hope the new-old ministry will take into account.
\nFirst: It is expected that the housing units that the Ministry will provide will be directed to meet the demand of the low-income group in the Kingdom, which must be integrated with the rest of the social classes to prevent the emergence of economic and social problems from dividing society according to income in neighborhoods or residential complexes. Residential complexes for low-income people may create a fertile environment for the spread of crime and deepen the culture of poverty. While their integration contributes to their interaction with other social classes. It also allows members of this class to learn better and benefit from interaction with members of other social classes. Integration between social classes contributes to political and economic stability.
\nSecond: The Ministry’s strategy must be based on encouraging the housing sector through its developmental role in the housing sector in cooperation with the Real Estate Development Fund (article in Al-Eqtisadiah on 1\/16\/2008), and I suggest that the latter should be a market regulator by evaluating developers and residential complexes and stimulating the housing sector at all levels to achieve balance. The housing market suffers from the weak role of real estate developers, and part of the market imbalance is this weakness, so the new ministry must also address the market imbalance that led to this crisis to reduce the causes that lead to the emergence of the problem in the future. The establishment of 500,000 housing units at a cost that may reach 250 billion riyals constitutes a strong boost to the real estate development and contracting sector through its participation in implementation. To ensure implementation and quality performance, it is preferable to establish a project management company in partnership with the private sector and under the supervision of the ministry.
\nThird: The royal decrees related to real estate have increased the overall demand for real estate sector services, which is difficult to meet with the currently available capabilities, leading to pressure on the general price level due to the high replacement cost in light of the available resources. If the matter is left to market mechanisms, this will lead to the impact of demand on the equilibrium prices for providing the service and create balance in the long term, but in the short term, the real incomes of individuals will be harmed by this imbalance. Government intervention at this stage is necessary to address the imbalance on the supply side by the ministry increasing production capacities in the real estate services sector and stimulating competition by establishing a real estate development and contracting company, which will pay part of the capital and offer the other part to investors and public subscription. To ensure raising the efficiency of the company’s performance, it must be managed by private sector mechanisms and target real estate development for residential complexes of different sizes, with some units offered for sale and the other to provide residential units for the ministry, as stated in the royal decree. The company must also focus on developing mechanisms that reduce construction costs and save energy by spending on research and development as one of its most important long-term goals, in addition to its primary goal of helping to provide the required housing.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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