1. Lecture held on Tuesday 25th October 2011 – LEBANON BUILD 2011 SUMMIT
Lecture for construction professionals to present the advantages of building
affordable housing in Lebanon
http://www.iqpc.com/Event.aspx?id=556874#richart_khalil

2. Richart Khalil, Arch.
Attracting Private Investors To
The Development Of Affordable
Housing

3. “People tend to think of affordable housing as a
problem that uniquely affects the poor and
homeless. However, in the last five years . . .
we're seeing this problem has spread to working-
class people who are priced out of the market.”
Annu Mangat, about NJ affordable
housing
Richart Khalil ©

4. Signs of a market shift
• Exponential boom of constructions
• Prices that doubled or tripled
• Expected numbers attained prematurely
• Raise of mortgage amounts by banks
• Young couples living in rural areas or in rent
INTRODUCTION
• Management of Beirut' s empty lots
• Political turmoil in the ME region
• Financial slow recovery about western crisis
Richart Khalil ©

5. “It's a basic supply and demand issue, as supply
becomes limited you have to delegate more"
Imad Bashour, Infopro Research
Richart Khalil ©

6. Signs of a market shift
The demand is in raise but:
Who can profit from these opportunities?
What are the benefits of such investments?
INTRODUCTION
What are the weaknesses, or risks in this market?
Is it a sustainable market in the long term?
What kind of challenges should the investor
overcome?
Richart Khalil ©

7. Actors
The actors that could answer the questions:
Real Estate Ground
The State
Waqfs Private Investor
Richart Khalil ©

8. Actors
The first actor:
Real Estate Ground
• The State
Urban remodeling – Public institution
Laws and regulation
"the affordability of housing is overwhelmingly a function of just one
thing, the extent to which governments place artificial restrictions on
the supply of residential land.”
Thomas Sowell “The Housing Boom and Bust”
Richart Khalil ©

9. Actors
The second actor:
Real Estate Ground
• Cooperatives, Political parties or Religious
welfare associations - Waqfs
Land providers
Punctual strategies and action
Specific market
Restricted areas or zones on the Lebanese territory
Richart Khalil ©

10. Actors
The third actor:
Real Estate Ground
• Private investors
Resources and Skills
Knowledge of ground rules
Richart Khalil ©

11. Actors
The Actors : The State
Real Estate Ground
• The State
• Waqfs
• Private Waqfs Private
investors Investor
Richart Khalil ©

12. “Currently the majority of apartments in Lebanon are two-
and three-bedroom residences. Only 1 percent of units in
Beirut and Aley are one-bedroom, and there are almost none
in Baabda. As demand for single occupancy and smaller
apartments in the 100-250 square meter range rises from
people with lower purchasing power than those who buy in
Beirut - namely young people who want to move away from home
and middle-class families - more affordable units will come
onto the market.”
Reported in the Daily Star, 2006
Richart Khalil ©

13. “For most middle income families and young couples the
search for an affordable place to live is usually
exhausting. Yet looking south, east and north of the capital
there are still areas with a high concentration of new
developments that cater specifically to middle income
groups. Along with the periphery of Beirut as well, there
are new areas coming up.
According to developers, most in demand are units measuring
between 120 and 180 square meters with three bedrooms.”
Reported in Lebanon Opportunities, 2011
Richart Khalil ©

14. 2. Key Benefits
• An important market of Lebanese prospects
• Market normally growing
• Active rural migration
Opportunities
Richart Khalil ©

15. “Surfaces under sale are smaller than before. It
is the only way for the developers to make the
price boom acceptable.”
Raja Makarem, Ramco
Richart Khalil ©

16. 2. Key Benefits
• Low income class and low middle-class
• High real estate prices / buying capacity
• Secure ROI
Opportunities
Richart Khalil ©

17. "If there is a limited capacity and increase
in price in Beirut, this will push development
to outlying areas. The market will react
differently depending on the location of the
boom."
Imad Bashour, Infopro Research
Richart Khalil ©

18. 2. Key Benefits
• The planning allows high BUA percentage
• Spacious constructible lands
• A lot of left-over spaces
Opportunities
• Rural areas being transformed into suburban areas
Richart Khalil ©

19. “The whole area from Khaldeh, [a few kilometers
south of Beirut] to Saida will eventually be
built up for Lebanese who cannot buy in the
capital”
Kamal Hamdan, Economist
Richart Khalil ©

20. Khalde region – South of Beirut 2004 ©
Richart Khalil

21. Khalde region – South of Beirut 2011 ©
Richart Khalil

22. “… as prices go up, the number of resident
Lebanese who can afford to buy in the capital
will go down. By 2030, […] people living and
earning their entire incomes locally will
essentially be pushed out of the city assuming
non-resident demand is sustained.”
Kamal Hamdan, Economist
Richart Khalil ©

23. Sahel Alma region – North of Beirut 2004 ©
Richart Khalil

24. Sahel Alma region – North of Beirut 2011 ©
Richart Khalil

25. “The preferred price is anything under $300,000. buyers
also insist on certain standard amenities, with ample
parking, preferably underground, topping the list. For
the price they pay buyers expect central heating and
air-conditioning, a private generator for the building,
a water well, electric shutters, marble floors and
solid wood doors.” Reported
in Lebanon Opportunities, 2011
Richart Khalil ©

26. 2. Key Benefits
• Diversity of offers
• Standardization of the construction
Opportunities
Richart Khalil ©

27. “Everyone wants a piece of land. It's the only sure
investment. It can never depreciate like a car or a
washing machine. Land will double its value in ten
years. In less than that. Land is going up every day.”
SAM SHEPARD, Curse of the Starving Class
Richart Khalil ©

28. 2. Weaknesses
• Expensive lands
• Uncontrolled urban planning
• Insufficient infrastructure
• Construction law
• Low standards construction
• Bad maintenance
Risks
• Ecological situation
Richart Khalil ©

29. “… for the buyer, it is no more the size that
counts, but the budget.”
Raja Makarem, Ramco
Richart Khalil ©

30. 3. Challenges
• A market of potential
• A market of innovation
• Evolution of the architectural concept
• Population adaptation
Conclusion
• Developing standards
Richart Khalil ©

31. 3. Challenges
• Developing standards www.ANAH.fr www.communities.gov.uk
Ensuring Safety
Ensuring Decency
Sustainability (Water and
Conclusion
Electricity)
Richart Khalil ©

32. “ Every person who invests in well-selected real estate
in a growing section of a prosperous community adopts
the surest and safest method of becoming independent,
for real estate is the basis of wealth.”
Theodore Roosevelt (1858-1919)
Richart Khalil ©

33. Thank You
Richart KHALIL
Urban Planner – Architect
Lecturer at Université Saint Esprit de Kaslik
Lecturer at Notre Dame University – Louaize
www.ArchiQ.net
Contact
richart@archiq.net
http://lb.linkedin.com/in/richartkhalil
Richart Khalil ©