Potential Areas of Useful Expertise or Interest: Criminology, Sociology, Criminal Justice, Public Policy, Psychology Maximum Number of Projects: 3 == == == == Project 11 Kuwaiti Land Use: Understanding a Distorted Market and Improving Efficiency in Land Allocation U.S. Embassy Kuwait, Economics Section Overview: In Kuwait, 95% of land is by the government or controlled by the oil and gas sector. Less than five percent of the country’s land is available for other uses. With only a small fraction of the country’s land area available for building, competition is fierce and prices are astronomical. A 400 square meter (4500 square foot, 0.1 acre) residential lot can cost more than $1 million, even in outlying areas. Larger plots can sell for more than $10 million per acre. At the same time, Kuwait is littered with old and abandoned buildings serving no productive purpose. With no land taxes, property owners can let a valuable plot of prime land sit undeveloped for decades, further restricting the limited supply of usable land. Disinterest in selling land makes it difficult to assemble larger parcels needed for commercial and industrial use. This makes it more difficult for the non-oil parts of the economy to grow and substantially raises costs for large construction projects. Questions: What can be done to make the Kuwaiti land market more efficient? Could property taxes provide the impetus to return unproductive land to the market? How can the government extract hydrocarbons without limiting access to the land above them? a more efficient land ownership system increase investment and GDP? Would such a system lead to lower costs for residential land? Format of Final Product: The final product would be a package of documents, including an analysis of pricing under various simulations (Excel workbook); a PowerPoint presentation summarizing the findings for an audience; a policy paper of 10-20 pages; and an executive summary of less than two pages. Potential Areas of Useful Expertise or Interest:
Potential Areas of Useful Expertise or Interest: Criminology, Sociology, Criminal Justice, Public Policy, Psychology Maximum Number of Projects: 3 == == == == Project 11 Kuwaiti Land Use: Understanding a Distorted Market and Improving Efficiency in Land Allocation U.S. Embassy Kuwait, Economics Section Overview: In Kuwait, 95% of land is by the government or controlled by the oil and gas sector. Less than five percent of the country’s land is available for other uses. With only a small fraction of the country’s land area available for building, competition is fierce and prices are astronomical. A 400 square meter (4500 square foot, 0.1 acre) residential lot can cost more than $1 million, even in outlying areas. Larger plots can sell for more than $10 million per acre. At the same time, Kuwait is littered with old and abandoned buildings serving no productive purpose. With no land taxes, property owners can let a valuable plot of prime land sit undeveloped for decades, further restricting the limited supply of usable land. Disinterest in selling land makes it difficult to assemble larger parcels needed for commercial and industrial use. This makes it more difficult for the non-oil parts of the economy to grow and substantially raises costs for large construction projects. Questions: What can be done to make the Kuwaiti land market more efficient? Could property taxes provide the impetus to return unproductive land to the market? How can the government extract hydrocarbons without limiting access to the land above them? a more efficient land ownership system increase investment and GDP? Would such a system lead to lower costs for residential land? Format of Final Product: The final product would be a package of documents, including an analysis of pricing under various simulations (Excel workbook); a PowerPoint presentation summarizing the findings for an audience; a policy paper of 10-20 pages; and an executive summary of less than two pages. Potential Areas of Useful Expertise or Interest:
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