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Housing for all

October 12, 2018

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THE housing initiative announced by the government is highly laudable considering the seriousness of the housing shortage in the country. By some estimates, demand for housing increases by 200,000 every year, with a backlog of almost nine million units, yet no major government housing scheme has been launched in decades. Instead, vast swathes of prime, state-owned land in urban as well as agricultural areas are being eaten up by rapacious property developers in the private sector who build to cater largely to elite demand. As the housing shortage grows, the vast majority of the poor find themselves left to the mercy of the rental market and the informal sector. Successive governments have shown marked apathy towards this situation, since catering to the housing needs of the poor does not carry the promise of outsize profits.

Given this context, the PTI government at the centre has done the right thing to prioritise housing and own the initiative at the highest level. The next step is to bring greater transparency to how the scheme will be structured and more importantly, how it will be financed. Housing is a complex issue in Pakistan because it touches on so many areas that are only partially under the control of the federal government, and many of the issues involved go far beyond housing alone. Zoning and tenancy laws play a big part, as do taxes and the depth of the financial markets. A scheme built on the simple idea of providing free land to private developers, with the condition that they will build only for low-income groups, runs the risk of ending up like the 14,000 plus acres reserved for that purpose by the Sindh government in Karachi’s Malir district. That land, through the provincial government’s own machinations, was instead handed over to Bahria Town as part of a huge, for-profit gated community.

A major source of scepticism about the plan, however, is the sheer size of the financing involved — a reported $180 billion — and its scope, which is to build five million houses in five years. The fervour with which the party and its followers believe in their ability to do big things can be admired, but questions remain about the viability of the initiative. If it is implemented in project mode alone, without accompanying legislation that seeks to change the power structures of urban Pakistan, give more voice to the poor in representative municipal bodies, improve the provision of civic services like water, sewerage and solid waste management, then it will amount to little more than another speculative enterprise. And the ability to finance $36bn per year, even through mortgage financing, will be challenged by the shallowness of Pakistan’s debt markets. The intention behind the initiative is laudable, but translating it into outcomes on the ground is likely to prove a bigger challenge than what the party seems to have bargained for.

Published in Dawn, October 12th, 2018