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Where are the flats for the struggling Maldivians?

Struggling Maldivians in Malé city

The original Dhivehi article was published on Avas.mv website on 22nd August 2017.

The following is a loose translation:

There are many reasons why one-third of the Maldives population live in the capital city, Malé. For a job, education, and other family reasons most Maldivians are obliged to move and live in Malé city. However, living in Malé city to the ordinary Maldivian citizen has become close to impossible. Land scarcity is a major concern and the room rates are beyond affordable.

Even when the situation is like this, it is still a necessity for Maldivians to live in Malé city. To say that having hopes for a housing solution is a fantasy, won’t be a lie. It is not because that housing projects are not ongoing. Nor flats are not also being built. It is because none of those projects tackle the real underlying housing issue. To date, we have not witnessed and do not see a solid action being taken to overcome this.

Let’s start with what happened to the flats built on the lands of Gaakoshi and Arabiyya School. When those flats were being built, the government announced that the rent will be MVR 7000 per flat per month. Several thousands of people applied for those flats and 200 people won them. Among them, some were Malé city dwellers who were struggling. However, at the last minute, the outcome turned out to be a sad and disappointing ordeal for them. This was due to the high down payment required to be paid to Housing Development Corporation (HDC). Only 60 out of the 200 applicants were finally able to afford the flats. There is a great lesson to be learned from this.

It is always good to hear about big social housing projects comprising of 1000s of housing units. Despite the happy news, people who hope and are able to occupy or afford these flats are very few, due to the high bank loan and the down payment. Many of those Maldivians who live in tiny apartments in the Malé city, and desperately in need of housing are unable to save and spare hundreds of thousands Rufiyaa to afford a flat.

Tata flats

Arabiyya flats

This is what happened with the flats built on Gaakoshi and Arabiyya land. The government gave the applicants, 2 months time to secure a 2 Million Rufiyaa loan and 400,000 Rufiyaa as the down payment. And as per the income criteria for eligibility, only persons with an income of MVR 40,000 and above could apply. Which means the occupants have to pay MVR 16,000 per month as the instalment for the bank loan.

‘In order to secure a flat, how do we pay 100,000s of Rufiyaa to the bank? Even now we are barely able to afford a place in Malé and that is only by pooling funds for rent from every family member occupying the apartment, after spending for electricity and water how can we save up a 100,000 Rufiyaa? We would only be able to hope to afford a flat when an easy and affordable option is available. When there is a scheme to facilitate an ordinary Maldivian citizen to afford housing,’ said a member of a family who gave up a Tata flat after not being able to come up with means to pay for the flat.

For all these reasons, social housing needs to be planned by targeting the ordinary Maldivian citizens and by coming up with a special mechanism to cater to them. Or they should introduce an easy pay back method. Along with such huge housing projects, it is also imperative to pave the way to make them affordable.

Rehendhi flats

Rehendhi luxury flats

Next is another major issue. When the ordinary Maldivian citizen struggles to even pay for social housing, luxury class housing projects are increasing. By taking half of Social Center, the new project is also to build luxury flats. Even in Hulhumalé city, projects are awarded to different companies, where premium class flats are rising.

True, high-end housing units should exist. However, as per Maldivians standards, it can be said that amongst the Maldivians who are able to buy them belongs to just one category. From time to time, we hear about some wealthy businessman or senior official of the government, who had ‘purchased’ more than one of these luxury flats. They then rent out those flats and earn back in double. These are hard to believe, but true stories.

Hulhumale flats

Premium flats in Hulhumalé city

‘In any country, different category housing projects needs to be planned out equally. However, like in the Maldives and in other countries, the social housing need is higher, or it is the target of every government to come up with a plan to provide affordable housing for even the poorest class. Maldives also needs to devise such systems and we need more of them. When the government has announced plans to build housing units in record numbers, those housing projects need to be available to the public at an affordable price for the ordinary Maldivian citizen. Also, in the capital city, the focus should be on social housing projects,’ a financial expert spoke to Avas news in anonymity.

Furthermore, the government has also decided on selling the remaining 19 empty lands in Malé city, and are now open for bidding. Square feet of those lands are priced at MVR 15,000. So imagine the total price of these plots that measures from 5000 to 7000 sq ft. Those lands will also be sold to the highest bidder.

So we need to think about how many Maldivians are there who can afford to buy flats in these lands. After pondering over that question, it is a wise decision to build flats on these lands, instead, right? Or else only the rich merchants will be able to enjoy the benefits. Is it more important now for Maldives to expand the pockets of these businessmen and senior officials? Or is it more important to come up with a solution to the huge housing crisis, and to ease the lives of those who are really struggling in our society?

Model of Hulhumale

Model of Hulhumalé city Phase 2

When we talk about these issues, certainly not all are bad. In order to provide housing, the government are carrying out many initiatives. Apart from the 15000 housing unit project in Hulhumalé city and other housing projects, considerable favourable changes have been made to the housing schemes. For example, for first time flat buyers, tax exemption law was raised, passed by the parliament and are being implemented. The government has also made it possible to purchase property through individual pension scheme, introduced new soft loans for housing and other initiatives for affordable housing are ongoing. However, unless a significant outcome is reached, it will remain a problem. This is a serious issue in need of an urgent solution.


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