Manama is wise to tackle its growing affordable housing shortage and assuage public discontent

Bahrain has taken an important step in addressing its affordable housing shortage, with the announcement that the first public-
private partnership (PPP) housing project in the country has reached financial close.

Although the scheme took three years to secure funding and was trimmed in size by a third due to concerns about its viability, it sets an important precedent by showing how governments and the private sector can work together to find creative ways of delivering low-cost housing. 

Once touted as the key to solving the shortage of affordable accommodation in the Middle East, PPP housing projects have failed to materialise due to a host of financial and contractual reasons. But governments in the region are increasingly finding that they do not have the resources and expertise to provide sufficient levels of quality housing for their rapidly growing populations.

If structured correctly, PPP programmes offer a promising alternative to addressing the housing problem, as they enable governments to outsource the professional management of large-scale residential schemes and help mitigate risks for all parties involved.

For Bahrain, addressing the lack of social housing is critically important as it is one of the key issues that has fuelled unrest in the country. As is the case in many other countries in the region, high land prices and low profit margins have prompted developers in Bahrain to shy away from low-cost housing projects. But with a shortfall that has grown to more than 50,000 housing units, Manama is wise to pursue PPP schemes to tackle the problem.