CAMBODIA'S URBANIZATION, AND HOUSING CHALLENGES

Tep Makathy, Ph.DCity for All Conference,

Phnom Penh, 24 November 2016

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PART I: Regional UrbanizationPART II: Cambodia’s UrbanizationPART III: Housing Challenges and the Way Forward

CONTENTS

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I. Challenges for Regional Cooperation

The Asia region is a hotspot of urbanization – with growing numbers of cities of 300,000 inhabitants or more in 2014.

It is increasingly the locus of megacities (>10 Million Population) with 17 of the 29 identified megacities in Asia, (UNHABITAT) .

Haphazard urban development, overcrowding, inadequate housing and deficient basic services, environmental degradation, increasing everyday risks well as the growing risk from climate change.

With an average of 28% of urban populations in Asia living in slum conditions, equating to 564 million people! (WCR 2016). 3

(Rapid & increasing) shifts of populations from rural to urban areas

World Urban Population

1900 - 13% (220 million) >> 2005 - 49% (3.2 billion) >> 2030 – 60+% (4.9 billion) (UN World Urbanization Prospects Report)

Yet many people remain without access to basic infrastructure including; safe water supply, sanitation and solid waste management (SWM)

Live in poor quality and overcrowded housing

With Informal slum settlements often in dangerous locations

Urbanization in Southeast Asia 1

UNESA 2012 1990 2010 2030

Urban Population Asia

1 billion 1.8 billion 2.7 billion

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Significant demographic shift from rural to urban areas

Broad-based urbanization - cities of different demographic and geographical sizes

Urban areas are often driving economic growth – due to increased connectivity to markets, improved infrastructure and services, when compared to rural areas.

Regional cooperation between countries is also encouraging the growth of economic corridors and the development of secondary cities and small towns, which are increasingly connected.

Urbanization in Southeast Asia 2

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Cambodia’s Economic Transformation2015 marked 22 years of generally progressive economic development in Cambodia, following the formation of the Royal Government of Cambodia in 1993 (and a transformation from a planned to a market-based economy)

Cambodia’s economic performance has been partly generated and supported by resilient exports and tourism as well as a strong real estate sector.

The Cambodian economy grew by an average of 7% in 2013, 2014, and 2015 and is project to maintained this growth of 7% per year in 2016 and 2017 (ADB).

With this growth, the GDP per Capita has risen to USD$1,158.7 (WBG) in 201,5 from a base figure of just USD$253 per capita/ per year in 1993.

If this rate of growth is maintained for a longer period Cambodia’s GDP is expected to double within 10 years.

II. CAMBODIA'S URBANIZATION

Source: [ADB, Assessment Strategy and Roadmap 2012] 7

The Connectivity of Urban Centres (Economic Corridors)

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11Regions, provinces, municipalities Source: Own design based on data from NIS

Current Municipalities

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Municipal and Non-municipal Urban Centers

Source: own design based on data from Urban Reclassification, 2011

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Population size class MunicipalitiesNon-municipalurban centres

Remarks

>1 million inhabitants Phnom Penh ---

Secondary cities, large (>100,000)

Siem ReapBattambang

Poipet---

Only 3 large municipalities with well over 100,000 inhabitants, incl. Siem Reap (230,000)

Intermediate(50 – 100,000)

13 municipalities –

typical provincial

centres

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As of 2008, three municipalities close to 100,000: Sihanouk Ville, Sarei Saophon, Takhmau (Kandal)The largest non-municipal town is Sa Ang in Kandal Province, with 53,000 inhabitants, i.e. much larger than many municipalities

Small (20-50,000)

9 11 towns

The larger non-municipal towns in this category are likely candidates for becoming municipalities

Very small (< 20,000)

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17 towns (10-20,000)

11 towns (<10,000)

The smallest municipality is Saen Monorom in Mondulkiri province (12,340)

Total27

municipalities40 non-municipal

urban centres

Total urban population

2.969,112 –81.7%

(municipalities)

665,065 –18.3% (others)

Urban Centres by Population Size & Classification

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The Urban Economy: Situation AssessmentThe demographically defined total labour force for the country was about 8.6 million in 2008.

Using the 2013 population count (14.7 million), the overall economically productive population has grown to ~9.1 million people in 3.2 million households.

Clustering and translating this into the three broad sectors and assuming equal household size (which is definitely a simplification),

Sectors% of

householdsHouseholds

(1,000)Population

(1,000)

Agriculture 55.8 1,765 8,186

Industry 16.9 534 2,406

Services 27.3 864 4,005

Total 100.0 3,163 14,677

Source: [World Bank, Cambodia Economy Profile, 2013]

15Source: Economic Census, 2011

Distribution of economic establishments and their workforce

Distribution of Economic EstablishmentsPopulation Engaged in Business

Establishments

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AreaFour most important sections of

employment – trade, manufacturing, accommodation/food, education

% Remarks

Phnom Penh 463,571 33 High concentration of registered enterprises & employment in Phnom Penh & 9 core provinces

Next 10 largest municipalities

616,274 44

Next 5 222,308 16

Subtotal 15 provinces 1,302,153 92Only four of 17 categories of enterprises /employment

All of Cambodia 1,409,477 100

Area Population % Employees %Concentration

indexPhnom Penh 1,501,725 11.2 559,166 33.4 2.9810 largest municipalities

951,762 7.2 341,143 20.4 2.86

All 27 municipalities

2,969,112 22.2 878,179 52.4 2.36

*ISIC: International Standard for Economic Classification – in the Economic Census, 17 classes of ISIC were used, but in this table, only the 4 major sections are presented. Source: From Econ Census, 2011, Report 3, Tab. 3.5.3, p. 10

Determinants of Urban Growth & Change (based on 2011 data)

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Baseline Conditions, 2008 Scenario 1, 2030 Scenario 2 , 2030

Total

Population

Urban

Population

Total

Population

Urban

Population Total Population

Urban

Population

Region

Pro

vnce

s

No.

Re

gio

nal

%

No.Urban

%No.

Re

gio

nal

%

No.Urban

%No.

Re

gio

nal

%

No.Urban

%

A. Phnom Penh1 1,670 12.5 1,502 89.9 2,759 15 2,759 100 2,391 13 2,391 100

B. Plain region5 4,878 36.4 701 14.4 6,418 35 1,861 29 5,701 31 1,767 31

C. Tonle Sap Lake8 4,357 32.5 977 22.4 5,793 32 2,433 42 5,517 30 2,207 40

D. Coastal Region4 961 7.2 253 26.3 1,324 7 569 43 2,207 12 971 44

E. Plateau &

Mountains7 1,531 11.4 203 13.3 2,097 11 482 23 2,575 14 772 30

Total 25 13,396 100.0 3,636 27.1 18,391 100 8,105 44 18,391 100 8,109 44

Urbanization Projection Scenarios (Indicators & Patterns of Change)

Source: Urbanization Studies, ADB, 2014

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Scenario 1 Business as Usual to 2030

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Alternative Scenario (2) , 2030

Population Engaged in Business Establishments

Satellite zone

City center

Proposed sub-center

one

City-center

one

III. The Capital’s Urban Development and Housing Challenges

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No. 5

No. 4

No. 3

No. 2

No. 1

SEZ

New centre pole Airport Old centre

Industries

Natural ponds

Prek Thnot river

Inner-relation between urban expansion and hydraulic system for decades

Rail lines

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GRAND PHNOM PENHINTERNATIONAL CITY

Development Projects

Some of the Current Large Scale Projects Being Implemented

In 2014 (CSES), 94% of Cambodian households were reported owning their own of homes/houses, with an average of 46m2 or ~10m2/ pers.

It is projected that Cambodia needs an additional 80,000 units (equivalent to 1.1 million units by 2030),

~15,000 housing units/ per year are estimated as needed in Phnom Penh

However current commercial provision is mainly aim at upper middle to high income (and foreign) markets only. Driving housing prices upwards which continue to grow and surpass local earning/incomes groups as

Avg. GDP is now 1,158$/per/yr, with an average of 7% growth/annum from 2005 onwards (2015)

It is currently estimated that a person needs 33-53 years to buy a house, If ranging between 36-48m2 with estimated costs 50,000-80,000USD/unit (Or only 17-26 years for 2 income earners)

Urban Housing Challenges 1

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At present only about 10% of Phnom Penh’s population can afford housing based on current and projected income levels!

Yet 87% of Phnom Penh’s population reported owning their homes?

Migration to Phnom Penh accounts for about half of (all) the out of province migration in Cambodia (CRUMP 2012)

With 22% of rural-urban migrants reported working in the garment sector; and 22% in small businesses.

Appropriate and affordable accommodation/housing units are required,

But the lack there of has often resulted in the creation of informal and slum settlements in Phnom Penh.

Urban Housing Challenges (Cont.) 2

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Nationally 95% of roofs are made of tile, fibro cement, concrete and zinc (Phnom Penh: 41% from tile and concrete)

Nationally 81% of wall made of wood, brick, zinc, fibro cement, concrete (Phnom Penh: 72% from brick and concrete)

Floor: 76% made of clay, plywood, bamboo, etc. (Phnom Penh: 79% made of strong materials)

Housing Quality and Security 1

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Recently published figures (2016) indicates that 4 million plot titles have been issued over the last decade (since 2004), through a number of programs including systematic and sporadic titling as well as under Circular #01 (2012)

2.5 million titles issued through the systematic titling program while over >3million plots have been surveyed (in rough half of districts/Khans (108/197) in the country)

Sporadic titling: 600,00 0titles (including transfer titles)

Circular #01: in 357 communes with 560,000 titles issued

Roughly, 30% of urban families in 27 municipalities/ 12 Khans may have a property title (CIUS, 2016) based on reported Ministry of Planning figures (2014)

Housing Quality and Security (Cont.) 2

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Nationally 51% of households have access to an improved water supply, with > 90% in Phnom Penh, 64 in other urban areas and just 42% in Rural areas

58% of households are connected to grid with nearly total coverage (>90%) in urban areas while just 47% of rural households, 31% of households mainly in rural areas rely on battery.

1980’s-2014, roughly 500 informal sentiments were identified in Phnom Penh alone (however there is no unified agreement on what and where these were). Officially Phnom Penh now recognized just 250 consolidated settlements

In the ~54 Municipal relocation sites around Phnom Penh, around 20% of households are not connected to water supply and sanitation (ADB).

Access to Utilities & Services

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Slum Housing (Urban Areas only) The United Nations (2016) reports that 55% of the urban

population in 2014 in Cambodia lived in slum housing! which equated to ~1.7 million people? This is based country household data using four of the five components of

slum (improved water, improved sanitation, durable housing and sufficient living area).

While a CIUS assessment would indicated that figures are likely to range from 147,000-276,000 (20-38% of urban ) households, equivalent to 730,000- 1.3 million people, are possibly living in slum conditions. Dependent on how strictly you interpreted the possible criteria, for example

if having a wooden floor results in the house being considered a slum house?

This comes about because there is currently a lack of consensus on what “adequate housing “ means and is defined in the Cambodian context.

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By 2030, around 80,000 new HHs/year will be needed (Est.),

With 47% in urban areas

With a major challenge will be the increase in commercial land prices (by 35%, and 50% for residential land price during the last 3 years)

No clear studies yet on the demand for housing, but the current supply is driven by a speculative market

Solely targeting higher income population (no demand forecast)

Housing Development in Phnom Penh and other Urban Areas

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Secondary centre

-Investor : Canadia Bank

-Total Development Area : 80 ha

-Development term : 99 years

-Investment cost : 47.5 millions SU$

Diamond Island Project

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Secondary centre

-Investor : World City Co, Ltd.

-Total Development Area : 119 ha

-Investment cost : 2 billions US$

CamKo City

Cambodia is only beginning to effectively consider and try to address it housing challenges with

Four priorities for housing being identified by Government:

Tenure security;

Access to Utilities and services;

Quality of construction; and

Access to housing by the poor

Some early efforts have being made through social land concession activities,

Though how good these have being is still questioned?

Beginning to Addressing Urban Housing Challenges 1

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Beginning to Addressing Urban Housing Challenges 2

Other efforts have included:

The 2010 Circular No. 03 on the “Resolution of Temporary Settlement on Land Which Has Been Illegally Occupied in the Capital, Municipal, and Urban Areas”,

The impact(s) of this and its application are difficult to qualify?

The comprehensive and generally well regarded National Housing Policy adopted in 2014,

Which now needs to be better acted upon.

and

▪ The DRAFT “Policy on Incentives and the Establishment of a National Program for the Development of Affordable Housing “ which is currently being worked on

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Based on the Draft Affordable housing policy

Not more than 30% of total income should be spent on housing (Proposed)

A National Program for Supporting Affordable Housing, particularly for young families/working age groups which should

Contributing to providing affordable housing for low income population (with an indicative unit cost of <US$15,000)

Access to an improved tenure security

Access to an improved quality and safety, and

Access to utilities

Likely implemented through a Pilot ( Public Private Partnership –PPP) program, through support from the national government

Proposed National Government Intervention

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MoUs signed with the Community Development Foundation (CDF) and its parent organization

the Asian Coalition for Housing Rights (ACHR)

CARITAS Cambodia for Disaster Preparedness Housing

And

More recently an MoU signed between Habitat for Humanity Cambodia (HFHC) and the new General Department of Housing (2014) of MLMUPC in October 2016

Contributing to the objectives of the National Strategic Development Plan 2014-2018 and

The implementation of the National Housing Policy of the Royal Government of Cambodia.

Housing Cooperation between Government and Non State Actors

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Examples of two models and designs of affordable housing options from HFHC as built in Battambang..

Housing Cooperation between Government and Non State Actors (Affordable Housing)

Design information

Description Specification Design 1 (Better Off) Specification Design 2 (Poor Class)

Total cost estimation Around USD 3,700 (A bit more/less) Around USD 2,650 (A bit more/less)

House size 4.5m*7.5m 4.5m*7.5m

Toilet 1.5m*2.00m 1.5m*2.00m

Kitchen 2.00m*2.00m 2.00m*2.00m

Story Extendable loft floor One story / Ground floor only

Wall material Fired hollow brick Fired hollow brick / Soil Block (SSB)

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CDF example of a 20m2 (4m*5m living space) row houses

1 2 3 4 5

TVaxageRkaypÞH TVaxageRkaypÞH

l MhkñúgpÞH l MhkñúgpÞH

0.70

0.80

0.70

1.00 0.90

TVacUl xagmuxpÞH TVacUl xagmuxpÞHA

B

C

1

2 3 2 3

1

1.68

dMbUl sgásI

epÞagEdkTIbRCug50KuN100pøanEdkTIbRCug40KuN40

3.60

3.00

0.70

A B C

3.60 1.200.60

\dæxül ;

erob\dæcak;dIkMBs;0/70EmRt

0.70

0.60

0.50

\dæxül ;

bøg;BHubeNþay

bøg;)at

bøg;BHu

beNþa

ySource: Community Development Fund/CDF

Materials: Concrete wall; zinc roof and with W.C.Est. Total: 4,100,000 Riels (US$1,040)

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Housing Cooperation between Government and Non State Actors (Affordable Housing)

Example of a 24m2, 4m x 6m (Wooden house)

rUbPaBemIl BIcMBImux

rUbPaBemIl BIcMehogxageqVg

bnÞb;Twk

GagTwkcRgáan)ay

1 2

A

B

C

bøg;Can;pÞal ;dI

l MhkñúgpÞH

ranhal

bøg;Can;TImYy

Materials: Wooden wall; zinc roof and with W.C .Est. Total: 6,500,000 Riels (US$1,625) Source: CDF

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Housing Cooperation between Government and Non State Actors (Affordable Housing)

Example of a 14m2 (3.5m x 4m) house

Materials: bamboo wall ; thatch roof and with W.C Est. Total: 2,300,000 Riels (US$ 575)

bøg;Can;TImYy

ranhal

rUbPaBemIl BIcMehogxagsþaMrUbPaBemIl BIcMBImux

bøg;Can;eRkampÞal ;dI

eLIg

cRgaán)ay bnÞb;Twk

l MheRkampÞH

3 2

1

l MhkñúgpÞH

Source: CDF

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Housing Cooperation between Government and Non State Actors (Affordable Housing)

Cambodian Institute for Urban Studies Pannasastra University of Cambodia,

# 89, Street 313, Boeung Kak II, Phnom PenhTel: (855) 023-6711-099, Email: cambodian.cius@gmail.com;

makathytep@gmail.com

Face book Page: Cambodian Institute for Urban Studies

Thanks You!

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