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...
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| Format: | Working Paper |
| Language: | English |
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World Bank, Washington, DC
2018
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| Online Access: | http://documents.worldbank.org/curated/en/956811531481933385/Urbanization-in-Kazakhstan-desirable-cities-unaffordable-housing-and-the-missing-rental-marke http://hdl.handle.net/10986/30003 |
| Summary: | 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 the capital, Astana. The
findings show that the two urban centers of Almaty and
Astana are 190 and 240 percent 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 Astana 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 from 2015 imply that in the current
environment, 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 Astana, 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
restrain economic growth. |
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