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Mega projects do little to calm Iraq's housing crisis

Despite several mega housing projects launched in Iraq, most notably the Al-Rafeel City project and Bismayah New City in Baghdad, Iraq still needs millions of houses to end the housing crisis.
A picture taken on Jan. 29, 2018, shows a man walking on the Iraqi capital's Rasheed Street, one of the oldest streets of the city.

The lack of affordable housing is one of Iraq’s deepest crises, with a severe shortage of housing units estimated to be 3.5 million, according to Iraq's Ministry of Construction, Housing, Municipalities and Public Works.

Population growth, rural-to-urban migration, lack of financial and natural resources, crises and conflicts that have dragged for more than four decades, the repercussions of the Islamic State’s (IS) occupation of the country, and the destruction of homes, infrastructure and public facilities have all exacerbated the housing crisis and increased homelessness and slums in the cities and their outskirts.

According to the Ministry of Planning’s estimates, Iraq had about 3,700 informal settlements or slums inhabited by an estimated 3 million people in 2019.

The slums vary based on the various parts. Houses are built of mud in some districts and of cement in others on state-owned lands. Some citizens have even turned military bases, facilities and buildings that belonged to the former Iraqi army and security services prior to the US invasion into homes.

The largest number of slums — about 1,000 — is found in Baghdad, followed by Basra with 700.

According to the United Nations Human Settlements Program, “Iraq's cities accommodate more than 70% of the population and are growing rapidly. A large number of people, particularly the poor, live in substandard housing and informal settlements and suffer from lack of basic services and the side effects of polluted water sources, poor air quality and climate change.”

At the same time, Iraq has been affected by political crises and conflicts that have dragged on for more than 40 years. The country continues to suffer from the fallout of the IS occupation and the destruction of homes, infrastructure and public facilities.

The Iraqi government is trying to address the crisis by launching several residential projects.

National Investment Authority president Suha al-Najjar told Al-Monitor that 130 licenses for housing investment projects were granted in 2021 and work has resumed on many stalled projects.

Iraq’s mega housing projects include Bismayah New City, which was implemented by a South Korean company in Baghdad and includes 100,000 housing units.

In July 2021, the Iraqi government launched the DARI housing initiative, which targets social welfare segments, martyrs’ families and citizens who were not previously included in the land bonds distribution.

Applications for 550,000 residential plots in all governorates, except for the Kurdistan region, were made online.

However, Hammam al-Tamimi, a member of the Parliamentary Services and Reconstruction Committee, accused the government of failing to implement the DARI initiative on the ground.

In response to the accusation, the adviser to the prime minister for construction and investment affairs, Sabah Abdul Latif, said that the distribution of land bonds as part of the DARI housing initiative will be soon made official in the presence of the prime minister, in addition to the distribution of 330,000 plots as part of other projects.

This initiative is the second largest housing initiative since 2003, following Bismayah New City.

Other projects that the government announced in a bid to address the housing crisis include the Al-Rafael City project, to which an area of 106,000 dunams surrounding Baghdad International Airport was allocated, intended for investment opportunities.

Najjar told the official Al-Sabah newspaper that the city will be built in four phases. The first will include the construction of about 75,000 homes for up to 300,000 people, in addition to shops, offices, hospitals, schools and recreational facilities.

She said that this project will have a positive impact on the economy, particularly since it will provide houses for about 1 million people and open more than 100,000 jobs.

Other mega projects in the housing sector include the AlKadhemiya New City, which started on May 1, 2021.

The project is one of the strategic investment projects in Iraq and is located near Kadhimiya district in the capital.

In a promotional video, the Baghdad Investment Commission indicated that the project will provide 5,000 housing units, schools, kindergartens, a private university, a hospital, green spaces, sports fields, in addition to shops and recreational centers.

Baghdad saw the launch of the Jawharat Baghdad residential project in al-Dora district as one of the most prominent investment housing projects, over an area exceeding 8 million square meters and including more than 16,000 housing units.

Moreover, the Iraqi government announced in June 2021 an initiative to buy and build houses via interest-free loans.

Cabinet spokesman Hassan Nazim said that the Central Bank of Iraq made the initiative of financing the Real Estate Bank and the Housing Fund with more than 1.8 trillion dinars (about $1.2 billion).

He added, “The initiative will provide interest-free loans to citizens to buy or build units. Citizens will pay off the loan over 20 years and would motivate them to buy units.”

Iraq’s housing crisis has been exacerbated by the constant rise in residential property prices. 

Observers believe that many of these properties are more expensive than real estate in cities in stable neighboring countries, including Istanbul, Tehran and Amman.

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