The Saudi Arabian Housing Crisis and Financial Solutions
Riyadh, Saudi Arabia: Lessons from the United States. Image courtesy of Shutterstock.

The Saudi Arabian Housing Crisis and Financial Solutions
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Every week, we read about the housing crisis in the Kingdom of Saudi Arabia.  An important recent development is the conversion of the Saudi Real Estate Fund into a real estate bank. The purpose of the fund is to expand homeownership for Saudi Arabians. In any country with low home ownership, the economy tends to perform less well than one with relatively high home ownership.  And, homeownership is a catalyst for economic, social and political cohesion.  When the middle class believes that owning a home is affordable and feasible, good things tend to happen to a country.

In making the conversion, I hope that our friends in Saudi Arabia will learn three simple lessons from the United States:

Make the instruments of homeownership easy to securitize. This has two immediate...