Special Report Contents

• Cooperating to protect Maghreb economies

• Region struggles to find answer to Isis advance

• Challenging journey for Maghreb transport

Like graduate jobs, affordable homes are in short supply in the Maghreb, compounding the tensions and demands for reform that have confronted governments across the region.

But behind the headlines, this is a story of considerable success. Morocco, Algeria and Tunisia all have a track record of sustained efforts to provide the accommodation their people need.

According to UN Habitat, the proportion of the North African population that lives in slum areas fell from 34.4 per cent back in 1990 to just 13.4 per cent in 2005. In absolute numerical terms, the number of people living in slums fell from 20.8 million in 1990 to 11.8 million in 2010.

The UN agency says Morocco and, especially, Tunisia have done well, thanks to “successful implementation of housing policies and programmes to increase low-income housing supply and systematically improved slums and informal settlements”.

But there is no room for complacency.

The challenge

By 2011, Rabat estimated the country faced a shortage of 1 million homes, while the Washington-based World Bank reported that almost 300,000 households still lived illegally in dwellings that were poorly constructed and lacked adequate services, many in shanty towns.

The average number of residents in each home [in Algeria is] among the highest in the world

Meanwhile in Algeria, overcrowding is a huge problem, with the average number of residents in each home among the highest in the world. In 2010, some 6.4 per cent of the population still lived in slums.

Demand for housing in Algeria was calculated at an average 175,000 new units a year over 2002-12. Families could wait 10 years or more to secure an affordable home.

The cost of housing in both countries has been pushed up by the uneven distribution of housing stock: affluent families often have several homes, whereas poor households must often share with another family. The Algerian government has admitted that more than 125,000 social homes are actually empty or are occupied by people who are not the officially approved residents.

In Morocco, some 800,000 housing units were empty in 2010.

Such pressures and paradoxes have an impact on the cost of accommodation. The World Bank found that by 2010, in proportion to average family incomes, housing was almost twice as expensive in Morocco and Algeria as it was in Tunisia.

Algeria programmes

In Algeria, with strong traditions of interventionist state economic policy, the government has developed a range of programmes to deliver housing at lower costs than the open market would provide.

The foundation of the system is rented social housing (logement social locatif), allocated in each district by a committee chaired by the head of the local administration. To qualify for such a home, a citizen should earn a salary of less than AD24,000 ($239) a month, but must pay a deposit – up to a maximum of AD50,000; there is no path to home ownership, but monthly rent is only AD3,000.

For citizens on lower middle incomes – between two and six times the minimum wage – and those who are comfortably off but not affluent, the Algerian government has developed subsidised routes to home ownership, combining payment in stages with forms of state support. For example, one scheme complements a subsidised mortgage with an outright cash grant of at least AD400,000, ranging up to AD700,000 for less well-off clients.

Staggered discounts

These support schemes are limited by ceilings on the prices of homes, such as AD3m or AD10m, with the highest levels of subvention provided only for the cheaper properties targeted at those on lower incomes. The acquisition of the ground itself on which the property is built is massively subsidised in some schemes, with prices discounted by 80-95 per cent, with the biggest discounts in the poorer south.

However, the schemes have struggled to keep pace with the huge demand for housing. To counter the risk of corruption-fuelled demand pressures, the government has repeatedly tinkered with the structure of the schemes. It has also had to impose waiting periods of five or even 10 years before families are able to secure a property under some programmes.

Handing over a batch of 2,031 homes developed under the Algiers section of the logement social participatif (LSP) scheme, the capital’s governor, Abdelkader Zoukh, admitted on 2 June that the programme had been implemented too slowly.

He explained that in an effort to speed up delivery of the 42,000 homes promised for the capital under LSP terms, the administration had shared the work out between 56 different real estate developers. Yet only 12,000 had so far been delivered to occupants.

Zoukh said an additional 9,000 units would be finished by the end of the year, with the remaining 19,000 following during 2016.

The government also supports schemes that enable better-off families to purchase homes directly from developers, with only limited financial support. But these have been hampered by the shortage of land available for construction of these larger homes in the main urban centres.

Morocco mortgages

It was only in the late 1990s that Algeria introduced mortgage lending, mainly through state banks, and by 2010, total mortgage debt was only equal to 1.5 per cent of GDP. This contrasts with the approach taken by Morocco, which has sought to leverage market mechanisms and commercial finance on a much larger scale to deliver affordable housing. By 2010, total mortgage debt in the kingdom was equal to 7 per cent of GDP.

Although housing is more affordable in Tunisia than in other Maghreb countries, there are signs of strain

A crucial step came six years earlier, with the creation of Al-Omrane, a national holding company for housing and urban development, replacing 10 predecessor state agencies.

Meanwhile, the government has vigorously pursued its ‘villes sans bidonvilles’ (cities without slums) programme, to upgrade the homes of 292,000 people living in informal or run-down urban fringe areas, or rehouse them. But this has sometimes been pursued through compulsory resettlement.

The programme has run into some problems; with the population on the rise, new bidonvilles continue to emerge because there is still an overall shortage of formal accommodation and the poorest residents struggle to pay even the lowest formal sector rents.

Steady progress

But overall, there has been steady progress in the provision of affordable social housing – for which the government in 2008 introduced a basic standard, with homes valued at the time at MD140,000 ($18,050). Indeed, the World Bank approvingly noted that commercial property developers were complaining about the government’s focus on social housing rather than approvals for their own more upmarket project proposals.

Now, these sustained efforts have begun to make a serious impact. The national housing shortfall, estimated at 840,000 units in 2012, has dropped to 580,000; Prime Minister Abdelilah Benkirane could come close to meeting his target of reducing the backlog to 400,000 by the end of his current term next year.

Progress is essential if Morocco is to continue delivering social housing at affordable prices. Already, local media report that homes officially priced at a maximum MD200,000 are in fact being sold for MD230,000-MD240,000.

Aiding the poorest

But housing and urban development minister Nabil Benabdallah admits the government has still not found an adequate way of meeting the needs of those people whose income is so low they can never hope to own a home, even under the cost-controlled terms of the current social housing programmes.

He is now exploring the option of reserving some homes in social housing projects for rent only, or using Al-Omrane and other groups to finance new developments of homes for rent. The challenge will be to do this without creating “ghettos” of poor people efforts to promote social integration (one of the purposes of the (cities without slums programme).

Tunisia leads

Tunisia has been a regional leader in ensuring a steady flow of affordable housing. A key instrument has been the provision of state-subsidised mortgages through the national housing bank, Banque de l’Habitat – which has delivered the finance at an average 2.63 percentage points below market interest rates. 

There have been complaints that the implementation of projects has been flawed by corruption and poor governance, both under the pre-revolutionary regime of President Zine el-Abidine Ben Ali and, more recently, under the Ennahdha-led transitional government. Critics have alleged that political vested interests have secured undue influence.

Impressive record

Still, Tunisia’s long term track record remains impressive, with 3 million homes for the country’s 2.6 million households. Some 77,000 new homes are being built each year, which roughly keeps pace with the annual growth in Tunisia’s 11 million-strong population.

Even in urban areas, the overwhelming majority of households are owner occupiers.

Although housing is more affordable in Tunisia than in other Maghreb countries, there are signs of strain, with many families struggling to secure accommodation at a manageable cost. That, of course, relates largely to the overall level of housing supply.

Since the revolution, a crucial role has therefore been played by the Societe Nationale Immobiliere de Tunisie, which was set up in late 2012 and has sustained an impressive pace of development.

But there are constraints, notably the rising cost of construction materials and a shortage of land available for building in locations where demand is strong.