Recommendations towards an Affordable Housing Policy for Saudi Arabia

There are both challenges and opportunities for developing a national affordable housing program in the Kingdom. Some key takeaways from the analysis of our upcoming White Paper are:

1. Regional and local dynamics

Saudi Arabia has a sufficiently diverse population demographic that regional and local market dynamics must be considered in a national affordable housing policy. Solutions applicable to major metropolitan centers such as Riyadh and Jeddah may be very different from what is needed in semirural areas in the country’s interior.

2. Private sector participation

Given the sheer scale of the affordable housing needs in the Kingdom, it is unlikely that the country’s housing goals can be accomplished without some degree of private-sector participation. However, this private sector participation brings with it many challenges – such as the lack of available professional developers versus the total number of units to be built, little history of PPP projects to establish an ongoing working relationship between the government and private sector, and the difficulty in administering private sector collaborations across a large country.

3. Affordability envelope

The Kingdom has a diverse economic demographic and a ‘’one size fits all’’ approach will likely not meet the needs of the population. Establishing an ‘’affordability envelope’’ on a national and regional level determining what categories of affordable housing are needed, is a key step in a successful policy.

4. For-sale versus for-rent housing

Cultural considerations in the Kingdom (similar to other GCC countries) dictate that most families expect home ownership as an intrinsic result of any government housing program. However, in reality, for-rent affordable housing programs internationally have shown much higher success rates than for-sale program models. A detailed analysis is required to establish whether a majority for-sale affordable housing policy is indeed sustainable for Saudi Arabia; and in the case that rental housing must be introduced, then development models must be adapted to fit local cultural dynamics.