Middle-east Arab News Opinion | Asharq Al-awsat

Land and real estate | ASHARQ AL-AWSAT English Archive 2005 -2017
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Genius Peruvian economist Hernando de Soto Polar cleverly notes the link between land and property and national economic growth. He argues that allowing and promoting land and real estate ownership has an instant positive reflection on other sectors. The father of management consultancy, late Austrian writer Peter Drucker, agreed with Polar’s theory, as can be seen in his quote: “real estate is power.” He added “real estate is the father of all commercial assets and the key guarantor for investment.” Of course, many people are also aware of the famous saying that goes “real estate may get sick, but it never dies.” One of the most important novels in Arab literature sums up the importance of land and real estate, namely Abdul Rahman al-Sharqawi’s famous novel “The Land”, which was later successfully adapted for the silver screen by Youssef Chahine. The story illustrates man’s relationship with the land and how by reclaiming and building on the land, things get better and conditions improve, provided that there is no injustice, oppression or infringement upon the rights of others.

Land is always the first target of any new policies. These policies are named after the orientation of their proponents, championing reform, nationalization, or distribution. All these policies have one goal, namely the achievement of social and economic justice for the reclamation and urbanization of land. Experiences vary between absolute failure and limited success in the above-mentioned cases. The most important thing remains the provision of equal opportunities for real estate ownership, the possible funding of this ownership process, the registering of the real estate in question as well as the reclamation and investment of land through real estate or agricultural development. This represents clear, compelling and unambiguous evidence of the economic soundness and compatibility [of such policies]. In order to attain this noble goal, legislation is enacted, policies are launched and laws ratified

Whenever a failing appears, responsible apparatuses would immediately step in to fix that flaw. An example of this is the thorough and rigorous re-examination currently taking place in Western countries in the wake of the huge financial collapse that occurred to the frenzied and massive loans granted in the name of real estate funding. Accumulative debts were sold and marketed without bringing actual and tangible benefits to common borrowers. Even worse, these borrowers were in fact destroyed by their debts, as this caused them to lose their homes and land, thereby directly contributing to the state of major and persistent economic depression.

There are various different “schools of thought” and “ideas” for improving and dealing with opportunities of ownership and preventing monopolization, as well as the circulation and transfer of land. A timeframe could be set for the owned land to either be developed or sold, after which it would be auctioned or taxed with annual fees and levies, to say nothing of other incentives to break existing monopolies or weaken the chances of real estate development and investment. Of course there are other means that are effectively used by other countries in this respect like setting a price or profit “ceiling” at a fixed rate to control high costs and inflation. The purpose of this is to prevent monopolization [of real estate], which would become an impossible and far-fetched dream that would generate anger, frustration and despondency, instead of providing people with decent living and affordable investment opportunities.

Offering land to citizens for the purpose of housing and accommodation is a clear and simple moral service that countries are required to provide. People ought to be granted that right by introducing regulations to this end and by creating cooperation between funding sectors like banks and real estate development companies. If the State succeeds in providing this service, it would exceed being just an investment and economic opportunity with realized material goals to being a sure way of forging social safety and communal security sought by governments and countries as a chief strategic target and vital part of major national projects.

It is ridiculous that people have more change and ability to finance or own a car than they do to own a piece of land or real estate where they can live a decent life. Increases in population, as well as the housing challenges in the Arab World, represents a pressing issue and we must look at all suggestions to solve this problem as quickly as possible.