At the government session chaired by the Prime Minister of the Republic of Kazakhstan Alikhan Smailov, the issue of subsidizing rent and new approaches to the country's housing policy was considered. Minister of Industry and Infrastructure Development of the Republic of Kazakhstan Kairbek Uskenbayev and Chair of the Board of Baiterek NMH JSC Aidar Arifkhanov presented their reports.

As the Minister of Industry and Infrastructure Development of the Republic of Kazakhstan Kairbek Uskenbayev noted, starting his speech, in order to accelerate the resolution of issues of certain categories of citizens, the Head of State instructed to develop a mechanism for paying rent on the commercial housing market.

“Today, there are about 590,000 people on the waiting list in the country, of which 210,000 people are from the category of socially vulnerable population. These are large families, disabled people of groups 1 and 2, orphans, families with disabled children,” Uskenbayev noted.

Of these, the minister says, according to the database of the Ministry of Labor, there are about 70 thousand citizens with incomes below one subsistence minimum, who need to be provided with housing in a short time. For this purpose, rules have been developed for assigning payments for housing rented in private housing stock. The operator is Otbasy Bank. The bank will check the waiting list according to the criteria of need for housing through the information system.

The principle of targeted assistance, according to the minister, is based on the joint responsibility of citizens:

- 50% will be covered by state subsidies;

- the remaining 50% is paid by the recipient himself.

“The required amount to cover 70 thousand citizens with support will be 50 billion tenge. At the same time, this amount may change annually based on the number of people on the waiting list,” Uskenbayev said.

According to him, the main requirements for the applicant are as follows:

1) citizenship of the Republic of Kazakhstan is required;

2) the presence of the total family income for the last 6 months for each family member is not more than a single subsistence minimum;

3) confirmation of placing on the waiting list in the akimat as a person in need of housing;

4) the existence of an agreement concluded between the owner of the housing and the applicant.

To assign payments, the applicant applies to the bank by means of an EDS with the application:

1) application for the assignment of payments;

2) housing lease agreements.

The remaining title documents will be obtained from the relevant information systems.

“Otbasy Bank considers and checks the submitted documents for compliance and, if confirmed, credits lease payments within 10 working days,” Uskenbayev reported.

In addition, according to the minister, in order to reduce the burden on the republican budget, co-financing from local budgets in the amount of 10% is necessary. That is, annually the costs from the republican budget will amount to 40 billion tenge and for local budgets — 10 billion tenge. A step-by-step action plan has been drawn up to implement the payment mechanism.

First, rules have been developed with criteria and requirements, as well as the marginal cost of rent.

Second, it is necessary to clarify the republican and local budgets.

Third, Otbasy Bank must complete the integration of its system with the information systems of state bodies.

The full launch of the Housing Benefit Program is planned for May. If the above approaches are approved, the ministry is ready to approve its order.

Speaking about new approaches to housing policy, the minister noted that by the end of 2021, 17 million sq. m of new housing was built. This allowed 151,000 citizens to improve their living conditions.

“Investments in housing construction increased by 19% compared to the same period last year and amounted to 2.4 trillion tenge,” Uskenbayev reported.

Starting this year, according to him, it is planned to move from "construction of square meters" to the formation of a comfortable living environment by creating a compact and diverse building through the efficient use of land resources, the development of the road network and improving the quality of public spaces. The main approaches to solving housing issues of citizens will be new mechanisms of state support through subsidies, housing payments for rental housing, the purchase of finished housing from developers, the renovation of "old quarters", the completion of problematic objects. With this in mind, it is proposed to determine the same annual volume of housing commissioning for the current year — 17 million square meters.

“There are currently 46,476 enterprises operating in the construction industry, employing 641,000 workers and specialists. And we will continue our further policy to preserve and increase jobs,” Uskenbayev assured.

In addition, according to the minister, the main goals of the ministry will be to ensure the affordability of housing, prevent the rise in its cost and improve the quality of life of the population. To prevent a rise in the cost of housing and building materials, the ministry is working in three directions:

First, the digitalization of the construction industry.

Second is the improvement of the pricing system and the strengthening of control in construction.

Third is the development of the production of building materials.

“According to the digitalization of the construction industry, a system is being introduced — the state bank of information models, which allows modeling construction objects in an online format, including using information modeling technologies,” Uskenbayev reported.

In turn, the E-Qurylys system, according to the minister, will allow online control of the construction process at all stages from digging a pit to commissioning. The Kazreestr system has been introduced to account for equity participation agreements. It minimizes the risks of buying housing for shared construction from unscrupulous developers. The E-Shanyrak platform is a unified system of housing and communal services entities and will ensure the transparency of housing stock management, monitoring and analysis of the housing and communal services sector. In general, according to the minister, the measures taken to digitalize the industry will reduce bureaucracy and simplify procedures in construction.

“In order to avoid overestimation of the cost of the same facilities with the participation of investments from the state and quasi-state sectors, limit limits for construction costs have been set with the introduction of an online calculator on the state expertise portal,” Uskenbayev reported.

According to him, single estimated prices and reference books of estimated prices are also being developed. This will exclude fluctuations in the cost of construction of the same facilities by region, as well as overestimation of the estimated cost of projects at the stages of design and examination of design estimates.

“According to the current legislation, inspections of state-architectural control bodies are impossible without complaints, and the State Construction Committee does not participate in the acceptance of objects for operation,” Uskenbayev said.

According to the minister, in order to strengthen state control in this direction, a draft law has been developed that contains urgent measures, such as:

1. introduction of urban planning expertise in order to exclude poor-quality planning of the development of the territory;

2. introduction of planned control of objects at all stages of construction and participation of GASK in the acceptance of objects for operation;

3. creation of an independent state laboratory service for laboratory and technical examination of the materials used and the quality of the work performed.

“In the Address of 2021, the head of state outlined the need to develop new standards for the integrated development of cities. In this regard, the ministry has already developed the first edition of the standards for qualitative planning of urban areas and sent for approval to government agencies and organizations,” Uskenbayev reported.

According to him, the standards will become a simple and visual aid for the design of compact buildings, taking into account the formation of attractive and comfortable public spaces, the development of pedestrian and cycling infrastructure. These standards are planned to be approved in June 2022. Taking into account these standards, akimats need to develop an integrated approach for the phased reconstruction of engineering infrastructure, housing stock and landscaping by developing and approving quarterly/district plans with funding from various sources. Today it is planned to start implementing pilot projects of the Concept for the development of urban infrastructure in large settlements of the country.

Further, the minister dwelled on the issues of developing the production of building materials.

“According to the results of the current year, the production of building materials increased by 9.8% and amounted to 902 billion tenge. There are 2,472 enterprises operating in the industry, employing about 26.2 thousand people,” Uskenbayev reported.

According to him, in general, the domestic market of building materials is $2.7 billion, of which the share of domestic production is 57%, and imports — 43%. Kazakhstani producers almost fully cover the demand of the domestic market for basic building materials such as concrete, cement, and wall materials. Almost everywhere in construction and repair, only Kazakhstani drywall and dry building mixes are used.

Nevertheless, according to the minister, goods with a high added value of the finishing segment remain import-dependent building materials. As a rule, these are finishing materials, wallpaper, linoleum, heat-insulating materials, sanitary ware and glass products.

In this direction, the ministry intends to continue work to provide the domestic market with the most popular construction products. It is planned to implement 35 import-substituting projects in the near future for a total of 601 billion tenge. It is planned to open new production facilities to provide domestic building products such as sanitary ware, ceramic tiles, mineral insulation, chipboard, etc.

“Introduction of these projects will reduce the share of imports by about 60% in the domestic market and prevent fluctuations in prices for building materials,” Uskenbayev said.

According to him, the launch of new projects will allow in 2024-2025. to cover the average annual demand in the amount of $700 million for more than 10 types of products. In terms of commodity items, 100% coverage of the domestic market is planned for the following building materials — reinforced concrete, concrete, dry mixes, paintwork, bricks, glass, cables, chipboard and facade slabs.

The key measures taken to digitalize, improve regulatory policy and urban planning standards are aimed at the transparency of construction processes and improving the quality of construction.

“As a result, favorable conditions for business development and the basis for economic growth will be created by improving the investment attractiveness of the industry. The ongoing projects in the industry will provide employment and improve the living standards of the population,” concluded Uskenbayev.

Continuing the topic of new approaches in the country's housing policy, Aidar Arifkhanov, Chair of the Board of Baiterek NMH JSC, noted the results achieved by the holding in the framework of housing construction in 2021 and presented new initiatives. According to the head of the holding, in the direction of the construction of credit housing through the bond redemption mechanism, the akimats were provided with funding for a total of 163.7 billion tenge, or 100% of the approved plan.

In the direction of the system of housing construction savings in 2021, 82.2 thousand preferential loans were issued to the population for a total amount of 1.235 trillion tenge. There are 2.2 million contracts for 1.5 trillion tenge in the Otbasy Bank system. In the direction of shared housing construction, 70 projects were guaranteed for a total of 372 billion tenge with an area of ​​2 million square meters of housing. In the direction of subsidizing loans to private developers with a plan of 20 billion tenge, projects were approved for a total amount of about 28 billion tenge.

As for the new initiatives of the Holding for 2022, according to Arifkhanov, they are as follows.

“It is planned to transfer the database of the register of people on the waiting list in need of housing from the state housing stock to Otbasy Bank. Together with the Ministry of Industry and Infrastructure Development of the Republic of Kazakhstan, a mechanism has been developed to subsidize rent for vulnerable segments of the population,” Arifkhanov reported.

According to him, Otbasy Bank is also developing a preferential mortgage program for residents of single-industry towns with low development potential within the framework of the bank's tools with an initial payment of 10%, an interest rate of 5% with a loan term of up to 20 years. Currently, the main parameters of the program are being coordinated with government agencies (Ministry of Finance, Ministry of National Economy and Ministry of Industry and Infrastructure Development). For these purposes, according to preliminary calculations, it will be necessary to allocate about 11 billion tenge from the Republican Budget annually in 2022-2025. The product launch is scheduled for Q1 2022.

“As part of the bill to reform the housing policy, a Housing Provision Center will be created on the basis of Otbasy Bank, which will centrally maintain, register and record all those in need of housing, as well as distribute housing by the date of setting in accordance with the housing affordability ladder,” noted Arifkhanov.

According to him, the database of the Center for Housing will be integrated with the state databases of individuals. This will automate the processes of maintaining, monitoring and updating the waiting list database, the formation and registration of citizens in need of housing.

As part of subsidizing the rent of the private housing stock of Otbasy, the bank, together with the Ministry of Investment and Development of the Republic of Kazakhstan, developed a mechanism for subsidizing. The maximum automation of processes in online banking and the exclusion of the request for information on paper are expected. Thus, the acceptance of applications, checking the level of income and compliance with other criteria — obtaining and checking the parameters of housing, the formation, signing and registration of lease agreements will be carried out online. The platform is currently being finalized for a subsidizing mechanism.

“In 17 branches of the bank, self-service zones will be prepared for people who do not have access to Internet services. Branches and the call center of the bank will provide consulting support. The expected launch of the program is May 2022,” Arifkhanov reported.

In order to automate them, according to him, services from 16 databases of state bodies are required. Currently, Otbasy Bank is working out the issues of integration with the Ministry of Justice, Ministry of Digital Development, Innovation and Aerospace Industry, Ministry of National Economy, Ministry of Finance, Ministry of Labor and Social Protection of the Population and NJSC State Corporation Government for Citizens.