D.Bayaraa lives with his wife and three children in Bayanzurkh District’s 28th khoroo. He is an ordinary young man working at a private company, earning a monthly salary of 1.8 million MNT, doing his best to provide for his family. Like countless young Mongolian families, their biggest dream is simple: to live in a warm, comfortable, secure apartment they can truly call home.

They once considered building a small family house on their own plot of land. But after calculating the soaring construction expenses, they realized the total cost would match, if not exceed, that of buying an apartment. This left them with a single practical goal: to find an apartment close to their children’s school and kindergarten, where the family could live safely and conveniently.

For young Mongolians, owning a home has become almost synonymous with stability and dignity. Yet a home should not be treated as an aspiration or luxury. It is a fundamental human necessity. The state has the duty to respect, protect, and uphold each citizen’s right to adequate, safe, peaceful, and dignified housing. Paradoxically, in Ulaanbaatar City, where more than half of the nation’s population resides, long-promised policies meant to reduce the “forest of chimneys”—the symbol of coal-dependent, polluted ger districts—remain either underdeveloped or inconsistently implemented.

Beyond redevelopment projects that often resemble forced mobilization more than genuine urban planning, little attention has been given to creating real pathways for citizens to move into apartments, to improve quality of life within their own plots, or to ensure that education and healthcare services are accessible where families actually live. If households in the city’s outskirts were at least connected to central heating and sewage systems, no family would voluntarily continue battling coal smoke and freezing winters.

To be clear, this is not a call for the government to hand out free housing or encourage dependency. No one here is arguing that people should wait idly for the state to build them apartments. The concern is very different: how do we support citizens who work tirelessly and honestly, day and night, yet find that their earnings barely cover food, clothing, and essential expenses? How do we help families who want to save but simply cannot? For many of them, the only remaining lifeline is the government-backed mortgage program with a six-percent annual interest rate.

What is at stake is not luxury, but the basic human right to live decently, safely, and with dignity—and the hope that this right does not remain out of reach for ordinary working families.

INCOME FALLS SHORT, LEAVING FAMILIES UNABLE TO AFFORD HOUSING

Mongolia began offering apartment mortgage loans in 2010. According to the statistics, 129,100 people have received mortgage loans by last September, with the outstanding balance of mortgage debt reaching 10.8 trillion MNT. 

The citizen introduced at the beginning of the article, D.Bayaraa, meets every requirement set by banks: he is over 18, has full legal capacity, has no overdue or non-performing loans, and has never participated in any of the government-supported housing programs—whether the subsidized six-percent mortgage loan or the “rent-to-own” scheme. Moreover, he is fortunate enough not to have reached the age limit of 45. In other words, he has no outstanding debts and fits the age criteria, yet he stumbled at the same point as thousands of others—the inability to gather the required down payment.

To make matters more discouraging, the bank told him, “Your application will be reviewed in two years,” crushing any remaining hope. Although the official down payment rate is 30 percent, he was told that in reality, unless he has 60 to 70 million MNT in cash, his application is unlikely to proceed. D.Bayaraa shared frankly that after taxes and social insurance deductions, his monthly salary is insufficient not only for housing costs but even for decent clothing and nutritious food. He added that the company he works for is also struggling, burdened by taxes and beginning to show signs of operational decline.

Mortgage loans were originally designed to help middle- and lower-middle-income citizens purchase homes. Yet the question remains: why has this goal not been met? To explore this issue further, economist R.Shinegerel offered insight. “The government must significantly reduce its structure and staffing,” the economist said. “The state has entered sectors where private businesses could operate, restricting competition. These state-run businesses should be transformed into publicly traded companies or privatized. The investment environment—both domestic and foreign—remains unstable. It is crucial to create an open, favorable environment for foreign investment. Reducing overlapping taxes and fees and increasing household incomes must be prioritized. Only when incomes rise will people be able to buy homes and repay loans. The government is restricting opportunities for citizens to run businesses freely. When the state enters the private sector, competition and investment incentives disappear. For example, foreign investment in Mongolia’s mining sector has practically evaporated,” R.Shinegerel said. 

The economist further explained, “Until government interference and bureaucracy are addressed, the middle class will continue struggling to afford housing. Heavy taxation prevents private companies from improving productivity and raising wages. Even small and medium businesses have been suffocated by state interference. The government has grown excessively large and now finances itself by collecting taxes and fees ‘by force’. While banks and construction companies tighten their requirements simply to minimize risk—something expected in a market economy—these issues are deeply influenced by tax burdens and government policy.”

For those hoping to obtain a mortgage, the process is grueling. Applicants must list every income and expense down to the last tugrug, and even after doing so, only a fraction receive approval. If successful, it feels like a once-in-a-lifetime achievement. Commercial banks charge annual housing loan interest rates of about 20 percent, while mortgage loans are three to four times lower and offer long repayment periods—hence the overwhelming demand. But in reality, the chances of qualifying are extremely slim.

For instance, the State Bank is reportedly now reviewing applications submitted back in 2023. Khaan Bank is accepting applications but cannot say when they will be processed. Strangely, while banks tell citizens it may take years for applications to be reviewed, construction companies have somehow become able to “quickly and smoothly” secure mortgage approvals—a practice that has already been ongoing for some time.

Online advertisements claiming “We can get your mortgage loan approved” are ubiquitous. When contacted, one such company said, “We work in partnership with a bank. Approvals are no problem. We have apartments in locations such as Officer’s Palace and Zaisan that will be ready next summer.” Others say that once a buyer makes a down payment and reserves an apartment, the remaining balance will later be transferred to a six-percent mortgage loan.

Despite regulations clearly stating that only banks can issue mortgage approvals, construction companies have somehow gained this power. The very opportunity that ordinary citizens spend years searching for seems to have conveniently ended up in the pockets of certain influential actors in the construction sector.

HUMAN RIGHTS INSENSITIVE ‘SHOW’ 

Prime Minister G.Zandanshatar and the members of his Cabinet, presented the government’s five-year development plan to the public in mid-November. During the event, Minister of Family, Labor and Social Protection T.Aubakir announced that households with four or more children would be moved forward in the queue for mortgage loans, and one parent would be exempted from personal income tax. Although the minister framed this decision as support for middle-income families and a measure to encourage childbirth, the public widely criticized it as discriminatory and lacking any understanding of human rights—a policy that effectively divides citizens based on how many children they have.

Many people expressed frustration, noting that even if their mortgage applications were moved ahead in the line, it would be meaningless if they did not meet the bank’s strict requirements. They argued that instead of creating a spectacle, the government should focus on increasing people’s incomes or providing support for the down payment—measures that would have real, tangible impact.

15 years ago, Mongolia welcomed around 80,000 newborns annually; today, that number has dropped to roughly 50,000. Population researchers and demographers consistently emphasize the urgent need for policies that genuinely support families in having a third or fourth child. Yet the state has failed to deliver meaningful incentives or effective mechanisms.

Citizens are calling for equal access to concessional mortgage loans—not preferential treatment tied to the number of children they have, and certainly not empty promises. For example, although authorities have repeatedly claimed that families with children with disabilities would be granted mortgages without waiting in line, this has never been implemented in practice.

In reality, the mortgage system has long been “hostage” to construction companies. Those with connections or influence can have their loans approved at lightning speed, while regular applicants are told to wait one or two years, effectively discouraging them from even trying. Such practices undermine fair competition and deepen social inequality.

Every country implements concessional or long-term housing loan schemes differently. Some provide a portion of the down payment as a non-repayable grant, while others cover part of the loan interest. Rent-to-own systems have also proven effective. For instance, in many Australian states, first-time homebuyers receive a grant of 10,000 AUD and can purchase homes with down payments as low as two to five percent.

If policymakers made decisions grounded not in publicity stunts but in the real needs and living conditions of ordinary citizens, Ulaanbaatar’s ger districts would not be expanding—they would be shrinking.