The Ministry of Commerce and Industry has approved a request from Public Authority for Housing Welfare for the establishment of the public or closed real estate companies, whose activities are focused on establishing residential cities and developing them economically on state-owned lands.
The ministry’s opinion came based on a request which was submitted to it by the National Assembly, reports Al-Qabas daily.
The National Assembly had approved the proposal for a law to establish cities and residential suburbs in a first deliberation in December 2022, which means that the proposal for a law is still incomplete and cannot be implemented as long as it is not approved during a second deliberation through a majority vote in the Parliament.
Informed sources said that the approval of the Ministry of Commerce to establish housing city companies opens the way for the Public Authority for Housing Welfare to establish residential real estate companies in cooperation with the Kuwaiti or foreign private sector or in partnership, noting that the approval means the ability of the institution from a legal point of view to establish companies on its own or with participation with government agencies or local or foreign investors, its goal is to build housing for citizens at a faster pace.
The sources added the PAHW also has the right and authority to finance the capital of the companies to be established from its own budget or through the Kuwait Investment Authority or other government investment agencies, through public or private subscription by attracting local or foreign investors who contribute to specific shares of companies as a type who owns a certain strategic stake?
The sources indicated that the Ministry of Commerce and Industry’s response to the National Assembly’s inquiry not to object to the establishment of the Public Authority for Housing Welfare for public or closed joint-stock companies with real estate activity, does not mean its approval of the feasibility of establishing these companies or not.
However, there is no legal impediment standing in front of the Housing Authority from establishing public joint-stock companies to implement housing cities to meet the increasing demand for private housing vouchers, and to reduce the prices of residential real estate, which are now above the level of the purchasing power of the majority of citizens.
The sources stressed the need for the PAHW to submit a feasibility study to the Ministry of Commerce for each company it wishes to establish in the event that it initiated the incorporation process procedures, stressing that the institution has full freedom to launch new real estate products in the local market, in addition to income-generating housing projects in partnership with the private sector, in order to keep up with successful global experiences in this field, and provide many housing options for citizens, whether through developing cities and building plots as well as apartments.
Concerned sources confirmed to Al-Qabas that the establishment of housing companies may be a good idea, but on its own it may not help in the process of reducing private housing prices, and it cannot be applied if there is a package of legislation equivalent to it, such as a law concerned with the abolition of real estate agencies, and another that restricts the process of monopolizing plots of lands. In addition to a new law related to real estate financing for private housing.
According to the Housing Cities Law, which was approved by the National Assembly in its first deliberation, it allows the government to construct giant cities containing 30,000 housing units and more, including public facilities, in addition to including them in commercial, entertainment, investment, and vocational packages if necessary.
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