Last month on October 10, Imran Khan announced that the Pakistan Tehreek-i-Insaf (PTI) government will set up a Naya Pakistan Housing Authority, to deliver on their promise to enable the construction of five million houses across the country.
These housing units will target low- and lower-middle income households. As per their manifesto, the aim is to build 1.5-2 million urban and 3-3.5 million rural housing units over a five-year period.
For this purpose, the PTI intends to play the role of an enabler and facilitator and incentivise private sector developers to build all five million houses.
Initially as per the announcement, the first phase of the housing project was to cover Sukkur, Quetta, Gilgit, Muzaffarabad, Swat, Islamabad and Faisalabad districts.
Since then, 12 additional cities in Punjab including Lahore, Multan, Rahim Yar Khan, Layyah, Bahawalpur, Vehari, Kasur, Sialkot, Jhelum, Gujranwala, Dera Ghazi Khan and Muzaffargarh have been added to the original list.
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That the provision of affordable housing is on the PTI’s agenda is praiseworthy. Once an issue that was at the heart of election campaigns and a high priority for international development agencies, low-cost housing provision has, for some time now, not been an urgent priority for key actors involved despite various plans to do so.
In that regard, the PTI’s focus on housing is timely and much needed, and has also been recognised as such by others writing on this issue.
Yet, there are many questions that remain unanswered and need to be considered.
What to expect from private sector
Traditionally, the private sector in Pakistan has had no real interest in building housing that is truly affordable. Profit margins are simply much higher at the upper end of the income spectrum.
For this reason, most developers have primarily targeted upper-middle to high income households.
Existing rules and bylaws have also not created any real requirements for affordable housing provision, and have continued to conceptualise it in the narrowest sense possible.
Punjab’s Private Housing Schemes and Land Sub-division Rules, for instance, state that 20 per cent of all plots in a housing scheme need to be reserved for plots upto five marlas (1,125 square feet in Lahore and 1,360 sq ft in other districts of Punjab) for low-income households.
Needless to say, a smaller sized house simply does not equate to a low-cost house. Five marla houses can now sell for as high as Rs15-20 million, out of reach for those most in need of housing.
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Of course, this is not to say that the right incentives may not encourage the private sector to build low-cost housing.
Changes to fiscal and regulatory frameworks, including shorter timelines for scheme approval, lower scrutiny fees, building bylaws and planning standards that enable higher densities and lower costs, will create more incentives for developers to build affordable housing.
Yet, it is absolutely disingenuous to suggest that all five million homes, particularly at the lowest end of the spectrum, will be provided by the private sector.
Housing provision for the poorest residents cannot be profitable due to their inability to purchase a home or a mortgage. Such homes cannot be built without the state providing some form of subsidy.
Private sector’s obligations
But while we speak of incentives, what are the private sector’s obligations when it attempts to build low-cost housing?
For this, we need to understand why some low-cost housing schemes have had limited success in the past. While there are a number of factors at play, four factors stand out.
The first is the inability to prevent speculation.
Some housing schemes (as was the case with Prime Minister Muhammad Khan Junejo’s Apni Basti, initiated in the 1980s), have been unable to achieve their original purpose of targeting the poorest households as speculators, investors or more middle-class households have secured housing units.
As a result, even after construction, housing units within these schemes have been vacant for years on end, or become unaffordable for low-income households.
Speculation is also rife in more recent low-cost initiatives, such as Bahria Town’s Awami Villas in Lahore.
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Second, in some projects, contractors have simply built housing and exited without adequate provisions for maintenance and management in the long term. Here, structures have continued to suffer due to poor service delivery and neglect.
Third, as was the case in Korangi Township or Surjani Town in Karachi, land has been selected far from the city and sites of employment, without adequate transport links and social or commercial infrastructure.
Typically, residents of such schemes have moved back to the city centre due to the absence of employment opportunities, social networks and safe transport links.
Finally, housing has been constructed without first understanding the needs and requirements of the targeted households and using materials or structures that are not socially accepted, resulting in low occupancy or an increase in social costs in the long term, as in the case of units constructed by Nawaz Sharif’s government on Wheatman Road, Lahore.
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To prevent such failures from taking place again, Jawad Aslam, CEO of Ansaar Management Company, a low-cost housing social enterprise, suggests that there must be a pre-qualification criteria for private developers.
Under this criteria, developers must ensure that majority of plots are affordable for those earning below the taxable income bracket, submit an occupancy plan, a community development plan, a plan to develop and maintain public buildings and social infrastructure, among other conditions.
Additionally, it is also important for developers to understand who they are building for and what their needs and preferences are prior to construction.
Many families prefer to build their house incrementally as and when they have money or as their family expands.
These preferences need to be incorporated during the design process as there are too many instances of entire structures and buildings being built without a clear indication of who will live in them.
Lessons to learn
While it is important to debate the modalities of house construction, and what has or has not worked in the past, there are also principles and lessons we can learn from other countries.
Pakistan is by no means the only country that has set an ambitious housing goal. Take our neighbour, India, as an example.
Prime Minister Narendra Modi launched his flagship scheme in 2015, popularly known as the Prime Minister’s Awas Yogana (PMAY), or Prime Minister’s Housing Plan.
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Promising to provide Housing For All by 2022, the scheme has four aims: 1) rehabilitate ‘slum dwellers’ (in-situ) with the help of the private sector, 2) provide a credit-based subsidy, 3) construct affordable housing with the help of the public and private sector, and 4) provide subsidies for house construction.
PMAY aims to address a 20 million housing demand.
However, by March 2017, according to a study, 82,000 houses had been constructed and 62,000 units had been occupied.
In addition, although no formal assessments have been carried out, scholars have pointed out that due to flaws in programme design, the PMAY is unlikely to adequately address the housing needs of the poor despite its explicit initial aim to do so.
In India, it has been argued that one of the key limitations of the housing programmes relates to the conceptualisation of housing primarily as a ‘new house,’ with little or no attention paid to mechanisms that can allow people to improve their existing housing stock and associated infrastructure.
Housing expert Gautam Bahn argues that no matter how sincere, governments will be unable address the housing shortage simply by building new housing units unless they also in parallel stop evictions, recognise informal settlements and help upgrade them through better service delivery and house improvements.
In Pakistan, laws to recognise and upgrade informal settlements, such as the Sindh Katchi Abadi Act 1987 and the Punjab Katchi Abadi Act 1992, have existed since the 1980s, although implementation has been slow.
Judicial-led evictions have also been a phenomenon in Delhi in India, particularly in the between 2000-2010, and it is well-documented that this led to further marginalisation of the poor and contributed to the housing shortage.
It is hence important to recognise housing as a multi-faceted issue, not a technical matter simply related to physical infrastructure.
Alongside building new housing units, it is critical to find effective ways to help improve the existing housing stock, upgrade informal settlements and — what is frequently ignored — increase the rental housing stock.
For long-term sustainability, it is also important that housing provision not be seen in isolation but in conjunction with transport and land use.
It is critical to design mixed-use, mixed-income solutions that are well connected to places of employment and other forms of social and commercial infrastructure.
There are many examples and principles that we can learn from. Without doing so, we will, without a doubt, repeat mistakes already made in the past.
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