oday, demand extends to 2 million housing units in urban and semi-urban areas across the country, but construction does not currently exceed 150,000 units annually. The housing shortage has sparked riots in urban centers around the country and remains one of the most crucial areas of government policy reform. “Indeed,” says Mr. Mohamed Nadir Hamimid, Minister of Housing and Urban Planning, “since Algeria has an urbanization rate in the 60% range – a rate that keeps growing fast because of the socio-economic changes – we are required to take measures to control both the organization of the national urban structure and the existing urban fabric.”
Efforts to solve the crisis have come largely in the context of the government’s economic reform movement. Perhaps the most fundamental change is the liberalization of the housing sector over the past ten years. Restrictions on land sales, material imports, and construction prices have been freed, along with a gradual easing of rent ceilings. The state-owned construction sector has also been restructured, with most local construction companies being privatized along with many local building material firms.
The regionally focused and state-owned real estate developers (OPGIs), have also undergone financial and physical reorganization. Their number has been reduced, many of their activities have been outsourced to the private sector, and they are now free to diversify their sources of financing and external investment. For example, the OPGI of Blida, an urban center 80 km east of Algiers servicing the rural hinterland, has succeeded in securing $300 million from the Kuwaiti government to finance housing development. The city has a population of slightly under 900,000 and faces a housing shortage of over 26,000 units. So far a housing program for 12,000 units has been implemented, out of which 1,320 have been completed and 4,000 were launched last year. The Kuwaiti funding program has allowed the construction of 1,020 housing units, but the Blida OPGI requires additional funds to tackle the housing deficit. Other participation from Arab investors, says Minister Hamimid, comes with the creation of a mixed-investment company of Arab investors and a group of six OPGIs, which is endowed with a paid-up capital of 1.6 billion dinars.
The leading state body in the housing sector is the National Housing Fund (CNL), founded in 1991. The CNL manages all government funds in the housing sector along with any national or international grants or aid monies. It finances the construction of on average 60,000 housing units a year, divided between the social housing programs dedicated to the urban and rural poor, and rent-to-buy programs (100% mortgage schemes) for middle-income groups. It also ensures the distribution of about 40,000 housing grants. Under a new plan released by the Ministry of Housing and Urban Development, the government is also trying to attract additional funds and involve private sector investment for the construction of another 60,000 housing units, bringing the total to 120,000 new units annually.
“When speaking about a housing crisis, we should take a more positive attitude and say that there is a demand and a market here,” argues CNL chairman, Mr. Nacer Djama. “It is a market in which the state is fulfilling its share of responsibility but which is open to the private sector, both to domestic and foreign capital. To be sure, the shortage of housing is a problem. But the concept of crisis would imply that we have neither the financial means nor the tools to fix it, which is not true. It’s just that we lack investments in this area, above all from the private sector, be it domestic or foreign.”