Iraqi government takes on housing crisis

During his visit to the city of Bismayah 40 kilometers (24 miles) southeast of Baghdad on June 19, Prime Minister Mustafa al-Kadhimi announced that sufficient funding had been secured to complete a project to construct 100,000 residential units. South Korea's Hanwha Engineering and Construction Company is implementing the Bismayah residential project. Only 35,000 have been constructed so far.

The Iraqi Council of Ministers voted last week to establish the city of Rafeel in the area surrounding the Baghdad airport, which will include hundreds of thousands of housing units in eight different regions.

Kadhimi announced on June 10 a national plan for the distribution of land, housing loans for construction, and advanced digital registration mechanisms to implement the project.

This project is an urgent move to tame the soaring housing crisis in Iraq, which is exacerbated by the large increase in a population that is set to reach 50 million by 2030.

In a clear picture of Iraq's housing problem, the Ministry of Planning announced on Nov. 5 that 3.5 million Iraqi citizens live in slums across the country. This is equivalent to about 10% of the total population of about 40 million people. The governorates of Baghdad, Basra and Ninevah are the provinces with the top number of slums.

Member of the Parliamentary Services Committee Abbas Al-Atafi explained to Al-Monitor that the huge numbers of residents who do not own homes are causing serious social crises. “Kadhimi’s project of distributing lands to the deserving beneficiaries and establishing residential communities on the outskirts of cities contributes to reducing the crisis risk,” he said.

Because of the lack of housing units, land intended for agricultural use gets bulldozed with the aim of converting them into residential neighborhoods. In Baghdad alone, around 12 agricultural properties were bulldozed in 2020 to establish housing projects.

In 2018, at least 10,000 dunams (10 million square meters) of agricultural land were completely leveled, according to officials in the ministries of Agriculture and Justice.

In an interview with Al-Monitor, parliament member Ali al-Budairi justified the bulldozing of agricultural land for housing purposes by invoking the lack of designated housing-allocated areas. He said the migration of most Iraqis from rural areas that lack services to cities has flooded city centers with slums. 

Budairi remained skeptical about the success of distributing land near city centers in solving the housing crisis, saying, “The solution is to limit migration and allocate to every person who lives in a village a piece of land.”

The housing crisis in Baghdad in particular led to the construction of vertical housing complexes, including in the city of Bismayah.

Farhad Alaaldin, chairman of the Iraq Advisory Council, talked to Al-Monitor about bureaucracy and political interests preventing the entry of global companies into the housing sector in Iraq. “Investment in housing projects is very important to the Iraqi economy. However, large investors have been discouraged from entering the market in Iraq. The UAE-based Emaar real estate company had a bad experience in Iraq. It tried to enter the Iraqi market several times but failed every time to reach an agreement with successive governments for technical and political reasons,” he said.

Adviser to the prime minister for construction and investment affairs Sabah Abdul Latif Mashtat spoke to Al-Monitor about the details of the land distribution project. He affirmed the distribution includes all Iraqis and priority in housing is given to widows and victims of wars, terrorism and protests, as well as those covered by the social welfare law.

Regarding technical details, Mashtat revealed an electronic portal will be operational in the coming days. Every citizen who does not have a residence can apply on the portal according to the information points system after disclosing their social and economic status.

He added, “The Ministry of Construction and Housing will prepare the residential houses' schemes so that the beneficiary chooses the design of the building after obtaining the land according to the number of their family members. The Real Estate Bank or the Housing Fund will finance construction loans. The Central Bank of Iraq has increased funding for the housing sector to more than 1 trillion dinars.”

On Feb. 2, the National Investment Commission voiced its desire to establish the National Real Estate Development Company to solve the housing crisis with mixed shares distributed by 50% to the public sector, 25% to the private sector and the remaining to be sold as shares to citizens.

On April 1, the Ministry of Construction and Housing approved the basic design for Al-Tariq residential site in Baghdad, as well as designs for new residences across Baghdad and the provinces of Najaf, Basra, Wasit, Diyala and Anbar.

Ministry of Planning spokesperson Abdul-Zahra Al-Hindawi told Al-Monitor, "Iraq has a huge gap in the housing sector, estimated at 3 million housing units. But there is a possibility of succeeding to overcome this crisis. The housing sector in Iraq is a development-thirsty sector and can absorb many investments, whether … internal investments by the private sector or foreign investments.”

Hindawi said the new plan will not include the distribution of lands randomly but via urban planning, based on the establishment of new residential neighborhoods with available services. “The plan sets contexts that compel citizens to build the housing unit on the land they obtained," he said. “Preparations for the implementation of the project are underway by all concerned parties, including the Ministry of Housing as the concerned party and the banks as the financing partners."

Still, corruption remains a barrier to the new project, based on previous experiences with other projects. The head of the Parliamentary Services Committee, parliament member Walid Al-Sahlani, spoke on May 30 about evidence of corruption in this sector. He pointed to 18 housing projects affiliated with the Ministry of Housing that were delayed or obstructed for unclear reasons.