The Role of Housing Finance Policies in Reducing the Housing Shortage in Erbil 2005-2017

Abstract

The purpose of this research paper is to analyze the efficiency of housing finance policies, mechanisms, and solutions to the problems experienced by the residential lending institutions in Erbil city, besides to find the reasons of not playing a role in reducing the housing deficit in the city. The research hypothesis is that the housing policies in Erbil city have not been able to reduce the accumulated housing deficit efficiently while there are several methods or procedures capable of establishing an efficient housing finance system based on the participation of the public and private sectors to help to solve the problem of housing finance. However, Erbil city has suffered during the past decades from a big gap between the housing demand and the housing supply. So, this is due to the inability of households to meet their needs of these units, because of the high prices and the limited funding or support for these families to help them to buy or build a housing unit, especially low-income or middle-income families, which constitute a large proportion of households in Erbil. The lack of an efficient housing finance system and its inability to provide support to these families has exacerbated the housing deficit problem and the accumulation of housing need for many years.

Further, this research has reached some results, the most important that the method used in Erbil city is granting loans for the construction of a new housing unit, but it does not cover all the costs of construction. The current loan covers only 50-60% of the construction cost. Also, one of the most critical factors affecting the success of housing finance policies is long-term continuity in order to achieve its goals. In Erbil city, there were no completely sustainable policies, but relied on the circumstances of the country and its potential to finance or provide the necessary funds, the lack of continuity has affected the extent to achieve its planned housing goals. As a result, found during the period 2008-2013, the housing market in Erbil could not achieve more than 11% of the housing needs for the same period.