8/15/2014 Housing scenario in Pakistan - News

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Housing scenario in Pakistan
Ismat Sabir

The population of Pakistan is growing more than 2 percent per annum and reached 184 million in 2013 as compares to 166
million in 2008, i.e.with in two years an increase of about 18 million people in total population.
The world population was growing at the rate of 1.4pc in 2011 reduced to 1pc in 2012. However, in spite of the decrease
about 71 million people were added in global population, and the total world population crossed the figure of 7 billion at the end
of June 2012.
According to official figures, Pakistan is the sixth most populous country in the world and the second largest country in South
Asia with an estimated population of 184.35 million, 2012-13. The growth rate of population during 2012-13 was 2.0 percent. It
was expected that Pakistan will have fifth position in the world, in terms of total population, in 2050.
Although working age population can become asset of a country but they need more food, education, and health and shelter.
It is estimated that median age in Pakistan is 22 years which means Pakistan is a young country. Out of the total population
the working population was 110 million which is 60 percent of the total population.
Urbanization
The world is undergoing the largest wave of urban growth in history. In 2008, for the first time in history more than half of the
world's population was residing in towns and cities. By 2030 this number will rose to 5 billion. Population growth and
urbanization go together and economic development is closely correlated with urbanization. The more urbanized a country the
higher is the level of individual income. No country has ever reached high income levels with low urbanization and mostly rich
countries have higher levels of urbanization.
Population growth together with rural urban migration increases density and creates higher urban agglomeration. This is the
phenomenon which is critical for achieving sustained growth as large urban centers allow for innovation and increase economies
of scale.
The population in urban areas increased from 58.74 million in 2008 to 69.87 million in 2013.
Table-12.6 gives the detail, of urban and rural population in Pakistan during the last six years. If the current pattern of
urbanization continues, the urban population of Pakistan will cross the figure of 122 million in 2030, which would be 50pc of
total population of the country.
The major contributor of urbanization was migration, which is the process of movement of people in search of social and
economic opportunity. Cities generate jobs and income. With good governance they can deliver education, health care and
other services more efficiently than less densely settled areas simply because of their advantages of scale and proximity. Cities
also present opportunities for social mobilization and women's empowerment.
Furthermore, the density of urban life can relieve pressure on natural habitats and areas of biodiversity.
Table - 1
Urban Rural Population in Pakistan

Year Urban Population Rural Population Total Population
2008 58.74 107.67 166.41
2009 60.87 109.07
2010 63.05 110.46
2011 65.28 111.82
2012 67.55 113.16
2013 69.87 114.48 184.35
Source: Economic Survey

As the population increases, the demand for housing units is increased. Housing is one of the three basic needs of human
being. Providing shelter to every family is a big issue for government that has been resulted due to rapid urbanization and
higher population growth. But on the other hand, the production of housing units has not kept the pace with the above factors
and resulted in the deterioration of living condition, increased health hazards and rapid growth of slums and squatter
settlements, Katchi Abadies.
Housing for all
To overcome ever increasing demand for housing units some innovative methods are needed to be employed to make a major
breakthrough in this area.
Due to the strong linkage of the housing sector to the economy, the income multiplier is generally very high, and the private
and informal sector can play a vital role in national development. The sector also generates direct employment especially
absorb rural labor and provide opportunity for seasonal employment for farm workers, enhance participation of women workers,
and activate small scale and mostly self employed industries such as building construction materials, equipment, fittings and
fixtures.
According to the 1998 Census, there were 19.3 million households in Pakistan, the average household size was 6.6 persons and
occupancy was 3.3 persons per room. The overall housing stock comprised 39 percent Kucha houses mostly without proper
water supply, 40 percent semi Pucca houses mostly without planned sanitation or sewerage system, and only 21 percent
Pucca houses.
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Pucca houses.
The demand for housing is estimated at 570,000 units annually, as against this only about 300,000 units were being built
annually, mostly in urban areas. The housing backlog was estimated at 4.3 million units in 1998 that has increased to around 6
million units in 2005.
About half of the urban population is living in slums and Katchi Abadis, with inadequate housing and living conditions. The share
of housing in the public sector programmes has progressively decreased from 10.9 percent in the 1960s to 5.9 percent in
1990s, with limited institutional finance continuing to be a major constraint in housing production and maintenance of old
dilapidated housing stock.
According to housing census, the housing backlog was about 4.30 million that was projected to reach 6.19 million in 2010. It
was estimated that to address the backlog and to meet the housing shortfall in the next 20 years the overall housing
production has to be increased to 500,000 housing units per annum. The present housing stock is also rapidly aging and it was
indicated that more than 50 percent stock is over 50 years old. Meeting the backlog in housing, besides replacement of out
lived housing units is beyond the financial resources of the Government. This necessitates putting in place a framework to
facilitate financing in the formal private sector and mobilize non-government resources for a market based housing finance
system. The government, therefore, encourages participation of local as well as foreign investors and developers and private
sector companies in housing sector to build more and more housing projects to meet the demands of a vast segment of
society, claimed government.
In addition, more than 80 percent of the total population cannot afford the financing terms provided by the House Building
Finance Corporation (HBFC) and other housing finance institutions. Resultantly, the construction of low income housing has
been much slower than the incremental demand.
Problems
The following are the major issues in the housing sector:
i) The households below poverty line have remained neglected.
ii) Inadequate supply of developed land and its skyrocketing prices, particularly in large cities, is making housing ownership
beyond the affordability limits of the majority of population. Related barriers also include poor land administration with
inadequate legal and regulatory systems, and high cost of property transactions.
iii) Housing for rural population, constituting two third of the total population, has not received adequate importance.
iv) More than 30 percent housing is in dilapidated condition requiring improvement /replacement.
v) An overemphasis on Katchi Abadis regularization in urban areas has encouraged further encroachments.
vi) Limited supply of housing finance, with weak mortgage collateral, does not encourage institutional credit based housing
development.
vii) Traditional approaches of reliance on the Government have not resulted in an increase in housing construction to match
the needs.
viii) Low public confidence in the housing development industry.
ix) Most of the Local Governments lack required skills to effectively manage the urban growth, provide basic utility service and
maintain the infrastructure, especially in low income areas/Katchi Abadis.
x) Lack of comprehensive planning at national, provincial, regional and local levelds without effective coordination among
various Government departments, development agencies and other bodies has impeded housing development.
Housing Strategy Recommendations
In addition to the backlog of 6 million housing units, the incremental housing need during the MTDF will be 3 million housing
units. Increasing the house construction from 300,000 units in 2005 to 800,000 units by 2010 will only cater to the incremental
needs during 2005-10. A much larger mass housing construction will be required if the housing backlog is to be reduced during
the MTDF. Accordingly, the strategy will be to undertake mass housing programme with enhanced supply of institutional
finance and long term fixed rate financing options; increase availability of developed land; enhance proportion of small size
plots for low income groups; undertake high rise condominium development, where possible, to utilize land more effectively;
build capacity for land administration; discourage speculation in land; improve house construction technology including
standardization of components for mass production; regularize notified Katchi Abadis complemented by policies to restrain the
emergence of new Katchi Abadis; increase community participation in housing and service delivery; provide sufficient and
affordable credit for rural housing to meet the needs of shelterless poor: invest in human capital to improve the quality of
construction; and put in place legal and regulatory framework to facilitate the development of housing both in urban and rural
areas.
The MTDF housing programmes were to be developed as per the recommendations of National Housing Policy, by the Ministry of
Housing and Works in consultation with the Provincial Governments and, both financially and environmentally, with replicable
models. The Government would assume the role of a facilitator for the implementing of housing programmes rather than being
the developer. Land Banks was to be set up at the federal and provincial levels, and innovative techniques were to be
developed to effectively involve the private sector. It was recommended that auction policy for disposal of residential plots/
sites should be discontinued to arrest land speculation, and also to capture a share of rising land values resulting from
speculation to meet the housing needs of low income groups. Low Income Housing Funds would be established at the provincial
levels, and opportunities capitalized from the effective implementation of proposed Spatial Planning Systems for development of
rural and urban areas in the country.
The improvement of slums and katchi abadies and provision of affordable housing to shelter less people will not only help to
alleviate the urban and rural poverty but also increase the productivity of the low income population through improvement in
their health. Every Government committed to give priority to housing sector and has promised to allocate enough resources to
accelerate its development and support 30 to 40 allied industries. The multiple effects of the housing and construction sector
have the potential to create maximum employment opportunities besides generating industrial, commerce and trade activities.
But no improvement has been seen during the last 4 decades therefore housing shortage is increasing day by day.
The present government also claimed, in its Budget 2013-14, that a 'roof over the head' is the right of every Pakistani. The
Finance Minister said unfortunately, the housing gap is rising very fast in the country. While the private sector land developers
have catered for the needs of the middle and upper middle classes, i.e. nothing has been done to provide decent housing for
the low and lower middle classes. With no prospect of profit making, it is quite understandable that the private sector remained
oblivious to the needs of these, otherwise very important societal groups.
He said during the last tenure of present government, it introduced housing schemes for the poorest of poor allover the
country, especially in the rural and semi urban areas. Under these schemes, land was provided free of cost. The Ministry of
Housing and Works is developing the detailed plan, but FM explained the main features of the policy on provision of housing to
the poor:

(1) Wherever possible, 3-Marla housing schemes will be developed on government land for the homeless, to whom plots will be
given free of cost.
(2) At least 1,000 clusters of 500 houses each will be developed for low income families through public private partnerships.
(3) To ensure cost effective access to credit for housing, government will bear a portion of the financing cost on behalf of the
borrower. A provision of Rs5 billion is kept in the Budget for this purpose. Now the Budget 2014-15 is approaching but nothing
has been done in this direction.
(4) Schemes on the model of Ashiyana Housing Scheme will also be developed in which the government will provide
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(4) Schemes on the model of Ashiyana Housing Scheme will also be developed in which the government will provide
opportunities to low income families to own their house on payment of easy installments.
The other feature is that persons per household are increasing some houses so conjested that about 16 people live in a
dwelling; table-1 and 2.