KUWAIT CITY, Sept 2: The pressing question of whether the local private sector can resolve the housing crisis, which is draining billions from the state budget, was addressed by several real estate experts. The experts emphasized the significant financial burden on the state, which spends over 173 million dinars annually on rent allowances, urging the government to collaborate with the private sector under the new reform initiatives. In an exclusive interview with the Al-Seyassah newspapers, the experts say they are optimistic that the government’s new reform era would pave the way for the private sector to play a crucial role in addressing the housing crisis, thanks to its substantial financial resources.

The experts have called for swift amendments to laws that currently limit private sector participation in this vital issue. Dr. Salah Bursali, Chairman of the Kuwait Contracting Companies Union, noted that the local private sector is well-equipped to tackle the housing issue, especially given the rising number of pending housing applications, which totaled around 96,315 by 2024. He pointed out the steady increase in applications over the years, from 4,456 in 2017 to 4,628 in 2018, and a significant jump to 6,179 in 2019. He further noted that despite the challenges posed by the COVID-19 pandemic, the number of housing applications continued to rise, reaching approximately 7,081 in 2020 and jumping to 8,879 in 2021.

Although there was a slight decrease in 2022, with applications dropping to around 7,181, the numbers rose again in 2023 to 7,561. He warned that if this trend continues, the number of housing applications could reach 10,000 annually within the next five years, driven by the growing population. Dr. Bursali explained that with the accumulated housing applications reaching about 96,213 in 2024, the state is currently paying 14.447 million dinars per month in rent allowances, totaling 173.367 million dinars annually.

Over a decade, this amounts to approximately 1.733 billion dinars, assuming the number of applications remains stable. He emphasized that the government can amend the relevant laws and allow the private sector to participate in solving the housing crisis. This would not only reduce the financial burden on the state but also expedite the process for citizens to obtain housing, which currently takes over 15 years in some cases. Dr. Bursali also highlighted that Kuwaiti contracting companies, which are already building residential cities in other Gulf countries, would be eager to invest in similar projects within Kuwait if given the opportunity. This would lead to a flourishing real estate and housing market. He expressed optimism that the government, under the leadership of His Highness Sheikh Ahmed Al-Abdullah, would finally address this long-standing demand.

He voiced his dissatisfaction with the current practice of awarding housing projects under the Housing Care Authority to foreign companies, based on the argument that Kuwaiti contracting companies lack the necessary capabilities. He argued that this claim is unfounded, as local companies can secure financing from banks, similar to how the Kuwait Petroleum Corporation funds its oil projects. Moreover, a single residential city could be divided among 20 or more contractors, ensuring broader participation. In a related context, Qais Al-Ghanim, Chairman of the Real Estate Residents Association and a housing expert, emphasized that the private sector in any country possesses the financial capabilities to contribute significantly to national issues. He highlighted that Kuwait’s local private sector is fully capable of partnering with the government to address the housing crisis and expressed hope that the government will prioritize providing the private sector with the opportunity to fulfill this role.

Al-Ghanim pointed out that the private sector had previously developed areas in South Surra, and questioned why it has not been allowed to participate in more recent housing projects. Al-Ghanim also addressed the challenges of the apartment system as a solution to the housing crisis, noting that many citizens prefer to acquire a 400-meter plot to build a home for themselves and their families, rather than opting for an apartment. He explained that this preference is natural, as most citizens would choose to own land over an apartment. Khaled Al-Anzi, head of the Mutlaa Residents Committee, stated that the private sector could play a significant role in solving the housing issue, including the execution of infrastructure projects. He noted that real estate and contracting companies are eagerly waiting for the current government to grant the necessary approvals to allow them to actively participate in resolving a crisis that has persisted for decades. Al-Anzi further explained that if the private sector were empowered, it could potentially resolve the housing issue within a few years. He suggested that the state could provide land to citizens and then entrust the private sector with the construction, thereby alleviating the financial burdens on the state budget. He also expressed surprise that foreign companies are being given opportunities to undertake housing projects while local companies are often relegated to sub-contracting roles. Al-Anzi questioned why the government does not directly entrust these projects to local companies, given their capabilities.

By Najeh Bilal
Al-Seyassah/Arab Times Staff