Working to solve Iraq’s housing shortage: Atlantic Village apartments in Erbil, Iraq
Challenge: Iraq has a shortage of 1.3 million homes and a severe lack of developable urban land.
Solution: OPIC is providing a $26 million loan for the construction of 900 affordable housing units and is offering 10 year lease purchase finance for buyers.
Impact: The construction of Atlantic Village will supply housing for hundreds of families in Iraq while also creating local jobs and supporting private sector development.
Millions of Iraqis without homes
For more than three decades, Iraq has suffered a housing shortage. Although the previous government of Saddam Hussein recognized the problem and pledged to build millions of new homes, only a small fraction of the number needed was ever constructed. More recently, years of sectarian violence have left many homes severely damaged. Housing shortages are most acute in urban areas were the majority of all Iraqis reside. More than half of the country’s urban population lives in poor conditions and many homes are overcrowded. This shortage has driven prices up dramatically and the average Iraqi family can no longer afford the homes that are available. Because of strong state control over land in Iraq, local companies are unable to acquire urban land to build new housing.
In 2012 OPIC agreed to provide a $26.8 million loan to Claremont Erbil LLC to build a housing project consisting of 900 affordable apartments. Claremont, a development company that was founded by the U.S. construction company, The Claremont Group, has operated in the Middle East since the 1970s. The construction of the Atlantic Village apartments represents the first significant opportunity for the U.S. government to support affordable housing in Iraq. The new apartments will be located in Kurdistan where the Kurdistan Investment Law, passed in 2006, has made it easier for foreign investors to enter the market by allowing 100 percent foreign ownership of land. In addition, Kurdistan has an increased need for housing due to a large inflow of immigrants moving from less stable regions of Iraq and looking for jobs and better quality of life.
The new housing complex will include 28 eight-story buildings in addition to common recreation facilities, a space for community use such as a health clinic, commercial spaces, and green areas. This project will also create 13 new jobs in Iraq and spur private sector development through the purchase of construction materials from local suppliers. In order to help Iraqis purchase the new apartments, the OPIC financing will allow Claremont to finance 60% of the sale price of each unit through ten year a lease purchase contract. This new project will relieve hundreds of Iraqi families from poor living conditions and give them a chance to become home owners.
This project was profiled in 2012