Batumi City Hall Program “Cheap House – Standard Housing for Citizens” Running with Faults
In the framework of the program “Cheap House – Standard Housing for Citizens”, Batumi City Hall announced an electronic tender for construction of a residential building on 78 Javakhishvili Street and arrangement of adjacent territories (SPA150025388). The cost of procurement makes up 4 430 000 GEL. October 9 is defined as the deadline for submission of tender applications.
Batumi City Hall has been planning implementation of the program from 2013. According to the explanatory note, the aim of the program is “to improve the availability of accessible and adequate housing for citizens of Batumi. The given goal will be achieved by means of awarding Batumi citizens with the right to long-term redemption of new houses“. Despite the fact that the tender was announced at the end of the third quarter 2015, the City Hall has not yet determined the criteria for selection of future beneficiaries. It illustrates the fact that the program is running with certain flaws; in particular:
- The explanatory note of the program “Cheap House” is not complete. The note does not include a detailed definition of “Cheap House-Standard Housing”; neither does it specify what the exact essence of “long-term redemption mechanism” is.
- Criteria for selection of beneficiaries for the Housing Program are not duly established. There is a general reference that low-income families are eligible to participate in the program. However, if the number of such families exceeds the number of beneficiaries, which the City Hall is able to cover, it is not quite clear what particular principle will be applied for their further selection.
- Prior to implementation of the program, Batumi government has not conducted any type of survey to identify potential beneficiaries for the program and assess existing needs. Currently, there are around 2000 applications of asylum seekers registered at Batumi City Hall, but none of them have been interviewed to determine whether they will be able to make their own contribution to the acquisition of housing. The program does not specify either what percentage of the total value of the housing should be co-financed by the citizen. It is not clear what procedures will follow if the beneficiary participating in the program fails to make a monthly contribution;
- As Mayor of Batumi, Giorgi Ermakov stated in the beginning of 2015, it was to establish an ad-hoc commission, which would focus on development of beneficiary selection criteria for “Cheap Housing” program. Albeit, no commission has been set up so far.
- Representatives of non-governmental organizations, social sector, urbanists, and sociologists are not duly involved in the process, whereas participation of field specialists and third sector representatives would ensure greater transparency and impartiality of the project.
Implementation of the program in the existing form carries the following risks:
- The criteria for selection of families participating in the program as well as their number is not specified; accordingly, it will be hard to judge whether selection of beneficiaries is handled in a transparent manner; the given factor merits particular attention considering the fact that in Batumi, as well as in other municipalities, there is not a uniform register of homeless citizens. By the current practice, homeless people are provided with housing on the basis of personal applications to self-governing bodies;
- There are no mechanisms embedded for prevention of corruption;
- Due to lack of program specifications, citizens and civil sector representatives have limited information about the “Cheap Housing” program; public statements issued by the City Hall and Sakrebulo representatives may sparkle exaggerated expectations among the homeless/low income citizens with respect to the housing.
- If the “Cheap House” program continues in the following years, the municipality will have to spend millions of GEL on construction works; it may put at stake activities of the construction companies whose target segment includes the middle and low income population.
Since the “Cheap House” program of Batumi City Hall sets a precedent in Georgia and since procedures, criteria and other important provisions are not defined in the form of a normative act (there is no state housing policy in place; there is no regulatory legislation for the given field), we believe that Batumi City Hall should thoroughly examine the current situation in the construction market. It should foresee the risks to ensure targeted spending of budgetary funds. Meantime, implementation of the program should not act as an obstacle to private business and investments.