Phnom Penh Building Boom Prices Out Poor

Holding a bag of freshly cut mar­i­gold, Huot Hoeun walked back to his wooden frame house with corrugated tin walls on the banks of the Tonle Bassac river that has been his family’s home for the past nine years.

Amid a tangle of fishing nets, one of his sons plays with some old tire inner tubes and the other works on an old boat engine as river crafts putter past meters away, and the spires of NagaCorp casino and the new Foreign Affairs building break the horizon.

When Huot Hoeun first came to Phnom Penh, he found it hard to find work. So he crossed the river to the still verdant Koh Pich, rented some land from one of the residents, and worked as a farmer.

But now, in a trend that is sweep­­ing the city, developers have set their sights on the island and many villagers who owned land on it, including Huot Hoeun’s landlord, have sold up and moved on.

While the farmer is continuing to work the land he once rented— until he is kicked off by authorities—he knows he will never make enough money to buy land in Phnom Penh as the price of property skyrockets.

“I will return to my birthplace [in Takeo province] because I cannot do anything,” he said Sunday.

Last month, the city unveiled its master plan for the next 20 years—a blueprint for the city to develop around Wat Phnom 30 km in every direction, as population grows to more than 2.5 million.

The municipality is encouraging development throughout the city, and has approved a strategy to improve infrastructure for 100 communities in Phnom Penh each year. But the improvements will likely displace low-income families living on public land that cannot afford new or better accommodations.

Tuy Someth of UN Habitat said one company recently tried to build affordable housing by offering 4-by-6-meter homes with a seven-year loan plan. However, many potential buyers couldn’t afford even the $3,500 down payment.

“The poor have no access to low-cost homes,” he said, adding that he estimates at least 10,000 new homes must be built in the city every year to keep up with de­mand.

Urban development expert Eric Huybrechts, working as an adviser to the municipality through French government support, said officials estimate there are 7,000 more households each year that need accommodation in the city.

While the housing market is im­proving and more options are being made available, Huybrechts said, only about 8,800 homes were built last year, which isn’t enough considering that new homes must also be built to replace old houses whose life span has run out.

In March it was revealed that the plan to improve those 100 communities per year would displace 4,771 families—most of them without land titles—over the next two years.

Some have already been evicted, with many receiving new land in areas around Phnom Penh as compensation.

There are possible benefits to developing the city’s outskirts into suburbs, including having factory employees living closer to their work places, Huybrechts said, noting that half of the city’s residents already live in Russei Keo, Me­an­chey and Dangkao districts.

Though the city has tried to buy new land to resettle displaced poor families, land prices are increasing and such options are becoming more and more difficult and ex­pensive.

In its most recent issue of Khmer Property News magazine, Bonna Realty Group estimated that since 2000 the price of land in the city has tripled.

The price of land was fairly steady during 2003, but the 2004 general election stalemate created a great deal of uncertainty, said Sung Bonna, director of Bonna Realty. The market has since bounced back and land value in many parts of the city—especially the outskirts where the municipality plans to expand—has increased significantly.

As the outskirts of Phnom Penh develop, those families resettled there could face further eviction in the future, Tuy Someth warned.

In May 2004, the realty company appraised land around Boeng Pong Peay lake in Tuol Kok district to be worth between $5 and $30 per square meter.

A year later, after much of the 157-hectare lake had been filled, the land was worth $30 to $70 per square meter.

The garment factory area of Stung Meanchey commune has seen land prices rise from $5 to $10 per square meter to $20 to $50 in some areas, while land prices along Monivong Boulevard have in some places increased by as much as $100 per square meter.

“Up until 2007, there will be more investment,” said Vannso­phy Kong, marketing manager of Asia Real Property Co Ltd. “Land prices in the city are very high and the prices are going to grow.”

Land is being bought up at fast rates around Boeng Pong Peay lake and Stung Meanchey commune because the government plans to improve infrastructure there, such as fixing the road to Choeung Ek, Vannsophy Kong said.

As the city continues to develop and residents face higher land prices and a shortage of housing, the need for affordable housing will continue to increase.

Later this month, the UN High Commissioner on Human Rights official for adequate housing, Mi­loon Kothari, will conduct an official mission to Cambodia to examine whether the right to adequate housing is being implemented in the country.

Special focus will be paid to Phnom Penh and urban poverty.

Sources also reveal that the in­ternational housing NGO Center on Housing Rights plans to open an office in the country next month.

Meanwhile, Huot Hoeun will continue farming on Koh Pich until he is kicked off.

“I will ask the city for some land,” he said, though he admitted he didn’t have much hope.

 

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