To meet the severe shortage of low-cost housing units in the country, Association of Builders and Developers of Pakistan (ABAD) doesn't need monetary assistance from the government but it requires a clear housing policy.
"We don't need anything from the government but a clear housing policy," emphasised Mohsin Sheikhani, chairman, ABAD, representative body of a thousand leading builders, in an exclusive chat with Business Recorder.
He implied that the Supreme Court may direct the government to announce a viable and vibrant housing policy for low-cost housing waiving the necessity for project approval and One Window System for all utilities.
However, Zafaryab Khan Spokesperson of Pakistan Housing Authority Foundation, Ministry of Housing told Business Recorder that the federal government has a national policy regarding the low-cost houses/plots to general public and the government employees at affordable prices.
"Due to continued pressure on land, the government prefers constructing high-rise buildings such as PHA-Maymar Towers in Karachi that is the first such endeavour; two projects in Islamabad I/12 and I/16 where 1500 and 3200 plots would be constructed on 15 acres respectively; Executive type apartments/shops for general public at Wafaqi Colony Lahore; "D" & "E" type apartments for low-paid federal government employees and for general public at Wafaqi colony, Lahore: and a total of 37,000 apartments for low-paid federal government employees on ownership basis would be constructed.
However, ABAD Chairman said ABAD members intend to build 5000 units (minimum) and a maximum of 10,000 units of 120 square yards each with two-bed rooms, two bathrooms, a kitchen and a veranda at a cost of rupees 1.5 million including cost of construction and land. He said that 20% of the total price will be paid by the buyer in 2 years and remaining 80% will be financed by HBFC or any other financial institution on easy and affordable terms and paid directly to the builders.
Answering a question, he said, ABAD has approached high officials of the House Building Finance Company Limited (HBFCL) and received a positive response; however, a clear instruction to the HBFCL is required for early completion of low-cost housing projects.
"ABAD will announce any of its low-cost housing society as the Federal Government Project and/or the Provincial Government Project if the latter indicate their support for the project," he said, adding that the project would be a self-sufficient residential society built on the community basis where all basic facilities including parks, schools, playgrounds and clinics/ hospitals, vocational homes to train youths of the colony in various technical trades would be available.
He said ABAD also planned to provide gas and electricity to the society through biogas plants and solar powers system making society self-sufficient in energy.
Moreover, the society will have its own source of water including sub-soil water and water treatment plant to cater the need of drinking water and gardening or other usages, he said.
Nadeem-ul-Haq, former deputy chairman of Planning Commission in his research paper wrote that all slums sprawl horizontally, wasting huge tracts of land. Re-zoning can generate the tapped wealth in the land. In any urban slum, the land can be re-classified, high-rise apartment buildings can be built in one-fifth of the area, and remaining land can be sold at significant capital gains due to appreciation. These gains can be spent on construction of flats of the same dwellers, which can be given property rights at very nominal charges.
The government does not have to spend a penny; only use its power of law. It can redefine property rights, zoning rules and building codes and can create a new asset class. Government need not, and should not, invest money. The private sector will be forthcoming in investment.
As per the paper, "We believe that the city planners should abandon the idea of 3 marla housing units outside the city for the poor. The best solution for solving the urban slums problem is construction of high-rise buildings, through the private sector, within prime urban land where jobs are likely to be available. While rich can afford a sub-urban life, poor cannot commute long distances".
The State Bank of Pakistan and the World Bank recently noted that housing shortage in Pakistan has reached 12 million housing units and according to a conservative estimate almost 0.4 million housing units are added to this shortfall every year. On the other hand, private builders and developers, most of them affiliated with the ABAD, are constructing 0.15 million housing units every year.
Thus, Pakistan needs 12 million housing units to be built immediately to overcome the shortage of houses. If we calculate this shortage in terms of finances with the minimum cost of rupees 1.5 million per unit, the total sum of construction roughly comes to rupees 18000 billion or US $180 billion. And if taxes are counted with the conservative and flat rate of 10 percent, the amount comes to rupees 1800 billion, more than 30% of the federal budget of 2016-17, the World Bank stated.
If 12 million housing shortage can be overcome in ten years, every year 1.2 million low-cost houses should be built costing rupees 1800 billion, which can contribute rupees 180 billion to the national exchequer. The government is losing almost more than 30 percent of revenue every year because of lack of regularisation of the construction industry through a vibrant policy.
Comments
Comments are closed.