Social Housing at current costs, a mirage?
There is perhaps no other issue that is at the forefront of our political and economic discourse than that of housing. A problem that we as a country have severely failed to address while it was clear for decades Male’ city was seeing an unprecedented rise in population. Now every political party has a grand design for our housing crisis. We are grateful, but increasingly skeptical.
Construction costs per square foot range on average from MVR 950 to MVR 1300. The big question is whether social housing on a mass scale can be made affordable to the average Maldivian at this rate. Feasibility studies dictate that at current costs, a sizeable rent, relative to the average salary will still have to be charged. This is a threat to the very fabric of our society. Current living conditions have already contributed to several social problems and studies in other countries show a direct link between difficult living conditions and crime.
Innovative approaches in terms of financing and construction methods combined will likely be needed to remedy the colossal mess we find our selves in. Talk of rent controls will most definitely be brushed off by any serious economist since they failed miserably in advanced economies like the UK.
Government housing projects at their most impressive can be seen in Singapore where 85% of the population live in HDB (Housing Development Board) flats of good quality. The Singaporeans have managed to do it with high construction costs but also with high growth that gave the average citizen a good income.
Our average income is dismally low in comparison while our rents are almost at par with Singapore. To fix a market this broken will require more than just building more flats. It will require economic growth and an increase in incomes to the extent that the average Maldivian will be able to afford a flat of good quality on an average salary. We seem to be far from it. And it is time for the discourse to include concerns about governance and the ability of this government and its successors to bring about the change we need. We sincerely hope they manage to do so.
