Mega housing Initiative

Prime Minister Imran Khan while addressing the launching ceremony of Naya Pakistan Housing Programme (NPHP) committed to setting up a Housing Authority within 90 days that would act as a facilitator, by providing a one-window facility, to constructing the 5 million houses during the next five years as per the Pakistan Tehreek-e-Insaf's (PTI's) manifesto. The objective is to not only provide housing for those with a monthly earning of 10,000 to 25,000 rupees but also to generate employment opportunities as the construction industry provides fodder to 40 downstream industries. However, details of financing were missing from the launching ceremony though the Prime Minister referred to public-private partnership while Secretary Housing noted that around 20 billion dollar foreign direct investment is expected in this sector - an estimate based on the queries he received from prospective investors from one country alone.
But a few words of caution with respect to the optimism with respect to NPHP. The construction sector, including ongoing projects under the umbrella of China Pakistan Economic Corridor, contributed from 40 to 60 percent to gross fixed capital formation last fiscal year with linkages to 60 industries. And according to the Economic Survey 2017-18, cement registered a high growth of 11.9 percent contributing 2.7 percent to Gross Domestic Product while State Bank of Pakistan data reveals that the construction industry received a net inflow of 35.7 million dollars in August last year. In other words, construction was not a neglected sector though one would assume that there was no capacity of the majority of Pakistanis to own a house.
The Prime Minister, cognizant of many prospective foreign investors in the country's real estate/construction sectors scammed by the unscrupulous in the past, stated that he personally would oversee the NPHP; and added "we are forming a land bank to get information of federal and provincial governments' lands and the government will provide only land while investment will be made by the private sector." The Prime Minister also stated that the government will collect data of katchi abadis to relocate people in the houses that would be built with ownership rights.
The Prime Minister's intent is clearly laudable notably to provide houses for a large number of people in this country who are unable to purchase land given the escalating costs. Unfortunately, the devil is in the details, as details provide the means to assess the success or otherwise of any scheme, and like other laudable schemes of Prime Minister Khan, details were not provided during the launch of the NPHP. Some of the questions that arise include: (i) would state land be available free of cost and if so what would deter the unscrupulous from becoming party to this scheme either before construction or afterwards by purchasing the units and selling them at market rather than subsidized rates; (ii) House Building Finance Corporation, the only main lender for house building is almost defunct and its revival would entail money that the government does not have. The question is: would domestic banks not be wary of lending to NPHP especially as the poor have no collateral so what would be the financing mechanism involved?; (iii) would the Housing Authority be empowered to ensure that loans are available to prospective buyers and, if so, at what rate? The market rate which is extremely high or at a subsidised rate and if so who would bear the cost differential; (iv) which agency would be empowered to ensure the quality of the house/apartment built?; (v) how would each unit be priced as price would differ due to the location of the unit?; (vi) is Nadra (or data to be collected from katchi abadis) to determine the beneficiaries appropriate? Or is the Benazir Income Support Programme, the more appropriate forum, as it has identified the beneficiaries scientifically and to the satisfaction of multilaterals who are engaged in investing in its expanding programmes; and (vii) katchi abadi residents include those who have encroached upon the land and those who rent units to the poor - the need to distinguish between owners and the poor would be necessary in allocating these units.
The Prime Minister must also review the existing practice of granting cheap state land to certain interest groups, in the public and private sector, the failure of government employees to vacate government housing once they retire and/or then demand that they should be given ownership rights to them is a malpractice that is becoming rampant. The better option would be to pay higher salaries to enable government officials to purchase their own houses and a mortgage financing mechanism.