reconstruction

Urban Recovery Framework for Post-Conflict Housing in Syria.

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EXECUTIVE SUMMARY

This report intends to establish a first approach for an urban recovery framework for post-conflict housing in Syria. This framework takes into account the country’s past experiences in housing delivery and construction as well as the dynamics of the housing market. It also considers the facts on the ground during the conflict, including the massive damages and destructions and the unprecedent flow of displacement and refugees. It tries to embed the housing reconstruction process in its physical, economic, financial, social, legal, administrative, governance and political-economy environment. Special focus is made on ethical concerns for human rights but also within a realistic outlook on financial considerations. The final objectives of this framework approach are to create a public debate, mainly amongst Syrians, and to focus research on the major issues involved and the dynamic interplay among these issues.

The main messages and findings of this report can be stated as follows:

General framework

  • The post-conflict housing reconstruction in Syria shall be, by essence, an economic and social developmental process, a recovery process, which should generate income to the working population, which, in turn shall be partly invested for housing repairs and reconstruction. Housing construction had continued in Syria during the conflict to cope with the growth of households and with the population displacement, damage and destruction. In a post-conflict situation, the issue is on how to increase these construction efforts and potentials to rebuild the damaged neighborhoods, cities and villages and to reactivate local economies.
  • Post-conflict housing reconstruction in Syria is a social, political and governance process, essential for peacebuilding. The way severely damaged and informal neighborhoods will be dealt with, and the conditions of return of the displaced and refugees shall affect the social structure of each urban area and its economic functions. This is an essential concern to avoid the recurrence of conflict and/or the partition of the country. With all the difficulties of a post-conflict governance, this requires the establishment of well-designed policies on several levels and carefully steering their implementation, from regional and urban planning to financial and monetary management.
  • Housing reconstruction should not be understood as returning to the pre-conflict situation. The conflict inflicted major transformations on an urban environment which had already experienced severe deficiencies for decades. Prior to the conflict, the informal housing represented 30 to 40% of total dwellings in some cities, a phenomenon that has only been exacerbated during the conflict. Housing reconstruction should be seen more as an opportunity to help formalize the informal and to create a new sustainable urban environment for the vast majority of the population. However, there are serious risks of limited available resources to rent-seeking real estate speculations. The structural conditions imposed by the war economy will also impose significant impediments to recovery. These must also be considered.
  • While an overall framework is needed to steer policy for the whole of Syria, options and policies should be adapted to the local context of each city and neighborhood. Formal, informal and heritage neighborhoods in different urban contexts will require different approaches to capitalize on local resources and adapt to local conditions. The choice of the options and policies must be done with strong implication and consent of the concerned communities. This is particularly sensitive with regards to dealing with the challenges of population displacement.

Housing demand and supply

  • In 2010, demand for housing was estimated to have reached 180,000 units yearly due to the natural growth of households, 66% of which was urban. That year, the country had an estimated housing stock of 4.13 million dwellings, around 15% non-occupied, for an estimated 4.17 million households and 228,000 yearly marriages. The new demand represented a yearly necessary average increase of 4.4% of the dwellings (up to 6% in urban areas due to the accelerating rural-urban migration). This demand was also strongly influenced by the arrival and return of 1.5 million Iraqi refugees. A gap in housing accumulated since decades, led to a large development of informal housing. The demand and ensuing supply gap varied significantly amongst governorates and cities.
  • The supply of housing in Syria was generally provided by small individual private developers. The contribution of public and “cooperative” developers was historically less than 25% of total; the so-called “cooperatives” being a form of collective but largely private housing subsidized development. The policy framework stagnated for decades as the Syrian authorities maintained a policy of scarcity limiting urban construction licenses. This culminated in the largest shortage around the year 2000. The problem grew partly due to delays in the evolution of the urban plans, but also as real estate was a source of rent-seeking and political patronage. The situation started to change around 2005 and Syria experienced a construction “boom” which culminated in 2010 with 120,000 new dwellings accounted for. This boom contributed to an inflationary trend. Real estate prices of formal dwellings peaked at levels similar to major Western cities.
  • The demand on housing continued during the conflict with the natural growth rate of the still residing population of safer areas and with the arrival of internally displaced population (IDPs) from conflict affected areas. With the transformation of the uprising into a fully-fledged armed conflict in 2012, IDPs numbers reached around 6 million by 2013. Others sought refuge outside the country and by 2017 refugees reached more than 6 million. The demand increased greatly in some localities with the population flight from fighting areas and with an even greater acceleration of rural-urban migration. Part of this increase was initially absorbed into the empty dwellings left by the refugees. UN agencies report that only 14% of the IDPs sheltered in camps and “last resort sites” in 2017. Locally, during-conflict demand reached extreme highs in cities like Aleppo and Homs, as well as in some safe “heavens” such as Atmah on the North-Western border with Turkey. On the contrary, such demand was low in most of the North-Eastern areas.
  • The supply of housing during 2011 and 2012 was even higher than that of 2010, in particular because of informal constructions, due to the weakening of State institutions and probably as a result of a deliberate “laissez-faire” policy. It continued, but at a slower pace in the following years. 600,000 dwellings are estimated to have been built during the conflict. This is while the conflict caused destructions and severe damages to around 328,000 dwellings that could no longer be reoccupied. Between 600,000 and 1 million dwelling were moderately or lightly damaged. Some modest repair and reconstruction activities were observed. Not all destructions resulted from fighting, but some from deliberated policies. The largest number of destroyed buildings was observed in Hama where informal areas were bulldozed without the pretext of major combat activities.
  • The post-conflict demand on housing compiles the needs of construction due to the natural growth of still-remaining resident populations to the needs for reconstruction because of destruction, damage and displacement. The need for construction to accommodate natural growth is estimated at around 160,000 units yearly, 70% of which urban. The yearly needs for reconstruction to recover damaged stock and accommodate displaced populations are directly associated with the rhythm of return of IDPs and refugees. Assuming a “quick” return in 5 years of both IDPs and refugees, these additional needs are estimated to reach another 108,000 to 242,000 dwellings per year depending on the effective status of damaged dwellings to be evaluated in detail in each locality after the clearance of debris and the cleaning of war remnants. Thus, the total demand would range between 148% to 222% that of 2010. This demand varies significantly from one location to the next and will have to be assessed along the three typologies in formal, informal and heritage areas.
  • Supply of resources will be limited. Individual and local resources were always in the past the motor for mobilizing supply. Despite the government’s great investment in the supply side of housing, the bulk of the demand was satisfied in the private sector and in self-help housing situations. Supply side financial instruments failed in the past to meet demand and are likely to fail again in the post conflict. The policy framework should consider financial and administrative instruments that support demand and capitalize on local community resources. Supply side funding should be limited to essential infrastructure, and a balanced approach between supply side and demand side policies will be needed to capitalize on the resilience of local communities.
  • The supply in informal areas poses issues of safety and sustainability of the informal stock as well as problems of social cohesion and competition over precious urban land. Land adjustment schemes will not likely provide a durable and sustainable answer to meet the magnitude of challenges in both damaged and non-damaged neighborhoods. With the assumed 5 years return scenario, the total supply would have to be between 2 to 3 times its level in 2010, large urban redevelopment schemes led by large development companies will not be a viable solution. The affordability of housing and the inability of disenfranchised populations to capitalize on social capital will render large development schemes out of reach for the bulk of informal areas’ residents. An alternative approach to “formalize the informalwill be essential to mobilize local economies and provide residents with security of tenure to invest and mobilize their own resources for reconstruction.
  • The post-conflict supply in the severely damaged heritage areas, as in Aleppo and Homs, poses critical challenges to balance priorities of cultural identity and authenticity, historic preservation, needs for change and possible gentrification and densification. Rapid assessment and focusing on critical technical and financial needs of such locations will have to be a priority, otherwise local municipalities are likely to succumb to pressures. One of the few and special local assets needed for the long-term economic recovery may be whipped because of lack of knowhow and skewed priorities.

The legal environment

  • The largely developed informal housing does not consist in most cases of slums. Informality was mainly linked to construction licenses and urban plans. Informal properties were recognized by the Syrian legal system, although the land on which it was constructed was not recognized by the urban codes. The informal properties were traded in the market and had their own market dynamics. Between 1/3rd to half of all properties in urban areas were not registered in formal urban cadasters, with multiple and complex regimes establishing some form of tenure guaranties for their residents. Prior to the conflict, urban planning was often delayed for administrative and legal reasons and lagged behind construction developments.
  • In the 2000’s decade, a series of legislative directives relaxed the constraints on speculations in un-developed land, abolished rent controls, changed the regulations of cooperative housing, allowed the establishment of private real-estate development companies and promulgated procedures to formalize of the informal. It led to a construction “boom” and unleashed speculative investments. In a very short decade this enabled a drastic increase in the ability of markets to produce new typologies of housing. However, this did not reverse the legacies of informality. Indeed, the share of informal housing still increased despite major increase in the supply of formal land for development. This came with serious consequences in political economy and in the ability of the State to control the process and hamper inflation.
  • The conflict period in Syria had experienced unprecedented, more active and accelerated legislative efforts concerning property rights, urban management, as well as real estate and housing development; a striking trend to transform land and property regimes in war times that will have lasting consequences for reconstruction. Controversial laws were issued to encourage large private development, public-private-partnerships (PPP) with municipalities and/or religious endowments (n°66 of 2012, n°19 of 2015, n°10 of 2018, n°31 of 2018). They were mainly dedicated to remove some informal areas “affected by war” without clear specifications on how to qualify such areas, nor due process for land pooling and adjustments. This legislative trend risks serious implication with regards the “rights to the city” for the returning population and is in contradiction of the Pinheiro principles; the most relevant international standard for ensuring the rights of displaced people.
  • Housing, land and property rights (HLP) have a central role in the establishment of the rule of law and in ensuring social, legal and economic stability. The housing pillar of any urban recovery framework must address the complex claims and counter claims and tackle the needs of displaced populations, secondary occupants as well as disenfranchised and vulnerable populations. An approach similar to the 2005 Vienna declaration (see appendix A) of the Balkan countries will be needed to ensure the voluntary return of IDPs and refugees in safety and dignity, secure the right to recover housing and properties, assert the right and resources for an equitable compensation and guarantee the rights of the most vulnerable individuals and populations. Women’s HLP rights will create a major challenge, as many will likely face social as well as legal prejudices. While most HLP solutions are likely to be addressed through administrative processes and not legal ones, individuals should retain the right for adjudication before an independent judiciary if their grievances are not met.
  • In addition, there is a critical need for the establishment of a comprehensive framework for housing recovery and reconstruction. The current legal framework is not likely to cope with the magnitude and complexity of post conflict challenges. Old legislation should be reviewed and new ones introduced to meet the challenge of finalizing urban masterplans, recovering and standardizing makeshift property registries, legalizing of informal settlements, providing incentives to speed the production of affordable housing, compensating owners of damaged properties and, last but not least, protecting and preserving urban heritage.

Housing approaches and patterns

  • Many cities have changed their economic and social functions during the conflict. The framework of housing reconstruction should be based on a regional planning perspective. A regional plan will have to assess the need to accommodate rapid urban growth in some cities, ease the demographic, environmental and other pressures on the major Syrian cities and to insure the socio-economic integration and the unity of the Syrian territory.
  • In the framework of housing reconstruction, new master plans should be produced for Syrian cities in their wider territorial context, considering them as connected and networked conurbations. A special focus should be given to the formalization of the informal zones in a realistic approach to meet the demands and challenges of urban demographics and economic transformations. Idealistic planning processes dependent on State resources will stand little chance of implementation given the limited prospect of public funding. Likewise, urban master plans should account for the limited absorption capacity of high-end residential development to meet the demand for affordable housing. Traditional master-planning process will not cope with the realities of urban growth and may inadvertently be transformed into instruments for gentrification and further displacement of fragile communities. Bottom-up participatory approaches to neighborhood development and planning will likely constitute a more flexible framework for housing and urban recovery.
  • The framework of housing reconstruction is to be designed with an eye of readjusting the political economy away from traditional patronage dispensation towards an economic revival, with income generation by the population as a focal issue.
  • At the local level, the framework should encompass all reconstruction approaches. On the supply side it can be a mixture of temporary housing, repairing damage, large new constructions, building-yard typologies where the affected communities rebuild their own housing as they have always done in Syria. While on the demand side non-construction related issues should also be considered such as loan guarantees, micro finance, housing subsidies, exemptions from building fees, technical knowhow, and formalization of informal areas. The choice of the approach is to be established on a neighborhood by neighborhood basis. It will depend on the degree of destruction and damage, precarity of the housing stock, and affordability of solutions to affected communities. This should be done in direct consultation with the population; those still present as well as those displaced or in asylum abroad.
  • In all its aspects, the framework should respect the Pinheiro principles and ensure HLP rights are secured in the planning and implementation process. However, additional concerns must take into consideration the pressure emanating from gentrification and other motors for economic and social displacement typical of post conflict situations.

Financing post-conflict reconstruction

  • Housing reconstruction, economic recovery and prosperity cannot be implemented without an equitable, effective and integrated economic system managed by the country’s own institutions and with the engagement of all relevant national and local stakeholders. The key challenges in a post-conflict situation are to secure the continuous functioning of the economy, steer financial resources towards the recovery of (local) production capacities, mobilize human resources, streamline institutional and administrative processes, and manage such critical issues in a transparent and fair manner to rectify the negative legacies of the conflict.
  • This means proper management and functioning of State regulatory institutions, with the necessary balance between central and local ones.
  • The foreign financial aid for post-conflict recovery should avoid creating an “aid curse” linked to the political agendas of the donors. It should rather drive new governance to set good policies.
  • Such a process will be greatly impeded by sanctions. The war economy often fosters conditions that hamper the return to good governance and consecrate a political economy based on corruption and self-interests of war profiteers. Sanctions create a vicious cycle that empower such actors. Creating a reverse cycle requires critical negotiations to incentivize reforms and direct resources towards reconstruction efforts.
  • Creating jobs outside the public sector is key for post-conflict recovery. This ultimately means that the employment creation policies should be designed in strong linkage with the physical reconstruction of housing and infrastructures, as per the UN secretary General recommendations. And the solution does not lie in the expansion of formal employment in public services and large companies. Managing informality will require flexible instruments to tap on the ability of the informal sector to create descent jobs, especially in the construction sector.
  • The role of government and central bank policies should be key, much more decisive than in the pre-war situation, as household savings had been strongly depleted during the conflict. The stabilization of currency will impose strict controls on balancing the accounts which will hamper the import of materials needed for reconstruction. Inflation is likely to be one of the most difficult challenges to cope with.
  • Assuming an average cost of US$ 260 per square meter (including infrastructures), as in 2010, and an average surface of dwelling of 100 m2, the yearly cost of construction for the natural growth of the remaining resident population is estimated at US$ 4.1 billion. With the hypothesis of 5 years for the return of the refugees and the displaced, the additional cost for reconstruction should stand during these 5 years between US$ 2.5 and 6.0 billion. This means a total cost for the physical reconstruction of the housing sector ranging between US$ 14.0 and 31.5 billion. Combining construction and reconstruction cost will require a total effort that is 3.9 to 9 times what had been spent for construction in 2010.
  • This cost is mainly in local currency, with a significant share for the cost of labor, land and local building materials. A well-governed housing reconstruction should tackle all major issues influencing construction prices and the needs for hard currencies for imports, avoiding bottlenecks.
  • In particular, the new regional and urban plans should aim to lower the cost of land for construction to a minimum, encouraging the development of new urbanities through land prices incentives, proper densities to minimize the cost of infrastructure and ensure proximity of the new housing stock to work locations.
  • The extra needs for cement are available in neighboring countries at reasonable prices and should cost less than US$ 1 billion yearly. However, the ability to purchase cement is not the only problem. Transporting, storing and providing water resources to mix and cure concrete construction will also be critical.
  • The role of bank loans in a post-conflict reconstruction would be significantly higher than before the conflict. However, the HLP issues are likely to be an impediment as property collaterals are the basis of housing loans and real-estate development financing. This necessitates bold solutions based on proper documentation. HLP is not only a human rights issue but also a financial matter, key for the financing of reconstruction.
  • Normative financing schemes should be adapted to the Syrian context. Standard financial instruments tend to favor supply side financing with little multiplier effects in the local economy. Syria has a complex public and private institutional and regulatory environment. Understanding this environment will be key to deliver a balanced mix of supply side and demand side subsidies to reduce the risks of gentrification, reduce inflation and create sustainable local economies, which shall strongly depend on the general environment of the post-conflict situation, including the suppression of sanctions on foreign trade and the financial sector.
  • Again, the role of the Central Bank shall be key in managing the financial end of the housing reconstruction process. In conjunction with the government, the Central Bank must elaborate a feasible financial scheme where compensations are set according to clear criteria for property valuation to avoid inducing inflation, burdening the public budget and/or increasing unreasonably public debt.

Key stakeholders

  • Owners and users of housing are the prime stakeholders in an urban recovery framework. The rights of ownership and tenure should be solidly established, as well as the legal ways to prove pre-conflict rights, tackle the transformation of the HLP eco-system during the conflict and deal with the likely HLP emerging pressures in the post conflict. The urban recovery framework should develop proper financing schemes adapted to the different reconstruction approaches to be adjusted neighborhood by neighborhood as a function of the local situation. These schemes should favor individual construction approaches, or “building-yard”, preferred in the Syrian context.
  • The regulations framing large public and subsidized cooperative developers and construction companies should be improved to ensure focusing them on the social objectives of the construction/reconstruction process.
  • The regulations framing large private and PPP developers should be improved to protect the rights of initial owners, avoiding confiscation for speculation and ensuring proper valuation of the rights of initial owners.
  • Municipalities and local institutions are critical stakeholders and should be engaged in decision making and encouraged to reach out to their communities to ensure social acceptance of policies and maximization of community resources.

 

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