The state-owned General Housing Establishment (GHE), which is supposed to provide affordable housing to the population, has once again raised the estimated prices for alternative housing units in the Marota City project. It also requested those eligible for the units to pay 30 percent of this new value now.
Marota City is one of two newly zoned real estate areas established in the city of Damascus under Legislative Decree No. 66 of 2012. Marota is located southeast of the Mazzeh district, while the second, Basilia City, is located south of the southern ring highway. The Damascus governorate manages these two areas through its Directorate for Implementation of Decree No. 66. Damascus Cham Holding company was established to develop the area.
Some of the former homeowners in Marota are entitled to alternative housing, one of several social housing schemes implemented by the GHE. Homeowners in informally built neighbourhoods may apply to receive alternative accommodation should they lose their homes to expropriation, demolition or rezoning. Under Decree No. 66, the people entitled to such housing include those who built their houses on state-owned land or those who built on agricultural land within an area subject to the decree. In practice, however, those built on state land were excluded from alternative housing in Marota City for unclear reasons. Only those who built on agricultural land were not allowed to build on it were entitled to the measure.
Alternative housing is not provided free of charge, though. Applicants must pay for it in interest-bearing instalments based on the estimated construction cost. Today there are 5,500 applicants entitled to alternative housing in Marota City, with 48 apartment blocks allocated to them. However, alternative housing meant for Marota City was transferred to the Basilia City area, in violation of Decree No. 66 and without official justification. Basilia City is farther from the Damascus city centre and has lower real estate values than Marota City.
The GHE announced on November 28, 2022, that it had allocated 522 alternative housing units to applicants in Marota City. It invited applicants who were granted priority to attend allocation sessions in December to choose their units. Those sessions were later postponed to January 2023 due to the long break imposed by the Council of Ministers at the end of last year due to the fuel crisis.
In these sessions, applicants may choose according to their preference which housing units they would like within the alternative housing project, so long as they fit within the allotted total surface area. Through this allocation process, the applicant enters into a contract with the GHE. However, the allocation contract does not include a specific timeline for the completion or handover of the housing units. Allocation of housing also does not mean that construction of the housing units has been completed or that the handover will occur soon. Nevertheless, the allocation contract is considered a title deed, provided that any remaining financial obligations are met.
Under Decree No. 66, those allocated apartments should have finished receiving them in 2018. Law No. 10 of 2018, which amended Decree No. 66, extended that deadline to the end of 2019. However, none of the planned residential towers for alternative housing has been completed to date.
Applicants have pointed blame for the delays on the GHE and the Damascus governorate. And to add injury, the social housing project delays usually mean the GHE raising estimated prices for their housing units due to increased construction costs and the depreciation of the Syrian pound. In 2020, the GHE set the estimated value at SYP 550,000 (about USD 200 at the time based on the black market exchange rate) per square metre, but raised that value at the end of 2022 to SYP 3.5 million (roughly USD 580).
For example, a 100-square-metre alternative housing apartment would have been priced at SYP 55 million in 2020. That same apartment would cost SYP 350 million today.
On top of the monthly instalments, the GHE requires alternative housing applicants to make large payments upon receiving certain entitlements, such as upon subscription and allocation. For example, when subscriptions opened for alternative housing in Marota City in 2020, applicants paid the GHE 10 percent the estimated value of their housing units at that time. To complete the allocation process, those applicants must pay the GHE 30 percent of the estimated value at the time. Should they fail to pay, they lose their turn for allocation.
Notably, because of the GHE’s continued price hikes, it no longer considers a subscription payment made in 2020 equivalent to the required 10 percent of the alternative housing unit’s value. Instead, it simply considers it one small payment instalment out of many. In other words, the GHE re-appraises the housing units retroactively, such that older payment instalments are no longer considered the same percentage of the total property price as they were upon payment.
This sparked discontent among applicants, who formed a delegation that met with Damascus governorate officials multiple times. According to the Marota City news website, the governor told the applicants’ delegation on January 8: “If you haven’t paid, then you won’t live here, and the project will halt.” The governor then asked them to “forget the past” and not discuss the project’s previous mistakes, also vowing to allow the 30 percent payment upon allocation to be completed in three instalments, pending a decision from the GHE.