Delayed Rent Allowance Payments for Marota City: Is Covid-19 the Cause?
In recent weeks, the Damascus governorate has resumed paying late rent allowances for 2020 and part of 2019 to residents entitled to alternative housing in the Marota City construction project, following a long interruption in payments. The governorate blamed the delayed payments on the Covid-19 pandemic, despite the fact that the latest delay was not the first of its kind in recent years.
The Damascus governorate’s director for implementing Legislative Decree No. 66 revealed that the governorate had paid a total of more than SYP 13 billion to 5,516 people eligible for alternative housing in the Marota City and Basilia projects, as a rental allowance for 2015 to the present. The director added that the total annual payments were more than SYP 2 billion, distributed via checks to the stakeholders. He affirmed that the governorate would continue making the rental allowance payments on time until the alternative housing units were handed over.
Legislative Decree No. 66 was issued in 2012 with the aim of establishing two zoning areas within Damascus: Marota City and Basilia City. The decree granted owners with official documents who were evicted from the two areas the right to buy a housing unit within these two projects, provided they paid for it at the price set by the governorate. Owners were compensated for their expropriation by receiving shares in plots in the project.
The alternative housing was meant to have been finished by 2016 under Decree No. 66, but then Decree Law No. 10 of 2018 extended the deadline to four years after the date the residents of the zone were expelled in 2015. This deadline expired in 2019, according to the law, but alternative housing has yet to be provided to eligible residents.
In October 2020, the General Housing Establishment (GHE), which is affiliated with the Ministry of Public Works and Housing, called on residents eligible for alternative housing to sign up for housing units between 18 December 2020 and 14 January 2021. Those who are eligible must make their first payment to the Real Estate Bank, after which they will receive payment ledgers. The first payment for alternative housing, according to the housing unit’s total area, is to be SYP 2.2 million to SYP 6.6 million, with subsequent monthly installments of SYP 11 million to SYP 33 million, as well as large payments upon allocation of the housing and signing of the housing contract. Neither the Damascus governorate nor the Ministry of Housing have set the final housing prices.
The GHE’s Director of Social Housing said in December 2020 that the rising costs of construction materials would cause an increase in the monthly installments for people who have signed up for the alternative housing units.
The Technical Studies Department of the Damascus governorate has estimated the total cost for funding construction of alternative housing in Marota City at SYP 285 billion. It is unclear if Damascus governorate is able to finance the alternative housing project. Despite eight years having passed since its inception, the governorate is still offering tenders for building the first two of the planned 38 residential towers set aside for alternative housing.
The Damascus governorate previously denied reports that alternative housing blocks would be constructed in a new district of Qudsaya, called the Qudsaya Expansion – Qudsaya is located west of the capital city – and confirmed that alternative housing for those who are eligible from the Marota City project would be located within Basilia City. In other words, the governorate transferred alternative housing for Marota City to Basilia City, which is farther from the city centre and has a lower monetary value, in violation of the terms of Decree No. 66.
In most cases, the rental allowances do not cover more than one third of the rental prices currently being paid at the market rate by people who have signed up for alternative housing. Meanwhile, 2,700 families from the Marota City area were barred from rental allowances and alternative housing, as they were unable to prove their prior real estate ownership.
The long delay in implementing alternative housing has created parallel markets, most importantly a market for eviction notices. Eviction notices received by occupants of properties slated for demolition in 2015 are the only documents proving a resident’s right to alternative housing. Due to high real estate prices and the inability of many people to make the down payment for alternative housing, a market for the eviction notices has developed. The price of one notice is currently between SYP 40 million and SYP 50 million, depending on the housing unit’s total area, with an average rate of around SYP 400,000 per square metre.
Decree No. 66 had banned the trading of such notices for Marota City, although subsequent administrations permitted the matter on the condition that they be obtained after signing up for alternative housing – provided that the GHE collects five percent of the housing unit for every sale or housing assignment that occurs due to the eviction notices. In other words, the GHE entered into the eviction notices trading market as a speculative partner. The prices of the eviction notices are calculated as part of the value of the housing unit, with the buyer pledging to continue paying the monthly installments on time. People who are entitled to alternative housing lose their right to receive rental allowances when they buy a fake eviction notice.
Source: Damascus Cham Holding Company