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A platform for research: civil engineering, architecture and urbanism
Urbanization in Kazakhstan: desirable cities, unaffordable housing, and the missing rental market
Kazakhstan’s cities are hubs of economic opportunity and prosperity. But despite the Government’s ambitious targets, the pace of urbanization remains slow. This study focuses on two key constraints: (i) the very high cost-of-living in Kazakhstan’s cities, and (ii) the near absence of a rental housing market outside of the capital, Nur-Sultan. The findings show that the two urban centres of Almaty and Nur-Sultan are 190% and 240% more expensive to live in than the national average. Housing is the primary driver of the disparity: after adjusting for inflation, housing costs tripled in Nur-Sultan and quadrupled in Almaty between 2001 and 2015. As a result, housing costs for the local population in these areas are more unaffordable than famously exclusive cities such as San Francisco and Vancouver. Demand elasticities imply that rural and low-income households are especially unlikely to relocate to high-priced areas where employment prospects are better and average incomes are higher. Regional convergence in wage rates remains slow but appears to be proceeding most quickly in Nur-Sultan, where rental housing is most prevalent. The findings suggest that high rates of home ownership and the high cost-of-living in cities lead to exclusion of lower-income households and restrains economic growth.
Highlights
Urbanization in Kazakhstan is proceeding very slowly, despite ambitious government targets.
The high cost-of-living in the urban areas of Nur-Sultan and Almaty deters many potential domestic migrants.
This is driven almost entirely by housing costs: housing in high-demand cities is seriously unaffordable for most people, even among those already living in cities.
High home ownership rates and an abnormally small rental market further reduce domestic mobility.
Urbanization in Kazakhstan: desirable cities, unaffordable housing, and the missing rental market
Kazakhstan’s cities are hubs of economic opportunity and prosperity. But despite the Government’s ambitious targets, the pace of urbanization remains slow. This study focuses on two key constraints: (i) the very high cost-of-living in Kazakhstan’s cities, and (ii) the near absence of a rental housing market outside of the capital, Nur-Sultan. The findings show that the two urban centres of Almaty and Nur-Sultan are 190% and 240% more expensive to live in than the national average. Housing is the primary driver of the disparity: after adjusting for inflation, housing costs tripled in Nur-Sultan and quadrupled in Almaty between 2001 and 2015. As a result, housing costs for the local population in these areas are more unaffordable than famously exclusive cities such as San Francisco and Vancouver. Demand elasticities imply that rural and low-income households are especially unlikely to relocate to high-priced areas where employment prospects are better and average incomes are higher. Regional convergence in wage rates remains slow but appears to be proceeding most quickly in Nur-Sultan, where rental housing is most prevalent. The findings suggest that high rates of home ownership and the high cost-of-living in cities lead to exclusion of lower-income households and restrains economic growth.
Highlights
Urbanization in Kazakhstan is proceeding very slowly, despite ambitious government targets.
The high cost-of-living in the urban areas of Nur-Sultan and Almaty deters many potential domestic migrants.
This is driven almost entirely by housing costs: housing in high-demand cities is seriously unaffordable for most people, even among those already living in cities.
High home ownership rates and an abnormally small rental market further reduce domestic mobility.
Urbanization in Kazakhstan: desirable cities, unaffordable housing, and the missing rental market
Seitz, William (author)
International Journal of Urban Sciences ; 25 ; 135-166
2021-01-01
32 pages
Article (Journal)
Electronic Resource
Unknown
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