Algeria is experiencing a housing boom

The last 17 years has seen a boom in Algeria’s development of roads, bridges, railways, dams, ports, universities, hospitals, and housing—at a colossal public investment of $65 billion between 2010 and 2014.

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Abdelmadjid Tebboune, Minister of Housing and Urban Planning

“Housing is an essential component of the public investment programs,” said Abdelmadjid Tebboune, minister of housing and urban planning.

The housing occupancy rate has gone from 6.8 in 1999 to 4.3 today. Social housing projects will continue, regardless of the financial status of the country. This was President Abdelaziz Bouteflika’s promise at the time of his election. This titanic accomplishment shouldn’t be seen as just a spontaneous endeavor: “We look forward to the future,” said Abdelmadjid Tebboune, minister of housing and urban development.

In 2016, a total of 350,000 housing units were delivered turnkey. “We are going to respond to the existing demand, and eradicate the shantytowns across the country,” Tebboune said.

The housing stock will reach 8,900,000 units this year, culminating efforts on every level since 1999. The state is the principal housing resource; the subsidy of housing estates represents an essential part of the budget reserved for social transfer. Many types of housing have been built in conjunction with different formulas: public rentals, AADL housing, rural housing, rent-to-buy and subsidized housing. Everyone can find the right formula, from the most disadvantaged to low-middle income to higher income residents.

A plan made of steel

Rent-to-buy is one more formula of this plan: A program intended for the middle class with a fixed income between $240 and $1,080, said Mohamed Belaribi, chief executive of the Agency for Improvement of Housing Development (AADL). AADL bears responsibility for rental management, construction, renovation and the evaluation of public lands and national heritage sites.

AADL oversaw 120,000 properties in 2016; it builds and administers entire new neighborhoods that are “delivered with social well-being in mind, public transportation, schools, medical centers, leisure areas, commercial premises and public areas lit with solar power—this is what citizens get when they get their keys to an AADL home,” Belaribi said.

In encouraging access to the property through the rent-to-buy promotional option these last 10 years, authorities wanted to relieve themselves of recovering rent and daily management. This is OPGI’s business. Mohamed Rehaimia, director general of the OPGI of Hussein Dey, one of the most densely-populated areas of Algiers, estimates its annual turnover was $8 million in 2015. OPGI manages over 87,000 housing units, almost as many commercial premises, and employs 1,176 workers. The efficiency of this program enabled a rental and fees recovery rate of 80 percent in 2016, Rehaimia said. Some 14,000 homes are in the process of development. OPGI Hussein Dey establishes all school infrastructure and leisure amenities within new cities.

For the more demanding customers with a higher income level, ENPI is another state-owned company involved in commercial real estate development since 2013, with 50,000 homes on its property portfolio, 6,186 homes built with materials that are manufactured in Algeria, along with higher standards and solar outdoor lighting.

ENPI acquires land, builds real estate, sells and buy buildings, and also rehabilitates, renovates or restructures them to ensure the sustainability of its main activity. “Consequently, it is very interesting to envision foreign partnerships for every profitable operation” said chief executive Mohamed Belhadi, who wants to improve the rationalization of energy consumption and respect for the environment in their projects.

A fit portfolio

In three years, the state has spent $14 billion to finance its building projects. CNL (National Housing Bank) manages all aid, “assistance and financing,” said its managing director Ahmed Belayat. “We make about $6 billion available every year.” Among its clients are numerous public and private operators as well as citizens who benefit from aid in the rural housing sector. “Close to 1.4 million households have returned to their villages in the countryside thanks to the rural housing project.”

“The state doesn’t want to cut down public assistance, but it can sort and target,” Belayat said. “CNL must restructure to become a growth model that will call on other resources, such as banking and household savings.”

Two-digit growth rate

Cities are an infinite source of wealth, and real estate developers have become inevitable players. The Mutual Guarantee Fund for Property Development (FGCMPI) accounted for 3,340 affiliates in 2015, of which “less than 200 are state-owned,” said chief executive Nacer Djama. “The overwhelming majority is private sector, including several dozen companies with 100 percent foreign capital and mixed foreign-Algerian capital.”

FGCMPI’s engagements amount to $5.4 billion. Established in 1997 as a public organization placed under the care of the minister of housing and urban development, it is a not-for-profit mutual fund that guarantees advance payments made by homebuyers as part of an off-plan sale. According to Djama, real estate development has been showing a two-figure growth rate since the 2000s.

The Ryad of Oran, a different model

Brahim Hasnaoui, chief executive of the Hasnaoui Group, has a different view on social housing. “Everything that’s free is costly and counterproductive,” said this private sector leader in construction, public works and construction materials. “One has to create hope, in obliging people to make this effort and work harder.” El Ryad City in Oran is a real estate project that extends over 450,000 square meters with contemporary low-density building surrounded by greenery. The project was awarded the Energy-Climate Control prize by Green Building & City Solutions Awards 2016 at the behest of the R20 nongovernmental organization.

The Hasnaoui Group never stops looking for novel solutions and suggesting them to its public partners. “The state no longer needs to intervene as it does. Its role is not to build, sell or distribute, but to put fair play into place and to establish a judicious process that is transparent and perennial. Only the free market can create a dynamic development. In Oran prices are nearly half those in Algiers because supply far exceeds demand.”

Improving urban life

For about 20 years or so, Algeria has experienced urban instability. Terrorism, whose main consequences were a massive rural exodus toward the cities and legal instability, also contributed to the degradation of urban life. To make Algiers the first African city without shantytowns was another challenge taken up by the Algerian government. Now, decent housing for all is about to be attained throughout the country.

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“By the end of 2016 shantytowns will finally be eradicated throughout the nation,” promised minister Abdelmadjid Tebboune. Over 561,000 at-risk homes on 12,000 different sites were identified throughout the country for demolition, to be replaced with public housing financed by the state. “At this time, 190,000 families have been relocated of which 40,000 in the capital of Algiers,” Tebboune said.

The rhythm of relocation beats records, while rehabilitation of old buildings continues to take place in over 20 districts in Algiers, with sealed façades, consolidated staircases, constructed wooden ramps and renovated elevators. To restore the capital’s image is also to restore its ageing old quarters—its buildings from the colonial era, its gorgons, mermaids and other precious decorative motifs from the Haussmannian styles that had made Algiers one of the most beautiful cities along the Mediterranean.

The buildings bordering its avenues recall the history of the city and its eclecticism—the neoclassical, art nouveau, art deco and neo-Moorish styles that exist side by side. Such is the meticulous and challenging work required by historic centers, which must be safeguarded.

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