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LAST week, this newspaper published an exceptionally detailed story on the allegedly coercive practices of one of Karachi’s main land developers. The details of how poor villagers are forced off their land to provide for the material aspirations of the privileged make for a harrowing read. Moreover, at every step, the apparently colluding Sindh government facilitates this process of naked primitive accumulation — the same government that is supposedly elected to protect the interests of the most vulnerable.
In the aftermath of the story’s publication, a few concerned voices have asked for greater accountability of the developer in question, and for an overhaul of government practices that make this sordid marriage of greed and graft a reality.
The land development regime in Pakistan is rife with loopholes, none less so than the colonial-era Land Acquisition Act, which allows the government to procure land under the pretence of claiming wider public interest. India next door inherited the same act, but finally pushed through for a revised version three years ago. The new legislation goes some way in protecting the rights of landowners, adds provisions for the type of activities classified as public interest, and introduces collective bargaining provisions to determine land rates. Pakistan would do well to follow this lead.
At a more fundamental level, the rapid pace of suburban real estate development raises analytical questions about the land and housing market in Pakistan. For some observers, developers like Bahria Town, DHA, Eden, and hundreds of others, are catering to market demand. Investors and homebuyers are interested in upscale, well-designed projects, with wide roads and orderly streets. They offer a safe investment with good (often great) returns, and thus prove to be an active avenue for savings. In turn, this demand feeds into more projects, which occupies more land, and thus perpetuates a particular sequence.
Two facts are clear from the demand-side picture of land development. First, there are enough investors, with cash equity and savings, to maintain a profitable cycle in land development. For the average middle- or upper-income family, the odds of getting good returns in any other saving instrument are probably lower. Plus the relatively high velocity of trade in plots makes it easy to cash in for large expenditures, such as weddings, medical treatment, and business shocks.
The land development regime in Pakistan is rife with loopholes, none less so than the colonial-era Land Acquisition Act.
The second fact is that these schemes also reflect the aesthetic preference of middle- and upper-income investors and homebuyers. They follow the suburban, gated community model, creating socio-economically homogenous neighbourhoods, with car-friendly roads, sanitised green spaces, and plot sizes that range from medium (125 square yards) to very large (1,000 square yards).
On the supply side, the situation is fairly straightforward. Given the presence of a growing upper-income market segment, with investable savings, developers see the obvious gains that can be made from initiating housing schemes. Even with development costs included, they offer good overall returns, with much less hassle compared to setting up a manufacturing and commercial enterprise. Little wonder that many agro-entrepreneurs in Lahore and other cities of Punjab, are converting arable land into real-estate ventures.
On our television screens and billboards, this happy marriage of demand and supply celebrates its glossy ventures through pictures of beaming (privileged) families strolling through golf courses and shopping malls. What is missing from view is the impact this suburban dream mongering has had on urban ecology and the housing market in general.
Each year, the housing unit shortage number grows by at least 600,000; 60pc of the urban population has access to only 1pc of the available land and housing stock. To give an illustrative example, the cost of a one-bed, 75 square yard house in a marginal locality in Lahore is approximately Rs2 million. That’s 150 times the average household income of a working-class family in the city.
Each year, the water table in our urban centres drops a couple of feet. Industrial and commercial usage is part of the problem, but at least that’s being siphoned off for productive consumption. What possible benefit does society obtain from well-manicured gardens cultivated behind the high walls of suburban houses?
We cannot expect people to change their aesthetic preferences or for developers to construct socially conscious real-estate projects. Their logics are private logics dictated by their personal preferences and profit motive. The only thing that can generate disruption in demand and supply is the state, which is sanctioned with the task of thinking about the benefit of society as a whole.
In Pakistan, unfortunately, the supply side aspect is made easier by the existing regulatory structure and policy regime. There is no penalty on holding vacant plots for investment, the government’s own development agencies actively collaborate with private developers to create schemes catering to middle and upper income buyers, and existing land-use rules are often amended to cater to suburban sprawl. In short, both aesthetic preferences and the real-estate industry are actively encouraged in its current shape and form by a friendly policy regime, and a complicit state apparatus.
In an ideal world, a conscientious government would act to stem this economic and ecological rot. It would amend its policy regime to ensure equitable access to land, and to recast housing as an item of use rather than of exchange and investment. It would discourage sprawl by regenerating inner-city neighbourhoods, investing in public transport, and limiting car-friendly infrastructure. It would protect the environment by creating sanctions for water wastage. Over time, this would have the desirable impact of changing people’s preferences and attitudes towards the types of housing they would want.
Unfortunately, none of this is foreseeable in Pakistan. The tragedy of an elite-favouring land market is fortified by a callous and complicit state. Unless something changes dramatically, the country’s headfirst plunge into unmitigated urban disaster will continue unabated.
The writer is a freelance columnist.
Twitter: @umairjav
Published in Dawn, April 25th, 2016
