Panama is in the midst of both an economic and real estate boom. New businesses, properties, and civil construction projects are going up at an unprecedented rate. However, there’s a flip side to all of this outward development that has not gone unnoticed by the Panamanian government. Despite all of the new building and development in the Panama real estate sector, Panama’s poor are going through a major housing crisis. How bad is it? Panama has documented nearly 9,000 condemned houses, with many more on the verge of falling into the same fate. Most of these houses are clustered in densely packed urban areas of Panama City and Colon, with Colon making up more than half of the total number.
Panama’s proposal to add 35,000 new homes
Panama’s new presidential administration, lead by Juan Carlos Varela, is making affordable housing a priority for the remainder of his term. His government has set aside $19.5 billion for investing in public improvements, and slated about $1.5 billion of that just for housing. According to a recent announcement made by the federal government, the housing plan will add 35,000 brand new, affordable housing units to the otherwise condemned sites, to be completed in stages over the next five years. This plan will also include renovations and improvements for over 10,000 existing homes throughout the nation. The initiative, in English, is known as the “Housing Program Solidarity Fund.”
This new initiative aims to help over 150,000 Panamanians currently living in sub-standard housing, and hopes to reduce the country’s housing deficit at 50%. This is a tall order, but a necessary one, and a priority of the highest order for the Varela administration.
Why affordable housing is critical for Panama’s growth
Panama’s real estate growth has been vital to the country’s overall economic outlook. More offices and residential buildings are being built than ever before in the country’s history. Multinationals are relocating to Panama, in part, because of its property infrastructure. However, a large part of Panama’s workforce lives in sub-standard housing, or is unable to afford housing that’s convenient (or even conducive) to working or studying. This housing deficit can have long-term effects on the workforce, and may lead to staggered business growth because of it.
New homes helps build quality of life
There’s also the quality of life issue, and crime. Safe, clean, affordable housing in urban areas typically leads to lower crime rates. It also increases the quality of life of the country’s inhabitants, which has immeasurable benefits to the overall health of the country and its economy. New housing in Panama’s otherwise neglected area will also help build their local neighborhood economies, incentivizing businesses to move and creating jobs. These jobs and businesses are crucial to Panama, as the wealth gap is growing, and the current administration wants to buck the trend as soon as possible.
Comparative market value
The housing market in Panama continues to be relatively cheap for international businesses and expats, comparatively. However, prices have been rising at a steady rate for 5 years, and many of the nation’s working class has been priced out of the market for both rentals and sales. The glaring lack of affordable housing not only affects those at the bottom of the economic scale, but also those in the middle class, who struggle to find quality housing at an affordable rate. While the new houses are meant to replace otherwise condemned homes, it will also help to level out prices for the middle class to buy, and private developers to follow suit to meet the demand.
Panama’s moving quickly in almost all sectors these days. With this new housing announcement, the government hopes to keep progress moving forward, without leaving the heart and soul of the country behind.
