Land strategies

1. Land strategies Land strategies to address low-income housing in Suleimany city, Kurdistan Regional Government Yad Faraj- 1272241 AR3R010 - Housing Policy, Management and Sustainable laboratory January 22, 2014

2. Problem analysis What? Shortage of affordable housing Poor housing production and current level of disruption have seriously deteriorated both the quantity and quality of housing 3. In practice, the State cannot produce enough units on an efficient and effective way Annual housing needs is 5,300 units (Mumtaz 2011) AR3R010 - Housing Policy, Management and Sustainable laboratory

3. Low-income Housing Target group constraints No house Low, irregular income No savings No land Housing strategy Land strategy Investment strategy Housing finance strategy Problem analysis • How? • Housing finance strategy • Investment strategy • Land strategy • Housing strategy AR3R010 - Housing Policy, Management and Sustainable laboratory

4. Low-income housing problem Land acquisition Subdivision Purchase Compensation Inclusion Allocation High-income Middle-income Low-income Problem analysis Main problem A very valuable public asset at very low prices to selected households 2. Access to cheap land lends itself to the practice of large plots and low density development 3. Allowing the subdivision and on-selling of plots without paying for the development gains resulting from public investments deprives the Municipality of funds for further development. We see the response to the problem and the current land acquisition as a result that the Low-income groups fall by the wayside. AR3R010 - Housing Policy, Management and Sustainable laboratory

5. Research questions Main question What kind of strategy can be developed to get land for low-income people’s housing earning less than $600 USD in Suleimany city, taking into consideration the effectiveness and efficiency of the strategy and the support of the actors? • Sub research question: • Sub questions for the formation of a theoretical framework for Land for Housing. • Sub question with the purpose to understand the land for housing delivery system in Suleimany city. • Sub questions to analyze the possible strategies. • Sub questions with the purpose to elaborate and evaluate the most interesting and promising strategy on the aspects effectiveness, efficiency and support. AR3R010 - Housing Policy, Management and Sustainable laboratory

6. Literature study Field study “Affordable Housing Strategies in Kurdistan region” report (2012) Research documents Policy documents UN-Habitat documents Surveys Interviews Case studies Research design Conducted in Suleimany in 07-2011/01-2012 AR3R010 - Housing Policy, Management and Sustainable laboratory

7. Literature study Field study “Affordable Housing Strategies in Kurdistan region” report (2012) Research documents Policy documents UN-Habitat documents Surveys Interviews Case studies Land strategies to address low-income housing in Suleimany city Problem identification Elaboration and Evaluation Land theory Categorize Criteria Effectiveness, Efficiency and Support Conclusions/ Recommendations Strategies Research design Conducted in Suleimany in 07-2011/01-2012 AR3R010 - Housing Policy, Management and Sustainable laboratory

8. Analysis - Land for housing theory Land delivery • Land tenure • Land use • Land planning • Land development To deliver a sustainable development AR3R010 - Housing Policy, Management and Sustainable laboratory

9. Analysis - Land for housing theory Difficulties & Challenges • The illusion of “Not enough urban land for housing” • The failure of the supply of formal, legal land for housing • Poor theoretical basis to policy of land • Lack the capacity to build land development processes • Incapacity to reorganize land parcels • Centralized decision-making • Inefficient use of urban land • Poor land recording systems • Low-income development returns are low AR3R010 - Housing Policy, Management and Sustainable laboratory

10. Analysis - Land and housing system in Suleimany city Urban land management and supply (market) Owns virtually all vacant land (supply) Ministry of Finance Land-use from agricultural to residential takes about 6 months. Land acquisition: Transferring it to Land development Acquiring land Planning and laying out Providing on-site (provided without charge) or off-site infrastructure Ministry of Municipality and Tourism (responsible for urban planning) Subdivision • MoMThas prepared Master plans, proposals such as land use, infrastructure, special projects, etc. Land for housing AR3R010 - Housing Policy, Management and Sustainable laboratory

11. Analysis - Land and housing system in Suleimany city Land development & allocation process Middle and high-income Low-income • To Ministries: • Governmental employees, • Work unions members, • Martyrs families, and etc. • MoCH: • Planning and laying out Land for Housing Not used for housing • Housing developers in collaboration with BoI: • Planning and laying out • Providing on-site infrastructure Private market High-income AR3R010 - Housing Policy, Management and Sustainable laboratory

12. Analysis – Possible land strategies What are the possible land strategies Technical New development (Greenfield) Existing supply • Planning more efficiently • or revised land standards • Improved land information • Better land taxation systems • Learning from informal land • developers • Supporting community • initiatives • Cross-subsidy schemes • Using public land for housing • Land sharing • Land readjustment • Regularizing existing slums AR3R010 - Housing Policy, Management and Sustainable laboratory

13. Analysis – Criteria AR3R010 - Housing Policy, Management and Sustainable laboratory

14. Analysis – Selection most interesting and promising AR3R010 - Housing Policy, Management and Sustainable laboratory

15. Analysis – Most interesting and promising Most interesting and promising • Cross-subsidy schemes • Using public land for housing Combining strategies Cross-subsidization scheme using public land for housing AR3R010 - Housing Policy, Management and Sustainable laboratory

16. Elaboration & evaluation – Elaboration • Cross-subsidization scheme using public land • To introduce a mixed-income schemes mechanism • Cross-subsidize low income units within the development (not having to rely on budgetary grants) • Allowing developed land to be sold at market prices using internal cross-subsidies • Produce more desirable social outcomes • MoMT controls and manages the public land allocated to them • Compulsory acquisition (12%) • Supply • 20 percent to more than 60 percent • Low-income households • - Secure, affordable land • - 100 sq.m. • - Population mix • Land price • Market price AR3R010 - Housing Policy, Management and Sustainable laboratory

17. Land revenues real estate department Construction period Site preparation Soil cleaning Land acquisition Land costs developer Land development period Project development Elaboration & evaluation - Evaluation • The Excel model • The cash flow model: • Land development feasibility • This Excel model is an End value calculation. The return on investment used here is 5%. • The method used here calculates the revenue gains or losses Land development feasibility (Koppels and Binnekamp 2013) AR3R010 - Housing Policy, Management and Sustainable laboratory

18. Elaboration & evaluation - Evaluation • Conventional land development and allocation scheme • Fixed data • 100 plots • Land development costs USD/m² (Soil cleaning & Infrastructure) • Non-interest % • Net residential % • Social infrastructure % • Return on Investment equals to inflation • Inflation % • Land price USD/m² • Compensation 12% AR3R010 - Housing Policy, Management and Sustainable laboratory

19. Elaboration & evaluation - Evaluation • Conventional land development scheme • MoMT develops the land • Low-income group housing only • Net End-value -627.047 USD -52% need of public funds • No housing constructed • Screenshot Excel model AR3R010 - Housing Policy, Management and Sustainable laboratory

20. Elaboration & evaluation - Evaluation • Proposed mixed-income land development and allocation scheme • Fixed (mixed-income) principles: • Inclusionary project • 37.500 m² • Population • - Upper-income: 10% • - Better off: 20% • - Middle –income: 30% • - Low-income: 40% • Plot size • - Upper-income: 250 m² • - Better off: 200 m² • - Middle –income: 150 m² • - Low-income: 100 m² • Subsidy AR3R010 - Housing Policy, Management and Sustainable laboratory

21. Elaboration & evaluation - Evaluation • Effect(outcomes) • A price tag for public land use • Land value of the land sale is income for the local authority and expenditure for the developer • Total revenue 3.241.350 USD for the local government • Net End-value of 1.070.183 USD - 0% public funds AR3R010 - Housing Policy, Management and Sustainable laboratory

22. Elaboration & evaluation – Effectiveness • Result • Balanced costs and revenues • 8,1 IRR – The planned development is feasible and acceptable AR3R010 - Housing Policy, Management and Sustainable laboratory

23. Final conclusion Cross-subsidization scheme using public land for housing AR3R010 - Housing Policy, Management and Sustainable laboratory

24. Landless households Middle and better off income households Upper-income households Low-income households Eligible for social/affordable housing Want to acquire land for housing Want to access to housing Acquire land as part of housing project Acquire land as part of social housing Purchase land Final conclusion AR3R010 - Housing Policy, Management and Sustainable laboratory

25. Intervention Low-income housing problem Land acquisition Current Inclusion Allocation Subdivision Purchase Compensation Informal Future Cross-subsidization Scheme Using Public Land Strategy Middle-income High-income Low-income Final conclusion Solution AR3R010 - Housing Policy, Management and Sustainable laboratory

26. Recommendations • Promoting affordable housing • Involve developers (in social housing projects with ‘non-market strategies’) • Evaluate the project • Find a substantial proportion of the different income groups in each specific project. • Exclude the housing development phase • Combine the strategy with Land Readjustment strategy (under certain conditions) • Set up a quasi-governmental housing management organization (HMO) AR3R010 - Housing Policy, Management and Sustainable laboratory

27. End Thank you! AR3R010 - Housing Policy, Management and Sustainable laboratory