Prospects for improving rural-urban migrant workers ...Vera_MA_2016.pdf · Prospects for improving rural-urban migrant workers’ housing in Phnom Penh, Cambodia The case of garment

Prospects for improving rural-urban migrant workers’

housing in Phnom Penh, Cambodia The case of garment factory workers

Berlin School of Economics and Law Master of International Economics SoSe 2016 Supervisors: Prof. Dr. Kronauer Prof. Dr. Wissen Submission: July 23, 2016 Author: Vera Buttmann (Student ID No: 450498)

Prospects for improving rural-‐urban migrant workers’ housing

in Phnom Penh, Cambodia The case of garment factory workers

Vera Buttmann

July 2015

Master thesis in International Economics, Berlin School of Economics and Law

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Table of Content

List of figures……………………………………………………………………………………..…………...5

List of abbreviations…………….…………………………………………………………………..……..6

1. Introduction........................................................................................................................................ 8

2. Methodology.......................................................................................................................................10

Section I – Housing policy and its effects on rural-urban migrants workers in East Asia

3. Housing and economic growth...................................................................................................12

4. Homeownership versus rental housing .................................................................................12

4.1. Policy support mostly for homeownership..................................................................14

4.2. Rural-‐urban migrant workers mostly in informal rental housing .....................14

4.3. Informal housing facilitating homeownership for the poor..................................15

5. State intervention in the housing market..............................................................................16

Section II – Rural-urban labour migration in Cambodia and transformation of Phnom Penh

6. Cambodia’s turbulent recent history.......................................................................................19

7. Cambodia’s economic growth based on Foreign Direct Investment .........................20

7.1. The garment industry as Cambodia’s economic backbone ...................................20

7.2. The construction industry as Cambodia’s motor of growth .................................23

8. Rural-‐urban labour migration mostly to Phnom Penh ....................................................24

9. Transformation of Phnom Penh.................................................................................................27

9.1. From urban poor settlements to high-‐rises and megaprojects ...........................29

9.2. Development of Phnom Penh’s land and housing market .....................................32

9.2.1. Commodification of real estate and speculation ................................................32

9.2.2. Mismatch in Phnom Penh’s housing sector ..........................................................33

9.3. Land use and ownership.......................................................................................................33

Section III - Development of Phnom Penh's rental housing sector

10. Cambodian culture favouring homeownership and landed houses........................36

11. Strong demand for rental housing by poor and low-‐income groups......................37

12. Why the demand for rental housing increases.................................................................39

12.1. Promotion of apartment housing...................................................................................39

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12.2. Decreasing affordability of homeownership ............................................................39

12.3. Increasing labour mobility................................................................................................41

12.4. Eviction of urban poor settlements...............................................................................41

13. Rental housing supply not matching the demand...........................................................41

13.1. Overall trend of the rental market.................................................................................41

13.2. Investment in high-‐cost rentals exceeds local demand........................................43

13.3. Rental supply in the middle market segment slowly increases........................44

13.4. Insufficient supply of low-‐cost rental housing.........................................................45

14. Interim Conclusions ..................................................................................................................46

Section IV – Garment factory workers' housing in Phnom Penh

15. Garment factories in Phnom Penh .........................................................................................48

16. Characteristics and needs of garment factory workers................................................48

17. Daily commute from rural home to urban workplace...................................................49

18. Housing close to the factory......................................................................................................50

18.1. Rents increase along with minimum wage................................................................52

18.2. Poor housing quality and lack of security ..................................................................53

18.3. Providers of garment factory workers’ housing......................................................54

18.4. Legal framework for garment factory workers’ housing ....................................56

18.4.1. Regulation on payments for electricity and water..........................................56

18.4.2. Rent control law.............................................................................................................57

Section V – Stakeholders' approaches to garment factory

workers' housing in Phnom Penh

19. Labour unions focus on minimum wage .............................................................................58

20. Garment factories engage only indirectly in housing market....................................60

21. Private sector has more profitable opportunities...........................................................62

22. Public sector postpones housing for poor and low-‐income groups........................63

22.1. Cooperation with the private sector targets the middle-‐class ..........................64

22.2. Constraints on improving the supply of low-‐cost housing .................................66

22.3. No transparent urban planning and few regulations............................................67

22.4. Cooperation with non-‐governmental and international organisations ........69

23. NGOs concentrate on evictions or withdraw completely ............................................69

24. Academics see necessity for state action ............................................................................71

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Section VI - Prospects for improving rural-urban migrant workers' housing in Phnom Penh

25. Control housing costs ..................................................................................................................75

26. Increase housing quality when housing is not prioritised ..........................................76

27. Increase housing supply in a much less profitable segment ......................................77

28. Transparent urban planning ....................................................................................................80

29. Conclusion.......................................................................................................................................82

30. Bibliography ....................................................................................................................................86

Annex I: List of interview partners………………………………………………………………95

Annex II: Interview guideline...................................................................................................95

Statutory declaration...................................................................................................................97

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List of figures Figure 1: Cambodia’s provinces. Source: National Institute of Statistics 2013a: v...........18

Figure 2: Population of Cambodia in millions, 2000-2014. Source: own figure based on World Bank 2016: n.p.. ...................................................................................................................19

Figure 3: Composition of the GDP of Cambodia by sector in per cent, 1995, 2005 and 2015 (est.). Source: own figure based on Hill/Menon 2013: 8; CIA 2016: n.p.. .........21

Figure 4: Nominal and real average monthly wage in the garment sector, in USD per month, 2002-2015. Source: ILO 2015a: 4................................................................................22

Figure 5: Poverty rates by area in per cent, 2007 to 2012. Source: ADB 2014: 4.............25

Figure 6: Internal migration in Cambodia in 2013. Source: own diagram, based on National Institute of Statistics 2013a: 90-91.........................................................................26

Figure 7: Growth of Phnom Penh’s population in thousands, 2000-2014. Source: World Bank 2016, n.p.. .................................................................................................................................28

Figure 8: Expansion of Phnom Penh’s built-up area, 2000-2010. Source: World Bank 2015. ......................................................................................................................................................29

Figure 9: Evicted families, 1990-2014. Source: Sahmakum Teang Tnaut 2014: 1. ..........30

Figure 10: Share of households living in rental dwellings in Phnom Penh, 1996-2014. Source: Own figure based on National Institute of Statistics 1996, 2005, 2009, 2010, 2012, 2013, 2013 and 2015..............................................................................................42

Figure 11: Total number of households and number of households living in rental dwellings in Phnom Penh in thousands, 2007-2014. Source: Own figure based on National Institute of Statistics 2009, 2010, 2012, 2013, 2015. .......................................42

Figure 12: Workers commuting out of Phnom Penh. Source: Mai 2013: n.p.......................50

Figure 13: Garment factory workers’ housing in Phnom Penh. Source: Oeurm n.d..........51

Figure 14: Overview of approaches and options to improve rural-urban migrant workers’ housing in Phnom Penh. Source: own table...........................................................74

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List of abbreviations % per cent

°C degree Celsius

ADB Asian Development Bank

BKK Boeung Keng Kang, central district of Phnom Penh

CDC Council for the Development of Cambodia

CDF Community Development Foundation

CIA Central Intelligence Agency

est. estimated

EU European Union

FDI foreign direct investment

GDH General Department of Housing

GDP Gross Domestic Product

GIZ Gesellschaft für Internationale Zusammenarbeit, German development agency

ha hectare

HRTF Housing Rights Task Force

i.e. id est

ILO International Labour Organisation

JICA Japan International Cooperation Agency, Japanese development agency

km kilometre

km2 square kilometre

MEF Ministry of Economy and Finance

MLMUPC Ministry for Land Management, Urban Planning and Construction

MOP Ministry of Planning

MoU Memorandum of Understanding

mm millimetre

NGO Non-‐governmental organisation

NHP National Housing Policy

NIS National Institute of Statistics

NSDP National Strategic Development Plan

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SEZ Special Economic Zone

STT Sahmakum Teang Tnaut

TK Tuol Kork, central district of Phnom Penh

UN-‐HABITAT United Nations Human Settlements Programme

UNTAC United Nations Transitional Authority in Cambodia

USD United States Dollar

WBL Worldbridge Land, Cambodian real estate company

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1. Introduction Turbulent developments take place in the housing markets of large cities in developing and emerging countries – in two very different, but somewhat dependent ways:

Firstly, urbanisation is ongoing. Already, more than half of the world’s population live in cities, and the United Nations predict that “all the expected world population growth [of 2.5 billion people] during 2014-‐2050 will be in urban areas” (United Nations 2015: 23). Urbanisation is predicted to concentrate in less developed regions (ibid.), where economies are shifting from agriculture to industry and services (World Bank 2015: xv), which increases rural-‐urban migration (Tacoli et al. 2014: 3). The large number of new urban households, most of them poor or with low incomes, drastically increases the demand for, especially low-‐cost, urban housing.

The second big influence is, in the context of an increasing globalisation of capital, strong demand for international real estate investment (Olds 2001 according to Percival 2012: 5). Among the reasons are low interest rates, bear bond markets and generally high uncertainty in the financial markets, because of the economic slowdown in China, low oil prices, changes in the European Union and tensions in the Middle East (Rapoza 2016: n.p.), as well as drastic increases in private capital and the establishment of large sovereign wealth funds, pension funds and insurance companies in Middle Eastern and East Asian countries, especially China (PwC/Urban Land Institute 2015: 2, Kidd 2015: n.p., Rapoza 2015: n.p.). International real estate investors aim to “expand into new and unexplored territories” (Harvey 2010 according to Percival 2012: 5), where governments often “lack sufficient budget due to inefficient taxation or state downsizing at the behest of the international financial institutions” (Percival 2012: 5-‐6) and thus choose an entrepreneurial mode of urban governance that welcomes private investors (Harvey 1989 according to Percival 2012: 5).

Generally, the international private investment in real estate does not satisfy the demand for low-‐cost housing, though, but focuses on prime developments and is often speculative, thus pushing prices up “to the point where housing is no longer affordable to the majority” (Percival 2012: 115). One third of the urban population in less developed regions lives in slums or informal settlements, where housing is non-‐durable, overcrowded, lacks access to improved water and sanitation or security against eviction (UN 2014: 46). It is obvious that, while urbanisation is often considered “a key process in ending extreme poverty and boosting shared prosperity”, it may as well “exacerbate inequality in access to services, employment, and housing” (World Bank 2015: xix).

In Phnom Penh, the capital city of Cambodia, this interplay of urbanisation and foreign direct investment (FDI) in the real estate sector occurs, with all its consequences, in fast motion: At the end of the 1970s, Phnom Penh had been entirely

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depopulated by the Khmer Rouge regime, but has grown to 1.8 million inhabitants since then. Cambodia’s urbanisation rate is expected to further increase from 30% today to 50% in 2050, with half of the rural-‐urban migration directed at Phnom Penh. Also, Cambodia has moved from the Khmer Rouge’s communist agricultural utopia to a capitalist, very liberal and globally integrated economy. It welcomes FDI, which focuses on the garment sector, whose factories have concentrated in Phnom Penh and thus largely contributed to the migration to the capital, as well as on the construction and real estate sector. New large-‐scale urban development projects have been prioritised over existing urban poor settlements, of which many have been evicted or are under threat of eviction.

While the fate of these urban poor settlements has received relatively much public and academic consideration, hardly any attention has been paid to the housing situation of new urban households, i.e. the large numbers of rural-‐urban migrants. This is essential, though: from an individual human rights perspective, because the newcomers’ housing conditions are mostly very poor, often below international minimum standards, and negatively effect their health, security and quality of life; as well as from an urban development point of view, because the disordered settling down and the not harmonised construction of new housing and infrastructure may be locked in for generations, cause social problems, technical difficulties, cost large sums of money, and may even lead to further evictions. Low public budgets, limited public land, constraints on skilled labour and a high prevalence of corruption make public interference difficult – nevertheless the urge is high for urban policy makers and planners to proactively organise the growing city and housing market in an inclusive and sustainable way. The interest of the private construction and real estate sector may be a potential to achieve a better housing situation for rural-‐urban migrant workers, if it can be redirected to low-‐cost housing. Due to increasing pressure on land and housing and increasing labour mobility, the rental segment is of particular relevance for poor and low-‐income groups, but it lacks consideration, not only from the real estate economy, but also from research and policy.

This study aims to fill the gaps that exist regarding new poor and low-‐income urban households and the low-‐cost rental housing sector. It focuses on rural-‐urban migrant workers, and here particularly on garment factory workers, firstly because they form the largest relatively homogeneous group of Phnom Penh’s new urban residents and secondly because they are examplary for new urban residents in many of the countries that are faced with rapid urbanisation. The study aims to answer the questions what the current housing situation as well as what the housing needs and preferences of them are, and based on this, what the prospects are to improve their housing situation. It therefore analyses the perspectives of major stakeholders such as labour unions and an employer organisation, the real estate sector, public authorities, Non-‐governmental Organisations (NGOs) and academics in the field of housing and urban poor.

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The study starts with assigning its topic and questions to the theoretical discussion and to the regional empirical context by outlining some principal policy considerations in the field of low-‐income housing in Asian developing countries (Section I). It then gives a background on economic globalisation processes in Cambodia to understand the reasons and the character of rural-‐urban migration and urbanisation as well as on the transformation processes that have hence occurred in Phnom Penh in order to understand the dynamics in the capital’s housing market (Section II). The next section of the study will give an overview of Phnom Penh’s rental housing sector (Section III), outlining its development in general and in the low-‐income segment in particular, explaining both its relevance and insufficiency for rural-‐urban migrant workers. Thus having defined the broad context, the study will turn to the case study of garment factory workers’ housing – firstly analysing the status quo (Section IV) and then the prospects (Section V). After a discussion of the findings including policy recommendations (Section VI), it concludes.

2. Methodology Research for this study included desk research as well as fieldwork with expert interviews. The desk research included conventional scientific sources in English, French and German language, but also many reports and websites of international organisations, Cambodian government agencies, labour and employer unions, real estate agents and NGOs as well as newspaper articles of the international and Phnom Penh’s daily press that are published in English. These sources were particularly valuable given the very scarce research and scientific data on labour migration to Phnom Penh and the capital’s low-‐cost and rental housing market. Even though unconventional sources have been used, there is still a significant lack of reliable data, why also primary data was collected, which is, given the scale of this study, obviously only a first and very small step to close the data gap. Fieldwork for this study took place in Phnom Penh from October to December 2015. During this time, I lived in the capital city and experienced and observed its development. I conducted 18 face-‐to-‐face interviews with in total 21 persons, ranging in length from just over 30 minutes to just under two hours. The interviews were qualitative, semi-‐structured (see annex II for the interview guidelines) and conducted with experts for Phnom Penh’s contemporary urban and real estate development and for the city’s urban poor and migrant workers’ concerns. Interviews with rural-‐urban migrant workers themselves would have been very interesting and useful, but the scope of this study did not allow interviewing a representative number of them, so that several persons who represent and are in close contact with them were included among the experts, i.e. representatives of labour unions, international and local NGOs. Further experts were representatives of an employer organisation, local real estate developers and valuers, the Ministry of Land Management, Urban Planning and Construction’s (MLMUPC) General Department of Housing (GDH), international donors as well as academia (see annex I for a detailed list of all interview partners).

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In all of these institutions, leading positions were held by men, why only a single woman is among the interviewees. This gender imbalance is particularly unfortunate given that most garment factory workers’ are women. Some contacts I established myself, others were facilitated by introductions made through previous interviewees. Interview requests were generally made by phone and sometimes followed up by email. While academics and representatives of the labour unions, GDH, donors and NGOs were easy to get hold of, it was difficult to arrange interviews with experts from the employer organisation and real estate sector. Here, repeated phone calls and emails were necessary and still, only two out of several requested real estate sector representatives finally accepted an interview. All interviews were conducted in English. Although interview partners were never chosen according to their language skills, all of them knew English well enough that Khmer to English interpretation did not become necessary, which is certainly due to almost all interview partners having high-‐ranking positions within their field. Still, the interviews contain many linguistic errors, which have not been eliminated in the citations included in this study. All interviews were recorded with consent granted. Due to the scarce available research and data, results from the interviews are used throughout the study, even in the first sections.

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Section I – Housing policy and its effects on rural-‐urban migrant workers in East Asia

3. Housing and economic growth During the last century, particularly its first half, housing has frequently been considered a social overhead, a consumer good and unproductive (Arku 2006: 379). Since the 1950s, it has become more and more common to assume a significant and direct link to economic growth, though (ibid.: 381). Besides the potential of housing to support industrial development, by attracting workers and increasing their health, longevity and thus productivity, attention has increasingly been paid to the direct contribution of housing construction to economic output, by generating demand for materials and related services, creating employment and income (ibid.). Some countries in East Asia1, e.g., Japan or Singapore, are outstanding in the way they have incorporated this view and made housing institutions and policies key components of their economic development strategies (ibid.: 385). Housing has been seen as a means to expand the construction sector, drive capital accumulation through the real estate sector, clear slums, exploit and increase the value of urban land (Doling/Ronald 2014: xii). With this priority “to sustain the express pace of modernization, urbanization and economic expansion” (ibid.: 9), housing has been considered “a ’pillar’ of developmental capitalism” (Izuhara 2013: 393).

Research has also pointed to the economic importance of informal, so-‐called “self-‐help housing” in low-‐income areas, highlighting its role as a “small production centre” when being used as a shop, workshop or rented out (Turner 1976 according to Arku 2006: 383). “Indeed, the majority of the well-‐documented economic benefits of housing investments, including those that relate to home-‐based enterprises (HBEs) and rental housing, were found in the informal neighbourhoods” (Arku 2006: 382). This is not surprising, considering that informal activities constitute about 80% of residential construction in developing countries (Grimes 1976 according to Arku 2006: 386). Nevertheless, self-‐help housing has been much less incorporated in East Asian housing policies than homeownership.

4. Homeownership versus rental housing With homeowners this study refers to those who consider themselves owners of the dwelling they occupy, this may also be on contested land or in illegal settlements. With renters or tenants it refers to those who have to pay rent to occupy their dwelling.

1 The term East Asia is used in this study instead of the eurocentric term Far East, covering the wide geographical area of Southeast Asia, China, Japan and Korea.

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Major determinants for which tenure type – homeownership or rental housing – people choose are preferences, income, wealth and the relative costs of owning and renting (Megbolugbe/Linneman 1993: 659).

A preference for homeownership is often linked to its high psychological value: It gives a feeling of financial security, personal stability and social status (ibid.: 660). The feeling of financial security is due to the investment value (ibid.): Homes are very often the largest financial asset that people have, and especially for old households living without pension schemes, which is the case in many developing countries, homeownership is seen as a significant repository of wealth (ibid.). It can also be used for intergenerational wealth transfer (World Bank 2014a: 17) and is thought to be a good hedge against inflation (Megbolugbe/Linneman 1993: 660). An owned home can further be used as a collateral (World Bank 2014a: 17) and homeowners can of course generate income from it by renting out parts of it. Homeownership is not conducive to financial security if it is attained at the expense of financial overextension, though (ibid.: 660). Reasons for the feeling of social status might be that homeowners, like some studies found, engage more in maintaining and improving their dwellings and are more likely to interact with neighbours and participate in community politics (ibid.: 661). Other studies point out, that these behaviours are likely inherent and not based on homeownership, though (ibid.). Further, homeownership tends to be concentrated in higher-‐quality residential environments, is typically larger and has more amenities than rental housing (ibid.: 660).

A preference for rental housing mostly occurs in “particular life events or circumstances”, e.g., economic or employment uncertainty, divorce or retirement (World Bank 2014a: 24). Renting provides flexibility: It allows moving quickly according to work or education opportunities (ibid.: 24), and it does not require long-‐term financial commitment. This is of importance for those with fluctuating earnings or who send remittances (ibid.). In contrast to homeownership, rental housing is frequently associated with lack of maintenance and upkeep of common areas (ibid.: 12) as well as with potential landlord intrusion and eviction (Megbolugbe/Linneman 1993: 660). In many East Asian countries there is also high-‐quality rental housing in premier neighbourhoods, which foreign professionals and expatriates frequently rent, though (World Bank 2014a: 14).

Across countries, differences in tenure patterns depend on cultural and historic factors, on the general economic organisation and the ideology of the government, state policy, the level of economic development and of urbanisation as well as, in developing countries, on the ease with which housing can be accessed informally (UN-‐HABITAT 2003: 14-‐15). In East Asian countries, renting is relatively rare compared to ownership, e.g., 25% in South Korea, 10% in Singapore or 13% in Thailand (ibid.: 9). In East Asian cities, around one third or less of urban dwellers are estimated to be renters (World Bank 2014a: 16).

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4.1. Policy support mostly for homeownership

As mentioned above, state policy is one of the influences on tenure patterns, and in fact a profound one (UN-‐HABITAT 2003: 19). Over the last decades, most East Asian governments as well as most multilateral agencies have been favouring homeownership while largely neglecting rental housing, and accordingly designed their policies, loan programmes etc. (World Bank 2014a: 2). In East Asia, the reasons for this have often been ideological (UN-‐HABITAT 2003: 3), with homeownership seen as conducive to the national economy (see Housing and economic growth). One of the historically first examples is Japan, who implemented a housing policy focusing on homeownership from the 1950s on that is still considered to have been key for the country’s rapid economic growth back then; South Korea, Taiwan, Hong Kong and most notably Singapore have applied similar approaches later (Arku 2006: 385).

But it is contested that homeownership is related to economic prosperity or growth: UN-‐HABITAT finds that “the fact that many of the world’s richest countries have a large rental sector demonstrates that home-‐ownership levels cannot be taken as a symbol of national prosperity” (UNCHS 2001 according to UN-‐HABITAT 2003: 15), and gives several examples of countries, where the growth in homeownership either levelled off during times of economic growth (these are all Western countries, though), as well as the example of, precisely, Japan, where homeownership rates did not change much during times of economic decline since 1960 (UN-‐HABITAT 2003: 16). It was also found that homeownership is positively related to unemployment, seemingly because of the reduced mobility of homeowners due to transaction costs involved in selling and buying houses (ibid.: 16).

However, besides the direct impact on economic growth, East Asian governments have seen homeownership also as a means to support family structures, thus increase family welfare self-‐reliance and hence reduce state liabilities (Izuhara 2013: 396), aiming at “a low-‐taxation, low-‐public-‐expenditure economy” (Doling/Ronald 2014: 9).

While not irrelevant, individual housing needs have usually had a lower priority than political and economic goals, which favoured economically productive households over the poor or vulnerable (Ronald/Doling 2014: 9).

4.2. Rural-‐urban migrant workers mostly in informal rental housing

While it is clear that the rental segment remains generally small in East Asia, any exact assessment is very hard because “data on the dimensions of rental markets are uniformly scarce across the region” (World Bank 2014a: 24). This is mostly because the rental housing market remains largely informal in most countries (Naik 2015: 157), in particular the low-‐income rentals of Asia’s cities with 60 to 90 % (UN-‐HABITAT 2008 according to World Bank 2014a: 16). Much of this market escapes legal frameworks and rarely, there are written contracts between landlords and tenants (Naik 2015: 157), which leaves tenants in a precarious position to take legal action against landlords who provide substandard or dangerous housing (World

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Bank 2014a: 16). By far most common among the low-‐income rentals are self-‐help or subsistence landlords, who own up to ten units on small lots, but there are also petty bourgeoisie landlords, who choose to rent to supplement their income or petty capitalist landlords who rent to accumulate capital (Naik 2015: 157). While self-‐help landlords often live close to the tenants and do not differ much from them in their socio-‐economic status (ibid.: 158), petty capitalist landlords may also be absentee landlords and engage property management firms. The latter are relatively “less accommodating to tenant demands” (World Bank 2014a: 16). The number of rental units increases with urbanisation and in particular in the low-‐income settlements that are located on the edges of most cities in developing countries (UN-‐HABITAT 2003: xix). A major barrier for the rental segment in Asian cities is that rent-‐to-‐income ratios are usually about twice those of developed countries, though (UN-‐HABITAT 2011 according to World Bank 2014a: 16).

If rural-‐urban migrant workers do not have relatives or friends who already live in the city they go to and whom they can share housing with (UN-‐HABITAT 2003: xx), they most commonly rent housing (World Bank 2014a: 16, UN-‐HABITAT 2003: 14, Arifin 2001: 110). Renting is generally more common in urban than in rural areas, particularly so in developing countries (UN-‐HABITAT 2003: 17), but this is obviously only a marginal reason. Mostly working in low-‐paid jobs in the informal economy, which are insecure and mostly without written contracts, rural-‐urban migrants often choose rentals because of their flexibility (Naik 2015: 170). Rentals allow them to quickly move locations when they change jobs, and in informal arrangements, landlords may be cooperative in terms of payments, allowing to pay according to availability of funding or to adjust for periods of absence (ibid.: 171). This is of particular relevance for seasonal migrants, who can thus change between the city and their villages with little pre-‐planning (ibid.: 170). Conversely, barriers for rural-‐urban migrants in East Asia to acquire homeownership are that it is very costly and “commercial mortgages are not targeted to low-‐income groups both because the typical terms and ticket sizes are too great and because they require proof of income and a clearly defined property title” (World Bank 2014a: 13).

4.3. Informal housing facilitating homeownership for the poor

While generally, the levels of renting are higher in cities with tight housing or land markets (UN-‐HABITAT 2003: 18), urban homeownership rates significantly increase with the ease to acquire land and housing informally, be it cheap or for free (ibid.: 20). This is one reason why in many poorer societies, high-‐ and middle-‐income households hardly ever rent, and if they do, mostly only at an early stage of their life (ibid.: 58). In developing countries, informal, irregular and self-‐help land and housing markets have also allowed many poorer people to become de facto homeowners by occupying land and building their own home (ibid.). It has been shown that in most cities of developing countries, owners are more affluent than renters within the informal sector, but still worse off than renters in the formal sector (ibid.), which underlines the importance of the informal land and housing market for poor people.

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However, it is unlikely that large amounts of poor people such as rural-‐urban migrant workers will find accommodation this way in the future, as various experts have argued already more than 15 years ago that the age of free urban land is over (Payne 1989, van der Linden 1994 according to UN-‐HABITAT 2003: 20) and that “even illegal land markets have become increasingly commercialised and it is rare for low-‐income households to be able to find sites which they can occupy free of charge” (UNCHS 2001 according to UN-‐HABITAT 2003: 20). Conditions will differ according to the exact location and policy, of course.

5. State intervention in the housing market Depending on its objectives, policy intervention can occur in different ways and at different stages of the housing provision chain, which concerns the life-‐cycle of housing from development through to consumption. Several East Asian countries have executed state intervention at the development stage “with highly directive plans and control over the economy affecting speed, location and nature of development. Construction is carried out by private companies and housing usually circulated as a market commodity” (Izuhara 2013: 393). This is in contrast to the liberal model of, for instance, the US, where “markets rule at each stage largely unfettered by the state” (ibid.), but also to the North European model, where policy intervenes not only in development, but also in allocation and pricing in order to achieve social equity (ibid.). As the type of policy intervention common in East Asia does not imply a decommodification of housing (ibid.), it tends to be of little help for rural-‐urban migrants.

One of the few public interventions that East Asian countries have applied in terms of rental housing, which, as has been outlined, is the by far most common tenure form for rural-‐urban migrants, is public rental housing. In contrast to private rentals, prices of public rentals are not determined through market mechanism, but are controlled and subsidised (World Bank 2014a: 25). Public rentals target certain groups, which are either defined based on income or on specific employment, e.g., public sector employees (ibid.: 11). It has been advanced in eight countries of East Asia, but mostly as a residual model, only comprising a very small portion of the total housing stock2 (ibid.). It is criticised that in most of these countries, public rentals as well as social housing, which is similar except that it can include owner-‐occupation, are largely misdirected towards groups who could as well afford other housing types, e.g., qualified, middle-‐income workers and public sector employees, and is thus reinforcing rather than reducing wealth inequalities (ibid.). It turns out that eligibility requirements are crucial to make sure that those who actually are underserved by the private market benefit. According to Izuhara (2013: 396), the provision of public rental housing has mostly been based on similar motivations as

2 Singapore and particularly Hong Kong, with accommodating almost 30% of its population in public rental housing, stand out (2009; Izuhara 2013: 396).

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the promotion of ownership, thus differing significantly from Western notions of public rental housing: In Hong Kong, early programmes facilitated significant slum clearance in order to sell urban land for development, and public rental housing has substituted more comprehensive welfare measures and thus created heavy reliance of the low-‐income population upon it (ibid.). Moreover, it is criticised that the provision of public rental housing has allowed companies to keep wages low (Castells et al. 1990 according to Izuhara 2013: 396), why Izuhara (2013: 396) concludes that in East Asia also public rental housing has so far supported “the commodification of labour and welfare reliance on the family rather than the state”.

Public housing provision or support for poor and low-‐income renters requires a definition of what is affordable. Generally, affordability relates housing expenditures to the earning capability as well as to the availability of savings and credit (Bredenoord et al. 2014: 9). There are different ways to define and measure this. Most widespread is using a housing expenditure-‐to-‐income ratio. The common opinion here is that housing is affordable when expenditures for it do not exceed 25-‐30% of the owners or tenants income (Bredenoord et al. 2014: 9). While some studies consider this threshold unrealistically low today, other studies suggest that for poor and low-‐income groups and rural-‐urban migrants, it has to be lowered. Osborne suggests that 15% is more realistic in their case (2012 according to Naik 2015: 170). A reason is that from their already low incomes, many rural-‐urban migrants use parts as remittances. There is further evidence that in urban areas, poor tenants pay more per m2 than middle-‐income tenants do, which can be attrib-‐uted to them inhabiting very small units (Mahadevia/Gogoi 2011 according to Naik 2015: 170). A general threshold is criticised anyway, reasoning that also ancillary costs that depend on housing have to be considered, e.g., transport, repair and maintenance costs, taxes, insurance and utilities (World Bank 2014a: 11). UN-‐HABITAT consequently considers housing as affordable that “is adequate in quality and location and does not cost so much that it prohibits its occupants meeting other basic living costs or threatens their employment of basic human rights” (2011 according to World Bank 2014a), which is a very adequate, but also a vague and hard to operationalise definition.

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Section II – Rural-‐urban labour migration in Cambodia and transformation of Phnom Penh

Cambodia is a relatively small country in Southeast Asia, between Thailand, Laos, Vietnam and the Gulf of Thailand in the south. Of its total area of roughly 180,000km23, 56.5% are forests, 32.1% are agricultural (2011 est.; CIA 2016) and only 0.1% are urban (2010; World Bank 2015b). The capital city of Phnom Penh remains the only city with over one million inhabitants.

Cambodia’s total population amounts to 15.7 million (2015 est.; CIA 2016), and is expected to grow to over 18 million in 2030 (Statistics Japan n.d.: n.p.).

The national language is Khmer and 90% of the population are of Khmer ethnicity; The remainder are mostly Chinese, Vietnamese as well as ethnic minority hill tribes (Percival 2012: 1). The country is very young with almost 30 % of the population under 15 years (National Institute of Statistics 2013a: vi), another 20 % under 25 years (CIA 2016), and only 5 % 65 years and older (National Institute of Statistics 2013a: vi). It is expected that Cambodia will age only slightly until 2030 (HelpAge 3 For comparison, Germany has about twice the size.

Figure 1: Cambodia’s provinces. Source: National Institute of Statistics 2013a: v.

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International et al. n.d.: n.p.). Although Cambodia’s literacy rate has greatly improved over the last decades to now 80 % (National Institute of Statistics 2013a: vii), the education level is still very low with over 45 % having less than primary school education, another 27 % having only primary school education and merely 5.5% having post-‐secondary education (National Institute of Statistics 2015: 70). These characteristics of the Cambodian population are closely tied to the country’s recent history.

6. Cambodia’s turbulent recent history It was only in 1953 that Cambodia gained its independence from the French Protectorate (Fauveaud 2011: 4). The time that followed is often referred to as Cambodia’s golden age, characterised by thriving culture and arts (ibid.). But it ended already in 1965, when the Vietnam War spilled over and Cambodia was heavily bombed (Owen/Kiernan 2006 according to Percival 2012: 1). The events thus set off ended in the seizure of power by the Khmer Rouge in 1975 (Fauveaud 2011: 4). Aiming at a communist, agricultural Cambodia, they abolished the concept of private property, destroyed all land and property ownership records and forced everyone to leave the large cities, thus almost entirely depopulating Phnom Penh (Percival 2012: 92). The city dwellers were forced to move to the countryside and work in cooperatives, where many died through starvation and exhaustion (ibid.: 1). The Khmer Rouge also systematically tortured and murdered, particularly all those belonging to the educated class. 1.7 million Cambodians thus died (Chandler 2008), until Cambodia was liberated and occupied by Vietnam in 1979 (Fauveaud 2014: 5). People started returning to Phnom Penh, where they inhabited any houses they could find (Percival 2012: 92). The situation in the city was chaotic and ruined infrastructure started to be rehabilitated only slowly (ibid.: 2). After the Communist bloc had collapsed in 1989, the United Nations Transitional Authority in Cambodia (UNTAC) took over the administration of Cambodia from 1992 to 1993, preparing it for a free market economy and democracy again (Hughes 2003 according to Percival 2012: 2). Tens of thousands of employees of UNTAC and other international organisations arrived in Phnom Penh and increased the demand for land and property as well as for services like bars and restaurants (Percival 2012: 100), thus that the city’s reorganisation in line with market principles quickly started. The elections that the UNTAC carried out in 1993 resulted in a coalition of the Cambodian

Figure 2: Population of Cambodia in millions, 2000-2014. Source: own figure based on World Bank 2016: n.p..

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People’s Party (CPP) and FUNCINPEC, which ended in 1997, though, when Hun Sen, co-‐Prime Minister of the CPP, ousted Norodom Ranariddh, co-‐Prime Minister of the FUNCINPEC, to gain exclusive power (Hughes 2002 according to Percival 2012: 2), in which he remains until today.

7. Cambodia’s economic growth based on Foreign Direct Investment

Cambodia’s economic development over the last decades is a crucial background to understand two trends on which the problem this study treats is based: First, the strong rural-‐urban migration that Cambodia faces, which is largely directed towards Phnom Penh, and for which jobs in the garment industry are a significant reason, and second the high pressure on land in Phnom Penh, for which rural-‐urban migration is one, and the booming construction and real estate industry as well as large-‐scale de-‐facto privatisations of land are other reasons.

The garment industry and the construction and real estate sector, the two largest contributors to Cambodia’s Gross Domestic Product (GDP), are largely foreign-‐funded (Natsuda et al. 2010: 1). The basis for such a reliance on Foreign Direct Investment (FDI) was created in the 1990s, when Cambodia did not receive aid from the soviet bloc anymore (Katz 1991: 147), and mostly Western donors stepped in. Their aid largely corresponded to the principles of the Washington Consensus, which implied large-‐scale privatisation and a strong liberalisation of inflows of foreign direct investment (Ear 1997). Although meanwhile, a shift from Western to Asian donors has occurred, these trends persist in Cambodia’s development strategy until today. FDI inflows have amounted to more than USD 28 billion between 1994 and 2013 (Open Development Cambodia 2016: n.p.) and focused, as Cambodia is still a low wage country, particularly on labour-‐intensive and value chain activities (UNCTAD 2013: 46) like the garment sector. Being foreign-‐funded to such a large extent is one reason for the sectors instability and for difficulties to involve it in the housing question, as will be detailed later.

7.1. The garment industry as Cambodia’s economic backbone

Cambodia’s GDP per capita of USD 1225 (2015 est.; CDC et al. 2016: n.p.) is still very weak in comparison to the world average and even to the average among regional developing countries in the region. But Cambodia has grown steadily and strongly over the last two decades, it was with a yearly average GDP growth rate of 7.7 % even the sixth fastest growing economy in the world between 1994 and 2014 (World Bank 2014b). As can be seen from figure 3, while the share the agricultural sector in the GDP has drastically decreased, the share of the industrial sector has more than doubled and the share of the service sector has gained about one third since the 1990s.

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To the industrial sector, but also to Cambodia’s total GDP, the garment industry4 contributes the largest part with 10.5% (2015; CDC et al. 2016: n.p.). It further accounts for 80% of Cambodia’s exports (2014; Reaksmey/Peter 2015: n.p.). However, the garment industry’s shares in GDP and exports have slightly decreased over the last years (ILO 2015b: 3), which can be attributed to the emergence of other regional low wage countries such as Myanmar, to the appreciation of the US dollar, as Cambodia is highly dollarised, and also to employers’ concerns about labour unrest (World Bank 2015: 1). The development of Cambodia’s garment industry might be further damped as the EU enters in a free trade agreement with Vietnam (ibid.: 8) and also, because the Cambodian government (2015: 14) aims to diversify the industrial sector, shifting the focus away from garments to more skill-‐intensive fields5. Nevertheless, the Cambodian government (2014: viii) predicts that the industry will further grow over the next years. Lately, roughly 30% of all newly approved large investment projects in Cambodia were in the garment sector (2014; ILO 2015a). Cambodia counts in total 655 operating garment factories (ILO 2015b: 1), of which almost 90% are in the Phnom Penh region (Chansamphors 2008: 9) and more than half in Phnom Penh itself (GMAC 2016: n.p.). “The benefit of setting up garment factories around the city is the easy access to electricity and infrastructure even though the materials and finished products have to be shipped from the port which is located 200 km away” (Chansamphors 2008: 9). The large majority of factory owners come from China and Taiwan, while only roughly 5% are Cambodian (GMAC 2016: n.p.). Also, almost all inputs are imported (Interview Conklin/So). The

4 This and all following references to the garment industry include the footwear and textiles industries. 5 According to Cambodia’s Industrial Development Policy 2015 – 2025 (Royal Government of Cambodia 2015), the garment industry’s share in exports will be decreased from now 80% to only 50% in 2025.

Figure 3: Composition of the GDP of Cambodia by sector in per cent, 1995, 2005 and 2015 (est.). Source: own figure based on Hill/Menon 2013: 8; CIA 2016: n.p..

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lack of local embeddedness and the ease with which a factory can be moved are reasons why the garment industry is very fragile (Interview Tep Makathy): It has happened many times that factory owners disappeared “over night” (ibid.). Given that the garment sector is still very important for the Cambodian economy and with 700,000 workers also Cambodia’s largest employer, it thus gets priority treatment in various regards.

A politically explosive topic is the minimum wage. Over the last years, there have been many disputes about it, whose bloody climax were mass demonstrations on January 3, 2014, where labour unions together with the opposition party CNRP demanded a minimum wage of USD 160 monthly, and the military police shot into the crowd killing five and injuring dozens of demonstrators (Naren et al. 2015). In fact, the minimum wage was increased annually since 2013 (ILO 2015a). Since the beginning of 2016, it amounts to USD 140 monthly, which is slightly above what the manufacturers wanted, but way below what NGOs consider a living wage and what labour unions demanded in many tense negotiations with the government (Carmichael 2015: n.p.). On top of the minimum wage, there are several extra payments such as a USD 10 attendance bonus (ILO 2015a: 3), and 87 % of the employees get additional income from working overtime, on average USD 30 per month (Sreang et al. 2015). For a minimum wage of USD 128 (figures for the recent minimum wage are not available yet) the total wage thus varied between on average of USD 171 (ILO 2015a: 4) and a median of USD 214 (Sreang et al. 2015) depending on the source. But while average nominal wages have been rising from the 2000s, average real wages have declined from 2003 to 2009 and increased less than the average nominal wages since then, as is shown in figure 4.

Figure 4: Nominal and real average monthly wage in the garment sector, in USD per month, 2002-2015. Source: ILO 2015a: 4.

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The decline was due to temporarily slow growth or stagnation in nominal wages as well as to high inflation of on average 7.1% from 2003 to 2009, letting the average monthly real wage fall to USD 88 in 2009 (ILO 2015a: 4). From then to 2014, inflation was lower again with on average 3.8%, which, together with the increases in nominal wages, has increased the average monthly real wage to USD 149 in 2014 (ibid.).

Now that other industries have developed more strongly and Cambodian workers also migrate to other countries for seeking paid employment there, labour shortages have been reported and some factories offered extra payments to attract workers (ILO 2015a).

7.2. The construction industry as Cambodia’s motor of growth

The construction sector has an 8.8 % (2015; CDC et al. 2016: n.p.) and thus the second largest share in Cambodia’s GDP (Konrad-‐Adenauer-‐Stiftung 2015: 1) and it is with 2.0 percentage points the largest contributor to GDP growth (2014; World Bank 2015: 5). Growth in the sector started already in the 1990s and was significant in the 2000s (Knight Frank 2015: 2), driven by low labour costs, rapid urbanisation and high margins (Meng 2015a: n.p.). Recently, a boom is occurring, with year-‐on-‐year increases of over 30% in 2013 and 2015 (Meng 2015a: n.p., 2016: n.p.). In 2015, 2,300 construction projects were approved with more than 13,400 units, totalling investments of USD 3.3 billion (Meng 2016: n.p.). Currently, about 700 buildings from five to 55 storeys are under or pending construction (ibid.). The sector is expected to continue to grow (Konrad-‐Adenauer-‐Stiftung 2015: 1).

Like in the garment industry, investment in the construction sector is also largely foreign (World Bank 2015: 7), to a large extent from Asian countries (Property Report 2016: n.p., Konrad-‐Adenauer-‐Stiftung 2015: 1) whose investors are apparently less deterred by the lack of harmonised and implemented laws and regulations in the Cambodian construction sector (Konrad-‐Adenauer-‐Stiftung 2015: 2-‐3), as well as the Cambodian planning mentality in which compliance is less important than political support (Faveaud 2011: 5). As far as the number of projects and not the investment volume is concerned, though, local investors make up the majority of real estate investments (Meng 2015a: n.p.), which points to a stronger involvement of local investors in smaller projects, whereas foreign investors focus on large-‐scale projects.

Most construction projects can be found in the provinces of and around Cambodia’s large cities (Property Report 2016: n.p.), a special focus is on modern high-‐rise buildings in Phnom Penh (World Bank 2015: 7). While there is indeed an improvement of living standards and a strong demand for housing in Cambodia (Konrad-‐Adenauer-‐Stiftung 2015: 1), experts point out that the investments that take place could outpace actual demand, which they note is unknown, and that investors should “take into consideration the selling price of properties to appeal to many buyers” (Property Report 2016: n.p.). Otherwise, they fear, rising land and housing

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prices, strong credit expansion and speculation could cause a bubble (World Bank 2015a: 7).

8. Rural-‐urban labour migration mostly to Phnom Penh The majority of Cambodia’s population still lives in rural areas today, but the share of the urban population has increased over the last years (National Institute of Statistics 2013a: vi). It is 30 % now (Interview Tep Makathy) and expected to be 50 % in 2050 (ibid.). This is mostly due to rural-‐urban migration, which is in turn largely motivated by labour and income opportunities.

Cambodia’s labour force has increased to 8.3 million (2014; calculation based on National Institute of Statistics 2015: 156), and while there are no reliable numbers for un-‐ and underemployment (National Institute of Statistics 2015: 66), it is seen as a major challenge to incorporate the growing labour force into the Cambodian labour market (CIA 2016: n.p.). Surviving on traditional agricultural livelihoods becomes more difficult with Cambodia being increasingly cash-‐based (Harima 2012: 5), so that less and less people are employed in agriculture, currently 45 % of the employed population (2014; National Institute of Statistics 2015: 73). In turn, more people look for work in the industrial and service sectors, which are growing. Employment in the industrial sector has increased to 24 % (2014; National Institute of Statistics 2015: 73-‐74), with the major employer being the garment industry, which currently accounts for 700,000 workers (better factories Cambodia 2016: n.p.) and thus roughly 8.5 % of Cambodia’s labour force. The Cambodian government (2014: viii) predicts employment in the garment sector to further increase. The service sector has grown to 30 % (2014; National Institute of Statistics 2015: 73-‐74), with the major contributor being the tourism industry with 500,000 employees (CIA 2016: n.p.). Cambodia’s third largest employer is the construction industry with 50,000 workers (ibid.). All of these industries are mostly located in towns and cities (Harima 2012: 5). What makes them attractive is that wage employment in the industrial and service sector is more stable and independent of seasonal factors than the often family-‐based agriculture (ADB 2014: 13). In fact, with the sectoral shift, unpaid family work in Cambodia has drastically decreased to 6 %, while wage employment has significantly increased to 44 % (2014; National Institute of Statistics 2015: 71). In Phnom Penh, this trend has been even stronger, with wage employment now amounting to more than 70 % (2014; ibid.). The secondary and tertiary sector also have a higher labour productivity than the agricultural sector (ADB 2012: 2), although this is not necessarily reflected in the height of wages. The median disposable income in Cambodia is USD 56.8 per month (2014; National Institute of Statistics 2015: 91). Indeed, it differs significantly from rural to urban areas and in particular to Phnom Penh, where it is roughly two and a half times larger than in rural areas (ibid.). But for low-‐skilled labour, these differences are much lower. The idea to benefit of higher incomes in urban areas is also clouded when looking at poverty rates. All over Cambodia, the income poverty rate has decreased by more

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than half from 2007 to 18.9% in 2012 (ADB 2014: 4), where it needs to be considered, though, that at the same time, vulnerability to poverty has increased, because many have moved only just above the poverty line (ADB 2014: 13). Also poverty is much higher, 46% in 2010, when not income poverty but multidimensional poverty is measured, which includes the dimensions education, health, and standard of living (ADB 2014: vii).

Anyway, as can be seen from figure 5, while the decline in poverty was steady in rural areas, it has fluctuated in urban areas, and has lately even sharply increased in Phnom Penh. Among the reasons is the dramatic increase in living costs there, which is much steeper than the increase of incomes (Researcher Chheang Vannarith according to Veasna/Piseth 2014)in: Khmer Times).

Besides the differences in labour and income opportunities (ADB 2012: 12), also other factors such as brighter prospects for services and education (ibid.: 2, Interview Sar) are causes for the unprecedentedly high migration in Cambodia (ADB 2014: 37). According to the Cambodia Inter-‐Censal Population Survey (CIPS) 2013, roughly 30% of the population have migrated and more than a third of them to urban areas, mostly coming from rural areas (National Institute of Statistics 2013a: 90-‐91), as shows figures 6.

Figure 5: Poverty rates by area in per cent, 2007 to 2012. Source: ADB 2014: 4

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While the CIPS 2013 only covered internal migration, a survey that the Cambodia Rural Urban Migration Project conducted in 20126 also included international migration, and found that one third of rural outmigration is to other countries (MOP 2012 according to ADB 2014: 2) and another half is absorbed by Phnom Penh (MOP 2012 according to ADB 2014: 2). Considering only internal migration again, this means that even roughly 75%7 of the rural-‐urban migration is to Phnom Penh. That corresponds to, e.g., for 2013, 779,411 migrants from Cambodia’s rural areas to Phnom Penh8.

Cambodia’s urban population has in turn an almost 50% share of migrants (2013; National Institute of Statistics 2013a: 90), of whom 85% are rural-‐born (2013; ibid.: 25).

Rural-‐urban labour migration is typically perceived as temporary. Indeed, some groups of migrants like construction workers are very mobile and move, when one project is finished, on to where they find the next job (Interview Meas). Also, many workers migrate seasonally, going back to the countryside when there is much work in agriculture, like at plantation and harvest times, and staying in the city for the rest of the year (Interview Meas). A third of urban migrants, especially male ones and thus probably again many construction workers, also plan to return to the place they are from (Linton 2015b: vi). But surveys among urban migrants show that in general, they stay for increasingly long periods in the city: In 2013, 60 % had lived there for ten years or longer and 35 % even for 20 years or longer, whereas these numbers were still much smaller in 2008. The share of migrants that had stayed only up to five years had in turn decreased since 2008 to just over 20 % in 2013 (National Institute of Statistics 2013a: 93).

Rural-‐urban migrants are primarily younger adults (ADB 2014: 2). If they have children, many do not take them to the city, but frequently leave them with their

6 The survey covered 1,000 Phnom Penh migrants and 4,500 rural households in 375 villages. 7 Substracting the third that migrates from Cambodia’s rural areas to other countries, the half becomes 75%. 8 75% to Phnom Penh of 24.5% rural-‐urban migrants of in total 4,241,693 migrants in Cambodia in 2013 (National Institute of Statistics 2013: 90-‐91).

Figure 6: Internal migration in Cambodia in 2013. Source: own diagram, based on National Institute of Statistics 2013a: 90-91.

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grandparents9 (MOP 2012 according to ADB 2014: 2). Migrants tend to be more educated than non-‐migrants (ADB 2014: 12), but the largest amount takes up low-‐skill jobs in the city. A very large group of rural-‐urban migrants, especially to Phnom Penh, finds work in garment factories: 90% of the hundreds of thousands of garment factory jobs, which have been created in the last decades, have been filled with workers from Cambodia’s rural areas (Harima 2012: 1). Another large group, like in the garment sector mostly young, unmarried females, works in the entertainment, food and service sector, so for instance in karaoke bars or restaurants. It is common that workers shift from the garment to this sector over time (Interview Sar), as working hours are a bit shorter (ibid.) and earnings slightly higher (Interview Ath). Yet another large group of migrants are construction workers, who are mostly young men (Interview Sar). Many construction workers bring their whole family (Interview Sok Vanna). In particular the older rural-‐urban migrants are frequently street vendors, vendors on the market or garbage collectors (Interview Sar). They often live in urban poor settlements. Also students constitute a considerable amount of rural-‐urban migrants.

The different groups of migrants have different characteristics and thus prefer, need and choose different types of housing, especially in terms of locations, as the large majority prefers to live close to the place of work or education. Thus, entertainment, food and service workers mostly live in the centre (Interview Ath), students close to university (Interview Meas), vendors and garbage collectors usually in any urban poor settlement (Interview Sar) and construction workers on the construction sites to save on housing expenses. The large majority of the rural-‐urban migrants rents, though, due to low budgets and plans to stay temporarily.

A reason why the budgets of rural-‐urban labour migrants are low is that most of them remit money, on average USD 20 per month, to their family (ADB 2012: 12). A higher share of women than of men remits money and women also remit higher shares – on average 20% more – of their income than men, although they generally earn less (ibid.). The mostly female garment workers, for instance, send on average USD 25 per month back home (ibid.), which is more than 10% of their disposable income (see The garment industry as Cambodia’s economic backbone).

9. Transformation of Phnom Penh Phnom Penh, Cambodia’s capital and political and economic centre, is located on the banks of the Mekong, Bassac and Tonle Sap Rivers in south-‐central Cambodia. It is entirely surrounded by Kandal province. Phnom Penh itself is the country’s only municipality, which has an equal status to provinces (National Institute of Statistics 2013b: I-‐1). It has nine districts, these are subdivided into 96 communes (sangkats), and these again are subdivided into 891 villages (khans) (ibid.: xxix). 9 More than 20% of the migrants in Phnom Penh report that their children live elsewhere.

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Today, Phnom Penh accounts for more than 10% of Cambodia’s total and more than half of its urban population (ADB 2014: 1). The capital’s population grew by 70% between 1998 and 2013 (ibid.) and now amounts to 1.8 million, estimates Seng Vannak, deputy head of the Urban Management Division at the Phnom Penh City Hall (beginning of 2015 est.; according to Morton 2015: n.p.). It is further estimated that around a quarter of a million of people commute to the city from surrounding towns every day (Chhay/Huybrechts 2009 according to Percival 2012: 101).

Also, Phnom Penh’s built-‐up area has grown, at an average rate of 4.3% (2000-‐2010; World Bank 2015b: 12), as can be seen in figure 7. This was the second highest urban growth rate in Southeast Asia excluding China10 (ibid.: 20). Also the administrative area has grown, from 370km2 in 2004 to nearly 700km2 today, because additional districts have been incorporated into the Municipality of Phnom Penh (Interview Tep Makathy).

Per additional inhabitant, Phnom Penh has grown by 115m2 (2000-‐2010; World Bank 2015: 147). Hence, its average population density has only slightly increased from 8,546 persons per km2 in 2000 to 8,596 persons per km2 in 2010 (ibid.), which is still below Cambodia’s average urban population density of 8,600 persons per km2. This is because Phnom Penh’s periphery remains predominantly rural with an average population density of only 1,800 people per km2, but the centre is much denser with on average 25,300 people per km2 (MPP 2011 according to Percival 2012: 101). The centre is probably also what Morton (2015: n.p.) refers to when saying that Phnom Penh’s growth has resulted in 49 more people living in every km2-‐block.

10 Only the Johor Bahru urban area in Malaysia grew at a faster rate (World Bank 2015b: 20).

Figure 7: Growth of Phnom Penh’s population in thousands, 2000-2014. Source: World Bank 2016, n.p..

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9.1. From urban poor settlements to high-‐rises and megaprojects

While growing, Phnom Penh is significantly transforming: Farmland is being encompassed, the centre’s skyline is becoming higher, and severe social changes are taking place. So far, the centre has been dominated by so-‐called shophouses, two-‐storey terraced houses with some kind of business on the ground floor, by huts and, also rather low-‐rise, architecture from the French colonial period and the period of independence. In recent years, the number of high-‐rise buildings and modern megastructures has significantly increased, though. They mostly include apartments and condominiums (henceforth referred to as condos), office space and shopping malls.

The public sector successfully encourages the construction of high-‐rises in the centre (Interview Ly): Their approvals have increased over the last years, are now numerous and in fact, they are meanwhile the only large-‐scale approvals that are given for the centre (ibid.). The high-‐rises often include apartments and condos (ibid.). Ly Chanphakdey of the General Department of Housing reckons that thus, the number of apartments and condos has increased, although residential land has decreased in the centre (Interview).

Figure 8: Expansion of Phnom Penh’s built-up area, 2000-2010. Source: World Bank 2015.

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Commercial land use, on the contrary, has increased, and is expected to continue growing. The office stock is estimated to grow by more than 64% until 2018, with the majority being so-‐called prime office space (Knight Frank 2015: 4) that today has average monthly rents of USD 22 per m2 (ibid.: 6). The number of malls is expected to increase from currently ten to 23 until 2019 (ibid: 8). Almost half of the existing retail space is classified as prime, too, with average monthly rents of USD 10 to 22 (ibid.: 9). While growth continues, already, 44% of prime office space (ibid.: 5) and roughly one quarter of all retail space are vacant now (ibid.).

Phnom Penh has also seen the development of many large-‐scale urban projects with mixed uses, that are also mostly catering to the demand of the upper class. Within the city, prominent examples are the developments of Chruy Changva and Diamond Island, which have been and are constructed on land, where settlements existed before. Even more large-‐scale urban projects are situated in the periphery. Generally, there is a shift of the growing number of building permits from the centre towards the outskirts in recent years (Interview Ly). In periurban areas, there are 75 gated communities, land sub-‐division projects and housing estates, as well as, particularly outstanding, six satellite cities, “large developments of hundreds or thousands of hectares with residential, commercial and leisure spaces” (Percival 2012: 125). These often refer to international standards and are foreign-‐funded, but supported by the municipal and national governments (Paling 2012: 2).

All these urban investment projects as well as public development plans have drastically increased the demand for land and led to sharply rising land values (see Commodification of real estate and speculation), which puts extreme pressure on existing, particularly poor, settlements. There are today 340 of them in Phnom Penh with around 33,600 families living there (STT 2014b: 8-‐9). The large majority, especially those in the inner city, were established before 2001, when the Land Law came into effect (see Decreasing affordability of homeownership) (ibid.). Since then, not only the establishment of new settlements has become more difficult, but also more large-‐scale evictions of existing settlements have occurred, as figure 10 shows.

Figure 9: Evicted families, 1990-2014. Source: Sahmakum Teang Tnaut 2014: 1.

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In fact, 10% of Phnom Penh’s population have been forcibly evicted or invited to resettle since then (Amnesty International 2012 according to World Bank 2014a: 7). From 1990 to 2012, in total 85 forced evictions took place (STT 2007, 2011, 2012 according to Talocci/Boano 2015), and from 1990 to 2014 over 29,700 families were evicted or displaced from their homes in Phnom Penh (STT 2014a: 1).

Often, the evictions were very brutal (e.g. Wright/Pheap 2016), and over the years, attention, local protest and international support have increased in terms of human and housing rights abuses by authorities, developers as well as involved donors (Talocci/Boano 2015). The evictions that thus became most widely known are those of Boeung Kak, Borei Keila and the Railway Rehabilitation Project.

Under the pressure of the evictees and the public, the municipality has developed, also in cooperation with local and international housing and urban poor organisations, alternatives to evictions that include relocations, on-‐site upgrading and land sharing, but their success has been meagre.

According to Sok Vanna, the Phnom Penh municipality announced that there will be „no more evictions“ (Interview). But he criticises that in fact, evictions did not become less, but are just not called like that anymore (ibid.). Also Durand-‐Lasserve (2005: n.p.) comments that forced removal “is usually presented as a voluntary or negotiated one. The terms of the deal will then depend on the negotiating ability of the community or households concerned (which includes its organizational and lobbying capacity, its political protection, and its tenure status)”.

Indeed, 45 % of the central urban poor settlements and 37 % of those in the outer Khans, in total 12,000 families, are under threat of eviction today (Fukuzawa 2014: 18, STT 2014a: 1). Currently, the second large lake of the city is being filled in with sand, and the urban poor households living on and around it are losing their homes, just like it was the case with Boeung Kak a few years ago. The site of Boeung Kak, previously a lake and now sand, remains fenced in and vacant until today, which points to a speculative nature of evictions, too.

As previously mentioned, one of the approaches of the city has been to relocate urban poor settlements. But there is no resettlement policy or land banking system for this purpose, which so far resulted in moving urban poor settlements from the city centre to the outskirts, where the residents usually have decreased access to services, livelihood opportunities and income (Heinonen 2008: 98). As the need to travel increases, they often have to change their jobs or become unemployed (ibid.). Thus, relocations have basically created new poor settlements with decreased standards of living. Needs and abilities of the settlements’ residents have not been included (ibid.).

Along with the evictions and relocations, the number of urban poor settlements has decreased from 569 in 2003 to 340 in 2013 (Fukuzawa 2014: 8), which corresponds to almost 30,000 urban poor families less (ibid.: 10). Also, a much larger proportion of the settlements is now located in the periphery of the city: In 2013, there were

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only 80 urban poor settlements in the inner khans while there were 260 in the outer khans (Fukuzawa 2014: 8).

Besides satellite cities and relocation sites, another significant contributor to the expansion of Phnom Penh are the numerous factories that have been established, as well as the workers’ housing that comes along with them. According to Kim Heang, it is approximately 20 km away from the centre that this more industrial land use starts (Interview). Also the Phnom Penh Social Economic Zone has been established there.

9.2. Development of Phnom Penh’s land and housing market

9.2.1. Commodification of real estate and speculation

Land and properties became increasingly commodified in Phnom Penh in the 1990s, when the number of foreigners and the demand for housing increased (Fauveaud 2014: 7). Market pressure and prices remained mostly low then, but the today most costly central districts of Boeung Keng Kang (BKK) and Tuol Kork (TK) already emerged as preferred areas for high standard rental housing (ibid.). Also, international companies and foreign professionals started to introduce new modes of real estate goods production (ibid.). Until the mid 1990s, the focus was on inner-‐city areas, but from the end of the 1990s on, periurban areas with their cheap land and space for residential projects were increasingly taken into account, which corresponded to more land speculation (ibid.). As the prices of peripheral residential or agricultural land rose enormously, owners chose to sell or rent it entirely and move away, to sell or rent parts of it or to build dwellings on it and sell or rent these (ibid.). From 2000 to 2008, the construction activity thus increased significantly. Local developers started to cater to an increasingly affluent population by setting up townships, so-‐called Borey, and other commercial projects (Knight Frank 2015: 2). More and more foreign developers came to benefit of the still relatively low land prices and the increasing demand for international standard real estate (ibid.). With the installation of garment factories and the arrival of numerous workers from rural areas, the demand for land and housing in the periphery increased further. Building and renting out precarious housing units for the workers emerged as a new enrichment opportunity for owners of land around the factories, some could thus drop their previous occupation. This also motivated households living in the inner-‐city to buy periurban land and build housing there, in order to either resell it or to rent it and in this case often move to the plot or near to it themselves.

Thus, a property boom and significant growth in land prices occurred from 2003 to 2008 (Knight Frank 2015: 2). In central Phnom Penh, land prices increased from about USD 250 per m2 in 2000 to USD 2000 per m2 in 2006 (GTZ 2009 according to Percival 2012: 3). Cambodia was then, from 2008 on, severely hit by the global financial crisis, especially because of its large garment exports, and large-‐scale construction projects were put on hold land and land prices declined – in prime locations by 50 % (Knight Frank 2015: 2). But from 2010 on, also because of changes

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in law, which facilitated foreign purchases particularly of condos (see From urban poor settlements to high-‐rises and megaprojects), the trend reversed again, and before crisis prices are again achieved or exceeded (Knight Frank 2015: 2). Over the last ten years, from 2005 to 2015, land values have generally increased tenfold (Interview Kim).

Today, land and real estate investment is thus a very profitable business in Phnom Penh. While salary increases amount to 5 % a year, Kim Heang estimates, the value of land and real estate now increases by 20 to 30 % a year for industrial and residential use (Interview). Increases are higher for commercial use (Interview Sear/Tan) and particularly high for certain areas of the city centre like TK, where they amounted to up to 40 to 50 % in 2015. In other areas increases can also be 10 to 15 % (Interview Kim). The high revenues lead to speculation, too: Land is thus withdrawn from use because those who bought it keep it empty for speculative purposes (Interview Meas).

9.2.2. Mismatch in Phnom Penh’s housing sector

As of 2014, a household in Phnom Penh has on average five members (National Institute of Statistics 2015). The average household has 2.1 rooms, so on average there are 2.6 persons per room (ibid.). Less than 10 % of the households have more than three rooms and more than 70 % of the households have one or two rooms (ibid.). The average space a household has is 60.7 m2, so 12.5 m2 per person (ibid.).

With the household size slightly decreasing (ibid.), general population growth and strong migration to Phnom Penh, the city’s housing demand is increasing. Precise numbers are not available, but it can be assumed that a large part of Cambodia’s housing need, which has been estimated at about 1.1 million new houses excluding the current deficit by 2030 (National Housing Policy: 3.), will be in Phnom Penh.

The construction activity is also high in Phnom Penh. However, Phnom Penh’s housing market is marked by a mismatch between supply and demand: “Housing supply today is seen at very fast rate especially for the middle-‐income and upper middle-‐income group, expanding very much. Generally the housing supply targets those groups and the middle-‐ and upper-‐income groups [are] still not very big, the proportion of the low-‐income group is still very large. […] Because […] urban poverty now is roughly 13% in the entire urban area” (Interview Tep Makathy). Poor and low-‐income groups together even amount to 50 % of Phnom Penh’s population, estimates Khemro, defining a person as low-‐income when income does not exceed USD 400 monthly (Interview).

Consequently, over 30% of the city’s population live without adequate housing and basic services (Municipality of Phnom Penh 2005 according to Heinonen 2008: 97).

9.3. Land use and ownership

Land and real estate speculator benefit from the fact that there is no regulation on the use and conversion of land so far. It is thus particularly easy to speculate with

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land in the city’s periphery which is still agricultural, but likely to be incorporated into the city, hence that the pressure for industrial, residential, commercial etc. use increases. As the land can be converted on an ad hoc basis, its value will then almost certainly increase (Interview Tep Makathy).

Recently, an urban master plan has been approved for Phnom Penh. It is unclear how this will change the situation. Still, many aspects have to be detailed and precise regulation that is needed for an effective implementation, for example on land-‐readjustment, land-‐subdivision, construction permits etc., is not in place yet (Interview Tep Makathy). And “at the end of the day is the enforcement” (ibid.).

For land ownership there are five categories in Cambodia: private land, state public land, state private land, common property and indigenous land. State public and state private land account for about 75 to 80 % of all land (USAID n.d.: 6). State public land includes natural resources like lakes, rivers, forests etc., natural reserves, patrimonies, land with general use like harbours, railways etc., land with public use like roads, parks etc. and land with public service buildings like hospitals, schools, administration etc. (Land Law, Article 15). State private land is any state land that does not fall under any of these categories (Land Law, Article 12 and 15; Sub-‐Decree 129, Article 3). While state public land is inalienable, state private land „can be subject to sale, transfer, lease, or other legal contractual transactions, including ELCs [economic land concessions] or social land concessions“ (Cambodian Center for Human Rights 2013: 13). Thus, the government must first convert state public land into state private land in order to perform these actions, which it does. For instance Boeung Kak, as a lake most obviously originally state public land, has finally been leased to Shukaku Inc., whose owner is close to the prime minister Hun Sen, for 99 years, which is the maximum possible time for a lease (Cambodian Center for Human Rights 2013: 18). The tenure rights of such long-‐term leases are comparable to the rights of private ownership (USAID n.d.: 7).

Since the 1985s, land privatisation has been ongoing in Cambodia (Interview Tep Makathy). There is no publicly available map of land categories (Interview Tep Kosal), why it is very difficult to say how much state land is left in Phnom Penh today. While it is relatively easy to determine public state land, it is hardly possible to know about private state land. The MLMUPC does not own any land because it was only established in 1999, when all state land had already been divided up between other ministries (Interview Khemro). Staff of the MLMUPC variously estimate that surely, there is state land left in Phnom Penh (Interview Tep Kosal), that it is unknown, how much state land there is left (Interview Sok Sam On), that other institutions know about it (Interview Ly) or, that currently, a committee tries to register all state land in order to protect it (Interview Sok Sam On). Doubts about this arise, though, as more independent observers reckon that within the last five years, state land has decreased to the extent that “there is not much left” (Interview Kim), that the state has “sold almost all of it” (Interview Meas) and, that the state still sells land to the private sector (Interview Sar). It is thus probable that, under the massive pressure

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for land and with drastically increased land values in Phnom Penh, as well as given the low base wage of public sector employees and the high prevalence of corruption in Cambodia, indeed most state land has been sold or given long-‐term leases for to the private sector. Also, often land that is theoretically still state land is de facto privately used (Interview Tep Kosal).

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Section III – Development of Phnom Penh’s rental housing sector

10. Cambodian culture favouring homeownership and landed houses

Generally, Cambodian people try to acquire land and build a house, even if they are poor (Interview Ath). They prefer ownership to rent, even if they can only achieve it in an urban poor settlement, for example along Phnom Penh’s canals or around its lakes, and if it is illegal and they are under threat of eviction (Interview Sia): “Poor condition is okay, at least you have your own” (Interview Sok Vanna).

Meas Kim Seng, urban development lecturer, explains the preference for homeownership like this: “First, we care about the next generation. Maybe in Europe you say: It is not my business, my children have their own responsibility. But here it is important, we think about leaving them a house. Second, there is a high pressure of the family for homeownership, especially for marrying it is important. Thirdly, ownership has a high social value. People might look down on you if you just rent” (Interview). Sok Vanna, programme manager for Cambodia of UN-‐HABITAT, confirms that “everyone will complain you, your performance is not good if you spend all money for renting” (Interview). He adds that the reputation of rental housing is slowly changing, though: “Now, for a young couple, it is okay if you rent a room for first five years, but if you have been living in Phnom Penh for 25 years and are still in a rent room, you are a bad person” (Interview).

Further, Sia Phearum, secretariat director of the Housing Rights Task Force, says, there is a difference in mentality to “Europe, where people always want to change jobs and want to learn new things and therefore prefer rental housing”, but at the same time he outlines that more and more Cambodian people need to be mobile because of work, too (Interview).

The preference for homeownership is further closely linked to a preference for living on or at least having direct access to the ground floor. According to famous Cambodian architect and once Minister of Town Planning Vann Molyvann “Cambodians don’t really know how to live in city buildings” (Ly/Muan 2001 according to Percival 2012: 148), which is confirmed by many who are currently involved in Phnom Penh’s urban development (e.g. Interviews Sear/Tan, Sok Vanna). Sok Vanna points to situations in Phnom Penh, where even on-‐site upgrading of housing has not been accepted, because people lost their direct access to the ground floor11 (Interview). Frequently, the preference for “landed houses”, as Cambodians often call housing with direct access to the ground floor, is explained with business opportunities: Even households with only two persons and very limited resources often like to open a small shop on the ground floor (Interviews Sok Vanna, Sia, Ly).

11 With this he referred to Stung Meanchey.

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But there is also a fear of high buildings: They “might fall down some day”, either because of bad construction or earthquakes (food seller according to Percival 2012: 148). There is also speculation that the insecurity, which the Khmer Rouge regime has caused with its abolishment of private property, is a reason why people prefer “land rather than a ‘space in the sky’” (country manager of an international real estate agency according to Percival 2012: 148). High-‐rise buildings are also criticised for unsuitable design and use of materials, so that, in contrast to, for instance, the traditional wooden houses in the countryside, they have bad climate, need air conditioning and the materials cannot be sourced locally and are more expensive (Interviews Sia, Sok Vanna).

Nevertheless, many stakeholders assume that people will slowly change their habit (e.g Interview Sia), out of necessity, because “the land area in the city is very limited and land prices are too expensive” (Interview Ly), and because real estate companies promote condominiums as a new housing type (Interview Sear/Tan, Percival 2012: 148).

11. Strong demand for rental housing by poor and low-‐income groups

Given that homeownership has a much better reputation than rental in Cambodia, the Cambodian upper class rarely demands rental housing. High-‐cost rental housing is thus mostly targeted at foreigners (Interview Kong). Increasingly, the Cambodian middle-‐class demands rental housing: employees of NGOs, in the public sector such as in ministries, or teachers (Interview Meas, Tep Kosal). Often, these have moved from their birthplace to the city for their job, and do not own a house there, yet, why Khemro of the housing department calls them “bridgeheads” (Interview). This transient view of rental housing is contrasted by Meas Kim Seng, who thinks that many of these middle-‐class people do not only need rental, but even social housing: “What they earn per month, that is not enough if you consider their expenses and the rent” (Interview).

The strongest demand for rental housing is by poor and low-‐income people, though. These renters are largely absent from research, from census and survey work as well as from policy (Pern 2014: V), but they constitute a very large group: According to Hun Sen, about 150,000 rural-‐urban migrant workers are currently renting about 30,000 rooms in Phnom Penh (according to Reaksmey 2015), but the number of all poor and low-‐income renters is certainly larger: First of all, alone the number of garment factory workers in Phnom Penh, of whom the majority is said to rent, is around 300,000 (see Garment factories in Phnom Penh). Secondly, Kim Heang expects that in one year alone, roughly 100,000 to 200,000 rural-‐urban migrants in need for rental housing arrive in Phnom Penh (Interview), own calculations based on data of Cambodia’s National Institute of Statistics are even much higher. And thirdly, although rural-‐urban migrants constitute the majority of Phnom Penh’s poor and low-‐income renters (Interview Kim), they are not the only ones. According to a

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survey that the local NGO STT conducted among people who rent rooms for less than USD 60 in Phnom Penh’s urban poor settlements, 13.7% of these are originally from Phnom Penh (Pern 2014).

While the STT survey defined poor renters based on expenses for rent, other sources define poor and low-‐income renters based on income or general consumption expenses (e.g. Interview Khemro). Given the lack of precise data, the results of this study can be expected to be very similar using either of the definitions, and both those who share monthly rents of up to USD 60 per room, and those who fall below the national poverty line (poor renters) or have low incomes or daily consumption expenditures will be included.

Almost all poor and low-‐income renters choose their housing location according to their school, university or workplace (58.5%) or other opportunities to generate income (33%) (Pern 2014). Gasoline is very expensive in Cambodia, about twice as high as in, for instance, Thailand or Vietnam (Interview Sia), and public transport is hardly available in Phnom Penh, which is why it is vital for poor and low-‐income people to minimise their commutes and transportation costs. As Phnom Penh got grants of in total about USD 250,000 from international donors to improve its public transport, Sia Phearum hopes that longer commutes will soon become more feasible (Interview).

Many of Phnom Penh’s poor and low-‐income renters have a very limited level of education (Pern 2014: 12) and most of them thus low skill jobs: The largest groups of poor and low-‐income renters seem to be garment factory workers and then food, service and entertainment workers (Interview Tep Makathy). Further, many are garbage collectors, students, street and market vendors, “housewife/husband” (Pern 2014: 13, Interviews Meas, Sar, Conklin/So) and a few are domestic workers, moto or tuktuk drivers (Pern 2014: 13). There are also a few construction workers: Despite constituting a large group of rural-‐urban migrant workers and of poor and low-‐income people, they hardly rent housing, because they mostly live on the construction sites (Interview Ath).

A large amount of rental housing for poor and low-‐income people is located in urban poor settlements. Many ”people who live in the slum and squatter areas […] are not occupied, they are only rental” (Interview Khemro). Sometimes, renters even form the majority there12 (Pho 2013: 48). They “are the most invisible and vulnerable of slum-‐dwellers” and often very poor (Davis 2006 according to Pho 2013: 89). Their rents “may be 5 or 10 USD” (Interview Khemro).

Garment factory workers are specific in terms of location. Rather than in urban poor settlements, they mostly live in new rental housing that emerges around the factories in the outskirts, and are thus quite concentrated and a bit in an offside position (see

12 e.g. Boeung Kak 2 commune in Toul Kok district, where homes are built on the canal.

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Housing close to the factory). Food, service and entertainment workers are the contrary: They mostly live spread over the city centre.

The location has an effect on prices: While rents can be very expensive in the centre, e.g. USD 40 per month for a room of 16m2, they are usually more affordable in the outskirts and in urban poor settlements (Interview Sar). Rents in the outskirts will be further detailed in section IV. In urban poor settlements, a room of just under 13m2 has an average monthly rent of USD 26.5 (Pern 2014: 22).

Most poor and low-‐income renters rent rooms (77.4%), some houses (13.7%) and very few beds (2.4%) or flats (0.8%) (Pern 2014: 17). On average, a room is shared with four persons. Given the average size of 13m2, the resulting space per person is 3.2m2 and thus below the minimum standard of 3.5m2 of covered living space per person that has been set by a wide range of humanitarian agencies (Sphere Project 2011). Also, it must be considered that 3.2m2 per person is an average: There are also rooms of no more than 4m2 and rooms with up to ten tenants (Pern 2014: 18).

In many housing units, there is polluted air (27%) and dirty water (13%) (Pern 2014: 19-‐20). More than one fifth of the units are deteriorated (21.9%), many are liable to flooding (17%), have rubbish around (18.9%), stink (15.4%) and cockroaches and flies are present (10%) (ibid.).

Very few poor and low-‐income renters have written agreements with their landlords, why they are in a precarious position to demand basic upkeep, stable rents, or even the right to stay from their landlords (Pern 2014: V).

12. Why the demand for rental housing increases

12.1. Promotion of apartment housing

Real estate companies try to establish the concept of condominiums, which are initially for sale but then often rented out, in Cambodia and broaden the market base for them by promoting a “new quality of buildings”, a “new lifestyle” and a “new taste” (Interview Sear/Tan). They are oriented towards other countries in the region, like Singapore, where condominiums are already common (ibid.). Condos are usually high-‐cost and so far, mostly foreigners buy and rent them (Horton 2014: n.p., Meng 2015b: n.p., Interviews Tep Makathy, Khemro). There is speculation that within the next years, the Cambodian demand for condominiums will increase, because of the decrease in space in the capital (CBRE 2012: n.p.) and the growth of the middle-‐class (Po Eavkong, managing director of Asia Real Estate Cambodia, according to Meng 2015b: n.p.) and the upper-‐class (Leng Vandy, senior associate at SBI Royal Securities, according to Horton 2014: n.p.).

12.2. Decreasing affordability of homeownership

Mostly and certainly, the demand for rentals increases in the low-‐cost and lower middle market segment, though, which has manifold reasons. Loss of land is one of

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them. Cambodia’s banking sector rapidly develops, and also informal money lending flourishes (Song 2013: n.p.). Many people who get loans for high interest rates – in the informal sector they amount to on average 10% – cannot manage to pay the bank or the lenders back, and thus lose property to them (Vorn Pao, president of the Independent Democracy of Informal Economy Association, according to Song 2013: n.p.). Sia Phearum, secretariat director of the HRTF, reports cases where people thus lost their land and housing, and have hence become renters (Interview).

Furthermore, it is hardly possible anymore to acquire homeownership for free. In the 1980s and early 1990s, it was possible in Cambodia, and especially in Cambodia’s cities, where everyone had been evicted and property titles had been destroyed during the Khmer Rouge period, to simply occupy land and housing (see Cambodia’s turbulent recent history). This still shows today, for example in many of Phnom Penh’s inhabitants considering themselves landowners, although very few actually have land titles (Pho 2013: 1), or in Cambodia being one of the rare countries in which the shares of homeowners are not lower in principal cities than in the rest of the country (World Bank 2014a: 14). But already in the 1990s, it became more frequent that households had to pay to acquire land and housing in informal settlements, and the commodification of informal markets has continued since (Durand-‐Lasserve 2005: n.p.). The Land Law of 2001 finally legally abolished the right to acquire land by occupation; Only those who had occupied their land for five consecutive years before the law still have the right to get a title for it (Pho 2013: 1).

But not only is it forbidden now to occupy land, also “there is no land available for that” anymore (Interview Meas) or at least the available “land area in the city is very limited” (Interview Ly, USAID n.d.: 10). The land of the parents, if they live in Phnom Penh at all, is often too small for all children (USAID n.d.: 10) and while the population of Phnom Penh has increased, most land has been utilised or sold.

While the chances to occupy land have decreased, the land prices in Phnom Penh continuously increase in a way that the formal or even informal purchase of land become less and less affordable for poor, low-‐income and even middle-‐income groups (Interviews Ly, Meas). “Informal brokers and lenders may be used to facilitate land transactions, but interest rates can be extremely high. Banks may refuse to use land as collateral, and loans are often based on the physical condition of the structure, which places the poor at a disadvantage” (USAID n. d. : 10). Especially the speculation with prime housing keeps pushing prices up “to the point where housing is no longer affordable to the majority” (Percival 2012: 115). The expenditures for housing, including rent and payments for utilities such as water and electricity, already amount to 31% of the monthly per capita consumption in Phnom Penh, compared to 19% of the monthly per capita consumption in the rest of Cambodia (National Institute of Statistics 2015: 107).

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12.3. Increasing labour mobility

As outlined in Rural-‐urban labour migration mostly to Phnom Penh, labour mobility and migration increase in Cambodia, and large numbers of migrants move to Phnom Penh. They “do not want to build and own housing” (Interview Meas). One reason is their temporary stay (Interviews Khemro, Tep Makathy), be it for a season or a few years. A second reason is their limited budget for housing (Interview Kim), because firstly, most are low-‐skilled workers and earn little, and secondly, they generally send remittances home. According to Kim Heang, every year 100,000 to 200,000 migrants in need of rental housing arrive in Phnom Penh, why the supply is “never enough” (Interview).

12.4. Eviction of urban poor settlements

Many of Phnom Penh’s urban poor settlements have recently been evicted or are under threat of eviction (see From urban poor settlements to high-‐rises and megaprojects). Sia Phearum is also worried about the plan of the city hall to upgrade 100 urban poor settlements every year, fearing that this will either directly or indirectly lead to an eviction of the residents, too: “This year, there are 400 urban poor settlements. […] then in 4 years all will be upgraded and the people will have no more place to stay” (Interview). He considers that “when the slum area reduces, it will become difficult” (Interview). The reason is that when evictions occur, numerous renters “are typically ineligible for compensation or resettlements” (Davis 2006 according to Pho 2013: 89), i.e. are looking for a new rental home elsewhere. Also those that are subject to resettlements are often not happy in the resettlement area (Pho 2013: 55), so that they return, most likely as renters, “to slum dwellings because it is possible to make a living” there: “the location is more important than what type of dwelling it is”, concludes Pho (ibid.: 79), and states that “renting is becoming more pervasive in Phnom Penh” (ibid: 55).

13. Rental housing supply not matching the demand

13.1. Overall trend of the rental market

“Renters are an important portion of Phnom Penh’s population” (Pern 2014: IV), both in urban poor settlements and the rest of the city, states the Phnom Penh Rental Housing Survey. It also says, though, that “no exact or accessible figures exist to-‐date” (ibid.). In fact, there is one data source, not on the number of rental dwellings, but at least on the number and share of households living in rental dwellings: The Cambodia Socio-‐Economic Surveys (CSESs). Since 2007, they include both numbers and shares of households who rent (the CSESs for 2008 and 2011 are not available,

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though), and for 1996 and 2004, they provide at least shares of households who rent13. These values are represented in figures 10 and 11.

Figures 10 shows that the number of households in rental housing has continuously increased from 2007 to 2010, slightly fallen until 2012, drastically increased until 2013, thus reaching its current maximum of 46,827 households, and drastically fallen again until 2014. Compared to the sharp and continuous increase in the total number of households in Phnom Penh, the development in households who rent is very fluctuating and increases are relatively small.

13 The first CSES was conducted in 1994, the next ones in 1996, 1997, 1999 and 2004, and only since

Figure 11: Total number of households and number of households living in rental dwellings in Phnom Penh in thousands, 2007-2014. Source: Own figure based on National Institute of Statistics 2009, 2010, 2012, 2013, 2015.

Figure 10: Share of households living in rental dwellings in Phnom Penh, 1996-2014. Source: Own figure based on National Institute of Statistics 1996, 2005, 2009, 2010, 2012, 2013, 2013 and 2015.

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Figure 11, which includes one more decade, shows a strong increase in the share of households who rent from 1994 to 2009, though, from three to 15.3%. But it has declined since, with one exception in 2013, to 10.6% in 2014.

Given the huge numbers of migrants to Phnom Penh, who are all likely to rent, as well as the extensive development of condominiums, this trend is very surprising. In terms of condominiums or high-‐cost rental housing in general, it is important to note that, because households are counted, only occupied dwellings are included, so that units that could be for rent, but are kept vacant for speculation purposes do not appear in the statistic (National Institute of Statistics 2015: 13). Also, one household does not equal one unit (ibid.: 9). It can as well occupy several rental units, or, more relevant in case of poor and low-‐income renters like migrants, more households can also occupy the same rental unit: In this case the trend that less households share one unit does not show in an increasing number of households who rent, but in fact results in more rental units. It is further important that only “normal” households are counted, not included is the “transient population”, which is not further explained but likely to include many, especially seasonal, migrants, and not included either are institutional households, such as student dormitories and not explicitly, but likely also factory workers’ dormitories (National Institute of Statistics 2015: 118). Yet another point is that the municipality of Phnom Penh, for which the statistic is, includes not only 667 urban villages, but also 246 rural ones (ibid.:120), where homeownership rates are probably much higher. None of this explains the sometimes drastic declines in the number of households who rent, though.

13.2. Investment in high-‐cost rentals exceeds local demand

Investment is enormous in Phnom Penh’s high-‐cost real estate segment, as for instance a 20 % increase in condominiums per year shows (Meng 2015b: n.p.). Prices of centrally located condos, which peaked at an average between USD 1,800 to 2,500 per m2 throughout the economic boom (CBRE 2012, n.p.) show also, why this investment is favoured by many real estate developers. The profits are enormous. But the cost of housing is “out of reach from all but the top few per cent of Cambodians, thus the level of demand is restricted” (Percival 2012: 124). This is why large parts of condo sales are to foreigners: according to Seng Bonna, director of Bonna Realty Group, 60 to 70 % (according to Meng 2015b: n.p.), and according to Kim Heang even 90 % (Interview). The demand for high-‐cost housing is further “very much speculative. The buyers seem to be from the top, very high income […], who buying for sell, buying for rent, rather [than] buying for living” (Interview Tep Makathy). This is why the physical occupancy rates are often low, for example in the central high-‐rises of Rose Condo (Meng 2015b: n.p.) and in the satellite cities Camko City (Percival 2012: 148) and Grand Phnom Penh International City (ibid.: 149).

2007, CSESs are conducted annually.

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Some experts fear that in the future not only many units, but entire buildings will be deserted (Meng 2015b: n.p.).

Nevertheless, the Cambodian government supports foreign investment in real estate: In fact, by law only Cambodian persons and companies, i.e. companies of whose shares at least 51 % are owned by Cambodian persons or companies, are entitled to own land in Cambodia (Article 44 of the 2001 Land Law). It used to be unclear to what extent this also refers to real estate, which has been clarified with the Law on Foreign Ownership of 2010 that now enables foreigners to, under certain conditions, purchase property above the ground floor (Horton 2014: n.p.).

13.3. Rental supply in the middle market segment slowly increases

Even given that demand for high-‐cost housing increases, it is expected that supply will outstrip it in coming years (Leng Vandy according to Horton 2014), or that this is already the case now: “The competition for high-‐end market is become very tight”, “the supply side [has] now become more than the demand side maybe” (Interview Khemro). This is one reason why developers are increasingly turning to the middle market segment. The same applies to the banks: “Now if you go out and study with the bank they start to do middle-‐income housing projects […] that cost below 30,000 USD per unit” (Interview Khemro). Another reason is the steady growth of Cambodia’s middle-‐class over the past years, so that the purchasing power of this income-‐segment has increased (Knight Frank 2015: 9).

The profit margins are still smaller in the middle-‐ than in the upper-‐income market (Interview Khemro), but according to Khemro investors “expect to get some incentive from the government, so the margin of the profit will increase” (Interview). Indeed the public authorities plan this because they “hope to make [the] low-‐cost housing market as attractive as the housing market for the high-‐end” (Khemro Interview).

To describe the new openness of the middle-‐class towards apartments, Sear Rithy, chairman of Worldbridge Land Co., tells the story of a young couple who just got married, and actually wants to buy a landed house, but cannot afford it in the city centre. Instead of moving to the suburbs, from where it takes at least one hour to the centre, where they work, he reckons that they would rather live in an apartment in the centre, “because location is very important” (Interview). Also Po Eavkong, managing director of Asia Real Estate Cambodia, thinks that the cost of living on the outskirts is now burdened by travel time and expenses to such an extent, that the middle-‐class will increasingly move to more central locations with hospitals, social services etc. available, even if they have to forgo ownership (according to Meng 2015b: n.p.).

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13.4. Insufficient supply of low-‐cost rental housing

While supply seems to slowly shift from the upper-‐market to the middle-‐market segment, “supply of housing has not been seen as very active regarding the poor and vulnerable groups” (Interview Tep Makathy). The profit margins are low there, especially compared to those in the upper market segment, and also to those in the middle market segment, which will not be exhausted for a long time. Under these conditions, “to be frank, who wants to deal with the poor who cannot afford?”, asks Tep Makathy (Interview). It will be elaborated on the provision of low-‐cost housing in the following sections, using the case of garment factory workers. A common problem is that as land values increase, landlords sell their houses in the city centre and with this money build or buy houses in the periphery: on a larger plot, with more units, and a higher standard, so that their incomes from rents increase (Interview Kong). Although the number of units thus increases, disadvantages for renters arise: They thus have to move to the periphery where the access to services, labour and income opportunities is more difficult, and have to pay more because of the increased standard (Interview Kong). But also housing location and quality will be detailed in the following.

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14. Interim Conclusions Cambodia sees rapid economic growth, largely due to its industrial and service sectors that expand in urban areas. While the garment industry is still the major contributor to Cambodia’s GDP, the construction sector has grown to the second largest one. Both sectors are largely foreign-‐funded. Also, both are closely related to the unprecedentedly strong urbanisation that Cambodia faces. Of all Cambodians, roughly one third has migrated and about seven per cent are rural-‐urban migrants. They are attracted by labour opportunities that are less dependent on seasonal factors, have a higher labour productivity and provide higher incomes, as well as other factors like better access to services and education. Very large parts of rural-‐urban migrants find employment in the garment sector, which currently provides 700,000 jobs in 655 factories all over Cambodia, of which more than half are located in Phnom Penh. Anyway, Phnom Penh is where three quarters of the rural-‐urban migrants go to, almost 800,000 annually. Both the garment sector and rural-‐urban migration to Phnom Penh are expected to keep growing over the coming years, thus that Phnom Penh’s population will further grow, in particular poor and low-‐income groups. The pressure on land will increase because of this, but also because of the growing construction sector’s strong activity in Phnom Penh that focuses on high-‐rises and megaprojects for middle-‐ and high-‐income groups and is highly speculative. Land values and property prices thus continue rising, so that the housing situation for poor and low-‐income groups gets more and more difficult. Existing urban poor settlements are threatened with eviction and relocation because of development projects. Of the rural-‐urban migrants, only a few can arrive at relatives’ or friends’ places, and since 2001, the Land Law prohibits the informal occupation of free land, which is hardly available anymore anyway. Among the hundreds of thousands of rural-‐urban migrants that arrive every year, low-‐cost renting is thus the prevalent housing option. Although data and research are very limited on Phnom Penh’s rental housing market, it becomes obvious that there is a mismatch of demand and supply, as only the private sector provides housing, and the middle-‐ and upper-‐market segments are much more profitable for it than the provision of low-‐cost housing. Rentals do not have a good reputation in Cambodia and are more work for housing providers, so that the focus in good locations is on housing for sale. Poor and low-‐income groups are thus pushed further and further outside the city and inequality and segregation are likely to deepen. Sia Phearum, secretariat director of the Housing Rights Task Force, summarises: “I am very concerned for the next five years. The poor have no chance for renting, at least not in the city centre. Outside the city maybe, but that is very far“ (Interview).

The next half of this study will analyse this difficult housing situation with a case study of garment factory workers. With the garment sector being huge in Phnom Penh, its workers are the largest rather homogeneous group of rural-‐urban migrants, sharing the same occupation, similar life styles, and they mostly live concentrated in

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proximity to the factories. Their budgets are limited and their housing conditions known to be problematic, but in contrast to other groups of rural-‐urban migrants, their sector is seen as economically relevant, why they receive political attention. For these reasons, their example will be useful to not only analyse the current housing situation and the housing needs, but also to explore and discuss the prospects to improve the housing situation.

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Section IV – Garment factory workers’ housing in Phnom Penh

15. Garment factories in Phnom Penh Phnom Penh accounts for more than half of Cambodia’s 655 garment factories (June 2016; GMAC 2016) and for roughly 40% of Cambodia’s 700,000 garment factory workers14. Ath Thorn, president of the Coalition of Cambodian Apparel Workers' Democratic Union (C.CAWDU), expects Phnom Penh’s garment sector to further grow (Interview). However, there is a trend that factories are being established further outside the city. In the past, most factories were set up in a belt of development on Phnom Penh’s outskirts, about 20 to 30 km from the city centre, mostly on former farmland (Interviews Loo, Sok Vanna, Paling 2012: 3). They have concentrated along the national roads 1, 2, 3 and 4 (Interview Sok Vanna). While the government used to encourage the factory’s construction there (ibid.), it now encourages it closer to the villages, where most of the workers come from, and in small and medium-‐sized cities (Interview Khemro). This is in line with the government’s decentralisation policy and aims at decreasing the migration to Phnom Penh (ibid.). According to Ken Loo, Secretary General of the Garment Manufacturers Association in Cambodia (GMAC), the construction of new garment factories in Phnom Penh is even not allowed anymore (Interview), but this could not be verified. But factories choose locations further outside the capital also by themselves: to be closer to sources of labour, to avoid that their workers are stuck in traffic jams, and to avoid the high land and rent prices of Phnom Penh (Interview Ath).

16. Characteristics and needs of garment factory workers Of those who work in Cambodia’s garment factories, 90% are migrants (Chansamphors 2008: 10), mostly from rural areas (Interview Loo). Their education level is rather low, they by median completed grade 7 from high school (Sreang et al. 2015), and they are young: between 18 and 35 years old (Clean Clothes Campaign 2013), with a median age of 26 (Chansamphors 2008: 10). Over 80% of them are female (Clean Clothes Campaign 2013). Mostly, they are unmarried (Chansamphors 2008: 10, Interview Sok Vanna): Ath Thorn estimates the share of singles at 70 to 80 % and explains that employers prefer them, because they do not have children and hence cheat less on their working time (Interview). Being far from their family, young, mostly female and single, the workers are vulnerable to robbery and kidnapping as well as to sexual abuse and rape, and thus have particular security needs (Chansamphors 2008: 33-‐34). The few workers that are married are, if they 14 The values that experts give differ slightly: e.g. Ath Thorn estimated that 30 to 40% of in total 1 million garment factory workers in Cambodia work in Phnom Penh (Interview), Beng Hong Socheat Khemro estimated that there are more than 300,000 garment factory workers in Phnom Penh (Interview).

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move close to the factory, likely to bring their husband along, unless he has permanent work in the rural area (Interview Sok Vanna). They have on average one child (Sreang et al. 2015: 18), so less than the Cambodian average, which some, if they move to their workplace, leave behind with their family (see Rural-‐urban labour migration mostly to Phnom Penh). Some bring their mothers or sisters along to take care of the child (Interview Sok Vanna). The garment factory workers have hardly any job security, with some 90% of them having no permanent but only fixed duration contracts (Solidarity Center n.d.), typically for only 3 to 6 months (Harima 2012: 26). Some of them just come seasonally (Interview Sok Vanna), but generally they stay for some years: According to the chairman of the real estate company Worldbridge Land, Sear Rithy, “they […] stay there for one year or maximum one and a half years. Then they leave already” (Interview), while a survey found that the median years workers stay at a factory are more than two (Sreang et al. 2015). The workers’ average income including overtime etc. is generally more than the previous wage in rural areas (Chansamphors 2008: 3). However, due to various factors they remain very poor (Interview Sok Vanna): The costs of living are higher in the city (Chansamphors 2008: 5); The only insurance they generally have is for work accidents, all other medical expenses etc. they have to cover by themselves (Interview Sar); If they have children they need to pay school fees; and they generally have to support at least one other family member: Garment factory workers are generally the only full-‐time and regular income-‐earner with a salary over USD 60 from their family (Sreang et al. 2015: 18) and send remittances back – typically 40% of what they earn (Interview Conklin/So). Sok Vanna, programme manager for Cambodia of UN-‐HABITAT, considers garment factory workers, compared to other migrant workers, to have good financial management and being very aware of savings (Interview). It is clear, though, that with their very limited budget and temporary stay, they need housing for rent (Interviews Sear/Tan, Sok Vanna). They generally want to stay close to the factory (Interview Loo, Pern 2014) – Ath Thorn considers that 1 km is already far in Phnom Penh (Interview) – because also transport is expensive, and they often start to work early in the morning and end work late at night, when it is good to reduce travelling time also for security reasons.

17. Daily commute from rural home to urban workplace Not all garment factory workers who work in Phnom Penh live there. About 30 to 40% of the workers keep living in their family’s home in the village they come from, typically some 20 to 30 km from the factory in a province close to Phnom Penh (Interview Ath). Reasons for not moving to Phnom Penh include that they want to stay with relatives or friends, that housing close to the factory is too expensive or they do not want to spend money on rent, or they want to have better housing conditions with more space, a place to cook etc. (Chansamphors 2008: 32, Interview Ath).

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They then commute to their workplace every day. Trucks pick them up from their villages and transport them to the factories. In rare cases the transport is organised by the factories, but generally the workers organise it (Interview Loo). The factory, if it does not organise the transport itself, has to provide a transport allowance of USD 7 (GMAC 2015: 2). Workers generally pay USD 10 for the transport per month (Interview Sar), so as much as for cheap rental housing (Interviews Sok Vanna, Ath). Each journey may take 1.5 to 2 hours, which means that some workers start from home already before 5 am in the morning to arrive for work from 7 am on, some work until 8 pm and thus only come back home after 10 pm at night (Interviews Ath, Sok Vanna). The trucks they take are usually open and provide no protection from weather events like wind and rain (own observation), with daily precipitation reaching up to an average of 257 mm in Cambodia’s wet season (ClimaTemps.com 2016: n.p.). Workers are crowded together on them: There might be 30 to 50 people on one truck (Interview Ath), sometimes sitting on benches, but often standing for the whole journey, too. Drivers are often unskilled and have no driving licences (Channyda/Worrell 2014: n.p.). Under these circumstances, many accidents occur (Interview Sok Vanna). In 2015, 130 workers were killed and 7,227 injured on Cambodia’s roads (David/Rollet 2016: n.p.).

18. Housing close to the factory However, around 60 to 70 % of the garment factory workers who work in Phnom Penh also live there (Interview Ath). They normally permanently stay there (ibid.), except that the migrants among them usually visit their homeplace and family three to four times a year for the long public holidays (Chansamphors 2008: 32, Interview Ath). The large majority shares rented rooms with co-‐workers, friends or relatives in Phnom Penh (Chansamphors 2008, Interviews Ly, Ath). However, exact numbers on

Figure 12: Workers commuting out of Phnom Penh. Source: Mai 2013: n.p..

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this are not available. As the demand for cheap rental housing around the factories has increased, also the supply has quickly grown (see Providers of garment factory workers’ housing). Ath Thorn considers that “all those that want to rent will find something, it’s not a problem, close or a bit far” (Interview) and Paling (2012: 3) even finds that “as of 2011, many of the [new rental] communities remained vacant”. On the other hand, Kim Heang reports that “when new rental housing close to the factories is on offer, no advertisement on radio, TV, nowhere is needed. The people come in the first days to the place to make contracts. The demand is very high” (Interview), and Sok Vanna even says that “rental housing is often not available” (Interview). Most probably, the assessments differ depending on expectations in terms of the quality, price and proximity to the workplace of the housing, and it can be said that some kind of housing is always available, but it may well be that only in bad quality, for a high price and far away from the factory.

Garment factory workers typically share rooms between two to seven people (Sothary Kun, former garment worker and now singer-‐activist, according to Tolson 2014: n.p.). The number of sharers tends to decrease and the space per person to increase (Interview Kim), but the average living space per Cambodian garment factory worker is still very small: One study put it at 3.6 m2 (Chansamphors 2008), another survey found that usually three people share a room with a median size of 12 m2, resulting in 4 m2 per person (Sreang et al. 2015). For Phnom Penh in particular, experts more or less confirmed these numbers: According to Ath Thorn, three to six people usually share a “small and narrow room” (Interview), and according to Sok Sam On, “rooms are too small” with, for example, four to six people having a 12 m2 room with a toilet or a 15 m2 room with a toilet and a kitchen (Interview). These estimates are slightly higher than for Phnom Penh’s poor and low-‐

Figure 13: Garment factory workers’ housing in Phnom Penh. Source: Oeurm n.d..

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income renters as a whole but still only slightly above the minimum standard of 3.5 m2 of covered living space per person that has been set by a wide range of humanitarian agencies (Sphere Project 2011).

18.1. Rents increase along with minimum wage

The rent which workers pay of course depends on the room’s size, the number of people with whom they share it and on the housing type and quality. According to a survey of Sreang et al. (2015: 20), Cambodian garment factory workers’ median rent or house maintenance costs are USD 12.5. The variations seem to be +/-‐USD 7.50: According to higher estimates, for instance of Sothary Kun, “usually a [Cambodian] worker has to spend approximately $15 to $20 for a rented room per month” (according to Tolson 2014: n.p.). Lower estimates were given for example by Tep Kosal, who observed that workers in Phnom Penh share rents of USD 60 among 6 people, so pay USD 10 per person per month (Interview), or by Ath Thorn, according to whom “most workers are paying $20 to $50 for substandard rooms shared between three to five people” (according to Sokheng/Taguiam 2015), so a maximum of USD 10 per person and month. He notes that workers in “Phnom Penh are sometimes forced to shell out up to $100 monthly”, too, though, so up to USD 20 per person and month (ibid.). He categorises workers’ rooms in Phnom Penh into low-‐price ones for USD 20 to 30, medium price ones for USD 30 to 50, and high price ones for over USD 50 (Interview), and Sok Sam On explains that one criterion for a higher price is the room’s location on the ground floor, with space to leave a motorbike (Interview). Generally, workers consider the price more important than the quality and take the cheapest room they can get (Interview Ath).

According to the above-‐cited survey of Sreang et al. (2015: 20), garment factory workers pay in addition to their rent a median of USD 2.9 for cooking energy, of USD 2.5 for electricity, and of USD 1.75 for water. This results in median expenses of USD 19.65 linked to housing, which is 9.5 % of workers’ median total consumption expenses of USD 207.5 per month (ibid.). Much larger expenses are directed towards other fields such as USD 116.3 for food and beverages, USD 78.79 for alcohol and cigarettes, or USD 45 for loan payments (ibid.).

In the low-‐budget rental sector, so for most garment factory workers, landlords increase rent prices every year (Sokheng/Taguiam 2015: n.p., Interview Ath). This is not a new trend resulting from the boom in land and real estate prices in Phnom Penh, but has also been like this before (Interview Sar). It is further “common practice that landlords [additionally] increase the rents for garment factory workers when there are minimum wage increases” (Sokhorng 2015: n.p.). This has been the case with at least “three minimum wage increases introduced since 2013 [that] have been met with consecutive rent hikes by landlords targeting low-‐cost renters, effectively diminishing the benefits of the wage increases” (Whitehead 2015). Dave Welsh, former country director of the Solidarity Center, gave the example that “when wages go up by $5 to $10, you will see rents around factories and other costs go up

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by around the same amount” (according to Sokheng/Taguiam 2015: n.p.). In case of the latest minimum wage increase from USD 128 to 140, the rents of many have even creeped up a month in anticipation (Sokhorng 2015: n.p., Interview Conklin/So), and although the wage raise was only 9.3 %, rents were increased more strongly by some landlords: Pav Sina, president of the Cambodian Union for the Movement of Workers, reports increases of 10 % (according to Sokhorng 2015: n.p.) and So Somalay even increases of up to 50 %, e.g. from USD 40 to 60 for a room or from USD 5 to 10 per person, respectively (Interview). Further increases might follow.

18.2. Poor housing quality and lack of security

As most garment factory workers’ share small rooms with other people, there is a lack of private sphere and space: Normally, they have only one place for sleeping, eating etc. (Interview Ath). Often, the rooms get hardly any natural light (ibid.) and are dark (Sokheng/Taguiam 2015: n.p.). Also, half of Cambodia’s garment factory workers complain about heat and not enough fresh air in their rooms (Chansamphors 2008: 28): Although monthly average temperatures range from 26 to 29.5°C, and average daily sunlight hours range from 4.2 to 8.6 in Cambodia (ClimaTemps.com 2016: n.p.), many landlords do not build ceilings under roofs of corrugated iron (Interview Sar), and most rooms have no ventilation (Sokheng/Taguiam 2015: n.p.), let alone air conditioning. The problem is exacerbated when workers have the night shift and sleep during the day. 35 % of Cambodia’s garment factory workers further complain about poor sanitary facilities (Chansamphors 2008: 28): Workers usually share toilets, sometimes there are only one to three for 20 to 30 rooms (Interview Ath), and in some cases, particularly right after having been build, accommodations lack water supply (Interviews Sok Vanna, Ath). 24 % of Cambodian garment factory workers mention flooding as a problem (Chansamphors 2008: 28). The infrastructure is also often problematic in terms of electricity (Interview Ath), which is partly too low voltage, partly cut off (Chansamphors 2008: 28 ) or sometimes not supplied at all (Interview Ath). Besides the accommodation itself, also the areas where garment factory workers’ housing is located are often bad, because there is noise pollution (Chansamphors 2008: 28), polluted air, it is not clean and smells (Interview Ath). The areas often have large gaps in providing essential services like education, health and legal services (Oeurm 2013: n.p.).

Garment factory workers’ housing is generally insecure (Harima 2012: 26). Sometimes, workers are robbed, but this is not the largest concern “because there’s not much money” (Interview Ath). A much bigger problem is sexual harassment and rape (Interview Conklin/So). As outlined above, young, female and single workers are particularly vulnerable. According to Ath Thorn, “some people just look down on female workers with husbands, but do not disturb them, but on single women they look down and also lobby them to do something” (Interview). It is especially dangerous for them if their housing is in quiet areas (ibid.) and they come home or leave at night time, which happens very much with nightshifts. There is often no

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lighting and inadequate policing (Oeurm 2013: n.p.). While some workers are “under constant fear of robbery and rape” (ibid.), most landlords do not feel responsible – So Somalay reports that some even question that sexual assaults can happen “if the girl is not in love” (Interview). For security reasons, the workers hence often travel in a group, but Ath Thorn rightly notes: “How can they live in a group all the time?”, “It’s not easy” (Interview).

Bad housing is a problem particularly for newly arriving migrants: Having lived in Phnom Penh for longer, it is possible to, over time, move to better housing, whereas newcomers first get the worst housing that others have left behind (Interview Ath).

18.3. Providers of garment factory workers’ housing When garment factories are established, their surroundings usually undergo ad hoc economic development: markets with formal and informal shops, various services and also housing quickly emerge (Interview Loo). There is no public provision of garment factory workers’ housing, and also the factories are only very rarely directly involved in it. But private investors, who either already own land or see land for sale next to the factory, are usually quick to construct rental housing when they see demand for it and thus income opportunities arising (Interviews Loo, Sok Vanna). These private investors are both local people, who operate on a small scale, and local and foreign people, who build whole housing complexes. The large-‐scale investors are often somehow linked to the factory owners or even the factory owners themselves, but not acting in the company’s name. Housing developers can easily convert whatever land around the factories into residential land, as there is still no proper land use planning (Interview Tep Makathy). It is unclear to what extent this will change now that the urban master plan has been approved. The rising demand for land, its conversion and development around new factories generally result in significant increases in land prices (Interview Sok Vanna), even when a factory is only planned and not yet built, why many speculative land purchases occur, too (Interview Kim).

Renting out rooms to workers’ often starts from a family basis (Interview Tep Makathy). Some locals living around the factory upgrade their own house, they “either purpose-‐build or convert existing structures into these rooms that the workers will rent” (Interview Loo), and some also newly develop land (ibid.). Often, they expand the amount of housing that they rent out to workers step by step: “If they have money, they rent [out] a room. If they have more money, another room” (Interview Ath). For the investment in additional rooms, they may also borrow money from banks. Normally, the rooms they offer to workers have a separate gate, and 60 to 70 % are in separate buildings (Interviews Sar, Loo). The housing quality varies widely. While some small-‐scale landlords have built from bamboo or palm tree leaves, their rooms are not clean and there is no approved water supply, there are also some who provide good quality rooms, which of course shows in differences in prices (Interview Ath).

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Garment workers’ housing is also provided on a large-‐scale. Tep Makathy “noticed that renting now [has] become a bit more professional and large-‐scale. […] Large units have been built and [are] being built [that] meet the demand of the garment factory workers, especially in locations where there is a concentration of the factories” (Interview). According to Paling (2012: 3) “until 2011, 90 private communities had been developed [in Phnom Penh], some of them gated, some consisting of many identical shop houses between one and four storeys”. All this is still individual, though: “It’s just one guy who owns a piece of land, build one block, that’s his. He’s not a company, he’s not a real estate developer” (Interview Loo). These providers may have already owned land around the factory or have specifically bought it. They may be from Phnom Penh or the area (Interview Sar), or as well foreign. Most of them know the right people in local politics, though: “Not everybody can do that […]. You have to have a space, you have to have the capital to build that, you have to pay off people maybe to doing a blind eye”, William Conklin, country director of the Solidarity Center, concludes from his experiences in other countries (Interview). So Somalay, programme officer of the Solidarity Center, assumes that many large-‐scale investors are family members of factory owners, although they rarely say so (Interview). According to Ken Loo it is not only “for sure” that some developers of factories are in dialogue with providers of housing, also he notes that some of them are landlords themselves, just that they do it as a business completely separate from the factory (Interview). Ken Loo did not provide information on how often this is the case (ibid.). Anyway, it is very frequent that factory developers engage in real estate speculation, as will be outlined below in Garment factories engage only indirectly in housing market.

By law, factories are required to provide accommodation or transport for their workers, and if not pay them a USD 7 allowance per month to pay for accommodation or transport themselves (GMAC 2015: 2). Very few factories do provide accommodation, though – exact numbers are not available. The estimates range from only a few shoe factories (Interview Loo) to 5 to 10 % of Phnom Penh’s garment factories (Interview Ath). So Somalay notes that many of the factories that say they provide accommodation actually do not (Interview), which makes assessments more complicated. According to Ken Loo, factories only provide housing if in their specific location there is a lack of supply of labour; Then they may provide housing to attract workers (Interview). But even if factories provide accommodation, it is not free of charge (Interview Ath). Sok Sam On notes that apart from having the same price, housing provided by factories is also still low quality – the only advantage is that the way to the factory is short (Interview).

A place where it is more common that factories provide housing is the Phnom Penh Special Economic Zone (PP SEZ), although it is not obligatory for factories there, either. One reason may be, as outline above, the location: Ken Loo reckons that the PP SEZ is neither close enough to Phnom Penh to attract workers from there, nor far enough outside the city to attract workers from the villages (Interview). Another

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reason may be the organisation: Housing in SEZs is either developed by the SEZs themselves or by private developers and is then available to the different investors. But the most important reason is that in the PP SEZ, companies are located which need workers with higher skill-‐levels. All factories provide housing for their expatriate and management staff (Interview Loo) and especially Japanese companies also for more employees. Some of them pay the rents fully, some of them subsidise them (Interview Sar). The few garment factories in PP SEZ do not provide housing there, either. Also, it is often not desirable that workers both work and live in SEZs, because labour unions and NGOs are not allowed to enter, cannot check the work and housing conditions, cannot encourage workers to fight, and workers are thus rather isolated (ibid.), which might be an objective of the factories.

18.4. Legal framework for garment factory workers’ housing

18.4.1. Regulation on payments for electricity and water

Many landlords in Phnom Penh charge their poor and low-‐income tenants, so mostly students and migrant workers and in particular garment factory workers, much more for electricity and water than the prices of the state-‐run providers actually are (Pern 2014: VI): Up to USD 0.62 instead of 0.15 per kWh for electricity (Keo Ratanak, director general of EdC, according to Pisey 2015: n.p.) and USD 0.50 instead of 0.38 per m3 for water (Pern 2014: 25). To prevent this from happening, in January 2015 the Cambodian prime minister Hun Sen and the state-‐run electricity provider Electricité du Cambodge (EdC) launched an energy discount initiative: EdC has installed connections to 116,914 rental rooms (as of July 2015) in districts of Phnom Penh that are heavily populated by garment factory workers, like Russey Keo, Meanchey and Dangkor (Taguiam/Chakrya 2015: n.p.). Using meters, EdC can thus charge tenants directly and avoid that they have to pay more than the EdC price of USD 0.15 per kWh due to manipulation by landowners (ibid.). Eligible tenants are those who consume less than 50 kWh per month (ibid.), which Hun Sen considers realistic “if they use only two lights and one fan” (according to Reaksmey 2015: n.p.). Although there were initial doubts, for example that many eligible tenants would lack the documentation they need to create own electricity accounts with the city because they move around frequently (Ath Thorn according to Reaksmey 2015: n.p.), or that landlords would not allow the installation of meters (Ken Loo according to Reaksmey 2015: n.p.), so far, the covered tenants, labour union leaders and NGOs are largely satisfied with the initiative, and ask for its expansion to more places in Phnom Penh (Taguiam/Chakrya 2015: n.p.). EdC had planned to, from March 2016 on, use potential profits to further cut kWh prices, and to set them at USD 0.12 for the poor who consume less than 10 kWh per month (ibid.), but no information is available on the implementation of this plan.

Also, Hun Sen has ordered the examination of a similar initiative for water in February 2015 (Sokheng/Taguiam 2015: n.p.), but information is still not available on this plan, either.

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18.4.2. Rent control law

The same year the electricity discount initiative was launched, a rent control law was passed particularly for garment factory workers, to avoid that rent hikes further accompany their minimum wage increases (Sieng 2015: n.p.). It locks the rents of the workers in for two years (Whitehead 2015: n.p.). In case of new rental agreements, landlords and tenants have to agree to an at least two-‐year contract, during which period the tenant can stay for the same price (ibid.). For existing rental agreements, EdC surveys the areas with a high density of garment factory workers’ housing to assess rent prices, which will then be fixed for two years, too (Sieng 2015: n.p.).

Critics worry that landlords will increase rents immediately, before EdC even gets to assess them, and “factor in future inflation, expected market changes, and the increased risk they face due to rent control” (Ward/Seila 2015: n.p.), so that rental prices will increase even above current market levels. Also, they think the exclusivity of the law might be an incentive for landlords to rent to other people rather than to garment factory workers, and that the law might thus be an improvement for those workers that already have rental agreements, but make it even more difficult for newly arriving workers (ibid.). Another critique is that garment factory workers’ housing might decrease because its supply becomes less rewarding, and that thus, prices might further increase, housing might only be available further away and with further decreased quality (ibid., Nguon Chhayleang, CEO of Century 21 Regent Realty, according to Sokheng/Taguiam 2015). Ward/Seila (2015) even suspect the “deterioration of garment worker ghettos into urban slums”. Also, there is speculation that the law might cause double contracts – “one reflecting the official price to present to authorities and regulators, and another unofficial contract, which more accurately represents the agreement” (ibid.).

Many stakeholders welcomed the rent control law, though: Some, because they hope that it will reduce calls for higher wages, stabilise the workforce and calm industrial relations in the important garment sector (Matthew Rendall, Partner at Soksiphana & Associates according to Whitehead 2015: n.p.), others because they hope for better living conditions of the workers. Generally supporting the law, NGOs only see some gaps in its implementation – How much can landlords increase the rents after two years? How will they be punished in case of non-‐compliance? – and point to the importance of effective monitoring not only by the NGOs, but also by the public authorities (Interview Bour). They also see it as the tenants’ duty to, in order to protect and defend themselves, provide public authorities, especially village and commune chiefs, with information on their housing’s quality and price (ibid.). Unions also pointed to the importance of effective implementation: “the authorities have done nothing to enforce or spread information about it [the law] to landlords or workers”, so that “workers have not received any benefit from the law; whenever the minimum wage increases, the rent will increase too” (Sina, president of the Cambodian Union for the Movement of Workers, according to Sokhorng 2015: n.p.).

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Section V – Stakeholders’ approaches to garment factory workers’ housing in Phnom Penh

19. Labour unions focus on minimum wage Compared to other groups of workers, garment factory workers are relatively well organised. Reasons include that they are concentrated in terms of their workplaces and thus easier to reach for labour unions, and that the garment sector is a government priority and they thus have a better negotiating position. As a result, they are the only group of workers with a minimum wage (Interview Sar).

Among Cambodian labour unions in general and also among garment factory workers’ unions, there is a division between independent labour unions and pro-‐government labour unions (Interview Conklin/So). Interviews for this study were conducted with independent labour unions only. Their members often “operate in an environment of danger and fear” (Harima 2012: 26), although “there are no legal restrictions on […] joining or forming trade unions in Cambodia” (ibid.). Over the last years, they have been faced with many crackdowns, arrests and even deaths, let alone loss of employment (Interview Sar). The judicial system cannot be trusted, because the “rich can pay to the government and judges” (ibid.) and, as Cambodians often say to describe the consequential powerlessness of the poor, “an egg cannot break a stone” (ibid.). Still, labour unions are not deterred from carrying out their work. Sar Mora, president of the Cambodian Food and Service Workers’ Federation (CFSWF), is convinced that “we have no choice, we have to fight” (ibid.).

Over the last years, the main concern of the labour unions has been the garment factory workers’ minimum wage. They criticise that, although garment factory workers work on average ten hours a day for their minimum wage of USD 140, it is so low that working overtime and on public holidays is common to complement it (Interviews Sar, Ath). According to the government, it is enough to afford not only the life of the worker but also of one additional person in Phnom Penh (Interview Conklin/So). William Conklin considers this a “myth”, though, asking “but how do they survive? Where do they live?” (ibid.). What the unions fight for is a living wage of USD 205 monthly (Interview Sar).

As conflicts about the minimum wage have been going on “for too long” and unions are worried about the reputation of the industry, they increasingly consider pushing for other kinds of remuneration including a housing allowance (Interview Sar). This is still a very marginal topic, though, and housing has otherwise hardly been considered as a separate topic, despite the unions reckoning that “room rental is very important to the worker (Interview Ath). For at least two reasons, it is not sufficient to treat housing as part of the minimum wage discussion, though. First, because minimum wage increases are generally followed by rent increases (see ), which both decreases the positive effect of the wage raise and implies no improvement in housing conditions. Representatives of the labour unions are aware of this. Secondly,

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labour unions doubt that if the minimum wage were higher, workers would decide to spend more money on better housing. According to William Conklin and So Somalay, Programme officer at the Solidarity Center, housing is not the workers’ priority and they would prefer buying other items or remitting more money home over spending even only slightly higher amounts on better housing (Interview). The Solidarity Center recalls a case where workers’ food allowances were increased and it “is not sure they spent that on food” either, although bad nutrition is known to be a serious problem among garment factory workers (ibid.), and also points to a case in Sri Lanka, where workers were given subsidies to improve their housing, but used the money differently (ibid.).

Hence, labour unions consider it better to prohibit housing below a certain standard, to prevent workers from minimising costs to their own detriment (Interview Conklin/So, Ath Thorn according to Sokheng/Taguiam 2015). Although other regulations, for instance of the labour law, are not always complied with, and also minimum housing standards “some might practice, some not”, William Conklin is of the opinion that at least, the standards should exist (Interview). They should be based on similar international or regional standards and ensure large enough, light and clean rooms, with clean water supply, cooking facilities and toilets (Interview Conklin/So, Ath Thorn according to Sokheng/Taguiam 2015), which the Solidarity Center reckons is still possible for USD 15 a month (Interview). It is considered important that rooms are available for rent (Interview Ath) and the Solidarity Center outlines that if workers had the choice, they would always choose rooms for themselves, because that makes it easier to sleep and do whatever they want at whatever time (Interview). In view of security problems, especially for women, the Solidarity Center proposes that dormitories should be fenced in, have only one gate that is guarded by security personnel, everything should be well lit, the rooms should have locks and inside toilets, and always, somebody should be available in case of problems (ibid.). For security, but as well for reasons of transport times and costs, housing should be close to the factory (Interview Sar). Also, basic services like a clinic, a school, as well as a market and some opportunities for recreation like barbecue places should be around (Interview Ath).

Labour union representatives had different opinions on whose role it is to improve the housing situation. William Conklin considers it necessary that the public sector conducts a housing census that assesses current conditions and actual needs by getting the input of the workers (Interview). In terms of who should finally take which measures, the opinions of union representatives differ. Ath Thorn, president of the country’s largest independent union, the Coalition of Cambodian Apparel Workers' Democratic Union (C.CAWDU), reckons that the factories should build dormitories (Interview), while several others consider the state in charge (Interviews Conklin/So, Sar). In Sar Mora’s opinion, it is part of the state’s responsibility of social protection to provide everyone with proper housing, i.e. to build low-‐cost rental housing for workers, too, for instance using the taxes it collects

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from the workers (Interview). That the state does not have funds and no land either, he as well as William Conklin and So Somalay doubt, rather they estimate that most of it is directed towards the private sector (Interviews). An increasing involvement of the private sector they consider unrealistic, pointing to the unwillingness of the public sector to introduce stricter regulation, but also to the lack of attention that is paid to regulation. For example, they note, incentivising landlords to provide low-‐cost rental housing with tax reductions would not be effective as probably, only 1 % of all landlords pays taxes at all (Interview Conklin/So). Frustration and a feeling of powerlessness in face of increasing privatisation, strong influence of the private sector and prevalence of corruption are obvious. Nevertheless, unions unanimously welcome approaches like the recently established rent control law (see Rent control law).

20. Garment factories engage only indirectly in housing market The employers of the Cambodian garment sector are represented by the Garment Manufacturers Association in Cambodia (GMAC), which has 616 members (GMAC 2016: n.p.), so a large part of Cambodia’s 655 factories. Their secretary general Ken Loo sees no need for a supply of more or better housing for garment factory workers (Interview). According to him, workers would be able to rent better housing, but freely choose to save on housing in order to spend more on other items:

“Quality relates to cost, so the quality […] in which the workers live […] has a direct correlation to the amount of money that they are willing to spend. Is there better housing available? Yes. Yes. The answer is absolute yes. Do the workers have to stay in […] unwell and less desirable environment? No, they don’t. Are there options? Yes! But it costs more. They don’t want to spend more. Simple.” (Interview Loo)

While Ken Loo understands that workers need to use parts of their wage for remittances, he considers that workers could use, e.g., expenses for phones for good housing instead (Interview). If they want to afford both, he does not consider this a problem, either, but reckons that simply “you’ve got to work hard” (ibid.). He says this given that the typical work of garment factory workers is ten to twelve hours on six days a week (Tola Moeun, head of the Community Legal Education Center, according to Tolson 2014: n.p.).

The rent increases that regularly follow minimum wage raises are a huge problem in Ken Loo’s eyes (Interview). Generally, he is against high minimum wages, but favours performance-‐based remuneration (ibid.), and in particular, he criticises the labour unions for not having aimed at wage raises that are not open to the public, so that landlords would have not known (ibid.). He sees public minimum wage increases as a cause for inflation, because they result not only in higher rents, but also in higher prices for transport, food etc.: “It’s needless inflation, because the worker never actually benefits” – he even considers the workers to be worse off after than before

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wage increases – and of course “the factory is also worse off” (Interview Loo). The only adequate approach to this is, according to Ken Loo, that the government controls inflation in a better way, which he could not specify (ibid.). Another option he would welcome but deems not feasible is that increases of workers’ remuneration are not effected in a general way via the minimum wage but earmarked for housing, e.g. via allowances or even direct investment (ibid.). His reservation about this is that such earmarked remuneration would not substitute but simply supplement minimum wage increases, though, because in his opinion, workers “want everything”, have a “minimum wage obsession”, and “the upward pressure on wages is eternal”, so that package deals do not work (ibid.). The rent control law he considers an absolutely inadequate response to the constant rent hikes: “Cambodia is a member of the WTO” and “this goes against every single WTO regulation” (ibid.). With this, Ken Loo underlines his rejection of any public interference in the market economy, except where it is “to prevent essential services from being priced out of the reach of the citizens” (ibid.). He does not consider housing an essential service, though (ibid.).

Garment sector employers thus refuse to be directly included in the housing discussion. Ken Loo does not think that a contribution of the factories to better housing for their workers would be advantageous in terms of labour productivity, either: “How it is related to whether the factory provide or not? Because there will be private providers that will provide such a service [housing]” (Interview). But in fact, many of the factory owners most voluntarily get involved in the housing market in an indirect way. As outlined in section IV, some company owners provide housing, but not in the name of the garment factory. Many other factory developers buy much more land than they actually need for the factory itself, and do not establish housing on it, but keep it vacant for speculation purposes, which in investor circles is called “factory for real estate”; It is thus expressed that the largest benefit is not made with the factory business, but with speculating with the land around it (Interview Kim). According to Kim Heang (Interview), a typical case of “factory for real estate” would be this: The developer purchases five times the amount of the land that is needed for the factory, e.g. 5 ha for a factory of 1 ha or 50 ha for a factory of 10 ha. The land price increases that follow the planning or establishment of the factory are at least a doubling within one year, e.g. from USD 10 to 20 per m2, and about a tenfold increase within ten years, e.g. from USD 10 to USD 100 per m2. The investor resells the land after five or ten years and thus becomes a millionaire (ibid.). While Ken Loo confirms that some factories thus engage in land and real estate speculation, he asserts that most factory developers buy larger land only to be able to expand the factory later on and claims that the garment business was “very short of cash” and would thus not “lock up their funds” like this (Interview).

Another way how factory owners are often linked to the housing business is that they build water and electricity infrastructure, if it is not in place yet, and sell water

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and electricity to the landlords around the factory for more than the municipality charges (Interview Kim).

As most garment factories are foreign and production is hardly locally embedded, and as the Cambodian economy heavily relies on the garment sector, decisions about less priority treatment or even responsibilities and obligations for factories are a delicate topic. But Sear Rithy, chairman of the real estate company Worldbridge Land (WBL), claims that the government plans to oblige new factories to provide accommodation for their workers, that it is being worked on such a regulation and that it will come into effect until 2025 (Interview). Kim Heang is of the opinion that this would not deter investors (Interview). Teck Kee Tan, executive director of WBL, even speculates that owners of factories will soon provide dormitories for their workers by themselves, in order to further attract workers, for whom Phnom Penh is becoming less attractive because of the rising cost of living, including rising rents (Interview).

21. Private sector has more profitable opportunities Housing for garment factory workers is a profitable business, “if it wasn’t no one would do it” (Interview Loo), but the returns are much less than they currently are in other segments of Phnom Penh’s housing market. Sear Rithy, Chairman of the Cambodian real estate company Worldbridge Land Co. (WBL), says “it still is really less profitable. It depends on the scale of the project” (Interview). Teck Kee Tan, executive director of the same company, estimates that investment on garment factory workers’ housing with the typical characteristics – rental rooms of 16m2 for USD 50 per month, located in Phnom Penh’s periphery – would be amortised after four to five years if it had decent quality, and with less quality even faster (Interview). Providing such housing with rather low returns and long amortisation periods, but also with low investment and low risk, is interesting mostly for local people, who have neither much money nor much expertise in providing housing, rather than for foreign investors with more capital and experience (Interview Kim) or for real estate developers (Interview Loo).

Ken Loo reckons that “real estate developers, they normally want to deal in sales, not in rental, they sell, they move on” (Interview), which is confirmed by Teck Kee Tan, who points to the almost immediate return on investment that sales deliver (Interview). Garment factory workers’ housing and more generally rental housing for poor and low-‐income groups on the contrary is “a lot more hassle” according to Ken Loo (Interview). Also Sear Rithy says that “it’s the hardest business, because you handle with all variety of the people. That you need to do a lot of education: How to live clean, how to live safe, how to live together at the community. It’s not easy”, “because we have to manage for them. We not just only built and get out the way, no” (Interview). Teck Kee Tan agrees that to “handle more people scares” (Interview), and he adds that administrative processes are often more complicated and longer

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with poor and low-‐income people from rural areas, because there is a lack of data and certification, even such as ID cards (ibid.).

That real estate companies invest not only for profit but also driven by social responsibility, Kim Heang has not heard of (Interview). He considers real estate developers as “too greedy” for that (ibid.). Sear Rithy, as the chairman of the only company that cooperates with the government on an affordable housing project so far, explains that this is part of the company’s Corporate Social Responsibility (CSR) (Interview). Having “enough private business that are generating profits for us already, running by themselves”, the company allegedly decided to cater the huge demand for affordable housing, because this “is one of the big things that the country needs” (ibid.). Teck Kee Tan has the vision that WBL will hence both be “helping each and everyone to own a proper house” and “helping the country” to further grow (Interview). When he continues that it will probably be necessary “to relocate a lot of people from their own current houses” and “it’ll be good for us [WBL] to be able to build estates for all these people”, it becomes clear that the affordable housing project is not only a social, but also a profit-‐oriented one, which benefits of the public sector’s support.

This is underlined when Sear Rithy notes that the affordable housing will be for sale, not for rent. He recognises that this is not an option for rural-‐urban migrant workers, unless they bring their families along (Interview). But he considers that it will be possible to afford ownership for people with monthly incomes under USD 150, as the instalment costs he targets are only USD 60 to 70 per month, which, he reckons, they can share among two or three persons (ibid.). Offering this price, Sear Rithy considers it impossible to do housing in the city centre unless land is provided by the public sector (ibid.). He plans to provide housing in the outskirts and expects cooperation with the MLMUPC and other ministries to improve public transport (ibid.). Otherwise, he considers a bus line specifically for the planned estate, which he speculates could even be operated by its inhabitants (ibid.).

WBL imagines the affordable housing project as a “community” and “livelihood”, marked by mixed uses including “a little bit of park for them”, a small clinic, a kindergarden and shops, which provide the inhabitants with internal labour opportunities (Interview Sear/Tan). Furthermore, WBL wants it to be mixed in terms of the inhabitants’ socio-‐economic status (ibid.). The first project shall comprise 2000 to 5000 units for households of four persons and be low-‐rise, as Sear does still not have confidence in Cambodians living clean and hygienic in high-‐rises, with which he refers to the grey building (Interview).

22. Public sector postpones housing for poor and low-‐income groups

Over the last few years, the public sector has paid increasing attention to housing for poor and low-‐income groups – at least in theory. In 2014, Cambodia has passed its

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first National Housing Policy (NHP), whose vision it is “to enable people throughout the country to have access to adequate housing to reside with welfare, peace and dignity, especially low and medium income households and vulnerable groups” (Royal Government of Cambodia 2014a: 3). Also in 2014, a General Department of Housing (GDH) was established under the Ministry of Land Management, Urban Planning and Construction (MLMUPC), “to lead, manage, coordinate and establish plans to guarantee rights to adequate housing of low and medium income households and vulnerable groups“ (ibid.: 6). The GDH, in turn, is part of an inter-‐departmental taskforce for affordable housing, chaired by the Ministry of Economy and Finance (MEF) (Interview Khemro), vice-‐chaired by the MLMUPC (Interview Tep Makathy) and comprising 23 more members, among them the Municipality of Phnom Penh. In theory, all these new institutions benefit garment factory workers. Specifically, the NHP proposes nine housing alternatives “for the low and medium income households and vulnerable households to obtain adequate housing” (Royal Government of Cambodia 2014a: 8), among them 1) low-‐cost housing, 2) cooperation with the private sector, 3) cooperation with development partners and NGOs, 4) rental housing and 5) state provides land to poor households/communities for housing purposes. While the NHP itself does not prioritise any of the alternatives, particular attention is currently given to 2) cooperation with the private sector.

22.1. Cooperation with the private sector targets the middle-‐class

As to date, the private sector is the sole actor on Phnom Penh’s housing market, it has by far the largest knowledge and data about it, too. The public sector relies upon this when it comes to, for instance, land values or development trends (Interview Ly). Hence, public policy often follows rather than guides private sector activity – Tep Makathy notes, for example, that rental housing would certainly be covered by the affordable housing taskforce if private developers had an interest in developing it (Interview). So far, the public sector aims to “encourage” and “incentivise” the private sector to engage in the provision of affordable housing by supporting companies that produce construction materials in Cambodia and by offering real estate companies infrastructure and cuts on taxes on the import of construction materials and on housing (Interviews Khemro, Sok Sam On). Thus, Peng Hong Socheat Khemro, general director of the GDH and vice-‐chair of the taskforce for affordable housing, hopes, the provision of housing for poor, low-‐ and middle-‐income groups will become as attractive for the private sector as for the high-‐income strata (Interview). The GDH has signed a Memorandum of Understanding (MoU) with the Cambodian real estate company Worldbridge Land (WBL), which agreed to, in return for such incentives, use one of the pieces of land it owns to build affordable housing there (see Private sector has more profitable opportunities). The project is supposed to start in 2016 (Interview Tep Kosal), but details are not known yet. Other companies have approached the GDH for similar MoUs, but the GDH is still checking them (ibid.). Khemro notes that with providing incentives “some problem will arise

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of course” (Interview), as companies will for instance pretend to target low-‐income, but in fact build for middle-‐income groups (ibid.).

Anyway, it has not yet been defined what affordable housing means and who will be eligible for it. In newspaper articles, Khemro presents the project planned together with WBL as “for migrants and short-‐term job seekers” (according to Vida 2015: n.p.) and states that it will “enable them to rent and buy at a reasonable price” (ibid.). But this is not confirmed at all in the interviews for this study, where GDH representatives explain that first, housing will be provided for the middle-‐class and for sale (Interviews Khemro, Tep Kosal), and neither in the interview with WBL (see Private sector has more profitable opportunities). As Khemro frankly states,

“the poor will not be able to participate in this […] programme. But that’s only 10 or 5 % of the population, which normally is part of the social housing programme. It has to be subsidised by the government. But for the rest of the 50% [poor and low-‐income people], it can be profitable for [the] private sector. You cannot have all people, [not] people who really do not have a stable job and who do not have commitment to work” (Interview).

It becomes very clear that the poor are not prioritised. With the social housing programme Khemro refers to plans to also provide public, subsidised housing, but these are only envisaged for later. And he recognises that even with incentives, building housing for poor and low-‐income groups will not be attractive for private real estate developers, only for the middle-‐class.

Sok Sam On outlines that the prices for an affordable housing unit shall be clearly fixed, he gives the example of USD 10,000 (Interview). Tep Makathy as a member of the affordable housing taskforce very similarly estimates housing for USD 7,000 to 10,000 to be affordable, assuming a monthly salary of USD 100 to 150 (Interview). But he highlights that affordability and eligibility cannot be determined before new data on income strata has been gathered (ibid.). Until the taskforce for affordable housing will have completed this, eligibility will apparently be understood in a broad sense and thus to the disadvantage of poor and low-‐income groups.

Also tenure types, i.e. rental housing, have only been a marginal topic so far, although GDH staff is well aware that rural-‐urban migrants such as garment factory workers mostly rent (Interviews Khemro, Tep Kosal). But just like representatives of WBL, also those of the GDH speculate that if room prices do not differ much between rent and ownership, “for example 60 USD per month for rental and then if they want to buy they just pay like 60 or 70 USD per month, […] people rather want to buy than to rent” (Interview Tep Kosal). The establishment of a housing bank is planned in order to increase the availability of housing loans (Interview Khemro). But all this does not consider aspects of flexibility and sharing that are crucial for most rural-‐urban migrants. Reserving a certain percentage of the affordable housing stock for rental units is also discussed, but only very vaguely (Interviews Khemro, Tep Kosal).

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22.2. Constraints on improving the supply of low-‐cost housing

The most frequently given reason that first, housing will be developed by the private sector, for the middle-‐class and for sale is that the public budget does not allow anything but that:

“In order to help those small segment of the market [the poor and low-‐income population], we have to help the middle-‐income first. When you […] get kind of a margin of the profit, that funding will be able to channel into the social housing programme. […] The rich will help the middle-‐income, the money that you get from the middle-‐income and the low-‐income will go to the social programme […] we do not have a choice. […] Otherwise where the money come from?” (Interview Khemro)

With the GDH waiting for such a trickle-‐down effect, “the affordable housing option may not come too soon” (Interview Tep Makathy). The argument of the low budget is hard to verify, because “the Government of Cambodia provides the public with scant budget information” (International Budget Partnership/The NGO Forum on Cambodia 2015: 1). On the 2015 Open Budget Index, an international measure of budget transparency, Cambodia scored only 8 out of 100 points (ibid.: 2). According to the index, Cambodia has even decreased the availability of budget information over the last years (ibid.: 2). According to the National Strategic Development Plan (NSDP), the national budget for urbanisation and construction will be increased every year from around USD 23 million in 2014 to roughly USD 40 million in 2018 (Royal Government of Cambodia 2014b: 103). But these amounts are only indicative and there is no information on the distribution among different ministries and departments. According to Sok Sam On, director of the GDH’s Department for Housing Technique and Development, the budget of the GDH was only USD 7,000 in 2014 (Interview), so merely 3% of the budget the NSDP indicates for urbanisation and construction in total, and thus just enough to buy chairs, tables, paper etc. (ibid.).

Another problem about the public budget is the prevalence of corruption and the resulting misallocation of financial resources. Cambodia scores only 21 out of 100 points on the 2015 Corruption Perceptions Index, which measures the perceived level of public sector corruption and thus ranks 150 out of 168 assessed countries (Beddow 2015: 7). In terms of housing, Sia Phearum of the Housing Rights Task Force (HRTF) wonders why, for example, it is considered important to upgrade the urban settlements at a small lake while the urban settlements at Phnom Penh’s two largest lakes have already been evicted in order to fill these up15, or why, in the face of rural-‐urban migration, there is more commitment towards affordable housing in rural than in urban areas (Interview).

15 The small lake he means is Boeng Tra Baek, the large lakes are Boeung Kak and Boeung Tompun.

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The GDH laments that its budget is not even sufficient to conduct a survey, why it still lacks data on where which amount and type of housing is needed, especially in the field of rental housing (Interviews Tep Kosal, Ly, Sok Sam On). It plans such surveys, but still waits for funding being granted (Interviews Khemro, Sok Sam On). More generally, interviewees very often pointed out that the GDH is still very young and the affordable housing taskforce has just been established, and that this is why “everything [is] still in the air“ (Interview Tep Kosal) and many things have not yet been done (Interviews Sok Sam On, Sok Vanna). Also, a frequently mentioned problem is a lack of skilled labour to implement the NHP (Interview Sok Vanna), especially in terms of technical and digital work (Interview Ly). Khemro sees this as one of the reasons why the land sharing model has not been implemented successfully in Phnom Penh, too (Interview). Moreover, the base wage of public sector staff is very low, and GDH staff earns only USD 150 per month according to Sok Sam On, which makes him wonder: “How can they support their family?” (Interview). He notes that “it’s hard to push them to come to work” (ibid.).

Given the alleged difficulty of direct financing, another way for the state to significantly support the construction of housing would be by providing land, if it owns or disposes of it. As outlined in Land use and ownership, it is not possible to gain insight into if and where state land is available in Phnom Penh, but most probably, over the last years, large parts have been privatised, sold and leased out, or are de facto privately used. But the GDH thinks about models of housing provision in which the state provides land, potentially only for a limited period of time, and the private sector finances the development of housing (Interviews Khemro, Sok Sam On). That the public sector buys land to develop housing is considered impossible in central Phnom Penh, as the land values there are too high now (Interview Tep Makathy). It would only be an option in the outer periphery (ibid.). Tep Kosal proposes an interesting model to regain state land: He knows of huge state land that was first occupied by many poor people, but then bought from them by a few rich people, who now occupy it16 (Interview). He expects that sooner or later, these will want to develop the land and therefore ask for land titles, which the government would normally give to them in exchange for money (ibid.). He proposes, though, that the government should ask them for a 20 to 30 % share of the land (ibid.).

22.3. No transparent urban planning and few regulations

At the end of 2015, an urban master plan for Phnom Penh until 2035, on that has been worked for many years, was finally approved (Thiemann et al. 2015: n.p.). It is still not publicly available, though (ibid.). In 2009, a newspaper article said about the draft that it “does pay consideration to urban housing. It talks of the need for a larger private rental market with affordable housing and of a need to upgrade the many informal settlements that still can be found around the city” (Nielsen 2009: n.p.). But

16 Specifically, he speaks of land around the Chroy Changvar bridge, on the left hand side of national road number 6 when coming from the city centre (Interview).

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after the French involvement ended with the publication of a White Paper in 2007 and the urban master plan has been further “developed in secrecy without the consultation of civil society groups” (Piotr Sasin, country director of People in Need, according to Thiemann et al. 2015: n.p.), there are concerns that the plan is for the privileged and further excludes marginalised groups (ibid.). Neither for the city nor for Phnom Penh’s surrounding areas, the theoretical attempts to develop a “clear land use plan by separating industrial zones and residential zones or urban areas” (Royal Government of Cambodia 2015: 21) have accessible results. Apart from the non-‐public urban master plan, no other plans on land uses, land values, construction permits etc. are available, either (Interview Ly).

Similarly, there are very few regulations on construction and housing, which seems to be slowly changing, though. A rent control law and a regulation on payments for electricity are already in place, although just for parts of Phnom Penh, and a regulation on payments for water is planned (see Legal framework for garment factory workers’ housing). In the context of the affordable housing taskforce the GDH currently develops regulation on rental and sales contracts and on minimum standards for housing (Interview Tep Makathy). At the same time, the GDH discusses maximum standards for the affordable housing project to avoid that the units become attractive for rich people and that the targeted population sells them off, e.g., the streets shall be too narrow for cars (Interview Sok Sam On). For this aim, people shall further be obliged to stay in the affordable housing for at least 10 to 15 years and to sell the unit only to other targeted people if at all (ibid.).

When it comes to large-‐scale investors, GDH representatives are very cautious about regulation and rather state that they “don’t want to force anybody” (Interview Tep Kosal, see also Interview Sok Sam On). Khemro says he drafts a regulation similar to a Malaysian one which obliges developers of sites larger than 2 ha to allocate 20 % for public housing, but adds that this is still very vague. For garment factory owners in particular, obligations are seen very sceptically. Prohibiting them from buying more land than they actually use, Ly Chanphakdey considers not feasible, but points to a tax on not using land (Interview). Khemro stresses that garment factory owners are a government priority and get many incentives from The Council for the Development of Cambodia (CDC), concluding that “we cannot make it mandatory for them to really housing the employees” or at least: “Making housing part of their mandate might be something very new” (Interview).

Anyway, enforcement is difficult, as becomes obvious from factories pretending to provide housing to avoid paying the housing allowance, from the GDH’s doubts that companies are serious with what they propose as MoUs, from the land sharing project in which the company did not meet its obligations and many other examples. One case that shows very well how difficulties in enforcement alter the public sector’s approach to regulation is the property transfer tax. It amounts to 4 % of the price of the property, but instead of using the actual price the department for

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taxation estimates a much lower one, usually amounting to one fifth of the actual price, because otherwise, nobody would pay (Interview Tep Kosal).

22.4. Cooperation with non-‐governmental and international organisations

The GDH also cooperates with non-‐governmental organisations (NGOs) and international organisations. It has signed MoUs with the Asian Coalition for Housing Rights (ACHR) and the Community Development Foundation (CDF), and a MoU with Habitat for Humanity is planned (Interview Tep Kosal). These mostly imply some kind of information transfer from the NGOs to the GDH, for instance by means of study tours (e.g., with ACHR to Thailand) or by providing data (e.g., by CDF about urban poor communities in Phnom Penh) (ibid.). Similarly, international organisations provide aid such as in policy development and training (e.g., by the Japanese development agency JICA for GDH staff) (Interview Khemro). In the context of the affordable housing programme, NGOs and international organisations are also invited for workshops and to comment on the draft, but according to Khemro, not many comments were made so far due to a lack of experience (Interview). Meas Kim Seng, founder of several urban poor organisations, considers that the cooperation with NGOs is largely pro forma, though (Interview). While the public sector has good intents on paper, these are not translated into reality, he reckons, and the focus remains on strengthening the private sector and the GDP (ibid.).

23. NGOs concentrate on evictions or withdraw completely A wide range of local as well as international Non-‐governmental organisations (NGOs) work on the situation of urban poor housing in Phnom Penh. Most of them focus their work on existing urban poor settlements, on upgrading activities in these, try to avoid evictions and relocations or to improve the way these are carried out. They have essential knowledge and data about Phnom Penh’s urban poor population and its problems, concerns, needs and preferences in terms of housing. However, the NGOs hardly engage in pro-‐active planning, in constructing and organising new, additional housing for the urban poor. In view of the strong rural-‐urban migration, it is sure that even if all existing urban poor settlements would be upgraded and maintained at the disposal of the urban poor, these would still not suffice to accommodate Phnom Penh’s poor and low-‐income population.

NGOs face limited capacities and difficult working conditions. The issues around existing urban poor settlements are so numerous that they tie up the NGOs’ capacities already. The human and particularly the financial resources of most NGOs are too limited to acquire land, plan and carry out infrastructure and housing construction. To merely make proposals for new housing projects, the NGOs would need information on future development plans for Phnom Penh and on land availability, which is not provided by the government and public sector (see Land use and ownership). The opportunities that remain are to provide information and issue

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recommendations as well as to criticise and mobilise protest. One NGO that engages in the latter is the Housing Rights Task Force (HRTF). Various threats and attacks, indirectly from the government, on the HRTF’s secretariat director Sia Phearum show that this is a dangerous approach to take, but at the same time an effective one: Having empowered urban poor communities to put up resistance, voice their critique and make contact with the media has put considerable pressure on the government and is certainly one reason why officially, no more eviction shall take place in Phnom Penh (Interview Sia). Still, this approach is mostly reactive and at best maintains the status quo. Another NGO, Sahmakum Teang Tnaut (STT), focuses on upgrading activities and research, and is among the few that have actually treated rental housing and rural-‐urban migration (Linton 2015a, 2015b), thus providing a rare and valuable database. The sole NGO found that engages in actually constructing low-‐cost housing in Phnom Penh is Habitat for Humanity, which was at the moment of research indeed planning a project on garment factory workers’ housing, which was still in its infancy, though.

Many international organisations have withdrawn from the field of land and housing as the topics are economically and politically highly charged. Sok Vanna, country director of UN-‐HABITAT, outlines that the principles of any involvement of UN-‐HABITAT are that the issue is a) neutral, b) technical and that it is c) not dealt with in the media before it is finished (Interview). As in terms of land and housing, these criteria are hardly fulfilled in Cambodia, UN-‐HABITAT is not active in these fields anymore. Also the World Bank has largely withdrawn from land and housing topics (Interview Tep Makathy). It made bitter experiences with the funding of land titling programmes that were associated with the eviction of thousands from Boeung Kak and in 2011, just after this incident, even froze all its new lending to Cambodia (Hodal 2012: n.p.). Yet another example is the German development agency GIZ that has recently decided to end its long-‐term land titling programmes “in frustration over the government’s slow reforms” (Zsombor 2016: n.p.).

There is broad consensus among the local NGOs that it is the state’s role to ensure quality and affordability of housing for poor and low-‐income groups. Meas Kim Seng reckons that if rural-‐urban migrants get land and build a house by themselves, it is likely to be of poor quality, why he prefers rental housing being built by the public sector (Interview). Sok Vanna considers it problematic that poor and low-‐income groups largely demand ownership, although having settled illegally before, and reckons that a provision of social housing must be accompanied by the clear message that when residents move on, they will have to pass it on to somebody else, or even that they can only stay for, e.g., ten years until an assessment will be carried out to see whether they have meanwhile earned enough to move elsewhere or whether they will be allowed to stay (Interview). As outlined in Legal framework for garment factory workers’ housing, the recent approaches to regulate payments for electricity and rent increases are widely appreciated by NGOs. A next step that is wished for is improved waste collection: Of only about 60 % of the urban poor, waste is collected

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so far, and Bour Chhayya of STT is sure that even the poor are willing to pay a fee so that waste will be collected, as “they don’t want to live with the waste” (Interview).

24. Academics see necessity for state action Various academics concerned with urban development consider that social aspects have been left behind during Phnom Penh’s rapid growth and see the housing situation in the capital city as very problematic today, marked by a mismatch between supply and demand (Interviews Tep Makathy, Meas, Kong). They consider low-‐cost rental housing as insufficient, but crucial for Phnom Penh’s poor and low-‐income population (ibid.).

Kong Kosal, dean of the Faculty of Architecture and Urbanism of Phnom Penh’s Royal University of Fine Arts, notes that in other countries, too, it has proven difficult for the state to increase the supply of low-‐cost rental housing (Interview), and Tep Makathy, lecturer at the Faculty of Architecture and Design of Phnom Penh’s Pannasastra University of Cambodia, states that Cambodia has lost an important means to support the provision of affordable housing as, in contrast to Vietnam and China for instance, land has largely been privatised (Interviews). Tep Makathy, who is also a consultant to the World Bank and ADB, further expresses concerns about the state depending on external support, pointing out that donors’ conditions are subject to change, e.g., with Cambodia’s rise from a low-‐income to a lower middle-‐income country according to the World Bank’s classification in 2016, the access to grants or soft loans will worsen (Interview). In terms of financial resources or rather, the alleged lack of them, Meas Kim Seng, urban development lecturer at various universities, is sceptical (Interview). He proposes to simply shift funds, e.g., away from the police, defense or red cross17, or to raise additional taxes, e.g., on companies profits or incomes from interest (ibid.).

Given these constraints, the interviewed academics still broadly agree that it is the state’s role to take care of the poor, e.g., Tep Makathy asks: “To be very frank, who wants to deal with the poor who cannot afford? That is the role of the government” (Interview). There is also consensus that, to improve the poors’ access to low-‐cost rental housing, the state must mobilise the private sector (Interviews Tep Makathy, Kong). Tep Makathy and Meas Kim Seng are in favour of obliging developers to allocate a certain amount of their land or project to affordable housing, Tep Makathy referring to the Malaysian model of 20 % of the land, Meas Kim Seng referring to 10 % of every building and being more precise that with affordable he actually means low-‐cost rental housing (Interviews). While Meas Kim Seng, who is also the founder of various urban poor organisations, generally reckons that if there is no pressure, the private sector does not care (Interview), Tep Makathy is very cautious with regulation when it comes to garment factory developers. He does consider an 17 In Cambodia, the red cross is known for having close ties to the government.

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inventory of land, that the private sector freezes, necessary, and deems it appropriate that land around the factories or owned by the factory owners be used for rental units (Interview). But as long as the land is private, he considers it impossible to enforce this and rather proposes to encourage, incentivise, promote champions, do pilot projects etc. (ibid.). This is also based on concerns of his to loose the competition for the garment sector (ibid.). Intents of the government to stabilise garment factories he sees as very important and the fear of their sudden disappearance as one of the reasons why no professional housing is developed for garment factory workers (ibid.). Meas Kim Seng agrees to incentivise the construction of low-‐cost rentals by providing cheaper loans for this purpose (Interview). Further, it is called for regulation regarding basics like safety, wastewater treatment and simply equipment such as built-‐on light (Interview Tep Makathy).

In terms of what location and type of affordable housing for factory workers is desirable, academics consider it important that the housing is close to the factory, that facilities like schools, for recreation like sports grounds and public transport are around (Interview Tep Makathy) and, from a more large-‐scale urban development perspective, that the housing is low-‐rise, in order to avoid traffic jams (Interview Meas). Kong Kosal emphasises that housing should not only provide shelter but also be seen as an investment in human capital (Interview). He highlights that thus, different types of housing are needed for different households and that hence, first and foremost, it is important to get to know the target group very well and consult with them (ibid.). Also civil society groups and NGOs should be involved (ibid.). Tep Makathy considers, referring to the grey building, that there is already a trend that citizens have a stronger voice (Interview). Once good low-‐cost rental housing is established, it is further considered important to protect it against speculators by clearly defining eligibility criteria (Interview Tep Makathy).

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Section VI – Prospects for improving rural-‐urban migrant workers’ housing in Phnom Penh

Two facts about Phnom Penh’s housing market are still by far not sufficiently acknowledged by urban policy and planning: First, as the number of rural-‐urban migrant workers and at the same time, pressure on Phnom Penh’s land due to real estate investment increase, the housing situation for poor and low-‐income groups becomes more and more difficult and the supply of low-‐cost housing for them is not sufficient. Second, although the Cambodian mentality generally favours homeownership, rental housing has become a common and important form of tenure in Phnom Penh, as well because of the pressure on land, but also because of increased labour mobility and people not always living in family contexts anymore. While representatives of both the private and the public sector reckon that everyone would choose to buy and not to rent if prices would allow this, they disregard that ownership implies long-‐term obligations and many rural-‐urban migrant workers choose rental housing because they need flexibility. Also, most of them share housing, even rooms, and while it is easy to share rental prices, sharing long-‐term obligations requires much more commitment. It is not realistic anymore to aim for homeownership for everyone at every stage of life and rather important to counteract the bad reputation of rental housing by supporting the low-‐cost rental sector. In the words of UN-‐HABITAT: “Renting will grow whatever governments do. However, the kind of rental housing that will be produced can be improved by more informed and better directed state action” (2003: xxii), why it is “essential to show how an obsession with homeownership can generate many housing problems and that some countries with large rental sectors face fewer housing problems than those with high levels of ownership” (2003: xxi).

The housing situation of rural-‐urban migrant workers in Phnom Penh needs to be improved in two ways: The quality of the existing low-‐cost rental housing stock needs to be improved and the supply of good quality low-‐cost rental housing needs to be increased. This was shown in section III already and has been confirmed and detailed by the case of garment factory workers’ housing in sections IV and V.

There are various ways and approaches, very few of them implemented, to achieve these goals. All of these have one problem in common: the lack of good and accessible data. What is needed is localised socio-‐economic data, e.g., on migration to Phnom Penh, on income strata of migrants as well as long-‐term residents, on housing in terms of preferences, actual household and unit sizes, the prevalence of homeownership and rental housing, prices and rents, total expenses for housing, as well as spatial data, e.g. on building permits, land in terms of categories, availability and uses. This data would be firstly necessary to assess the status quo and the trends, secondly to monitor and control measures that are in place and thirdly to enforce regulation.

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Partly, this data is assessed already – important sources are, e.g., the surveys of the National Institute of Statistics (NIS), which have also been quoted in this study. They have major gaps and flaws, though. E.g., migration to urban areas is assessed, but not specifically to Phnom Penh, thus that for this study, data of the NIS had to be combined with data from other sources with different survey designs, so that results are only approximate; The incomes assessed by the NIS tend to be too low, why it is planned to resurvey them (Interview Tep Makathy); The data on housing that the NIS provides, like household and unit sizes and shares of rental housing, does probably not consider migrants’ housing and workers’ dormitories and is therefore misleading. Other, in particular spatial data that the public sector has is not accessible, for instance on building permits and the urban master plan. Data that the real estate sector assembles only covers upper market segments, e.g. in terms of the apartment market it includes condos, but never urban poor settlements. Data that donors and NGOs publish are hence very valuable insights, but in the fields of land and housing not comprehensive at all.

There is thus an urgent need to gather or make available this kind of data. To cover the whole city with all its residents, also the poor, low-‐income and migrant population, a joint initiative would be necessary of the public and private sector as well as NGOs and civil society.

Needed for all approaches and options: improved data base

Approac

h

Control housing costs

Increase housing quality

Increase housing supply

Option

• Control rents • Control payments for utilities

• Increase housing expenditures

• Introduce minimum standards

• Incentivise or enforce private housing supply

• Oblige housing provision by factories

• Public housing provision

• Make use of urban planning instruments

Assess all options in terms of

1) Prospects for resolution 2) Practicability and 3) Impact

Figure 14: Overview of approaches and options to improve rural-urban migrant workers’

housing in Phnom Penh. Source: own table.

Figure 14 shows ways to improve rural-‐urban migrant workers’ housing in Phnom Penh that have resulted from the case study of garment factory workers’ housing in the previous sections. They are categorised under three broad approaches: control housing costs, increase housing quality and increase housing supply, which all cover several options. All approaches are constrained by the previously outlined lack of data, or require data collection, the other way around, which is shown by the bar on

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top. The options will in the following be explained and evaluated in terms of the three aspects 1) prospects for resolution, 2) practicability and 3) impact. Prospects for resolution means the chances that an option is actually chosen and implemented. It mostly refers to the public sector, whose willingness to support the urban poor and low-‐income groups, to whom rural-‐urban migrant workers largely belong, is not sure. It was called into question by the evictions over the last decades and can be assumed from the lack of transparency in urban policy and planning among others. Visions of a modern, global and economically strong city are often in contrast with poor and low-‐income groups’ housing, and it may be intentional to push them out of the centre. Moreover, close ties between the public and private sector and potential benefits from corruption, especially given the very high prices and price increases of central land and the resulting opportunities for speculation, may have a higher significance than the interests of poor and low-‐income groups. Practicability refers to the chances to successfully implement and, where applicable, monitor and enforce options. This touches on the ties between the public and private sector and corruption again, but also on available resources in terms of land, financing, skilled labour, data, institutions etc.. Finally, impact means the expected effect and scale of the outcome of an option.

25. Control housing costs A big problem is that rents, like most other expenses, typically increase by about the same rate that the minimum wage is raised. This reduces the workers’ benefit of the wage increase and means that they can still not afford better housing. Whether landlords use (parts of) their increased income to improve the dwellings they rent out is not clear. That a rent control law was recently enacted is a right and important step. But like critics say, it will be difficult to control. Given that poor and low-‐income renters so far rarely have formal contracts, it is particularly hard to prevent that rents will be disproportionately increased before being fixed. To properly monitor landlords, the renters themselves need to cooperate, which means that they have to be aware of their rights and, like it is the case with minimum standards for housing, need to have a contact point where to complain in case of landlords’ non-‐compliance, which seems not to be given, yet. Furthermore, landlords who increase their rents hardly have to fear loosing out on tenants both because housing is not a normal market product which consumers change according to prices as this is associated with high transaction costs, and also because the supply of low-‐cost housing is very limited in Phnom Penh and competition for it is thus high. The recently implemented regulation on payments for electricity, which landlords have so far often increased above what they have to pay to the public provider, is equally good and important. It is easier to implement because landlords can be monitored by means of meters, and a positive impact of the regulation can already be observed.

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26. Increase housing quality when housing is not prioritised Rural-‐urban migrant workers’ budget for housing is limited. In the case of garment factory workers, there is a minimum wage, which has also been increased annually over the last few years. But considering real rather than nominal wages, these increases were not significant, and in fact, the minimum wage is still far below what local labour unions and NGOs as well as international organisations have defined as a living wage. The living costs in Phnom Penh are high compared to rural areas, they keep increasing and often, garment factory workers are often charged even more close to the factories.

But also, good housing is not among their priorities. It is not clear at all whether they would spend more on it in case they earned more. Both the garment sector’s employer organisation and the labour unions point to this issue. Garment factory workers are among the groups who send home the largest proportions of their wages as remittances within Cambodia, and they usually support at least one other family member. As long as an increase in wages is not enormous, it is rather probable that the workers would send home still higher remittances or as well spend more on other items, e.g., phones and beverages.

In order to increase the housing quality, one option would be that workers spend more on housing. One way to achieve this would be awareness rising about the negative long-‐term effects that housing may have on, e.g., health. It can be assumed that this would be easy to decide on as it is to no one’s detriment. Practicability comes down to financing, which would, for instance from donors or NGOs, probably be manageable. But awareness rising could only be effective if the supply of better quality housing was actually given, which remains unclear, and still then, it might not have very far-‐reaching consequences.

Another option to increase housing expenditures would be to earmark a certain budget for it. This happens already with the housing allowance, but with USD 7 to such a small extent that workers hardly pay less for housing anyway and further, the earmarking is merely reflected in the name, but the allowance can as well be spent otherwise. The unions could push for a higher and more strictly handled housing allowance. The garment factories do not care whether they pay an increase of the minimum wage or an allowance instead, as long as an allowance is really instead and not on top of a wage rise. To handle a housing allowance more strictly (i.e., if the money is not spent on housing, it lapses), better monitoring or ideally a direct payment from the factory to the landlord would be necessary. Those who found a good place for little money would thus be disadvantaged. It further entails a risk of corruptive deals between factories and landlords, and significantly, if the rent control law does not work properly, it could happen that all landlords increase the rents to at least the amount of the allowance, also for substandard rooms, knowing that the money is there. Earmarking does thus not per se mean an improvement in housing conditions, unless combined with other measures. Practicability and impact are hence limited. Anyway, it is a crucial question whether such interference in garment

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factory workers’ freedom of choice is wanted and justified at all. Is it not their right to allocate resources according to their preferences, and if they prefer bad housing conditions in favour of other expenses, they may? This, as I will argue below, varies depending on what specific aspects of housing are referred to. But the effect of earmarking parts of the workers’ wages is certainly too vague to justify such a strong interference.

Another option to increase housing quality is to introduce a minimum standard for housing. This is a widespread demand among labour unions and NGOs and it is currently being worked on in the General Department of Housing (GDH), although it is not clear to which extent the GDH plans to implement the standard. While a standard for a single housing project is certainly easily decided upon, it is more questionable, but still a possible scenario that the government enacts a minimum standard for all housing in Phnom Penh. A considerable counterargument could be the practicability: The feasibility of upgrading all housing according to the standard obviously depends on its criteria, but the monitoring and enforcement is in any case hard to ensure. Considering that not even once a census of all housing has been done, regular checks are far away and would only work if enough human and financial resources were made available for it and residents themselves cooperated by reporting non-‐compliance to a contact point, which needed to be established. If the implementation worked, the impact would likely be strong. Because of necessary upgrading, rental prices might increase, and again the question arises whether it should not be the workers’ choice what standards they want to afford. The next question is: What housing standards can a society support and which ones does it reject for human rights reasons? In the case of garment factory workers, housing does often not or just meet internationally acknowledged minimum standards, and the human right to adequate housing is frequently infringed. This cannot be justified when it comes to aspects such as basic hygiene, e.g. supply of clean water and enough toilets, or basic security, e.g. lighting and locks on doors to decrease the risk of robbery and rape. A minimum standard would need to focus such aspects and, as there is obviously a class bias when policy makers with different lifestyles and perspectives than the workers think of housing standards, the standards would need to be developed in close cooperation with the workers. Then their introduction would certainly be appropriate and have, if monitoring and enforcement are successful, a great positive impact.

27. Increase housing supply in a much less profitable segment Phnom Penh’s housing market is marked by high-‐cost development projects that target foreign professionals and the local upper class, increasingly also the local middle-‐class. But professional and large-‐scale providers rarely provide low-‐cost rental housing, which garment factory workers commonly look for. Their return on investment is much higher in the other market segments, and rentals imply more work and still have a bad reputation in Cambodia. Although currently, the likely

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saturation of the high-‐cost housing market and the increased demand in the middle market segment are leading to increased housing supply for the middle-‐class, it cannot be expected that soon, when the middle market segment is saturated, too, supply will also increase in the low-‐cost market. The middle-‐class is much larger than the upper class and is further growing, so that a saturation of this segment is not due in the foreseeable future. Thus, although demand continuously increases in the bottom market, supply will hardly keep pace, unless this is worked on.

Increasing the supply of low-‐cost rental housing would indisputably be an improvement for those who are in need for it. It would mean more options and might, due to increased competition, lead to lower or less rapidly increasing prices. It would merely be an offer, but not imply obligations for tenants, so that it does not entail moral questions like earmarking funds or setting standards. But it touches much more on the financial question.

One option to increase the supply of low-‐cost rental housing is to incentivise the private sector to supply it. Currently, mostly those who lack capital and expertise for the higher market segments provide low-‐cost housing. They are frequently small-‐scale, informal providers. This is advantageous for tenants as they often provide some more flexibility in terms of payments, but the scale of the market is thus likely to remain small and the housing quality low, and also, monitoring, e.g., of minimum standards and rent increases, is difficult. It seems reasonable to include also large-‐scale providers and real estate developers in improving the housing situation, as they are the most potent actors in terms of expertise and financial resources. This is the approach the public authorities currently take by discussing positive incentives. It becomes obvious that positive incentives would need to be enormous in order to cover the difference between the profit margins in the top and in the bottom housing segment, though, and that this approach has so far only managed to further increase the interest in investing in middle-‐class housing for sale, which is slowly developing anyway, but not in low-‐cost rental housing, as even the planned affordable housing project in cooperation with Worldbridge Land Co. (WBL) shows. It is thus a politically supported and obviously feasible, but not very effective option.

Negative incentives, so not tax cuts for targeting lower income strata but instead increased taxes on high-‐class housing, are on the contrary not discussed, probably because it is feared that these would deter investment in the real estate sector, which is a driver of economic growth and as such very welcome, as for instance the changes in foreign ownership laws show. The practicability of negative incentives might be weak as compliance and enforcement are often not provided for, but in terms of impact it could still be a good measure: Even if only some investors would comply and if the negative incentives would not encourage investment in the low-‐cost rental segment, they would at least increase the public budget instead of putting a burden on it. If they would slow down investment in high-‐cost real estate, this might be considered a short-‐term economic disadvantage, but it would be a long-‐term social advantage, as the chances for Phnom Penh’s citizens, for urban policy and planning

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to keep up with and adjust to the urban transformation processes would increase and the pressure on land as well as the speed with which land values rise would decrease, which would obviously be a great benefit for poor and low-‐income groups.

Given that both positive and negative incentives, and cooperation with the private sector not either, are sufficient to redirect investment of real estate developers to low-‐cost rental housing, a more useful option seems to be regulation. Some promising models that have proven effective in other regional countries have been discussed in the interviews for this study. These models basically oblige large-‐scale developers to reserve parts of their property for affordable housing. This is similar to what has been intended with the land sharing model in Phnom Penh’s Borei Keila, a former slum and now high-‐rise complex, a few years ago, although this was not based on a general regulation, but merely a pilot project. The results have not been satisfying, as many former residents of Borei Keila did not receive the new units they had been promised. The reasons for the failure are seen in a “combination of lack of transparency, abuses and large-‐scale speculation” and “inadequate monitoring and enforcement procedures” (Rabé 2010: 11). These would likely restrict the practicability of a similar regulation, too, and the bitter experience of Borei Keila and fears that the same would happen again make it currently very improbable that an obligation for developers to finds political support. Also, a regulation would in fact also have the character of a negative incentive and is thus seen as a potential barrier to economic development in terms of large-‐scale investments, which further decreases political support. If it was successfully implemented, a regulation to develop a certain share of every one of the numerous large-‐scale construction projects that are underway and planned as low-‐cost rental housing could have a great impact, though, why it is very worth developing a feasible model of it.

Another, similar option to increase the supply of low-‐cost rental housing would be to oblige factory owners to provide housing for all of their workers. Although it was speculated by one interviewee that such a model is underway and by another interviewee that such a regulation would not deter garment sector investment at all, the majority of the interviewed experts reckon that obliging factory owners is very delicate given the high priority and economic relevance the sector has in Cambodia, and is thus unlikely to be decided on. Factory owners are a very powerful party and surely not in favour of such a regulation, and they would put up significant resistance. But like real estate developers, factory owners are financially potent and anyway often purchase land around their factories, although for speculation rather than for workers’ housing. In terms of practicability, it would be relatively very easy to control whether factory owners comply with a duty to provide workers’ housing and with the rent control and other housing laws, and also minimum standards could be well set. Workers would of course still need to be allowed to live elsewhere, but the guarantee to get housing from the factory if they want it would increase their negotiating power and increase competition on the housing market. This would be a very positive impact. Negative effects could be increased segregation and insulation

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of garment factory workers and rising dependency on their employers. Also, as they often just work for some years or shorter periods at one factory, it might imply frequently moving house. Nevertheless the overall effect for workers can be expected to be positive.

There is no public provision of housing so far, and it is, according to the research for this study, at least some years, if not many more, away, as public funds for it are allegedly lacking, i.e. it is not at all a political priority. Given the high incentives that the public sector plans to give to private housing providers to invest in lower-‐cost housing, and given that real estate experts consider the provision of low-‐cost rental housing merely a much less, but still a profitable business, public housing should be considered more seriously and urgently, though. While it would mean a high initial investment, it would also mean low long-‐term gains instead of continuous expenses or loss of revenues, respectively, for incentives. Public housing would be an opportunity to provide housing above a certain standard without having to monitor and enforce this, as well as to set appropriate rent levels and, depending on the scale of the public housing, even have a ripple effect on rents on the free market. It would further be an opportunity to improve the image of rental housing: So far, it is often referred to the very few examples of rental housing in Phnom Penh’s centre that have been built many decades ago, by now lost their rental status, have no landlord or common organisation that cares about upkeep anymore, are thus deteriorated, and occupied by marginalised groups. These are a thorn in the side of those who promote a modern, international standard Phnom Penh, although they are still crucial in accommodating the urban poor. Pointing to these examples alone is not appropriate anyway, as many more people in Phnom Penh live for rent in other places. But public rental housing could, if well implemented, provide a more prominent counterexample to convince critics of rental housing and lead to a general change of mind, away from discrediting rental housing and thus also all those who cannot afford ownership. The impact would thus be positive in many regards.

28. Transparent urban planning It is not clear, to what extent spatial planning is currently used to guide urban development, but certainly, it is hardly used in favour of the poor and low-‐income population. There are no available land use plans, but these could for instance be used to assure that new factories are set up in a surrounding where there is enough space for workers’ housing, and generally, it could be assured that not too much residential land is converted into office or commercial space, as it is currently done to a large extent. Spatial planning could further assure that a factory is well connected to social infrastructure like schools and clinics and other facilities like markets, sports grounds etc. A major task of urban planning in the context of Phnom Penh’s current development should be to prevent land speculation. One way to do this is, again, clear land use planning, so that it would, e.g., not be possible for garment factory investors to speculate with land around the factory by claiming that

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they want to expand the factory, but in fact using or selling the land for residential instead of industrial purposes afterwards. Another important issue is to protect state land and use it for the common good. Wherever state land still exists or can be regained, it should neither be sold nor leased for commercial, but only for social purposes.

Publicly available, transparent plans, also spatial ones, are also urgently needed to enable all stakeholders and the public to get involved in the housing discussion, comment on plans and help to develop ideas. This could be extremely helpful, as much knowledge that exists, for instance in NGOs, is otherwise lost for urban planning. More transparency in this regard would also help to regain the commitment of international organisations that have withdrawn from the field.

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29. Conclusion So what are the prospects for improving rural-‐urban migrant workers’ housing in Phnom Penh? The following section will summarise the major trends that the problematic housing situation is based on. It will then sum up what precisely the problems are and how the various stakeholders’ approach or mostly, do not approach them. Housing policy in Cambodia will be put in context with housing policy trends in East Asia. It will further be outlined how the housing situation for rural-‐urban migrant workers will likely develop, if no major changes occur. Based on this negative outlook, there will be recommendations for action.

Housing problems of rural-‐urban migrant workers in Phnom Penh are based on two socio-‐economic trends: Firstly, labour migration to Phnom Penh is and will continue to be very strong. Hundreds of thousands of migrants arrive in the city every year, mostly because they look for labour opportunities. Many of these migrants, mostly young and female ones, take up jobs in the garment industry. It is Cambodia’s largest employer and has more than half of its factories, so more than 300, in Phnom Penh’s outskirts. All these migrants need housing, i.e. increase the pressure on Phnom Penh’s land and housing market. The second trend is the boom of the construction and real estate sector. Like the garment industry, also this sector is largely foreign-‐funded. It is backed by enormous capital, which is invested mostly in upper market segments, because these are most profitable, and also in large-‐scale speculation. This changes the face of Phnom Penh: It causes direct and indirect evictions of poor settlements for development projects, so that in addition to the migrants, also poor and low-‐income long-‐term residents of Phnom Penh are in need to find new housing. Furthermore, construction and speculation projects of the real estate industry use or freeze, respectively, much of Phnom Penh’s land, and push land and housing prices so high up, that land and homeownership in central districts is by now impossible for the majority.

The problems that result from this are limited availability and affordability and low quality of housing for rural-‐urban migrant workers. Most of the migrants are vulnerable, as they are faced with new environments and lifestyles and often have no traditional support network in the city. Their jobs are mostly low-‐skill and thus low-‐paid, as well as instable, like in the garment sector. Some migrant workers move seasonally from rural to urban areas according to labour opportunities. Under these conditions, homeownership is neither suitable nor affordable for them in Phnom Penh’s tight land and housing market. If they cannot live at the place of relatives or friends, they mostly rent. Rental housing has a bad reputation and is still a marginal segment in Cambodia’s housing market, though. Professional real estate developers only provide high-‐cost rentals, while low-‐cost rentals are mostly privately provided, on a small-‐scale and informally. Migrant workers’ thus mostly lack contracts and the housing quality is low, which is particularly problematic in terms of hygiene, health and security.

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There is thus an urgent need to increase both the supply and quality of housing for rural-‐urban migrant workers. But as the interviews for this study have shown, nobody really tackles the problem. For workers’ unions, the topic of housing stands back behind minimum wage discussions. Employers are not held accountable and do not feel responsible for their workers’ housing and on the contrary, speculate with land for it. The private sector with capital and expertise invests where the highest profit margins are, which is and will be very far away from the low-‐cost rental housing segment. Small-‐scale providers alone will not supply sufficient housing for the expected number of migrants. The capacities of NGOs are absorbed by defending and upgrading the urban poor settlements that remain in the city. Many international donors have completely withdrawn from the topics of land and housing as these are too politically charged. By academics, the topic of rural-‐urban migrant workers’ housing has not been put on the research agenda, yet. The public sector has enacted some regulations that may decrease workers’ housing costs, and it works on standards to increase their housing quality, but the effects are yet to be seen. Concerning housing supply, the public authorities have vague plans, but no practical measures exist, allegedly because the state lacks budget, but obviously also because economic growth by means of real estate investment is prioritised over the needs of the poor and low-‐income population.

In this regard, Cambodia is very similar to many East Asian countries that also see and use the housing sector largely as a means to achieve economic growth. While state intervention is not uncommon in these countries, it rarely aims at decreasing the commodification of housing. Hence, it is often not to the advantage, but even to the detriment of poor and low-‐income groups. Very frequently, state intervention favours homeownership in East Asia. It is seen as a means to strengthen family structures and thus welfare self-‐reliance. While in Cambodia no such intervention occurs yet, future plans point in a similar direction, as they focus the middle-‐class and homeownership.

As long as the socio-‐economic trends and the stakeholders’ approaches do not change, the housing quality of rural-‐urban migrant workers’ will likely remain bad due to limited competition in the low-‐cost segment, a lack of formal contracts and regulations. It can be expected that migrants will face increasing difficulties to find housing in Phnom Penh. Likely, what they will find will be increasingly far away from the centre, and hence from services and facilities as well as from sources of income. Garment factory workers are slightly better off in this regard, as their work is in the outskirts. Segregation and inequality can thus be expected to deepen. Furthermore, urban development will be ad hoc instead of planned and hence probably cause social and technical problems, which will be hard and costly to handle in the future. Maybe, at some point the state will find itself forced to evict rural-‐urban migrant workers from where they move to today.

So what are the changes that need to be made? It results from this study that awareness for the topic needs to be raised among workers, who currently do not

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prioritise housing. It needs to become clear that bad housing conditions can have serious long-‐term impacts on health and well-‐being. Also, the government and public sector need to recognise the problems that their striving for economic growth and support of foreign real estate investment cause and pay more attention to the residents’ housing needs. To know these needs it is necessary to collect data and to consult with the residents themselves. This study found that it is particularly important for rural-‐urban migrant workers that housing is located close to their places of work or study and close to services and facilities, and that standards are increased in terms of hygiene, health and security, but details differ among the different groups.

To decrease housing costs, the regulations that have recently been implemented are good steps and need to be monitored and enforced now. The planned minimum housing standard should be further developed in cooperation with poor and low-‐income people and migrants and be introduced as soon as possible for all housing, not just for single projects.

When it comes to increasing the supply of low-‐cost rental housing, the public sector claims to have limited opportunities because of its low budget and due to most land being private. Public authorities as well as many other stakeholders thus opine that real estate developers should be mobilised, because these are the most potent actors in terms of budget, land and expertise. It has clearly been shown in this study, though, that the state cannot provide incentives high enough to the real estate sector to compensate for the profits that the latter can make in the middle and upper housing or even in commercial segments. The only ways for the state to increase supply are thus regulation and obligations, for instance for real estate developers to reserve some percentage of their project for low-‐income housing or for factory developers to provide workers’ housing. Also public housing should be considered, as the provision of low-‐cost rental housing is less, but still profitable, and the public sector’s arguments about its limited availability of funds and land are contested by several stakeholders.

The chances that these options find political support are low and they are susceptible to corruption. Monitoring and enforcement face difficulties due to the lack of institutions, data and transparency. Nevertheless, it is worth trying to implement them. As the courageous and incessant fight for social justice of many labour unions and NGOs in Cambodia shows, and as Sar Mora, president of the Cambodian Food and Service Workers’ Federation puts it: Although normally an egg cannot break a stone, “we have no choice, we have to fight” (Interview). An encouraging example is the time between 1953 and 1970, where the population of Phnom Penh also rapidly grew, i.e. tripled, and yet, due to urban planning and the systematic incorporation of housing into universities, industrial developments etc., there was adequate housing for all (Ross/Collins 2006).

With this study I hope to make a contribution to a better understanding of the problematic housing situation and the housing needs of rural-‐urban migrant workers

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in Phnom Penh. Based on expert interviews, I provided an overview of stakeholders’ approaches to these topics and thus sketched development trends and needs for action. This adds a little bit to the scarce body of research that exists on migrants’ and rental housing in Phnom Penh. But a huge lack of data and many questions remain. Much more research in this field is needed.

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Annex I: List of interview partners No. Person Institution Position Date of interview

Labour representatives

1 Mr. ATH Thorn1 Coalition of Cambodian Apparel Workers' Democratic Union (C.CAWDU)

President Dec 8th, 2015

2 Mr. SAR Mora Cambodian Food and Service Workers’ Federation (CFSWF) President Dec 9th, 2015

3 Mr. William CONKLIN Country director

Ms. SO Somalay

Solidarity Center

Programme officer

Dec 18th, 2015

Employer organisation

4 Mr. Ken LOO Garment Manufacturers Association in Cambodia (GMAC) Secretary general Dec 15th, 2015

Real estate sector

Cambodian Valuers and Estate Agents Association (CVEA) President 5 Mr. KIM Heang

Khmer Real Estate Chief executive officer

Dec 3rd, 2015

Mr. Rithy SEAR Chairman 6

Mr. Teck Kee TAN

World Bridge Land Co. (WBL)

Executive director

Dec 21st, 2015

Public authorities

General Department of Housing (GDH) Director general

Taskforce for affordable housing Vice-‐chair

7 Mr. Beng Hong Socheat KHEMRO

National Committee for Land Management and Urbanisation Deputy general secretary

Dec 16th, 2015

8 Mr. SOK Sam On General Department of Housing (GDH); Department for Housing Director Dec 8th, 2015

1 Names are given in the order that the interviewees put them. Usually, family names are put before given names in Cambodia, which is likely to cause confusion. To avoid this, family names are put in capitals. Where interviewees are referred to in the text, family names are used and, if necessary for clarification, also given names. For any mistakes that might have occurred in assigning family and given names, I apologise in advance.

Technique and Development

9 Mr. TEP Kosal

General Department of Housing (GDH); Department for Housing Fund and Loan

Director Dec 14th, 2015

10 Mr. LY Chanphakdey General Department of Housing (GDH); Department for Legislation, Planning and Cooperation

Deputy Director Dec 17th, 2015

Non-‐governmental organisations

11 Mr. SOK Vanna United Nations Human Settlements Programme (UN-‐HABITAT) Programme manager for Cambodia

Dec 3rd, 2015

12 Mr. SIA Phearum Housing Rights Task Force (HRTF) Secretariat director Nov 17th, 2015

13 Mr. BOUR Chhayya Sahmakum Teang Tnaut (STT) Senior research project officer

Dec 18th, 2015

Academia and other

Various universities’ faculties of architecture and urban development

Lecturer 14 Mr. MEAS Kim Seng

Sahmakum Teang Tnaut (STT), Urban Poor Development Fund (UPDF), Community Development Foundation (CDF)

Founder

Nov 12th, 2015

Pannasastra University of Cambodia, Faculty of Architecture and Design

Lecturer

World Bank, Asian Development Bank (ADB) Consultant

15 Mr. TEP Makathy

Cambodian Institute for Urban Studies (CIUS) Founder and director

Dec 14th, 2015

16 Mr. KONG Kosal Royal University of Fine Arts (RUFA), Faculty of Architecture and Urbanism

Dean Nov 16th, 2015

Annex II: Interview guideline Rental housing 1. How does the mentality of Phnom Penh’s inhabitants develop regarding

homeownership and rental housing? 2. How did and does the rental housing sector in Phnom Penh develop? (last 10

years) 3. Who do you see as the major target groups of rental housing in Phnom Penh?

Why?

Rental housing for the urban poor 4. What role does rental housing play for the urban poor in Phnom Penh? 5. Currently, how is rental housing for the urban poor in Phnom Penh mostly

provided? (By whom? Where? What type of housing?) 6. What problems do you see in terms of rental housing for the urban poor in

Phnom Penh? 7. What positive examples or aspects do you see in terms of rental housing for

the urban poor in Phnom Penh? 8. Do you know good examples of rental housing provision for the urban poor

from other, comparable places? Ways to provide housing for the urban poor 9. How do you think housing for the urban poor in Phnom Penh should be

provided? (By whom? Where? What type of housing?) 10. How do you think, for the urban poor in Phnom Penh, rent payments compare

with instalment payments? Are long-‐term instalment payments feasible for them?

11. What do you think about minimum standards for (rental) housing?

12. Only public authorities: Are you planning to introduce minimum standards for

rental housing units? Why (not)? What kind (if applicable)? 13. Cambodia’s National Housing Policy says the government should be

“encouraging and collaborating with the private sector which is willing to take part in resolving housing issues for low and medium income households and vulnerable groups”. Do you think (a part of) the private sector is willing to do so in Phnom Penh?

14. How do you think the private sector could and should be involved in the provision of more and/or better housing for the urban poor in Phnom Penh?

15. Only real estate sector: Question about the (lack of) projects for the urban

poor in Phnom Penh and (if applicable) the motivation for developing these

16. Only real estate sector: How does the profit margin of (rental) housing for the urban poor compare to the one of luxury apartments in the city centre and in satellite cities? Is it positive at all? Are subsidies needed? What kind (if applicable)?

17. What do you think about the land-‐sharing model applied in Borei Keila? 18. What do you think about involving factory owners, who employ large

numbers of workers in need of (rental) housing, in the provision of (rental) housing for the urban poor? How do you think they could and should get involved (if applicable)?

19. What about state land? Much is being sold or given long-‐term leases for. How

much is left? Where? Would the state be able to provide land for housing for the urban poor?

20. Only public authorities: Are there maps showing land categories, land

availability and land uses in and around Phnom Penh that I could get?

21. Only public authorities: What role do you think urban (land use) planning could and should have in facilitating more and/or better housing for the urban poor?

22. What do you think are the necessary steps towards “resolving housing issues for low and medium income households” as aimed for in Cambodia’s National Housing Policy?

Statutory Declaration I hereby formally declare that I have written the submitted dissertation entirely by myself without anyone else’s assistance. Wherever I have drawn on literature or other sources, either in direct quotes, or in paraphrasing such material, I have given the reference to the original author or authors and to the source where it appeared.

I am aware that the use of quotations, or of close paraphrasing, from books, magazines, newspapers, the internet or other sources, which are not marked as such, will be considered as an attempt at deception, and that the thesis will be graded with a fail.

I have informed the examiners and the board of examiners in the case that I have submitted the dissertation, entirely or partly, for other purposes of examination.

Berlin, July 21, 2016