Presented at the 8th Meeting of the Working Group on Infrastructure Finance in Iraq, MENA-OECD Investment Programme. 30 April 2013, Cairo, Egypt

1. Housing Sector Challenges
•Substantial unmet housing demand – 200,000 units per year needed
•Acute shortage of buildable land in urban areas
•Near absence of formal housing finance
•Incomplete legal and regulatory system for private sector investment in housing
•Infrastructure backlogs
•Many households cannot afford decent housing
•Deteriorated rental stock
•Undercapitalized construction sector
•Lack of established procedures to address unplanned settlements

2. Key Housing Policies – Enabling Approach
Land
• Prioritise infill developments
• Encourage land wholesaling to mobilise capital for land development
• Establish land inventories
• Undertake electronic land title registration processes
• Progressively remove subsidies on the allocation of public land, and introduce
sunset clauses on undeveloped allocated land
• Institute fair and appropriately scaled system of real estate taxes
Housing Production
• Establish a level playing field to support private developers
• Rationalise housing SoEs
• Encourage PPPs and cooperatives for housing delivery

3. Housing Policies – Enabling Approach
Housing Finance
• Encourage commercial banks to enter the market by:
- Reviewing legal currently restrictive framework (foreclosure law)
- Establishing NHF and REB as second-tier financing instruments to capitalise
commercial housing finance providers
• Modify building standards to make housing more affordable
• Utilise government banks to provide targeted low-interest loans to poor/
vulnerable HH
• Encourage more extensive use of loans for housing extension and improvement
Infrastructure for Housing
• Increase capital investments and improve maintenance/ management
• Upgrade Trunk Infrastructure
• Promote private sector involvement in the development and management of
housing infrastructure (explore PPPs)

4. Housing Policies – Enabling Approach
Housing Management and Maintenance
• Increase inspection of private/public rental housing through commuity based
methods to improve compliance with minimum standards
• Privatize maintenance services of public rental stock
Housing Construction Materials
•Introduce financial instruments to support materials producers
• Promote international joint ventures
• Standardize operating environment and rationalize SoEs
• Promote environmentally friendly, local production
Informal Housing
• Upgrade/ redevelop on a case by case basis using standardised criteria
• Resettlement undertaken fairly, with consultation and compensation

5. Housing Policies – Achievement so far
Land
• Land policy vision, studies undertaken (PMAC), state land policy drafted – nothing
yet submitted to COM
• Land inventory piloted (MMPW)
• Digitisation of land registry underway (MoJ RERD, USAID)
Housing Production
• Rationalization of MoCH SoEs initiated/ under discussion as a pilot in a PMAC led
programme to rationalize SoEs
Housing Finance
• Capacity Building of Iraqi Private Bankers League in regard to housing finance
(USAID); dialogue on reforming legal framework

6. Housing Policies – Achievement so far
Informal Housing
• Informal Settlement Upgrading piloted in Erbil and initiated in Baghdad
(Governorates, line ministries and UN-Habitat)
• Studies completed on Baghdad informal settlements utilizing land sharing
mechanisms to redevelop high value informal settlements (UN-Habitat)
Constraints
• Renewed focus of MoCH on traditional housing delivery mechanisms to meet
urgency of current demand
• Communication strategy has been insufficient
• Commitment of relevant institutions in implementing the policy is not yet
translated into significant programmes and budgeted actions
Result so far: Limited progress on implementation, therefore limited
impacts

7. Suggested Way Forward
Housing Policy provides appropriate directions in creating a well functioning
housing market, and should remain a medium - long term goal
Contributing institutions should reflect on progress and consider whether this
approach is well understood, feasible given the limited interaction between
ministries, and has sufficient political support
If there is political will to move forward, Housing Policy implementation requires
unified vision and serious commitment of relevant institutions, strong leadership
and adequate resources
Additionally, short – medium term mechanisms/ instruments are required in
order to rapidly address the housing needs, particularly for the poor

8. Income: USD/month
Affordable Housing (Rent to Buy) model
2000
Land /Housing is often “allocated.” Housing provision
constrained by ineffective housing market
Often informal/inadequate housing
Requires housing assistance
500
population

9. Rent to Buy model
Housing Agency provides low cost housing - ideally within mixed use
development, or mixed housing developments
Housing Agency is capitalized by government and through value capture
mechanisms on mixed-use developments by private developers
Housing units cost are 75 sqm and cost approx 30,000 USD to build
Housing is provided on a rental basis (eg 75 USD / month – ie 3% per year of
building cost). This makes it affordable to HH with incomes of 300 USD or
more
HH on lower incomes are provided with rent support based on a periodic
means test
HH are encouraged to own asset through repaying capital
Rent is reduced proportionate to share of ownership

10. Affordable Housing (Rent to Buy) model
Income: USD/month
500
400
300
Income
Repayment
Rent Subsidy
75
Rent cost
Population

11. Value Capture through Land Sharing:
Informal settlement, 9 Nissan, Baghdad
800 households
informal
84,000 sq. m
Commercial.
58,000 sq. m.
MoA Research
Lab
56,928 sq. m. and 211 units
Private Housing
114,912 sq. m. and 1,512
units, Government
supported Housing
•Land is redeveloped for mixed use
•Phased to avoid external relocation of
existing informal residents
•Value capture to finance “assisted”
housing

12. Land Sharing: Al Bahith El Almi: proposed
Outcomes
Net positive Cash
Flow: 115 Billion IQD
(US$98.6 million)
Annual Internal rate
of return: 68%

13. Value Capture through Land Sharing:
What does it take?
• An agreement from the land custodian (or custodians) to redevelop the
site.
• An expeditious conversion of the legal land use as agricultural/protected
green zone to the proposed residential and commercial uses.
• An initial investment of 27.5 Billion IQD (US$23.6 million).

14. Recommendations:
• Continue with Housing Policy Implementation to establish an
effective housing market
• Expedite housing delivery by establishing a land development
agency that develops land for mixed uses, and uses value capture
mechanisms to capitalise assisted housing for vulnerable and low
income families.
[urban informal settlements are a good place to start; land is often
high value, has access to trunk infrastructure, local amenities,
sources of livelihood, and they in any case need to be addressed]
• Establish a Housing Management Organization that provides
housing to vulnerable and low-income families on a Rent to Buy
basis