Measures identified for implementation of a new housing construction system

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November 23, 2019

Measures identified for implementation of a new housing construction system

On November 22, a meeting was held under the chairmanship of the President of the Republic of Uzbekistan Shavkat Mirziyoyev to discuss measures for introducing a new system of providing the population of cities and villages with housing.
In order to provide decent housing over the past three years, 104 thousand units of affordable housing have been built, including 63 thousand in villages and 41 thousand in cities.
Despite this, the pace of housing construction is not keeping pace with the growing demand of the population. This is evidenced by more than 36 thousand appeals regarding the housing issue received by the People’s Reception Office for 9 months of this year.
Many are unhappy with the quality of houses. Some areas erected in villages are not connected to engineering and communication networks. There is unrealized housing, and for some houses, repayment of loans is problematic.
The reason for these and other shortcomings is that the construction of affordable housing does not have a stable financial source and is carried out mainly at the expense of budgetary funds. Competition in the system is weakly formed, private sector participation is not enough.
According to the calculations of international organizations, to fully satisfy the housing needs of the population, it is necessary to build 145 thousand apartments annually. It takes almost 30 trillion soums a year.
Starting next year, a new system for providing the population with housing will be operating. From now on, the construction of houses will be carried out not by the state, but by the private sector. The state will support the demand for housing through the provision of mortgage loans to the population under optimal conditions. The amount of resources for mortgage lending will no longer be limited by the banking and regional principles.
Following the local discussion of this proposal, business developers responded positively to it. They noted that if the population’s access to loans is simplified, the possibilities for housing construction will expand while maintaining the current price level, but with higher quality.
Based on this, henceforth, the construction of houses in cities will be carried out in the following order.
First, business entities, at the expense of their own and external funds, will build houses for 13 thousand 750 apartments in the capital and other cities. The issues of designing houses will also be addressed by entrepreneurs themselves.
Second, land for construction of houses will be allocated through auctions. Connection of houses to water supply and sewage networks, construction of access roads will be financed from the republican and local budgets.
Third, for healthy competition between banks, the Ministry of Finance will allocate almost 3 trillion soums to them through an auction for the subsequent allocation of mortgage loans.
In addition, a mortgage refinancing company will be organized with the assistance of the Asian Development Bank. It will place funds in banks as additional resources for the allocation of mortgage loans for new buildings.