One of the major social concerns for many in Saudi Arabia is the rising and seemingly uncontrolled cost of available housing and the apparent lack of will on a national scale to address the problem.
Among the many challenges facing the Saudi youth, it is not simply jobs or the lack of opportunities that derail ambitious young hearts.
The shortage of affordable housing ranks high on the list of many concerns. A gap between what is available in the market and what many Saudis can afford has left many frustrated. A shortage of low and middle-income housing means millions of Saudis cannot afford to buy a home. Young Saudis are especially affected since it takes years of savings before many can afford to buy a home — often a precondition if they want to get married and start a family.
Some newlyweds have resorted to living with their parents because they can’t find suitable and affordable housing in Jeddah’s real estate sector. Living with their parents is meant to be temporary until they find the apartment of their choice, but for many, the start of a new chapter in their lives with their new partner extends well into several months or years. And in some cases, that has not nurtured the relationship of the newly-married couple.
One young bank employee, who is currently in such a situation, recently confided to me that he could not afford the rent his landlord was charging. “They are indulging in uncontrolled price-gouging and there is no way that I can afford something decent on my salary. Even if my wife is to pitch in with her income, we would barely get by after paying one bill or the other,” he complained. He added that while his parents were gracious and welcoming, it was the couple’s desire to move out on their own so they could enjoy some privacy, but prices have effectively barred them.
He is one of many such young men who are facing an almost hopeless situation in acquiring appropriate housing at affordable prices. Some studies claim the number of Saudis who do not own their own homes is higher than 70 per cent.
The government recognised early on the potential blowback of this situation and in 2011, under the directives of the late King Abdullah, nearly $70 billion (Dh257.46 billion) was allocated for the purpose of building entry level homes, and a new housing ministry was established. The ministry at the time stated that its mission was to ensure the rapid creation of half a million new units for prospective buyers at affordable prices.
Five years have passed and many Saudis have become disillusioned about the ministry’s promise that has delivered so little. It was certainly not the lack of funds that was the factor. Many complain that the ministry has failed in its aim to provide affordable housing to ordinary Saudis.
A local columnist even went so far as to suggest that the ministry’s bureaucratic housing loan programmes had “actually created even more demand for homes, while the agency had almost completely neglected its duty to get more houses built”.
Failed promises
The kingdom should not be facing such a situation, given its large real estate potential. Vast tracts of land sit undeveloped and unoccupied within city limits, as their owners bide their time and wait for prices to rise.
Following repeated calls for heavy taxation of such tracts of prime real estate that sit for decades within urban centres, the government recently approved a levy on all such land whose area exceeded 5,000 square metres per plot. The government has also been proactive in sacking housing ministers who have failed to deliver on their promises.
For Vision 2030 to be successful, the basic needs of the people must be catered to. The government is moving in that direction. Jeddah, the largest commercial city in the country, continues to face a housing shortage as the city’s population increases by approximately 160,000 every year. Yet, hectares of prime land is lying vacant and uninhabited.
Coupled with unemployment, the rising shortage of housing must be regarded as a threat to the country’s national security.
Pompous, bureaucratic announcements alone will not tackle the problem. Actions beyond words and speeches must produce quick and concrete results. Otherwise, more and more home-seekers will just see their dream vanish into thin air.
Tariq A. Al Maeena is a Saudi socio-political commentator. He lives in Jeddah, Saudi Arabia. You can follow him on Twitter at www.twitter.com/@talmaeena
