Building
the future |
Algeria's accommodation and construction policies
have shown important limits over the years. Since
independence, the efforts made have had but a
weak impact on national accommodation statistics
: after forty years of independence, the country
has an estimated deficit of more than two million
houses. Several factors have contributed to this
situation, among which feature the strong demographic
growth that the country has experienced and the
ever-present role of a state wanting to do everything
by itself in the management of the country's accommodation
resources.
This over-enthusiastic state intervention has
had considerable effects on the crisis, with long
delays in the construction of new housing, financial
setbacks and all too frequent distribution irregularities
when it comes to social housing. The concentration
of the population in coastal regions (with two-thirds
of the population concentrated in just four per
cent of the territory), the inefficient management
of housing and illegal construction projects are
additional problems to be solved.
The most important government measure put in place
to correct past wrongs concerns the availability
of housing. The idea is to diversify the available
options, concentrating on the adaptation of revenues
and the possibility of owning the property. Different
housing policies have therefore been adopted :
social leasing, for which The Real Estate Promotion
and Management Office (OPGI) is responsible; social
participation, aimed at constructors; let-to-sell,
which has been handed to the Agence de l'Amélioration
et de Développement du logement (housing
development agency); rural development, which
is designed to help repopulate rural regions ;
and, finally, promotion. These projects require
large investments and provide plenty of opportunities
for partnership.
Faster and better
Current Ministry of Housing policy (www.mhu.gov.dz)
is guided by the need to reconstitute the market
character of the sector. The stated wish is to
introduce a spirit of competitiveness and commercial
activity into a real estate market which is already
more open to private initiative, whether that
initiative be foreign or Algerian. The only role
the state wishes to keep is that of regulator.
"We have never shunned private sector or
foreign partnerships. Indeed, we acknowledge the
need for assistance and the help of foreign partners
who have more experience in the construction sector:
partners who can offer us much more in the construction
and conceptual choice domains. We are fully aware
of the deficit that we have in town planning circles.
We encourage the formula for partnerships. I am
convinced that this will allow us to grow further
and faster. " says M. Hamimid, minister for
housing and town planning.
This will to establish partnerships and access
new technologies is a desire held by all of the
country's businessmen, something which is certainly
the case with ECA, one of the largest construction
companies in the Algiers region. Its General Manager,
Mr. Hasbellaoui, explains his interest in seeking
a private partner: "Our most important market
is the state housing construction market. That's
why we wish to take on board a large part of the
65,000 houses that are being planned for the near
future, a project for which we are seeking private
partners. This should help us complete the project
better and quicker."
The alternative to the social-participatif
The projects that were launched in 2002 include
almost 130,000 houses, with 62,000 that fit into
the category of social housing, financed by the
state to the tune of 47.6 billion dinar.
The Real Estate Promotion and Management Office
(OPGI), a network that manages promotion and supervises
the building of houses for the state, is also
seeking private foreign investment. "Our
primary goal is to build social housing financed
by the state," explains Mr .Zahana, general
manager of the OPGI office in Blida. The general
manager of the Oran OPGI office, Nadir Imadali,
confirms this: "Currently, the housing demand
in Algeria is so strong that we need some very
important investments. We have a deficit of around
one million houses and I think that any investor
willing to share expertise and financial resources
is welcome. Their investments would be assured
as we have no unsold property liabilities."
Mr. Imadali explains that: "The OPGI is a
state instrument to help put in place its social
housing policy. But it is also an industrial,
commercial entity because it can undertake purely
profit making enterprises alongside its public
service mission (
) whenever we find interesting
opportunities, like the discovery of an interesting
plot of land, we contact investors to build promotional
housing, aimed at better off families. That way,
we try and increase our commercial exposure and
obtain some profits." Mr. Zahana goes even
further: "We at the OPGI offices know very
well that the future will be built on commercial
real estate promotion." Real estate promotion
constitutes another very important sector in contributing
to the reduction of state financing and participation.
Let-to-sell: the latest trend
The importance of the new let-to-sell formula,
aimed at the middle classes, must not go unnoticed.
35,000 houses will be added this year to the 20,000
constructed last year. This state enthusiasm will
continue for another three years because of the
popularity of the project among Algerians. The
project will not impose any additional expenditure
on the state budget as it will be financed by
reimbursable loans from the public treasury.
Apart from the fact that this operation is assured
with capital recycling, which will guarantee its
financing in the medium- and long term, the powers-that-be
have started discussions with potential foreign
partners (notably the Chinese and estate management
companies from the Middle East).
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They are also planning to extend financing to
Algerian and foreign loan companies. The situation
generated by this formula will allow the state
to progressively disengage itself from housing
finance, at the same time as keeping its finger
in the social housing pie to aid the poorest families.
Since its launch, let-to-sell is unquestionably
the formula which has had the most success in
the opinion of the Algerian public. Launched in
eight wilayas (districts) in the 2001 programme,
the project has surpassed all hopes and has thus
been extended to twenty-five further wilayas this
year. For the 20,000 houses planned for 2001,
the AADL, in charge of the let-to-sell programme,
has re-estimated its growth plans and is currently
constructing 55,000 more units spread across Algeria.
Algiers is to benefit from most of them, with
eleven zones pinpointed for improvement by AADL.
Annaba, Tipaza, Constantine, Oran and Blida have
not been forgotten either.
One of the elements of let-to-sell's success in
Algeria is its methods of payment, which are linked
to the financial possibilities of the Algerian
middle classes. For the F3 and F4 types of house,
for example, which are valued at 1.4m AD and 1.7m
AD respectively, the buyer only needs to provide
a down payment of ten per cent. The remainder
is paid very gently over the next twenty or twenty
five years in monthly payments. The buyer is,
of course, also allowed to reduce this repayment
period if he (or she) wishes. The let-to-sell
contract, however, specifies that the occupant
may not sell the property in the first ten years
and, thereafter, and should the occupant wish
to sell, that the agency will be the sole buyer.
Financial Diversification
Aside from the AADL
and the EPLF (Entreprise de Promotion du Logement
Familial or family housing promotion unit), which
intervene directly in the construction, different
public bodies have been created in order to promote
and sustain the development of the housing sector
financially. Amongst these is the Caisse Nationale
du Logement (CNL). This institution was created
to manage state contributions dedicated to social
housing. According to its general manager, Nacer
Djama: "Total state interventions can be
valued at one billion dollars every year, 75%
of which pass through the CNL." Mr. Djama
adds that : "this is also a sector where
foreign investment is growing and encounters a
low risk. There is an large demand and, as strange
as it may seem, limited competition. (
)
The housing sector occupies a great position within
the 525m DA plan to re-launch the economy. There
are therefore some excellent business opportunities
in our area." Another important body in the
Algerian housing sector is the FGCMPI (Fonds de
Garantie et de Caution Mutuelle de la Promotion
Immobilière or real estate mutual guarantee
fund), whose role is to secure the loans awarded
to buyers based on off-plan and show-house sales.
The SGCI (Société de Garantie du
Crédit Immobilier or real estate loan guarantee
society) is a loan insurance company which is
developing an real estate investment fund. Finally,
we have the SRH (Société de Refinancement
Hypothécaire or mortgage refinancing society)
whose goal is to refinance banks to help them
award loans for the acquisition of housing.
Sidi Abdellah : potential for success
In order to ease urban pressures, the Algerian
authorities are planning the construction of three
new cities: one in the wilaya of Constantine,
with an estimated population of over 300,000,
one at Boughzoul and a new city near Algiers named
Sidi-Abdellah. This last project will give priority
to new technologies, with the creation of a cyber-park
part-funded by the Ministry of Post and Telecommunications
and the scientific community.
"We are eagerly awaiting financing from large
private investors", explains Liess Hamidi,
general manager of ANSA, the company in charge
of the Sidi-Abdellah project. Some investors are
already present, like the Khalifa Group or the
American hospital, which has committed itself
to building a research centre for cardio-vascular
diseases. Mr. Hamidi highlights this: "Investors
will have the EU just across the water and will
be able to benefit from very favourable economic
conditions. Goods and labour are both cheaper
than in Europe and we have very skilled workers
here. We have young, dynamic, well trained graduates
who are paid less than there American and European
counterparts. The location is also exceptional,
with impressive views over the Mediterranean and
the Mitidja Atlas." The general manager of
ANSA adds : "the new town of Sidi Abdellah
represents a key project for the Algerian economy
of tomorrow and for scientific research. We must
invest in this project so as to be able to reap
the rewards in a few years time. In five years
time, Sidi Abdellah will have an international
presence. First come, first served."
Revitalising urban infrastructures
Alongside all of these programs, projects inherent
to existing urban infrastructures are being developed.
Algeria has an exceptional architectural heritage,
composed of medieval cities and designs inherited
from the French colonial period but it is an architectural
heritage in a very advanced state of decay. "There
is an awful lot to do in this area," explains
Mr. Hamimid, minister of Housing: "One of
our principal concerns is to preserve the historical
quarters, which represent a historical heritage
that we cannot let disappear (
) We must
also renovate and revitalise our towns and cities,
re-qualifying and improving them so visitors and
inhabitants can see their true characters."
The rehabilitation of entire housing estates is
already under way in the oldest districts of the
capital and the regional metropolises (Oran, Constantine,
Annaba). In addition, the restoration of historical
centres in the south is programmed within the
framework of the national fund for the development
of southern regions.
In the capital, an urban reorganisation project
on a grand scale has been undertaken in the "Hamma"
neighbourhood, which should be the future businesses
district of Algiers. This project should see the
construction of 17,000 homes for around 120,000
inhabitants, along with the establishment of business
premises, service centres and an interaction point
for heavy machinery. Another long term project
is also winding its way through the urban planning
maze : the restoration of the Casbah, one of the
most treasured historical zones of Algiers.
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