Housing Diagnostic in Greater Baku: Growing informality in The City of Winds Preliminary Findings World Bank Land and Poverty Conference– March 2015

Housing Diagnostic in Greater Baku: Growing informality in The City of Winds

Preliminary FindingsWorld Bank Land and Poverty Conference– March 2015

Core team: Yarissa Sommer, Paula Restrepo Cadavid, Ashna Mathema, Hadji Huseynov, Luis Quintero, Mihir Prakash & Rodrigo Munoz

With support Poverty (Nishta Sinha, Nobuo Yoshida, Alexander Skinner & Mortiz Meyer), Land and Social teams

1. Context2. Research questions 3. Methodology4. Preliminary results 5. Conclusions

Caucasus – Caspian sea

Incorporated in Soviet Union in 1920 & proclaimed its independence in October 1991

Rich in oil and natural gas

GNI per capita 14,870 USD

54 percent of the population live in urban areas

1988-1994* Azerbaijan-Armenia war (Nagorno-Karabakh region) = IDPs

More than 25 percent of the country’s population lives in Greater Baku Region

• Newly created Housing Department in the Ministry of Economy (Client)

• Diagnostic of the Housing Sector in Greater Baku Region in two phases:

– Phase I: primary data collection through a household survey (Completed and financed under Norwegian MDTF) + land use assessment based on Google Earth.

– Phase II: qualitative assessment to further identify bottlenecks to access affordable housing (Inclusive cities TF …)

• This Presentation: Methodology and Results from Phase I with some preliminary conclusions

1. Context


• What is the current state of the housing stock?• What is the current access to basic services, neighborhood quality and

access to social and transport infrastructure?• What types of tenure are predominant in Greater Baku? (owners vs.

renters, informal vs. formal) : scale and type of informality• How do households finance the purchase of their dwellings and recent

housing improvements?….

…. Across population groups, tenure types and districts.

2. Research questions

1. Research questions 2. Methodology3. Results4. Conclusions and follow-up


• Household Survey designed is representative of the Greater Baku Region and covered:– Total 1,200 households over 14 districts– Included Internally Displaced People (IDPs) living in collective centers– Covered the spectrum of housing typologies – informal to formal

3. Methodology (household survey)

• A number of innovations were used to allow for better data collection and quality control: – Tablets (real time data) - Capi– Geo-referencing households– Pictures of housing structures

3. Methodology (household survey)

• Maps: – Google Earth – Time series analysis (2004 - 2009 - 2014)– Fourteen categories of development patterns = Greater Baku Region classified

3. Methodology (land use)


RESULTS HOUSEHOLD SURVEYHousing: Age, Type, Quality of Structures, access

and accesibility

The majority of the housing stock in GB was constructed in the early 70s. There was a sharp reduction in the construction of housing after 1990. Only around 8 percent of housing was constructed between 1990 and 1999 and around 3 percent after 2000.

4. Results: the majority of the housing stock was constructed in the early 70s

0.0

05

.01

.01

5.0

2D

en

sity

1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

Question: When was your house/apartment constructed approximately?

Year of construction.

On average, the housing stock in the eastern and western suburbs is younger than the one in Baku. However the majority of new housing units (After 2000) are being constructed in Baku and in the Eastern Suburbs.

4. Results: Eastern Sub. and Absheron have a younger housing stock

Baku

Sumgayit

Western

Absheron

Eastern

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Before 1940 Between 1940 and 1969 Between 1970 and 1989 Between 1990 and 1999 After 2000

Percentage of housing stock built in each time period

After 2000 (60 percent single family houses) which contrasts to that seen in earlier decades (25 percent). Most of the new single family houses are being constructed in the Eastern Suburbs or in Absheron district.

4. Results: Most of the new constructions are in the form of single family houses

Before 1940

Between 1940 and 1969



After 2000

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

SINGLE FAMILY HOUSE APARTMENT ROOM IN HOUSE/APARTMENT COLLECTIVE CENTER

Percentage of housing stock built in each time period

69 percent of households reported having one or more problems with housing structures and common areas.

The main issue reported was no- working lifts in multi-family buildings and issues with the maintenance of common areas: building façade, dirty common areas.

Buildings constructed between 1970 and 1989 were the worst performers in terms of quality of structure (78 percent reporting having one or more problems).

4. Results: Most households report having issues with structures and common areas

Leak roof, walls, floors or ceiling

broken windows, frames or floor

visible cracks in floor or walls

lift not workingcommon areas dirty

common areas in dilapidated state

building façade in a bad state

0%20%40%60%80%100%

Percentage of households reporting problems

Better of

Striking differences are visible between IDP and non-IDP households.

59 percent IDP report leaks in roof, wall or floors against 17 of non-IDPs

60 percent IDP reported visible cracks in floor or walls against 18 percent of non-IDPs

Similar patterns can be visible across different levels of informality. Those who do not have any proof of ownership reported having more issues with their structures compared to those having proof of ownership.

4. Results: Quality of housing structures and common areas is much worse for IDPs, informal…

Percentage of households reporting problems

Leak roof, walls, floors or ceiling

broken windows, frames or floor

visible cracks in floor or walls

lift not workingcommon areas dirty

common areas in dilapidated state

building façade in a bad state

0%

20%

40%

60%

80%

100%

Non-IDP household IDP household

Better of

Overall access to most services in the Greater Baku Region is high but a large proportion of households reported having no heating.

Access to electricity, piped gas and sewer connection is almost universal…

But only 36 percent of households reported having heating (either central heating, public or private) and still 11 percent don’t have individual flush toilets.

4. Results: Almost universal access to water, electricity, sewer connection…

Percentage of households with access to…

Individual piped water connection

Electricity

Piped gas

Sewer connection Individual flush toilet

Heating (Private or public)

Solid Waste regularly collected

0%

20%

40%

60%

80%

100%

Everyone

Better of

Differences in access are visible between IDPs and non-IDPsLargest differences are in access to individual flush toilets (Most IDPs still live in collective centers with shared sanitation facilities).

Similar patterns are visible across different levels of informality. Those who do not have any proof of ownership have overall lower access to basic services when compared to those having proof of ownership.

4. Results: but large disparities in access to services among IDPs and informal


Individual piped water connection

Electricity

Piped gas

Sewer connection Individual flush toilet

Heating (Private or public)


0%

20%

40%

60%

80%

100%

Non-IDP household IDP household

Secondary schools and bus stops are accessible to most of the population in Greater Baku within a 15 minutes distance*.

And most people feel it is safe to walk outside…

But only 49 percent of households reported having paved roads in good condition (outside their dwelling) and only 60 percent thought they had sufficient public spaces in their neighborhood.

4. Results: Most households have secondary schools and bus stops nearby…

Secondary school < 15 minutes

Bus stop < 15 minutes

Hospital < 15 minutes

Paved road and in good conditionSafe to walk outside

Street well lit at night

Sufficient public spaces

0%

20%

40%

60%

80%

100%

Everyone

Better of

Differences in accessibility are visible across the territory…. Eastern suburbs are overall the worst performers (Figure on the left). and also between IDP and non-IDP households. Similar patterns are observed when comparing households with and without proof of ownership (Figure on the right).

4. Results: again, important differences in “accessibility” across the territory, IDPs & informals







0%

20%

40%

60%

80%

100%

Baku Eastern Suburbs







0%

20%

40%

60%

80%

100%

Non-IDP IDP

As expected the level of satisfaction with housing is correlated with the indicators mentioned in the previous slides. The Eastern suburbs, which are the worst performers in access, accessibility and quality of structures have the highest percentages of dissatisfied households. Higher levels of dissatisfaction are also found for IDPs and those who don’t have proof of ownership: 68 percent and close to 80 respectively.

4. Results: level of satisfaction with housing linked to access, quality, neighborhood indicators…

Western Suburbs

Absheron Sat. City

Sumgayit Sat. City

Baku

Eastern Suburbs

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Very satisfied Satisfied Neutral Dissatisfied Very dissatisfied

Level of satisfaction by zone

RESULTS HOUSEHOLD SURVEYHousing: Tenure and access to finance

Results from the survey confirm high ownership rates. 92 percent of households reported being owners.

The highest levels of informality are found for housing units constructed between 1990 and 1999 and after 2000. 17 percent of households living in units constructed after 2000 don’t have any proof of ownership and an additional 31 percent have land documents but do not have extracts from the real estate Registry.

4. Results : High ownership rates and growing informality

before 1940

1940-1969

1970-1989

1990-1999

after 2000

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Nothing Registration card Contract with builderNotarized contract on sales donation Certificate of homestead land title Extract from real Estate registry

Proof of ownership by year of construction

The highest levels of informality are found in Yasamal, Suraxani and Sabunchu districts. On the contrary Binagadi and Narimanov have the lowest levels of informality.

4. Results : Informality is spatially concentrated in some of the districts

Binagadi

Narimanov

Sabail

Nasimi

Sumgayit

Pirallahi

Absheron

Khazar

Khatai

Nizami

Garadagh

Sabunchu

Suraxani

Yasamal

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Nothing Registration card Contract with builderNotarized contract on sales donation Certificate of homestead land title Extract from real Estate registry

Proof of ownership by district

Most households in Greater Baku obtained their housing units through the privatization process. But some differences can be observed across zones. In the Western Suburbs more than 20 percent of households reported received their dwelling from the State or company.

4. Results : There is [very] low access to mortgages

Baku

Eastern Suburbs

Absheron Sat. City

Sumgayit Sat. City

Western Suburbs

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Privatized Purchased without mortgage Inherited / Gift Provided by State / companyCooperative Occupied Other

How did you obtain the dwelling in which you are currently living?

None of the households reported having mortgages and most of those who purchased their homes did it using their own savings. 69 percent used own savings as the sole source of financing, 22 percent used a combination of savings, gifts and loans from family members or friends, around 4 percent exchanged their previous dwelling as a form of payment, 3 percent received dwelling as a gift from family or friends, and only 1 percent used microcredits.

Around 12 percent of households reported making a housing improvement in the past 12 months. 77 percent of housing improvements involved minor improvements (painting, sealing walls) and were financed using own savings (72 percent).

4. Results : Access to finance is limited both for buying and improving housing

Own savings70%

Savings + Gifts + Loans from

family/friends22%

Exchange for another dwelling4%

Gift from family/friends3% Microcredit

1%

Housing Finance sources

The rental market remains small (only 8.4 percent reported being renters) and mostly informal. Among all renters only around 28 percent have written contracts and 72 percent have verbal contracts which reflects the high level of informality of the rental housing market.

Most renters live in Baku City (72 percent) and to a lesser extent in the Eastern Suburbs (13 percent) and Sumgayit Satellite City (13 percent).

4. Results: limited and informal housing market

Most households are owners (from LITS survey)

4. Results : Findings in line with other studies

Uzbek

istan

Macedonia

Tajik

istan

Kosovo

Ukraine

Moldova

Lithuan

ia

Azerbaij

an

Kyrgyzs

tan

Romania

Georgi

aSe

rbia

Bulgaria

Armen

ia

Bosnia

and Herz

egovin

a

Kazakh

stan

Croati

a

Hungary

Poland

Slove

nia

Mongolia

Monteneg

roRussi

a

Slova

kia

Belaru

s

Estonia

Italy

Czech Rep

ublicLat

via

France

Swed

en

Great B

ritain

Turke

y

Turke

y

German

y0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

OtherOwnedRented

Very few have mortgages (from LITS survey)

4. Results : Findings in line with other studies

Azerbaij

an

Uzbek

istan

Kyrgyzs

tan

Georgi

a

Kazakh

stan

Belaru

s

Macedonia

Mongolia

Monteneg

ro

Slove

niaSe

rbia

Estonia

Slova

kia

Czech Rep

ublic

Albania

Hungary

Swed

enFra

nce0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Not stateCOOPERATIINHERITEDPRIVATIZEPURCHASED BUILT WITHOUT MORTGAGAPURCHASED BUILT WITH MORTGAGE

RESULTS LAND USE ANALYSIS

4. Results: Land use typologiesConfirm a lot of urban growth is happening in the form of agricultural land subdivisions in the periphery and satellite towns

4. Results: Land use typologiesGrowth “unplanned/informal” plotted housing near hazardous surface Oil-Wells

4. Results: Land use typologiesInfill development I: growth of high rise apartments in Baku city

4. Results: Land use typologiesInfill development II: Inner courtyard squatter housing


2. Conclusions: Preliminary findingsThe household survey confirmed: - Poor state of the housing stock, in particular buildings constructed during the 70s and 80s- Growth and sprawl of informality – mostly following a sprawl-type development and to a

lower extent in the form of infill development- Almost universal access to services (Electricity, water supply…) and overall good levels of

“access/proximity” to social infrastructure and public transport infrastructure (bus stops). Roads are the worst performers in terms of “accessibility” indicators.

- High ownership rates and limited (and mostly informal) rental market + limited access to housing finance (buying housing and housing improvements)

- While the overall picture looks OK a more disaggregated analysis shows a different story: - High disparities in access to services, accessibility, quality of housing across groups

(IDP, non-IDP), across tenure types and across the city (Eastern Suburbs vs. Baku)- Broad spectrum of informality: new luxury buildings not registered (Contract with

Builder), squatter settlements occupying private and public land, land divisions…- Next steps: completion of Phase II (Identify bottlenecks of accessing formal affordable

housing, wrap up of study and dissemination).

2. Next steps: Phase II

While registering property has gotten easier, the country is still lagging behind in the Doing Business Ranking in terms of dealing with construction permits….

To be continued

Thanks!!!

IDPs and households and those who do not have ownership documents** have the lowest space available per person and the highest level of overcrowding* measured as people per room.

*We use two indicators for overcrowding: (i) Persons per Room (PPR) and (ii) Meters per person. A benchmark of 1.5 PPR is used to assess overcrowding levels. **Households were asked which documents they had as proof of ownership and classified across different levels of informality. Households having nothing are considered the most informal while households having an extract from real estate registry are considered as the most formal.

4. Results: Overcrowding indicators

IDP Nr. roomsSurface (sq.mts) Household size

Sq.mt per person

People per Room

Overcrowding (PPR >1.5)

NO 2.60 56.0 3.83 17.0 1.62 40%YES 2.04 43.1 4.18 11.5 2.53 69%

Proof of ownership Nr. roomsSurface (sq.mts) Household size

Sq.mt per person

People per Room

Overcrowding (PPR >1.5)

Nothing 1.80 37.3 4.20 9.8 2.89 76%Registration card 2.42 56.6 4.20 15.5 2.03 57%Contract with builder 3.00 75.0 4.00 18.8 1.33 0%Notarized contract on sales donation 2.52 27.2 3.83 12.1 1.50 39%Certificate of homestead land title 3.82 103.1 4.54 24.5 1.32 25%Extract from real Estate registry 2.65 56.8 3.85 17.1 1.57 38%

Differences in access are also visible across districts… Khazar is overall the worst performer in terms of access while Binagadi and Narimanov are the best performers.

4. Results: Access to services

Individual piped

water connection Electricity Piped gas Sewer

connection Individual flush

toilet

Heating (Private or

public)


Binagadi 97% 100% 96% 100% 92% 59% 84%Narimanov 98% 100% 91% 99% 92% 46% 93%

Khatai 99% 100% 98% 99% 88% 30% 96%Yasamal 99% 100% 96% 99% 79% 44% 83%Sumgayit 96% 100% 100% 100% 95% 7% 97%

Sabail 100% 100% 100% 98% 81% 56% 58%Nizami 84% 100% 82% 93% 86% 51% 84%Nasimi 100% 100% 100% 100% 91% 10% 69%

Suraxani 84% 100% 94% 77% 84% 46% 57%Absheron 100% 100% 100% 94% 88% 30% 30%Sabunchu 91% 100% 95% 88% 60% 24% 69%Garadagh 100% 100% 97% 100% 63% 0% 61%Pirallahi 100% 100% 100% 90% 10% 0% 100%Khazar 50% 96% 74% 65% 54% 45% 67%

Best performers

Worst performers


4. Results: Land use typologiesGrowing spatially towards satellite towns: agricultural land subdivisions…

Documents

Housing Diagnostic in Greater Baku: Growing informality in The City of Winds Preliminary Findings World Bank Land and Poverty Conference– March 2015