Dr Sok Siphana has a number of titles to his name, from managing partner of his namesake law firm Sok Siphana & Associates to an advisor to the Cambodian government. The former Secretary of State at the Ministry of Commerce has made his mark on the Kingdom, at both a local and international level, and now Siphana is doing his part to help low-income earners in Cambodia become homeowners.

The practising lawyer recently teamed up with Worldbridge Land chairman Sear Rithy through the signing of a memorandum of understanding which will see the law firm provide legal and other consultation services to buyers of Worldbridge’s government-backed affordable housing project in Kandal province.

Siphana spoke to Post Property about the rationale behind his involvement in the project and the future of affordable housing in Cambodia.

Why did you feel it was important to partner up and get involved in this low-cost housing project?

For our firm, it’s part of our corporate social responsibility (CSR). Let’s be real, there’s barely any money to be made [in low-cost housing]. Here, it’s more how we can dispatch information for buyers who want to know more about their legal rights, duty, and responsibility because not many people understand their rights and responsibilities. When it comes to real estate, it’s quite sophisticated and requires a lot of due diligence. The buyers don’t have to come to us, but if they have some questions, then lawyers of Sok Siphana & Associates will make themselves available and we can explain everything to them. The fee – a very minimum one – we will take from the developer.

Did Sear Rithy approach you for the partnership?

Yes. We represent a few of his big accounts so, in a way, it’s sort of like returning a favour. For example, we represent him on The Bridge (an Oxley-Worldbridge residential project) so we made some money there, so this is a project that, I don’t think, he himself will make much money from. For him, it’s also a civic duty side. This is something that, at the end of the day, is a good profile of giving to the people. He’s very passionate and very sensible, and I also find him really open-minded. He listens to advice and he respects my opinion, which is why I’m very comfortable partnering with him.

What is your opinion on low-cost housing in the Kingdom? There’s a general position it’s lagging behind its regional counterparts. Would you agree with this?

When we look at Cambodia, it’s hard to make a comparative analysis. The conditions are very different, mainly because Cambodia has started from a much lower base than its neighbours. For a country that has just had peace for about 16 to 17 years, the market is finally in a position to respond. If the government didn’t have a [housing] policy, the company couldn’t move in also so here it’s a clear partnership in the sense that the government has set the stage.

There are so many things the government can facilitate with that will reduce the cost [of developing low-cost housing]. Cambodia is a copycat society. Rithy started this but I give it two years before we see many other copy cats. It’s a good copy cat. The notion of CSR is very much him. One just has to be careful that other copycats don’t take advantage and exploit, and this is where I think my role in this project is so important. The public, however, have to work harder to understand their rights and obligations.

If someone claims it’s public [housing], is that true? Does it have the endorsement of the Ministry of Land, Management, Urban Planning and Construction? That is important. It’s important that people know the project is endorsed. If it’s not endorsed you’re not going to have the benefit. One has to make sure that people aren’t deceived by false advertising. I would say, if those developers want legitimacy, they should find some local partners and lawyers to help them and I’m sure there would be plenty out there who want to do the right thing.

Do you think the foreign and local financial institutions will be hesitant to get involved with low-cost housing?

The threshold is not that high. And for this sort of thing, the risks are very minimal in the sense that the people have a home – they are not merely speculators. A home is a roof for your kids; a family. I would encourage – not the commercial banks as it is too small for them – but the MFIs (microfinance institutions) for example. A MFI will suit the project well. But again, when it comes to financing, one has to also ask the financer not to take advantage of these poor people. Because the risk is not high, they should not charge too much interest.

If [the financers] decide to enter into this affordable housing project they must come not with a pure commercial mercantile mindset. They have to come with a certain heart. We shouldn’t lose money, but break even. To me profit is good. It’s greed that kills. So if a MFI enters into this affordable housing project they should come with a more passionate approach.

Why is affordable or low-cost housing just starting to make some inroads in Cambodia now?

Economically speaking, there’s always a ripple effect but there has to be a big stone thrown first before there are ripples. I think what you see in Phnom Penh now is that big stone in the water that has started to cause the ripple. This affordable housing project is a small ripple effect of that construction. Four years ago, this low-cost housing project would not be possible because the costs of construction would be prohibitive. The labour, based on the lack of experience, would again be cost-prohibitive.

The lack of equipment and construction material would not be enough. So what we have now, after four years, is an excess of construction equipment. Also, the human resources are there, the knowledge base is there and the technology is there, all based on the boom of the construction. All these factors explain why it is possible to only now do affordable housing.

Had it not been for the boom in real estate [in Phnom Penh], forget about low-cost housing. Financially, it would just not be possible.

How do you envision the future of low-cost housing in Cambodia? Do you see more developers following in Rithy’s footsteps?

Yes, I suspect more will come, but it’s up to the public to make sure they are credible. The trick is how to deliver quality housing, because you don’t want shabby stuff. So the experience and capability of the developer matters. The luxury is for the condominiums but for public housing what matters is that the roof doesn’t leak, the paint will last and the walls don’t crack. What you do in the early phase is very important.

There will also be an opportunity for a more junior Cambodian lawyer to step in also for other projects. The legal advice is not that sophisticated, you are not dealing with complex real estate legal concepts for an investor. It’s very straight forward. A young Cambodian lawyer could easily fill that gap. To me, I’m more like a pioneer setting the stage. And this is something that will be good for Cambodian lawyers. Hopefully for future projects, local firms could fill the gaps there. Say for example, Rithy expands somewhere in Battambang, he won’t need me. By that time I would have set up a system – a legal framework and everything and someone else can get involved.

This interview has been edited for length and clarity.