Solutions for Land and Housing Shortages

• 20 January 2021
• Local News
• 3252 Views

According to CBRE Cambodia, the supply of condominiums reached over 25,000 units in the market by the end of 2020 and is expected to jump to 38,000 units by 2021. Data from Knight Frank Cambodia also shows that by the end of 2019, a total of more than 55,000 housing units are available on the market, and another 22,000 are expected by 2022.

On the other side of the same coin, according to The Borgen Project, 10 million Cambodians do not have decent housing. Moreover, around 21.2% of Cambodians live in cities, and one in five of them live in the slums with a lack of access to basic services, according to Habitat for Humanity.

Why Cambodia is still facing a housing shortage issue though the housing supply keeps increasing? And how to mitigate that?

Like other major cities around the world, Phnom Penh is getting bigger in terms of population and land size. Phnom Penh has the highest population density among cities and towns within Cambodia, with approximately 2 million people residing in the city and this already crowded population is expected to increase to 3.5 million by 2030.

Unfortunately, the government to date has not attempted to tackle the rising concerns of the housing problem. On the other hand, due to lower profit margins amid high land prices, many developers have failed to embark on affordable housing developments.

There is an urgent need for the local authorities to launch urban renewal projects – aimed at redeveloping run-down areas of the inner city which exist in many different pockets of Phnom Penh, and thus increasing residents’ quality of life. As land is very limited, especially in the inner-city areas, building high-rise condominiums is the only solution to solve housing supply shortages.

Not all families and residents can afford a modern, luxury condominium unit in the city. For the majority of average or below-average income earners who require inexpensive but convenient housing, they also have the option to live in public housing that is transit accessible and provided by the government or the housing authority.

One of the challenges in providing affordable housing is the availability of land, if there are subsidies for land from the authorities, available land can be utilized to build affordable housing. This would make it more affordable for either private developers or the housing authority to construct low-cost housing.

Second, to subsidize the prices of building materials and manpower, and also embrace innovation in building materials and constructions, can help builders to develop better houses on limited budgets.

In addition, tax incentives from the government and supporting finance would be advantageous for the residents either renting or purchasing the units.

In the end, affordable housing is an issue of basic human dignity. As Phnom Penh continues to grow, the city must allocate land for affordable housing as part of the overall municipal development plans.

In addition, Phnom Penh must provide an adequate transit system from the existing city center to these newly-developed areas, or urban renewal spots. As soon as the authorities in Phnom Penh can reserve land to build affordable housing, the city population can keep growing without informal settlements or slums.

Therefore, the key is for city administrations to be proactive, and always plan ahead to make sure that land for affordable housing is sufficiently built.

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