From Bricks to Vision: Rethinking Housing Policy

By: Dr. Abdulla Muthalib

Minister of Infrastructure, Housing and Urban Development

Every family deserves a place to call home. Housing is one of the most basic foundations of a secure and dignified life, and ensuring it is among the most vital responsibilities any government carries.

With the changing times and circumstances, it is time to look at the next stage of housing policy. At this juncture, it is worth reflecting on how best that responsibility can be met. It is no longer the case that the State must only focus on building directly, but rather the time to explore how it can help the greatest number of families to buy and build homes of their own.

The role of government in housing is evolving: from direct provider, to facilitator of a housing system in which families, banks, developers, and investors each play their part — and in which every family in need of housing will have the opportunity to secure a home. To deliver this, the Government is bringing in a set of new housing policies — one of which is already underway.

I am here to share with you an outline of these new policies and the objectives they are designed to achieve.  

The Pledge Is Clear, The Question Is How Best to Deliver It

The Government's commitment is firm: every family in need of housing will have a home.

Housing demand in the Maldives is substantial. Under a single recent programme, more than 35,000 households applied for flats. Among long-term residents of Malé who are not registered in a Malé household, over 23,000 families applied for roughly 1,500 homes.

Demand of this scale calls for government to not only build, but also to create space for wider private sector involvement in housing construction. The State has never been the only builder of homes: families have historically built on their own plots, and private developers have brought homes to the market, albeit at a modest level. What’s lacking is a frameworkthat enables far more families, as well as more builders, to participate.

The Real Obstacle: Affordable Supply That Reaches the Right Families

For a first-time homebuyer today, the main obstacle they face isn’t willingness or effort – it’s the lack of affordable homes on the market.

Houses are built, but not at prices working families can reach, and the few that are affordable are quickly taken.

The consequences are far reaching and affect large numbers of families. Because affordable homes are not available in the market, families who are, in effect, capable of obtaining a bank mortgage also resort to applying for social housing insteadas it becomes the only affordable route open to them. This results in the queue for government housing growing longer, and the families in greatest need - those who could never carry a mortgage - must wait behind applicants who, in a functioning market, would have otherwise bought a home of their own.

The Government intends to change this. Social housing will be prioritised for the most vulnerable families — those for whom it is designed. And for families who can afford a bank mortgage, the Government will create affordable homes in the market through private developments, so that buying becomes the natural path for those who can, and social housing remains protected for those who cannot.

We have tried price control before. Under a model run by HDC, developers were permitted to sell 40 percent of units at market price, with 60 percent sold at a controlled price. The design was sound. But in practice, the controlled-price units were never regulated to prioritise first-time home buyers. The result was predictable: individuals with means bought multiple apartments as investment assets to rent out — while the families the units were priced for remained tenants, often in those very apartments.

The lesson is clear: price control without buyer targeting does not deliver affordable homeownership. Instead, it delivers affordable investments.

It is to address this that the Government is bringing in four policies that correct this.