Current Situation
In his book, The Art of War, Sun Tzu said that, “a leader leads by example, not by force”. I King Abdullah wish to lead our country to resolve our current housing challenges by being in the front line to formulate policies that will provide more housing units to cater for our 22 million people. I understand that at the moment there is an annual shortfall of about 200,000 housing units for the country’s growing population. In addition, more than 50% of Saudis are unable to buy houses and that in the next 10 years the country will need 2.4 million new housing units to cater for the increased population.
Vision
My government’s vision is to provide decent housing for all people residing in Saudi Arabia.
Mission
Driving forces
In order to accomplish this mission, increased income from oil trade as well revenues from the expanding tourism industry will be channeled to fund government housing projects. The government also banks on cooperation with the vibrant private sector especially in the Real Estates development which will be provided with incentives to enable it to expand housing in the country. The disadvantage of relying on oil proceeds is the fluctuations in international oil prices which could lead to losses and hence negatively affect the housing projects. There is also stiffer competition for tourists in the Arab region which puts reliance on such funds in jeopardy.
Strategic objectives
The government plans to improve the number of housing units to match the demand. The Real Estate Development Fund (REDF) which is currently working on several housing projects will be revamped, more people trained on engineering and relevant courses on housing and construction in order to ensure that the country does not import a lot of expensive labor for its housing programs.
Financial objectives
Government funding to the REDF will be increased by 250 billion riyal (US$67 billion) in order to enable it construct adequate houses for the next five years. Within the next two years (2014-2015) the government shall use about 130 billion riyal (US$34 billion) to construct 500,000 houses and thereby meet the demand for 200,000 homes per year for those two years. Each subsequent year, the government shall be using a similar amount on housing. The sale of houses to citizens shall be expected to fund the continuity of housing programs.
Alternatives
Some of the alternatives the government has in order to meet the housing challenge in the country are:
- Government developed housing projects - This means that the government will develop housing units under the ministry of housing and then sell, lease or rent those houses to the people.
Pros
- The government has adequate funds to develop a high number of quality houses
- Government houses are bound to be cheaper and therefore more affordable to the public
Cons
- Corruption and embezzlement of public funds could lead to the housing program being compromised and failing to meet the desired needs
2. Subsidization of real estate development- The government can also subsidize real estate developers in land, building materials and labor to ensure the sector provides many quality and affordable housing units to the people
Pros
- Variability and customization of housing units to meet divergent needs and tastes
- Members of the public can obtain housing easily without the lengthy government procedures
Cons
- Houses developed by the private sector are generally more expensive
3. Control of population, demographic and settlement patterns to ensure they match up with the current housing situation.
Pros
- Minimal expenditure in putting up many new houses
- Other socio-economic needs such as education and healthcare for a controlled population can be successfully met
Cons
- This alternative is hard to implement and is bound to face opposition from the public because it seems dictatorial to control population instead of expanding government services.
SWOT Analysis
Implementation steps
Some of the implementation steps in order to improve housing in Saudi Arabia include:
- Allocating Resources
The government will allocate adequate resources by providing government land as well as funding for the construction of residential houses.
- Establishing Strategy-supportive Policies
The government will also establish policies that increase partnerships with the private sector through subsidization of building materials, reduced taxation of building materials, low land rates and other incentives aimed at encouraging increased construction of residential houses.
- Exercising Strategic Leadership
At the moment, the government is running a program called “Decent Housing for Decent Living”. This project was initiated by the King and it has plans to construct 100,000 apartments in period of five years with 20,000 units being constructed per year. This shows strategic leadership that will spearhead the achievement of adequate housing in the country.
Conclusion
Carl Von Clausewitz once said that, “boldness governed by superior intellect is the mark of a hero”. I as the King boldly intend to utilize my foresight and intellect as well as that of industry players to pursue massive housing projects and make sure that we resolve the current housing problems in our country within the next few years.
