CDC, invest in building affordable housing, not luxury projects.

Woman in front of her house in Lilongwe's Chinsapo settlement (2014).

Woman in front of her house in Lilongwe’s Chinsapo settlement (2014).

A couple of years ago I attended a real estate seminar held in Phnom Penh’s swanky new Sofitel hotel. I was anomaly among the participants – most people there were, predictably, working in Cambodia’s real estate sector, there was a smattering of journos, and then me, a land and housing rights activist. My reasoning for attending the workshop was to get a sense of how ‘the other side’ thinks. The other side, which in Phnom Penh has over the past few decades occasionally been directly responsible for, and has regularly indirectly benefited from, forced eviction of the growing city’s urban poor.

The seminar focused on both the real estate sector in Cambodia and Burma/Myanmar. Discussion on the latter focused on how investors could by-pass as much red tape and tax as possible to get in on the expanding market in Rangoon/Yangon. When talk turned to Cambodia, it was all about the need for malls, gated communities, and serviced apartments. Now granted, from what was presented there did seem to be a demand for these things. But a need? Unable to contain myself I stood up in a room of a few hundred realtors and asked exactly that question: Is there really a need for more malls and gated communities, and even if there is, is there not more of a need for affordable housing for the city’s working classes? The response I got was something along the lines of ‘we’re capitalists, we’re here to make money’. And that was that, no affordable housing projects on the horizon.

I was reminded of this episode by the recent controversy surrounding the British CDC development fund’s investments into what can be described as luxury projects in places like El Salvador, Kenya, India, and Mauritius. To make it clear: that’s investments that are classified as aid, and contribute to the UK’s spending of 0.7% of gross national income as aid.

It’s hard to see how the CDC can justify the investments. Claims that they contribute to the creation of jobs in the construction industry simply don’t cut it. Not unless there is a simultaneous, significant push for better working conditions for construction workers. Also, as Jonathan Glennie points out in The Guardian “the creation of jobs can’t be the only rationale for aid investments. When aid money is spent to support the private sector, it should go on projects that struggle to find alternative means of finance because of the perceived risks involved and the expectation of relatively low returns.”

Affordable housing is exactly such a sector. As I’ve written before, Lilongwe for example needs some 10,000 new dwelling units each year to keep up with demand and population growth. The majority of these need to be affordable to the country’s poor. In Phnom Penh too, there is a distinct need for affordable housing. Over the past two decades, over 10% of the city’s population has been displaced, usually to poorer futures at the city’s unserviced outskirts. Factory workers, who form the heart of the country’s economy, meanwhile flock into the city to live in highly inadequate, small rooms where landlords charge a premium for basic services like water and electricity.

With realtors being ‘capitalists’, few actors are stepping in to develop housing for the poor in Lilongwe and Phnom Penh. As such, these are exactly the kind of projects that struggle to find alternative means of finance that Glennie highlights. These are the ones the CDC and its likes should be funding if they want to make a real difference. And they come with construction jobs to boot.

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