The slum factor

With urban population growing by 3 percent, it has been projected that more than half of the Pakistan’s population (2017: 37%, 1998: 32%) will be living in cities by 2030. As quoted in various studies—though a more accurate measure is still not available—the housing shortage that needs to be met is 10-12 million houses, and each year, the incremental need is rising as rural migration and overall population grow. Lack of urban planning, poor governance and public service delivery are only exacerbated by these two rapidly growing factors allowing for a mammoth slum population to persist.

Largely poor and informally employed, swathes of people move out of the rural areas into the lands of opportunities only to be left largely poor and unemployed in the cities—without human necessities like water, sanitation, basic nutrition and healthcare, sometimes food, and many times shelter.

At nearly half the urban population, the slum population is almost never unaccounted for when policies are made. The inability of subsequent governments to bring informal, unplanned settlements and kacchi abaadis into the ambit of formal housing is even starker when compared to India and Bangladesh. Both countries have dramatically improved living conditions for their urban population faced with the same dual challenges of rural migration and population growth (see graphs).

A research paper published under a working paper series at the Centre of Excellence for CPEC argues that the sheer infrastructure development through the road and rail network will boost urbanization further. CPEC along with greater economic activity and the creation of special economic zones (SEZs) across the country present a strong case for urban development. But with the current state of urban dwellers and the unequal distribution of resources and income, cities will have to come with not only affordable housing and infrastructure but also employment, business opportunities and basic public service delivery systems.

The PTI which is the leading political party likely to form the government introduced a housing policy promising to add one million new homes to the housing stock. While commendable, the government should not be in the business of constructing houses. In fact, it should act as the facilitator for market solutions to thrive and sustain in the long term without having to go into public funds every time.

This means. Banks and development finance institutes should be encouraged to lend to mortgage borrowers (CY17: 0.2% of GDP) and new builders through innovative products. To that end, the SBP’s new low-cost housing finance policy (read: “Rousing low-cost housing finance”, published July 27, 2018).
Collaborations in the public-private sphere can be garnered where the government may provide some incentives for builders to enter the low-cost demand market. Mobilization of the private sector will be critical for to meet the housing shortage (read: “PTI housing policy”, published July 9, 2018).

Most importantly though. The legal and regulatory framework needs to be harnessed so that the demand can be met. This means, revitalizing of foreclosure laws to keep these cases out of the court, eliminate land tilting issues and disputes through one-window electronic land registration and records, updating building codes and density laws in favour of vertical development for better land utilization, bringing down the red tape that prolongs registration and transfer procedures requiring multiple government institutes for approval, allowing these procedures to be short and transparent so costs can be brought down and incidence of bribery can be reduced.

Moreover, the ballooning land prices due to speculation in the real estate market have to be controlled. Consistent and jerky rise in real estate prices is a major factor into the unaffordability of housing and why even middle class families cannot afford to buy property. This can be done by ensuring that only registered and authentic builders can enter construction and by stipulating time by which construction must begin on land auctioned out, among other solutions.

Lastly, the problem with undefined urban boundaries needs to be resolved. Currently, urban population is determined by administrative boundaries which are not revised over time, but urban dwellings have moved beyond these lines. This further stresses the cities’ limited resources.