RMG Assists Mongolia in Developing Affordable Housing
The population of Mongolia just hit 3 million people in July of 2015. The majority of the population live in the capital city, Ulaanbaatar. But just one generation ago, the majority of the people were herdsman on the steppes, “Nomads”, and lived in ger’s (a tent-like structure made of wood frame and covered in wool felt). Their livestock consists of goats (for cashmere), sheep (wool and mutton), horses (for herding, racing and mere’s milk), cows (milk and beef) and camels (milk and transportation). But Mongolia is changing.
Now, over 180,000 ger’s line the hills outside of the capital city. The pollution from their outhouses and most notably from their coal burning furnaces, have resulted in a city on the brink of an
environmental disaster. The carry water to their homes from a common well. Many displayed solar panels but according to City officials, these fail quickly because of the harsh climate.
The Ger District consists of residents on 7,000 square foot lots, given to the citizens by the Mongolian government. They are also given a small lot outside the city to have as their “country residence”, in order to escape the smog during the days with bad air quality. The most smog is associated typically with the cooler days while using coal furnaces.
RMG is taking an opportunity to assist in this crisis and create a partnership with the City in developing affordable units that the Ger District population can move into. The units will be small; typically 16’ x 16’, 20’ x 20’ and 24’ x 24’. The water, sewer, electricity and heat resources will be provided by the City. RMG will provide the layout and architecture, while 84 Lumber will provide the building materials. The details of agreement are in the beginning stages and many financial concerns have plagued the City in the past. The main industry is mining and is unfortunately in a downturn. However, an election in the spring of 2016 may spur on this type of project.
The City realizes if economic opportunities are going to be explored by international companies, like ours, that the air quality and soil pollution needs to be addressed. Currently, a successful, Mongolian businessman has expressed an interest in assisting our connection with the City on this project. If this happens, then the infrastructure will be paid for by the City. This still leaves a wide gap in the building of the homes and materials. Most residents have a monthly income of aproximately $500 per month. If they were to put 30% of their income towards housing, a typical Ger District resident would be able to afford about $150 per month; which means a typical 30-year loan would only amount to a principal of $15,000. The building and materials for a small unit may cost between $30,000-$50,000. This gap is being discussed by government officials, financial institutions and non-profits. No current remedy exists.
The Mayor of Ulaanbaatar, Mayor Batuul, has expressed the Ger District concern in many meetings I attended. They also discussed opportunities for students to travel back and forth and exchange resources, research and development. Many universities were represented in the “roundtable” discussions, such as University of Denver, Metropolitan State University (Denver), University of Mongolia, and Colorado Heights University.
Many Mongolian businessmen have attended universities in Colorado and feel a strong connection to the State. Everyone I met at these meetings had heard of Colorado and knew of this connection. The literacy rate in Mongolia is high; 95%. Education is taken very seriously and the children are taught English in schools. They also have the choice to attend a Russian, Japanese, Chinese or British school or university.
Mayor Batuul and Mayor Hancock dedicated a street, named “City of Denver Street” at a ceremony attended by many delegates from the International Sister Cities program, with music and singing. Music is very much a part of the Mongolian lifestyle and Mongolians are said to literally be born singing. Horse violins are the traditional instrument you will see in many concerts. Also, many of their songs are written about the horse, as this animal allowed them to survive in a harsh climate and herd their livestock.
Not only was I privileged to meet many government officials and city planners, but I also made many contacts with business and development companies. The largest development is the new airport which will be built 60 km to the southwest of the existing airport. The funding is considered a “Soft Loan” from the Japanese government, but 80% of the workers are Mongolian. An 8-lane highway to the new airport will be constructed by the Chinese government. Many benefits will be felt by these governments when this airport is completed in 2017. There will also be an Airport City to be built just on the outskirts of the new airport, to house workers and provide luxury hotels, casinos, services and shopping opportunities for travelers. Just beyond this new airport, to the south, is the famous Gobi Desert; famous for paleontological discoveries, windswept steppes and singing dunes.
Many development opportunities were explored on this trip. Above, property owned by NovaTerra which is a plan for 20 luxury homes, a clubhouse, an archery training center for the Olympics and retail stores. This property sits just across the street from a project previously pursued by RMG. During this meeting, Mr Itgel, the CEO of NovaTerra, expressed an interest in having us put together a proposal and contract. This has been accomplished and we’re waiting to hear back from him.
The Shinest Community Plan consists of approximately 350 single-family homes, some multi-family buildings, a school, a sports center, some retail stores, some offices and will be self-sufficient as far as water, sewer, electricity and heat. The project is being revised, based on RMG’s initial comments. This meeting resulted in renewed interest in the proposal and contract already sent prior to the trip to Mongolia. Ex-patriots who are seeking a similar housing opportunity to the United States are being targeted for this project.
Other projects, like the Ehbut companies’ development ideas were explored during the trip. Proposals and contracts have not been signed but the upturn anticipated in the mining industry will drive more business to Mongolia. And RMG is well positioned at this moment.
The City redeveloped the blighted area along the river, just beyond the United States Embassy property which has the “City of Denver Street.” The affordable apartments behind were bought by residents in an open market and go for about $40,000 to $50,000 per unit. This was considered a big step up for them to purchase their own apartment in the City. Unfortunately, the construction wasn’t good quality and many are failing and will have eventually have to torn down. The building code is non-existent currently but the City may pass one in the spring of 2016.
Vista Village, an affordable housing project in Ulaanbaatar consisting of 1,500 homes with retail shops, offices on the first floor of the four built. This project has easy access to bus stops and is near the existing airport. The units are one-bedroom,approximately 24’x36’ and two-bedroom units at 36’x36’ feet and one larger unit. The units were sold at $20,000 through $40,000 each and are financed by the development company MCS in Ulaanbaatar and are sold out. The purchaser was required to put down 10% of the total purchase price. Many young families live in these units.
