Al-Riyadh A SOLUTION to the Kingdom's housing problem will not come all at once through one single decision or one changing factor. Solutions are born out of a series of fluid decisions. When orders were issued to start "loan acceleration", there were many reactions opposing the move. The opposition was so intense that an electronic newspaper asked me whether the decision would lead to increased poverty. It was obvious that the majority of contenders did not understand the whole picture. They either read the headlines about the new loan and, influenced by the opinions of others, thought it was a negative step. Or they believe that the loan should not bear any costs, which is unrealistic because the loan does not oblige anyone to anything. In fact, it is an "option" to whoever has a decent income and in a hurry to own a house. Many people launched an emotional attack on the accelerated loan program. When delving into a conversation with these people one would find that most of their arguments were subjective and far removed from a thought-out economic vision. Housing solutions will not come with government initiatives alone. The government wants to partner with the private sector through banks and through loans that are "easy and less costly" and offer more benefits than borrowing directly from financiers. The same people who had a negative outlook on accelerated loans that they said would not suit everyone in fact supported and welcomed the proposal to introduce land tax. In one of my articles titled "We still suffer from land scarcity" published in 2010, I called for increased supply as a basic solution. In articles published in 2012 and 2013, I demanded that white land with a size of 5,000 sq. meters and more should be taxed. Many people welcomed the draft bill presented before the Cabinet to impose tax on white land because this move would achieve two goals: lower prices, making land affordable for many people who wish to build houses and bolster the real estate market with increased construction activity. Are these goals going to be met? We will wait and see. The wide welcome received by the proposal to impose land tax, unlike the opposition to the accelerated loan program, though both decisions were taken by the government itself, means that the government is looking into what is best for citizens, with minimum costs and maximum benefits. There are multiple types of house seekers with different requirements and levels of income. So there must be multiple solutions that meet those needs. We should not jump into conclusions with regard to any solution. Imposing land tax would be a legitimate action if the government decides so because it always makes decisions in the interest of the citizen. We must admit that housing solutions will not become real with one or even four steps, but with a series of actions. Anyone borrowing from the Real Estate Fund will also pay in installments the same way the loan acceleration works, but the difference is the ability to provide financing, which is a main problem. Whoever is financially sound or creditworthy can buy a house with the accelerated loan, and it of course provides a solution. Time is money for house buyers. The evidence is the high prices today compared to the prices five years ago. The prices will further increase in another five years. Effective and practical solutions are what people want — not what they wish or desire. Reality is far removed from emotionalism.
