Rent allowances paid by state to Kuwaitis exceed ‘cost’ of building a city

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KUWAIT CITY, Aug 7: The number of housing requests, according to the latest statistics issued by the Public Authority for Housing Welfare, reached 94,379 as of the end of December 2021. This means that the state pays KD 14.15 million per month as rent allowance, which is set at KD 150, or about KD 169.8 million annually as rent allowance, reports Al-Rai daily.

According to the statistics, the amount of KD 169.8 million exceeds the cost of building a city such as South Saad Al-Abdullah City, which was about KD 136.6 million, by about a quarter (1.24 times). The city planned for completion in 2029 includes 30,000 units targeting beneficiaries of the residential care, as well as spaces designated for non-residential purposes to serve city residents.

If the calculation is expanded a little, the cost of the rent allowance for the state in seven years will be equivalent to KD 1.188 billion. This is a little more than the estimated cost of building four residential cities – South Saad Al-Abdullah, South Sabah Al-Ahmad, Jaber Al- Ahmad City, and South Abdullah Al-Mubarak Suburb. The estimated total cost of these cities, which provide about KD 64,500 housing units, or meet about two-thirds of the current applications, is approximately KD 1.172 billion.

Housing projects
Real estate experts believe that accelerating the pace of completion of the housing projects and covering the existing demands for housing will save the state the huge amounts it pays annually as rent allowance, which can be directed to other development projects.

They said providing housing as soon as possible for citizens who are waiting for their dream house ensures psychological, material and social comfort for them, and also contributes to reducing the price of land and private housing. The real estate experts explained that the solution must be integrated by approving the mortgage law, liberating more land from the grip of the state, and enabling the real estate developers to complete housing projects according to special specifications and a specific timetable.

This would speed up the pace of completion. On other hand, the state should keep pace with the growing housing requests by about 8,000 requests annually, thus providing the amounts in the form of subsidies to cover part of the rent of citizens’ apartments, some of whom have been waiting in the queue for more than 20 years.

According to a Kuwaiti citizen, the sums he paid 20 years ago for the rent of his apartment (KD 500 per month) amounted to about KD 120,000. This amount was sufficient to build his house, but he spent these amounts without any interest other than psychological and social pressures. Rents for Kuwaiti families’ homes range between KD 400 and KD 900 per month.

About 33 percent of Kuwaiti families live in rented housing, or in their family houses, while waiting for their turn. Statistics from the Public Authority for Civil Information indicate that the number of Kuwaiti families in the waiting list for housing has reached 313,000. Rent is the most important component that consumes about 35 percent of the employee’s salary. Real estate sources estimate the rents of Kuwaiti families’ homes at between KD 400 and KD 900, depending on the area, cladding and region.

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