Affordability of housing and new opportunities for the population and business

Affordability of housing and new opportunities for the population and business

On March 3, President of Uzbekistan Shavkat Mirziyoyev held a video conference on measures to develop housing construction and the mortgage market.

It was noted at the meeting that 11 trillion 500 billion sums will be allocated within the framework of the program for providing the population with housing this year.

The importance of the measures taken in the comments of the expert of the Center for Economic Research and Reforms (CEIR) Feruzbek Davletov.

Over the past 4 years, under the state program, 140 thousand housing units were built, which is 2 times more than the number of residential buildings built over the past 10 years in Uzbekistan. However, it is no secret that the population's annual demand for affordable housing remains high. In this regard, additional measures to provide the population with housing through mortgage loans based on market principles envisage providing housing for all segments of the population and expanding their choice. In details, this year it is planned to provide 45 thousand families with affordable housing. 33 thousand of planned new houses out of 45 thousand will be built in 2021 by entrepreneurs under the state mortgage program.

Experience shows that affordable housing is one of the best ways to stimulate entrepreneurship and economic growth. Affordable housing offers the opportunity to stimulate capital for business investment through mortgages and savings from households.

It is no secret that the cost of housing the most constraining factor for the internal mobility of the population within the region in many countries. A study by the World Bank Expert W. Seitz in 2018 shows that 28% of the total household consumption in urban areas accounted for rental housing, and for rural areas it reached 30%.

Such a consumption structure does not directly imply serious financial difficulties among the population. However, the diversity of forms of well-being of households that live in both urban and rural areas by obtaining affordable housing would allow them to achieve a higher standard of living, including opening a new business, increasing demand for goods and services and other aspects.

Therefore, it is expected that the pace of urbanization will accelerate due to the increase in affordable housing under the envisaged program, which in turn implies an improvement in business activity, demand and the quality of life among people.

The most prosperous cities must be open to the best and most talented in Uzbekistan. Housing costs should never be a barrier to living, finding a good job, or starting a business. That is why, over the past few years, the country has been paying special attention to improve the affordability of housing for all segments of the population. The measures taken in this direction will not only provide the population with safe and modern housing, but will also serve to further develop the mortgage lending market and create favorable conditions for doing business in the republic.

Feruzbek Davletov

Leading Researcher at CEIR

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