THE STRUCTURE OF THE CURRENT HOUSING PROVISION IN SAUDI ARABIA: AN INSTITUTIONAL PERSPECTIVE Salman M Aldalbahi A thesis submitted in partial fulfilment of the requirements for the degree of Doctor of Philosophy The University of Sheffield Faculty of Social Sciences Department of Urban Studies and Planning December 2020 1 Acknowledgements I thank Allah Almighty for giving me the wisdom, knowledge, and strength to be able to complete my thesis. Without the grace of God, and the blessings that have been bestowed upon me, I would never have been able to complete this work. I am extremely fortunate and grateful to have had the supervision of Stephen Connelly and Ryan Powell. Their constant encouragement, guidance, and patience in showing me how to complete my thesis have been invaluable. I will always be indebted to you and thank you deeply. My parents, from early childhood, have always strived to provide nothing but the best for me, and have been a source of unending love and support. You have been my inspiration, and I hope my achievements will make you proud. My wife Reem has been my rock throughout this process. She has stood by me throughout this difficult journey, encouraging me at times of difficulty, always seeking what was best for me and our family. I only hope that one day I will be able to support you like you have supported me. To my wonderful children Bader, Rakan, and Rana, I hope this will be an inspiration to you to achieve all that you aspire to. There are countless others, too many to count, who have helped me through this process. I want to thank all my friends who have given me moral support to continue on this journey. Finally, I would like to thank my home university, which supported me to undertake this journey. I look forward to returning to Saudi Arabia, where I will strive to make improvements to make my home country the best it can be. 2 Abstract Over the past five decades, large petroleum reserves have made Saudi Arabia one of the top twenty economies in the world. Changes to the economics and politics of the oil industry in the 1970s led to an unprecedented and rapid expansion of the country’s economy and to higher levels of internal and external migration to major Saudi cities. This has intensified the demand for housing, and particularly for affordable housing. However, despite being well-resourced, the government of Saudi Arabia has struggled to meet this increasing demand for housing. This research explores the underlying factors contributing to the Saudi housing shortage, using an innovative framework that combines insights drawn from institutional theory (which has rarely been applied to the Saudi context) with critical realism. This is used to explore qualitative data (drawn from document analysis and interviews) in order to demonstrate that institutions play a key, though sometimes contradictory, role in influencing the provision of housing in Saudi Arabia. The research focuses particularly on relationships between three sets of actors: the first set includes the state actors which are involved in the regulation process of the housing provision; the second set includes other actors who implement these regulations, this includes the financers, developers, and marketers who represent the capital interests of the Saudi housing market. Finally, the last set includes the end users of the final product represented by individual consumers. The thesis seeks to position the housing shortage at the crux of a complex series of relationships between the institutions in which these actors work, portraying a fragmented landscape in which there is a poor degree of integration and coordination between significant organizational players. Mismatches between the cultural norms, and the written and unwritten rules and regulations of different institutions, are reflected in a governance landscape where land use policy and financial mechanisms are poorly connected, and where both strategic urban planning and more quotidian types of planning permission are not joined up with individual construction projects. This disjointed institutional landscape is further complicated by the existence of competition between two governmental bodies leading to conditions of intensified capitalist land accumulation. The emergence of this fierce capitalist market has meant that development has become a source of vast surplus value, raising the price of housing and problematizing the delivery of more affordable types of dwelling. 3 TABLE OF CONTENTS Acknowledgements 2 Abstract 3 Table of Contents 4 List of Figures 8 Declaration 10 CHAPTER 1: Introduction 11 1.1 Historical Background To The Housing Shortage 12 1.2 Explaining The Housing Shortage: The Advantages Of An Institutionalist Perspective 16 1.3 Research Aims, Objectives and Approach 19 1.4 Contribution 22 1.5 Thesis Structure 24 CHAPTER 2: Theories Of Housing Provision 26 2.1 Introduction 26 2.2 Neoclassical Economic Models And Their Drawbacks 27 2.3 structure- And Agency-Centred Models Of Development 29 2.3.1 Structure-Centred Models 29 2.3.2 Agency-Centred Models 36 2.4 Structure-Agency Solutions And Institutionalism 41 2.4.1 Giddens And Solutions That Combine Structure And Agency 41 2.4.2 Institutionalist Approaches: An Introduction 47 2.4.3 Neo-Institutionalist Economics 50 2.4.4 Old Institutionalism 52 2.4.5 New Institutionalism 54 2.5 Mixed Models 56 2.5.1 Healey’s Mixed Model Of Development 62 2.5.2 Ball’s ‘Structures Of Provision’ Approach 69 2.5.3 Approach Adopted In This Research 76 2.6 Relationship Of State And Private Sector 83 2.7 Conclusion 87 CHAPTER 3: Methodology 90 3.1 Introduction 90 3.2 Research Questions 90 3.3 Methodological Choices: Qualitative Versus Quantitative Approaches 91 3.4 Research Philosophy 94 4 3.5 Data Collection And Data Analysis 97 3.5.1 Data Collection Methods 98 3.5.2 Interview Themes 100 3.5.3 Selecting Interview Participants 102 3.5.4 Secondary Data 109 3.5.5 Data Coding And Thematic Analysis 110 3.6 Research Validity 113 3.7 Ethical Considerations 114 3.8 Limitations Of The Research 116 3.9 Conclusion 117 CHAPTER 4. Housing In Saudi Arabia: The Context For The Housing Shortage 119 4.1 Introduction 119 4.2 The Kingdom Of Saudi Arabia 119 4.3 Saudi Government And Economy 123 4.4 Saudi Population Growth And Urbanization 125 4.4.1 Migration 127 4.4.2 Residents’ Age Structure 129 4.5 The Housing Sector In Saudi Arabia 131 4.6 Historical And Cultural Factors Governing Saudi Housing Type 131 4.6.1 Traditional Houses 134 4.6.2 Detached Or Villa-Style Houses 135 4.6.3 Semi-Detached Houses 136 4.6.4 Terraced Houses 137 4.6.5 Apartments 138 4.6.6 Other Housing 139 4.7 Housing Ownership In The Kingdom 140 4.8 Housing And Land In Saudi Arabia 142 4.9 Cost Of Housing 143 4.10 The Roles Of The Public And Private Sectors In The Saudi Arabian Housing Market 144 4.10.1 A Brief History Of Recent Public Sector Involvement In Housing Provision 145 4.10.2 Current Public Sector Bodies Involved In Housing Provision 148 4.10.3 Private Sector Actors In Saudi Arabia 155 4.11 Conclusion 160 CHAPTER 5: Identifying Failures In The Saudi Arabian Housing Market: Structures Of Provision 162 5.1 Introduction 162 5.2 A Polarised Housing Landscape: The Two Types Of Saudi House Developer 166 5.3 Informal Rules: Cultural Expectations 172 5 5.4 Formal Rules: A Lack of Institutional Coordination and a Contradictory Policy Landscape 184 5.5 Land: Legislation, Land Supply, And The Land Grant 193 5.6 Unequal Access To Finance 202 5.6.1 The Redf Loan 202 5.6.2 Non-Redf Sources Of Finance 209 5.7 Failure Of Alternative Models For Housing Delivery 218 5.7.1 Corporate Housing 218 5.7.2 Cooperative Housing 221 5.7.3 Charitable Housing 224 5.8 The Failure Of Public-Private Partnerships 227 5.9 Conclusion 229 CHAPTER 6: Thematic Discussion 234 6.1 Introduction 234 6.2 An Overview Of The Institutional Sop For Housing Delivery In Saudi Arabia 234 6.3 The Role of Power and Process 239 6.4 Conflicts, Interests And Strategies 244 6.5 The Interface Between The Public/Private Sector And Capitalist Accumulation 246 6.5.1 Land Banking 247 6.5.2 The Role Of Developers 249 6.5.3 Financiers And Banking 250 6.5.4 Developing Public-Private Partnerships Conclusion 251 6.6 Conclusion 252 CHAPTER 7: Conclusion 254 7.1 Introduction 254 7.2 Theoretical Contribution 254 7.3 Practical Recommendations 269 7.3.1 Removing Socio-Cultural Obstacles 270 7.3.2 Removing Political Obstacles 271 7.3.3 Removing Obstacles To Public-Private Partnerships 273 7.3.4 Finance Sector Reforms 274 7.3.5 Reforming The Land Grant 277 7.3.6 Alternative Housing Initiatives 278 7.4 Research Limitations 280 7.5 Directions For Future Research 281 7.6 Conclusion 283 6 APPENDICES Appendix 1 Research approval letter 285 Appendix 2 Interviewee list details 286 Appendix 3 Consent form (Arabic Version) 288 ABBREVIATIONS 289 REFERENCES 290 7 List of figures Figure number Title Page Figure 1.1 Unmet housing targets, 1999 onwards 15 Figure 2.1 Circuit 1, or the industrial circuit 30 Figure 2.2 Circuit 2, or the commercial circuit 31 Figure 2.3 The development process as a circuit 32 Figure 2.4 The primary, secondary, and tertiary circuits of capital 34 Figure 2.5 Aalbers’ fourth circuit 35 Figure 2.6 The land conversion process 37 Figure 2.7 The land development process according to Drewett 38 Figure 2.8 The land development process: a descriptive model 39 Figure 2.9 The developmental-pipeline model 43 Figure 2.10 The summary of Neo-institutionalism 52 Figure 2.11 The summary of Old Institutionalism 54 Figure 2.12 The summary of New Institutionalism 56 Figure 2:13 Consolidated model of the development process 63 Figure 2.14 A model of the elements of the development process 64 Figure 2.15 The structure of owner-occupied housing provision in the UK 73 Figure 2.16 The structure of council housing provision 74 Figure 2.17 Saudi SoP for Housing 81 Figure 3.1 Interviewee sample 105 Figure 3.2 The process of identifying themes in data 111 Figure 4.1 Map of the provinces of the Kingdom of Saudi Arabia 123 Figure 4.2 Population growth and urban development in Saudi Arabia 126 Figure 4.3 The urban growth boundary for Al Riyadh city 127 Figure 4.4 Internal migration in and out the Saudi cities (CDSI, 2004).