Paper by The Syria Report – The Housing Crisis in Syria: Do Social Housing and Housing Cooperatives Still Have a Role?
In Syria, the average annual housing deficit reached nearly 130,000 homes in the decade preceding the 2011 conflict, according to official estimates. This represents the annual gap between the demand for housing and the supply of implemented housing units and has become a major obstacle to property rights.
Historically, most of the housing production in Syria was carried out by the private sector, usually by individuals, building contractors, or small real estate developers. However, official numbers show that even in the most productive years, namely between 2005 and 2010, the social housing sector, which the public sector implements, and the housing cooperative sector, which cooperatives implement, failed to provide more than 20 percent of the annual housing demand in Syria. Both sectors cooperate to supply and sell finished and unfinished low- and medium-cost housing to citizens, especially to those with low incomes.
According to World Bank data in 2017, 27 percent of housing units in Syria were completely or partially destroyed during the war. During this period, the state-funded housing sector was inoperative, disrupting the completion of delayed or struggling projects. However, the development of the legislative and legal infrastructure for the post-war reconstruction phase – which is based on an investment logic and which grants little weight to the needs of low-income individuals, and thus, to social housing and housing cooperatives – continued uninterrupted.
Given the magnitude of the housing crisis, it does not appear that the private sector alone can bridge the gap of the housing deficit or rehabilitate and rebuild what has been damaged. Accordingly, this study examines the factors underpinning the shortcomings of the social housing and housing cooperative sectors, as well as the possibility of establishing a new housing policy that addresses the post-war housing crisis.
Part I. About social housing and housing cooperatives
The housing crisis in Syria has always been a major issue. Given the widening gap between the cost of housing and the average income, owning an ordinary home in a zoned area remains a distant dream for most Syrians. Official housing policies have not managed to keep pace with the rising demand for housing incurred by population growth and rural exodus. The policies remained insufficient to meet the housing needs of low-income city residents, many of whom are employed by the public sector, ministries, the army, and security forces. This stratum has increased in number as a result of the expansion of the state and its institutions in the last few decades.
Since the 1960s, the state has been directly intervening in the housing sector. It established various institutions, chiefly the General Housing Establishment, founded in 1961, to provide social housing for low-income individuals through concessionary loans and at prices commensurate with building costs. As of 1975, the General Housing Establishment became subject to the law governing the work of public sector institutions “of an economic nature,” namely for-profit enterprises. Furthermore, it was put under the supervision of the Ministry of Public Works and Housing, which was established that same year.
With time, the government put forward a number of social housing programmes: popular, savings, labour, employee, youth, alternative, and government. In general, state institutions develop these different projects based on various criteria, including building area and their specifications. They then allocate and sell homes to citizens in facilitated monthly instalments over up to 25 years. Some of these programmes are only available to civil servants, while others offer alternative housing to those whose properties were expropriated by the state on the grounds of public interest. Based on most of these programmes, housing is allocated to the applicant once they have paid half the cost of the property through instalments. “Allocation” is a contract between the applicant and the implementing party. The contract determines the obligations of both parties and includes the location and specifications of the dwelling. The allocation contract is considered a property deed provided the remaining financial obligations are met.
The state is also involved in the housing sector indirectly through the housing cooperatives system, which was theorised as the embodiment of the Syrian economy’s socialist orientation given that cooperatives are not capitalist institutions, i.e. they are self-funded and not for profit. For many years, cooperatives relied on purchasing build-ready land from the state at cheap rates, in addition to incentives like easily obtained construction permits and the ability to purchase building materials in reasonable quantities at officially set prices. In terms of instalments and allocations, applicants of housing cooperatives are treated in the same way as those of social housing. Generally speaking, social housing and housing cooperative schemes are connected by the laws regulating their work, which stipulate that applicants can only benefit from one scheme and only once in their lifetime.
Legislative Decree No. 65 of 1950 was the first legislation issued to regulate the works of different cooperatives. Later, Law No. 93 of 1958 was issued to impose Egypt’s Cooperative Law No. 317 of 1956 during the period of Syrian-Egyptian unity. The law linked all relevant associations, including those for housing, to the Ministry of Social Affairs and Labour. Law No. 13 of 1981 was issued to regulate the work of housing cooperatives, before being modified by Law No. 17 of 2007. That law was replaced by Decree No. 99 of 2011.
In order to reduce the existing housing gap, most of the Five-Year Plans approved by the Planning and International Cooperation Commission of the Prime Ministry set ceilings for the contributions of cooperative and social housing to the housing sector. For example, out of the 880,000 housing units planned for construction between 2011 and 2015, the eleventh Five Year Plan (2011-2015) specified that the public sector would contribute ten percent and cooperatives twelve percent. The eleventh plan, which was the last Five-Year Plan to be approved, determined that the demand resulting from population growth alone was 550,000 housing units. The tenth Five-Year Plan (2006-2010) admitted that the housing gap reached more than 700,000 housing units.
In all cases, the social housing and housing cooperative sectors never managed to achieve the percentage targets set forth by the five-year plans. Since the launch of the first programme five decades ago, the social housing sector has only managed to supply 77,000 dwellings, while the housing cooperative sector supplied around 220,000. Thus, the estimated proportion of the total share of social housing and housing cooperatives of the total number of housing units in Syria is around 7.3 percent, on the grounds that the total number of housing units in Syria is some 4 million, according to a 2010 housing census conducted by the Central Bureau of Statistics.
Part II. The crises of social housing and housing cooperatives before 2011
Since its launch, the social housing and housing cooperative experiment has suffered from its inadequate response to the pressure of the housing crisis, a lack of vision, the absence of long-term directives, and the failure to link housing policies with general population growth indexes, demographic changes, and urban planning. Moreover, there were major delays in issuing master plans. The experiment was also marked by the slow and poor execution of projects, high fees for developing the final product, multiple and intertwined legal legislations, and the hegemony of the public and executive authorities. All these factors resulted in an inability to execute the decree and plan for social housing and housing cooperatives and in the reliance on improvised and randomised solutions to mask the poor execution. Consequently, this contributed to worsening the housing crisis and depriving the majority of low-income individuals of the opportunity to own their homes.
The implementation of social housing programmes has been characterised by their extremely slow pace, to the extent that subscribers began treating the programmes as a form of investment income or a retirement plan, instead of a service to meet immediate housing needs. In many cases, public sector employees who applied to social housing schemes received their houses once they retired. In other cases, houses were allocated to heirs after the natural death of social housing subscribers.
For example, the youth housing programme was launched in 2002 over five phases. In the first phase, houses were supposed to be delivered after five years of subscription. In the second phase, they would be delivered after seven years; in the third and fourth phases after ten years; and in the fifth phase, after twelve years. However, by 2021, only houses from the first phase and some from the second phase have been completed. Most of the following stages are still in the contracting and construction phases.
Subscriptions to alternative housing in the planned Marota and Basilia City projects in the capital of Damascus began in early 2021 after a delay of more than eight years, during which the original residents from the area were displaced and their homes destroyed. In July 2020, the Prime Minister requested that the Ministry of Finance, the Damascus Governorate, and its subsidiary, Damascus Cham Holding Company – which is responsible for managing the governorate’s projects – devise appropriate formulas to secure funding for alternative housing. However, the implementation of such housing is far from being realised given the lack of funding.
One of the reasons for the delay in the completion of certain social housing projects is the link between the progress in the implementation stages of a social housing project and the total of the subscribers’ payments. The delay in the allocations of social housing is due to the requirement that an applicant must pay half of the total price of the home. This is because the amount of the monthly instalments may not exceed 30 percent of the income of the applicant, which in the first place is very small.
For example, in 2001, a public sector engineer making SYP 6,000 per month would be required to pay monthly instalments of SYP 2,000 towards a housing unit that is valued at some SYP 1 million. Thus, it would require the engineer nearly 20 years to pay back half of the apartment’s value; only then could he receive and live in the apartment.
Although it took years to implement and allocate housing, social housing programmes were also poorly executed in terms of structure and cladding. The flooring, bathrooms, kitchen, and plumbing were also of bad quality. Consequently, social housing applicants were compelled to independently carry out high-cost maintenance of their apartments in order to make their dwellings habitable. In 2019, in response to complaints about the poor conditions, the General Housing Establishment decided to reduce the proportion of cladding from 100 to 80 percent, violating subscription contracts and without likewise reducing the value of payments owed by applicants.
The delay in the completion of housing cooperative projects is largely because of the state’s delay in allocating housing cooperatives the plots to build on. However, the poor execution of the housing cooperative programmes remained, in some measure, within “acceptable” limits mostly connected to corruption. Housing cooperative programmes were not as bad as social housing programmes because subscribers did not have to repair and maintain their supposedly finished homes.
In general, the total price of homes in social or cooperative housing programmes remains much lower than that of the private sector, and they also are easier to buy given the availability of low-interest instalments, such as in Real Estate Bank loans.
Social housing has also remained a hostage of poor state funding. From the 1990s until 2011, the share of the construction and development sector in the government’s budget ranged between 0.2 percent to 1.1 percent, bearing in mind that the housing sector is only a small part of the construction and development sector, which also includes schools, hospitals, bridges, roads, and public facilities. For example, the ceiling set for loans from the public debt fund allotted to the General Housing Establishment to develop housing for civil servants remained limited to SYP 300 million, as stated in Decree 46 of 2002 for workers’ housing ownership. In 2021, the ceiling was increased to SYP 5 billion, as stipulated by Law No. 1. However, this increase was not proportional to the exchange rate of the pound, which rose 64 times between 2002 and 2021.
The multiplicity of legislations specific to social or housing cooperative programmes is unsurprising, given that they are the result of improvised government responses to interim conditions amidst the absence of a national housing vision. As a result, each housing programme has its own legislation, different provisions, and different financial and administrative references. The differences impregnate every detail, including the criteria of specifying the target segments of the programme; the conditions for subscriptions, monthly instalments, and their values; the stipulations and timelines for the allocation of housing; the registration procedures at the Cadastral Affairs Directorate; and the owner’s legal rights to the property. For example, residential housing cooperatives are under the umbrella of the Ministry of Public Works and Housing, while summer housing cooperatives are under the Ministry of Tourism. The difference in affiliation resulted in differences in subscription rules, taxes and duties, allocation timelines, and their costs. The chaos in legislation also resulted in a multiplicity of legal references for land organisation, between master planning, urbanisation, and real estate development.
Although social and housing cooperative projects stem from official authorities, they nonetheless require the approval of some or all of the following: the Regional Planning Commission, the General Commission of Development and Real Estate Investment (GCDRI), the Ministry of Local Administration, the Ministry of Public Works and Housing, the Ministry of Tourism, the Ministry of Culture, the Ministry of Agriculture, and sometimes the Ministry of Defence. This depends on the nature, the magnitude, and the suggested location of the project. Often, disputes between these various parties lead to delays in launching given projects, a change in location or specifications, and sometimes a cancellation of the projects years later. For example, the planned touristic area that includes the Amrit Resort, south of the city of Tartous, is disputed among the Ministry of Tourism, the Ministry of Culture, Tartous governorate, the General Housing Establishment, and Cham Holding Company, which is led by prominent businessman Rami Makhlouf. As a result, the project was not implemented, including its beginning phase. As stipulated by Decree 2197 of 1975, the Ministry of Tourism owns the area, which spans over 480 hectares, of which 144 were allocated for popular housing projects.
In the event that a project is approved and in the absence of an integrated implementation mechanism, there are multiple public and private bodies proposed for its execution. There are currently 11 state-owned companies and development and implementation institutions in the construction and real estate development sector, including the General Company for Building and Construction, Al Sahel Construction Company, and the Military Housing Establishment. In many cases, the implementation phases are fragmented and often arbitrarily commissioned to a public or private party through patronage and clientelism. Thus, the required engineering studies, preparatory groundwork, construction, cladding, and infrastructural and utility work end up being granted to different parties. Each phase requires the submission of tenders and solicitation of offers, which are mostly carried out as a formality but in actuality favour a predetermined party. This requires additional time and new approvals.
During the implementation phase, the project may be subject to administrative disputes between the “sponsoring” parties and the executing authority and between the local and administrative authorities under which the project falls, as well as the housing association and the Engineers Syndicate branch of the area. For example, an alternative housing project based on Decree 66 of 2012 was set to be built in Marota City, but its location was changed without notice in 2019 when it was moved to Basilia City, an area farther from the city centre of Damascus. Surrounding this matter is a dubious overlap between the work of the General Housing Establishment, which handles the administration of the project; the General Company for Engineering Studies of the Ministry of Public Works and Housing, which supervises the implementation; and the Military Construction Establishment of the Ministry of Defence, which began building the first two residential towers of the project.
Based on the current average wage for low-income individuals, if applicants paid their entire salaries towards instalments, they would repay their social or housing cooperative loans in up to 30 years. However, it would take them 200 years to obtain a house through the private sector if they were to do the same. As living costs increase, a large segment of subscribers can no longer afford to pay long-term loans and instalments. In many cases, subscribers illegally sold their dwellings before they were officially allocated to them. Consequently, they regained what they already paid and, in some cases, even made a profit.Lately, due to the lack of prospects for subscribers to receive their houses, trade-in subscription files emerged, in light of rising real estate prices. The price of the subscription file depends on many factors including the duration of the subscription, the sum of settled payments, the sum of remaining payments, the area and location of the apartment, and the exchange rate of the Syrian Pound. People mainly resort to this market in order to protect their small and medium savings after the significant devaluation of the Syrian Pound over the past months, in addition to fears about dealing with foreign currencies in the black market due to government crackdowns. In general, these parallel black markets resulted in a further disadvantage for those with low incomes who are unable to continue to pay their instalments and were, therefore, denied the right to dignified housing.
Part III. Social housing and housing cooperatives after 2011
After the major battles in Syria subsided in 2018, the magnitude of the widespread destruction in the housing sector appeared amidst a massive wave of internal displacement. In 2017, the World Bank estimated that the total or partial destruction of housing in Syria amounts to around 27 percent. That means more than a million of Syria’s 4 million houses (according to a 2010 housing census conducted by the Central Bureau of Statistics) were damaged. If we add that to the pre-war shortage of approximately 1.3 million houses (a result of a decade of annual housing deficit reaching 130,000 homes), it becomes reasonable to accept the estimates of the current housing gap in Syria as over 2 million housing units. These are only broad estimates given the lack of new statistical studies that link demographic changes and displacement to housing.
The Syrian civil war affected all sectors of the economy, including the social and cooperative sectors, which nearly came to a total halt between 2012 and 2018. While development and constructions works were suspended, legislative campaigns to regulate real estate investments was active. Social housing and housing cooperatives bore a good share of these developments.
While it is understandable that projects in areas outside government control have been disrupted, the state’s conscription campaign to recruit men between the ages of 18 and 42 have also caused the construction sector to lose its basic workforce. Further, there has been a depletion of employment opportunities, migration, resignations, and unpaid deposits for engineers and technicians due to their oppositional political views or because they sought to avoid the dangers of daily commutes and security checkpoints. As funds were redirected to finance the war, the social housing and housing cooperative programme lost a large portion of its public funding. Applicants in many areas stopped paying their monthly instalments as the forces controlling the ground changed and the costs of living increased amidst the collapse of the exchange rate of the Syrian Pound. The redirection of funds also interrupted payments to daily workers at public sector institutions and led to the suspension of the disbursement of funds to contractors, which gradually halted their work. Moreover, the prices of construction materials, especially imported ones, increased. Most housing cooperatives slowed down and suspended their activities as they waited for the political and security situation to improve and for the repercussions on the real estate industry to be evident.
Amidst this climate, amin accumulating losses, social housing and housing cooperative programmes went on what could be described as a forced leave for many years. According to official statements in 2017, the war led to significant losses for the social housing sector, reaching SYP 98.7 billion. Some of those losses are a direct result of the destruction, which exceeds SYP 5.2 billion. The remaining losses are due to delays in execution and other indirect causes. Meanwhile, no reports have been issued regarding losses in the housing cooperative sector.
Despite the suspension of construction and development companies, which also incurred great losses, the Ministry of Public Works and Housing, through the General Housing Establishment, has continued announcing new housing projects, including large residential neighbourhoods, and also new social housing programmes. In 2012, the General Housing Establishment announced the launch of a new suburban residential project called “The Green City” in the Maarouneh area outside Damascus, as part of its public housing programme. The programme was launched in 2011 after receiving an interest-free loan from the government. It aimed to build more than 11,000 housing units for citizens across Syria’s governorates. The General Housing Establishment did not issue the master plan for The Green City until late 2020 as it was experiencing a funding deficit, which hindered its ability to begin implementing the project. Moreover, in April 2015, the amended master plan of the Fayhaa Neighbourhood, which lies on the Beirut-Damascus highway, was issued when the area was outside of the state’s control. The neighbourhood was founded in 2004 based on a decision issued by the Prime Ministry, while the General Housing Establishment has owned the land since 1977. It was allocated to the housing cooperative sector to develop 334 housing plots, while the General Housing Establishment would develop only 38 plots. Despite all the time that has passed, the neighbourhood is still under development with only 80 percent of its infrastructure completed.
Contrary to the claims of the General Housing Establishment, the lack of funding for social and housing cooperative projects prevents the possibility of their completion in the foreseeable future. In fact, the failures of execution over the past decades may further facilitate the involvement of foreign parties, like in the case of the new Dimas City project, west of Damascus. By the end of 2020, a Russian delegation visited the city and suggested it be completed through Russian investments. Within the new Dimas City project, the Ministry of Public Works has developed social housing programmes, namely alternative housing and youth housing programmes that began in 2004. During his visit, Russia’s Deputy Minister of Construction and Housing and Utilities stated, “They can learn how a master plan of the area should look like and how houses should be built from us.”
On the other hand, and in cases whereby social housing and housing cooperative projects were incomplete, the original owners of the land and the applicants would be unjustly affected. Social housing and housing cooperative projects were often built on plots acquired by the state under the pretext of public benefit. Often, the original dwellers received no alternative housing due to reasons related to the legal specifications of the plots and the nature of their dwellings. For instance, in early 2021, Aleppo’s City Council demolished an informal housing area in the Al-Masraniya neighbourhood in order to complete the youth housing project, which was later suspended since 2012. The demolition operations and completion of the youth housing project threaten the rights of hundreds of people displaced from the region, without guaranteeing the rights of the applicants. The housing association cancelled the subscriptions of more than half of the applicants who stopped paying between 2012 and 2016. Currently, most of these people are forcibly displaced from Aleppo.
Since 2018, the General Housing Establishment has revived suspended social housing projects. The establishment waived fines imposed on contractors who did not meet their contractual obligations and extended payment deadlines for subscribers who had defaulted on their instalments. In addition, the establishment started suspending some applicants for financial and sometimes political reasons. In all cases, the pace at which the developments moved was very slow, with an average delay of at least 15 years, despite the establishment promising to meet its housing obligations by the end of 2024. In 2017, the Ministry of Public Works and Housing announced that it had built 74,871 social housing units, and in 2021, the number reached 77,130. In other words, the ministry only completed around 2,250 social housing units since the end of the war.
The biggest losses in the social housing and housing cooperative sector mostly stem from delays in implementation, failures to meet deadlines for delivery, and the direct and indirect damages that affected the applicants. The delays were accompanied by the continuous increase in the prices for homes that were already subscribed to between 2011 and 2021. The prices increased twenty times for the same period, mainly because of the decrease in the foreign exchange rate of the Syrian Pound. The final cost of social and housing cooperative units is actually calculated by the end of the project, as stipulated in the subscription contracts. In reality, the fees are gradually calculated throughout the execution of the project but the final cost of the dwelling is only announced when the project is complete. For example, if the cost of a 100 square metre apartment in a youth housing project in one of the suburbs of Damascus was estimated at around SYP 1 million before 2011, its price upon completion in 2021 would be around SYP 20 million. Moreover, if the average income for employees in 2011 was around SYP 12,000, it is currently around 100,000. Thus, the price of an apartment in a social housing project has increased 20 times, while the average income has only increased 9 times.
During the same period between 2011 and 2021, there were a lot of laws and administrative texts, some of which were directly or indirectly related to social housing and housing cooperative programmes. In 2016, after the Ministry of Housing and the Ministry of Public Works were combined, the Ministry of Public Works and Housing emerged. Legislative Decree No. 26 of 2015 suspended Legislative Decree No. 76 of 2011, which organised the work of the General Housing Establishment. Despite the justifications provided by the Director-General of the General Housing Establishment, it is strange that in less than 4 years, two contradictory decrees were issued to organise the work of an institution that is almost non-functioning. The Director-General’s justifications included the need to amend some of the articles of Decree 76 of 2011 in order to guarantee the rights of citizens and maintain public interest. He also particularly pointed out the need to amend articles related to applicants violating rules of payments, as well as articles relating to the provisions on handling social plots and granting citizens the freedom to waive ownership of their subscription, allocation, or plot for the benefit of someone else. Decree 26 of 2015 also amended other articles linked to the investment activity of the institution. They aimed to achieve an “appropriate rent,” i.e. profits, to guarantee contributions to securing land and funding for the execution of social housing projects. Further, decree 26 of 2015 reaffirmed the for-profit nature of the General Housing Establishment as being of an “economic nature.”
On another note, Decree 99 of 2011 on social cooperatives aimed to replace all former laws. The General Union of Housing Cooperatives, which was founded in 1961 and organised through Law 13 of 1981, represents the sector as a whole. The Union was dissolved based on Legislative Decree 37 of 2019, 58 years after its establishment. It was disbanded under the pretext that the government sought to avoid having two administrations for housing, namely the union and the Ministry of Public Works and Housing. However, this is unconvincing because the union was the ministry’s partner at the level of planning, decision-making, and implementation, and it managed to execute more than twice the work of the public sector. In all cases, Law 37 of 2019 transferred the union’s duties and functions, as well as its movable and immovable properties, which amount to SYP 80 billion, to the ministry. Afterwards, the ministry led a focused campaign to restructure the housing cooperatives sector, which resulted in hundreds of cooperatives being dissolved. The number of members registered with the cooperatives in the Union exceeded one million. Under its umbrella, there were more than 2,500 housing cooperatives.
Linking housing cooperatives to the Ministry of Public Works and Housing reflects the government’s desire to control cooperatives, as well as intervene in and limit their decisions. The first traces of this appeared when some housing cooperatives cancelled the memberships of a considerable number of their applicants and those who were already allocated houses on the grounds that they failed to meet contractual obligations and defaulted on paying instalments. In addition, subscriptions of those who opposed the government were also cancelled with no prior warning. Dissolving the union was a significant blow to social housing, but did not end housing cooperatives altogether. Knowledgeable sources report that dissolving the Union aimed to compel the remaining cooperatives towards for-profit investment and real estate development. A high number of new laws paved the way for these steps, in particular the Investment Law 18 of 2021, which designated so-called private economic areas, including some damaged areas. While the discussion of the draft law on establishing a new General Commission of Development and Real Estate Investment is still ongoing, a new board of directors for the Real Estate Finance Oversight Commission was designated as this commission seeks to fulfill its role of regulating the real estate finance sector, overseeing it, developing savings within the sector, and working on regulating the real estate finance market.
While legislative preparation for the reconstruction phase is viewed primarily as an opportunity to financially benefit from investments in the real estate sector, only housing policies based on principles of justice in reconstruction, sustainable development, and national interest can guarantee the housing, ownership, and land rights of all residents, including those with limited income.
Thus, the future may seem grim given that there are no solutions currently available for those with limited income, including refugees and the displaced, who have lost their rights and properties and who cannot afford housing in zoned areas. The 2011 uprising and the war that followed did not succeed in forcing a significant change in terms of the social policies carried by the regime. It is, therefore, unlikely to witness greater governmental support or an expansion in the social and housing cooperative sectors in the coming years. Indeed, the legislative surge over the last few years indicates a preference for private real estate investments and the search for profit in the sector. Hence, although large segments of people with limited incomes have politically supported the regime over the past years, in particular members of the army and the security forces, it is unlikely that they will be among the segments benefiting from new housing plans. Furthermore, as the regime attempts to dissolve remaining social support for essential products like bread and fuel, launching a housing policy that meets the needs of those with limited income is not its priority.
Mazen Ezzi and Wajih Haddad
Mazen Ezzi is the editor of the Housing, Land and Property section. Wajih Haddad is a researcher based in Damascus.