Six steps

This week we entertained world famous economist Hernando De Soto who was visiting Mongolia by invitation of President Ts.Elbegdorj. Mr. DeSoto gave a few speeches for his Mongolian audiences, including a speech at the first Mongolian Economic Forum, which was held this week.

His famous book “the Mystery of Capital” was translated into Mongolian a few years ago, and at that time, several of us made a proposal to city officials addressing housing and air pollution problems in Ulaanbaatar city. The proposal was made based on DeSoto’s theory of property registration.

This proposal was made by many of us, who eventually founded the Mongolian Civic Union in order to make a number of changes in the political and public management structure of the country.

This proposal of replacing the Ger area with apartment housing, based on the following six steps are still valid. Low income housing construction is a viable solution to the disastrous smog problems we have been facing for the past few years. The city can solve this problem in close cooperation with the residents of the Ger area.

Here are the six steps:
1. Registering:
- Every household in the Ger district of Ulaanbaatar must register the land they occupy within their fence (up to 0.07 hectare) as their property, which would thus entitle them to the rights to the land, and become their own property.
- If there are two or more households within an enclosure, they may get separate or individual titles for them by agreeing to a division of the land.
- A comparable apartment unit value will be calculated according to the size of the enclosure.

. Creating housing cooperative(s):

- Upon receiving the title for the land, owners in blocks of (about 100 owners) can make an agreement to form a cooperative.
- The cooperative members must agree on terms and conditions of cooperation regarding how to build and divvy up structures: For example, a household which already runs some shops in the ger district would have the first choice to use the first floor of the apartment building for their proprietorship. This would be another shop that would face the street.

3. Planning:

- A cooperative(s) will plan the housing project, including public services, infrastructure to administer the general city plan, and agreements with city authorities on the final plan.
- A cooperative(s) will participate through its representative board in the final planning of the housing district. Schools, parks, public transportation, parking lots, hospitals and shopping centers should all be a part of the feasibility study and final business plan.

4. Financing:

- All titles of land ownership will serve as part collateral against the proceeds for bonds issued by the city for that micro-district’s housing project. The other portion of the collateral will be the investments that the city authority commits to invest in the district.

- The rest of the financing will come from the open market sales scheme. The apartments that are remaining, after each union member receives their unit of apartments, may then be sold on the open market.

5. Building Houses:

- The contractors will consist of construction companies, chosen by an open bid. Those companies who train and hire local people, will have priority over the others. The entity responsible for the project will be the Management Council which will consist of the city authority, and of individual representatives of the cooperative(s). The Council will make progress reports to the cooperative(s) on a monthly basis. The cooperative(s) will nominate an independent auditor for independent inspection or monitoring of the implementation of the project.

6. Managing new communities:

- After the construction of these houses and related public service buildings are completed, there will be a managing board (or neighbors union, or an owner’s association) formed that will ensure the proper maintenance of the buildings and related operating services. That committee will be based on self-management principles from within the community which will in turn, cooperate with the local district administration.

We, the Civic Union of Mongolia, appeal to all citizens of the city, engineers, architects and other professionals, to participate actively in this socially impacting project for our city.

WE CAN DO IT!