By AZE.US
Legalizing nearly 500,000 undocumented homes and apartments in Azerbaijan could sharply increase housing supply, generate hundreds of millions of manats for the state budget and help reduce property prices, economist Natig Jafarli said.
Jafarli outlined the potential economic and social effects of a large-scale property legalization program in a public Facebook post.
He said that once ownership documents are issued, as many as 500,000 properties could potentially enter the formal real estate market. Their owners would be able to legally sell, transfer, inherit or use the homes as collateral for bank loans.
Legalizing detached houses could also accelerate the redevelopment of older residential neighborhoods, according to the economist. Developers would be able to formally purchase documented homes and combine adjoining plots for larger construction projects.
Jafarli offered an example in which a developer buys 10 to 15 houses and replaces them with a three-building residential complex of 12 to 14 stories. Each such project could add approximately 70 to 90 apartments to the market.
If 2,000 comparable projects were implemented, the total number of additional apartments could reach roughly 150,000, he estimated. Such a substantial increase in supply could place downward pressure on housing prices.
Legalization would also expand economic opportunities for homeowners. After receiving official ownership certificates, residents could register small businesses at their properties, including repair workshops, bakeries and cafes. They could also use their homes as collateral to secure financing and expand their businesses.
Jafarli said the program could produce significant revenue for the government. If the official legalization fee were set at 1,000 manats, or about $588, per property, processing 500,000 homes would generate 500 million manats, approximately $294 million, for the state budget.
However, the economist argued that the documents should ideally be issued free of charge. He claimed that unofficial payments currently demanded in some cases can be 15 to 20 times higher than the proposed 1,000-manat fee.
The initiative could also resolve residence-registration problems for people living in undocumented properties. Jafarli said formal registration would improve access to public services and allow residents to participate fully in elections and civic life.
The figures represent the economist’s projections rather than an officially approved government plan. Legalization would not mean that all 500,000 properties would immediately be offered for sale, but it could make a large segment of Azerbaijan’s housing stock legally transferable and eligible for mortgage-backed transactions.
AZE.US