[The Role of Government Supported Housing Finance-Case in Mongolia]

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ABSTRACT

This paper aims to analyse the role of government on facilitating the housing finance in Mongolia. It is important to view this concept keeping in view the role of government as the population of Mongolia is ever increasing and the need for new and affordable housing projects is imperative. This research employs a qualitative secondary research decision because the nature of this study is descriptive and the already published material and the preceding work will help understanding how well the government has been implementing the housing finance in Mongolia. The selected studies will be interpreted ensuring that the authentic and relevant findings are deducted.

Table of Contents

CHAPTER 1: INTRODUCTION3

Background3

Problem Statement4

Research Purpose4

Significance of the Study4

Research Questions5

CHAPTER 2: LITERATURE REVIEW6

Housing Finance and State Aid6

Defining Housing Affordability6

The Information Problem in Mortgage Markets8

Benefits of Housing Finance for Low-Income Households8

Mongolia and Need for Housing Finance9

Mortgage Market Overview10

Housing Finance Efforts in Mongolia12

CHAPTER 3: METHODOLOGY14

Research Design14

Data Collection Method15

Data Analysis16

Validity16

Ethical Concerns16

REFERENCES18

CHAPTER 1: INTRODUCTION

Background

The financing of social housing evolves according to the priorities of the state housing. In the aftermath of the Second World War, the emergency reconstruction and the State establishment a funding system relied on aid, grants and loans paid to producers of the houses. By 1977, the governments from all over the world became keen in reforming the financing of social housing. The state intervened primarily in the structure of housing supply in correcting the market effects on the most vulnerable distributing personal assistance (Shlay,2006,511-531). The first consequence of these reforms was to reduce the number of houses built, and in a context of economic crisis, to ensure the personal assistants in order to mask the effects of the housing crisis. Keeping in view the benefits of the housing finance, the government of Mongolia has introduced various subsidies for the housing construction sector that includes custom duties exemptions and VAT. These programs call for the provision of 10,000 apartment units, 15,000 housing units in the vacant lands of government (USAID,2005). To implement these 40,000 housing units, the ministry of construction and urban development (MCUD) has come up with a resolution developing a national housing centre as a self financing unit within the ministry. One of the initiatives named “GER” was undertaken by the government, the purpose of which was t put into practice a method that will encourage the local initiatives, supporting public and private collaboration, sharing cost in affordable manner and enabling the physical improvement at lowest possible rate (USAID,2005). The main purpose of this strategy is to encourage the communities to take part in improving efforts by seeing affordability.

Problem Statement

People of Mongolia have been coming across hosing concerns as the population increases rapidly. About 72% of the urban household live in the conventional housing where 38% live in the apartments, which are mostly privatised. ADB implemented a project to facilitate the longer term objective of developing a sustainable market based system for the housing finance. The purpose of this system had been to meet the borrowing needs ...