When political uprisings spread across the Middle East and North Africa in 2011, governments were quick to assure citizens that key areas of discontent would be addressed, in an effort to prevent unrest within their own borders. Providing affordable housing for nationals formed a central part of this rhetoric, with countries such as Saudi Arabia, Bahrain and the UAE putting building homes at the top of the agenda.
Two years later, very little has changed. Initial housing deadlines have been missed across the region and the building of new homes is not keeping pace with population growth. Many governments do not have the experience or capacity to deliver what is required, and it is vital that they entrust the private sector to assist in solving the housing crisis before it becomes chronic.
Saudi Arabia provides a prime example of a government that has failed to deliver on housing pledges. After promising to spend almost $70bn on building more than 500,000 homes in early 2011, Riyadh has now decided to hand over the responsibility to private developers.
This does not guarantee quick success, however. Bahrain has been trying to get the private sector to develop new houses through a public-private partnership for years. Even though these programmes offer an attractive way to share risks between the public and private sectors in the long term, they take a long time to establish.
As the experience of Dubai shows, developers often prefer to build luxury villas than the low-cost homes that are really required. Governments need to step away from directly procuring new housing developments, while ensuring new construction is targeted towards lower-income families. The recovery in property prices also suggests the attentions of the private sector will not be focused on affordable housing unless there are government incentives.
Getting the balance right between letting the private sector take charge while providing a framework and incentives for it to do so is difficult. So far, not enough is being done.