Reports of the recent Pakistan Housing Sector Conference, held in Lahore the other day, have once again highlighted the fact that the government's resolve to provide housing to all is still a distant dream.
The 1998 census shows that the total number of housing units in the country was 19.3 million and the backlog was 4.30 million units, which has now risen to a staggering 6 million units.
The annual requirement is estimated around 570,000 additional housing units whereas the annual production is estimated around 300,000 housing units, resulting in a recurring shortfall of 270,000 housing units annually.
It is estimated that in order to address the backlog and to meet the shortfall in the next 20 years the overall housing construction will need to be increased to 820,000 housing units per year.
Responding to the incentives given by the government to spur investment in the housing and construction sector, it has gained and has shown growth in the last couple of years.
In contrast to the negative growth of 6.9 percent in 2003-04, the construction sector grew by 6.2 percent in 2004-05. Presently, construction activities in the country have gathered momentum and the demand for construction-related materials has skyrocketed. Many national and international real estate developers from the UAE, Malaysia and Singapore have launched or are in the process of starting housing projects in Pakistan.
People have been attracted to the real estate business and are willing to invest in quality projects. In addition, massive flow of remittances has helped the families of expatriate Pakistanis in improving their housing conditions.
With an array of banking and non-banking institutions offering mammoth sums to the affluent, housing for middle and upper middle classes is likely to post healthy gains in the years ahead.
But when it comes to the people in the low-income group, the housing situation in the country is not that rosy.
Most of the new housing schemes are designed to cater to the middle classes and high-income groups. This has resulted in unbridled growth of unauthorised Katchi Abadies particularly around the cities. Most of the speakers at the Housing Conference pointed out that almost 80 percent of the Pakistanis have an average household income of Rs 7000 per month.
So the majority cannot afford to buy land at market prices for building their houses. Land prices, particularly in the cities, have scaled heights that are even beyond the reach of middle classes.
In view of the rising land speculation, the housing conference, which was attended by engineers, builders, architects and government representatives, rightly recommended that a mechanism should be developed to levy a deterrent non-utilisation fee and cancellation of plots if they are not utilised for housing within a specified period.
In view of the shortage of land in and around the urban centres of the country it was proposed that the provincial and federal governments should introduce land banking, as being done in Malaysia and many other countries.
When the poor cannot afford land at market prices, they have to be subsidised, much to the dislike of market-economy enthusiasts. The cost of not doing will be social commotion, low productivity, unhealthy manpower, and all this will cost the national economy dearly.
Faced with the fact that most of the new public and private schemes are for the middle and upper middle classes, and 80 percent of the people falling in the low-income segment are left out in the cold, the conference recommendation makes sense that the number of small size plots should be in the same ratio (80%) in all public and private housing schemes.
For meeting the needs of the rural people which constitute over 60% of the national population, it was recommended that cluster housing schemes should be developed with basic amenities and infrastructure facilities. At present most of the rural housing is spread over either on peasant owned farm land, or on the plots given to the peasants by the landlords. These houses lack basic amenities, which can be provided by the local authorities economically if the cluster housing system is developed.
There are no building control rules and regulations for the rural areas or even the small towns. The tragic results of low quality construction and disregard for the basic architectural requirements were just witnessed by the nation in the recent earthquake.
This brings us to the issue of lack of properly trained manpower. It is true that low-income people cannot afford architects to design their houses, but surely the government can help them by providing them appropriate prototype models to follow.
The next step should be special house financing schemes for the low-income people. As recommended at the conference, the banks should provide house financing on fixed low interest rates and the State Bank of Pakistan should extend a refinancing facility for this social purpose.
This measure can be supplemented by creating savings and loans associations taking cue from the traditional house financing methods.
The banks would only be able to give them loans if they have title over the land on which they plan to construct a house. This land has to come from the government.
As recommended by the Housing Conference if the government is really sincere in its resolve to provide housing to the low income groups, there is no walking away from social housing projects wherein the government should provide necessary infrastructure facilities like roads, electricity, health, education and public transport at affordable prices. Indeed, it is the government's responsibility to provide housing on priority basis to low-income groups at appropriate locations.
The question the government has to ask itself is why the informal sector, which is also called 'land grabbers mafia' can meet the needs of the poor of this country and the government cannot. Isn't it time to learn from the market forces and do legally and systematically what these land grabbers are doing illegally. The place to learn is not far but it is in the scores of Katchi Abadies next door.