A place all their own

Lebanon’s landmark housing scheme is working, but difficult obstacles lie ahead

So that every family may own a home. This, according to the chair–director general of Lebanon’s Public Corporation for Housing (PCH), Rony Lahoud, is the overarching idea under which the understaffed government agency pursues its mission of examining an endless stream of loan applications from Lebanese citizens. “It is hard work, but it’s amazing at the same time because when we are giving a loan to the citizen, we are telling him, ‘yeah you are going to have your own apartment where you can build your family,” he says.

Lahoud’s career stops included work in banking and banking related IT companies outside of Lebanon before he joined PCH as ranking public servant and was confirmed as the agency’s chair and director general (CDG) on May 9, 2014, as part of a wave of high level administrative appointments that constituted one of the last governmental decisions before the end of President Michel Sleiman’s term.

According to Lahoud the PCH approves about 6,000 loan applications per year and has had close to 67,000 loans in its records since it started operations in September 1999. Housing loans with PCH support account for half the real estate market — numerically but not in value. “The value of these loans is about LBP 7.300 trillion [$4.842 billion], and that is cumulative; we are talking here [of] all the years since September 14, 1999, which was when the first loan was given.”

While Executive reporters wait for Lahoud to arrive at his office, some of these loan applications are being delivered; an employee pushes in a classic wire mesh supermarket shopping cart that is not loaded with groceries but stacked high with paper folders, each of them bulging with application documents. Signing these endless files is one of the arduous daily duties of his role, Lahoud confirms during the interview, but according to him the agency is on the brink of enhancing its processes through computerization and automation.

Making work flow with limited means and archaic methods is a common sight today around ministries and administrative units in the Lebanese public sector. Fundamentally to blame for this is always the nation’s chronic lack of fiscal breath that transpires into financial and operational asthma of government departments. Plus, as far as operational cash flows, the periodic occurrence of political disagreements among government players poses a constant risk of disruptions.

Short term funding deficiencies were also what brought the PCH into the headlines last year when commercial banks became wary of outstanding payments under the agency’s responsibility, reported, to the tune of $60 million. “The biggest problem was the cash that the PCH needs each month to transfer to the banks for paying interest of the loans given to the citizens where we are paying about LBP 17 billion [$11.3 million] per month,” Lahoud explains.

The transfers are essential under the complex mechanism by which the PCH and commercial banks collaborate in granting housing loans whose beneficiaries enjoy credit terms that are much more affordable than in standard housing loans (see explainer page 68). For this mission of sponsoring housing finance for Lebanese citizens in the reasonably priced range of the market, the PCH is entitled to draw on certain property related government revenues, such as a portion of construction and building permit fees.

ON THE CUSP OF AUTOMATION

The money tap was turned back on through discussions with the two involved ministries, finance and social affairs, and with the prime minister and the speaker of the house, Lahoud adds. In securing these funds at the end of last year it was ascertained that the PCH could continue to approve new housing loans in 2015, but that appears to be far from the last of its challenges.

A core structural need is already lined up. The PCH needs to expand and renew its human resources, Lahoud says, because it has a current headcount of about 100 employees, many of whom are approaching mandatory retirement age. To be fully staffed for its operations in the Beirut head office and four satellite offices, and for collaborating with banks — currently 29 collaborations are in place — the agency needs “about 180 employees,” he says.

In moving into the information age, Lahoud says PCH will soon bring technical measures to bear, “like implementing an internal automation system for our work, and everything will be soon computerized starting with the launch of our website in the near future.”

He adds that the PCH needs to revise its organization charts and add new key positions, such as an IT manager.

“YOU ARE GOING TO

HAVE YOUR OWN APARTMENT WHERE YOU CAN BUILD YOUR FAMILY”