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Possibility of affordable housing

*Mera Pakistan Mera Ghar buzzword a three-pronged benefits for country’s homeless population

Poor access to affordable housing results in unequal home ownership: proprietorship remains concentrated in the top income bracket, leaving a limited supply of housing for low-income households. Housing insecurity among the lower income strata of Pakistan has therefore become a pressing public policy issue. And now affordable housing has become a buzzword in Pakistan. Pakistan’s Prime Minister, Imran Khan, has promised to provide five million new affordable houses to the people in his term. Mera Pakistan Mera Ghar is a low-cost housing scheme offering affordable house financing to low and middle income households and is for both salaried and non-salaried individuals.

Affordable housing is the key when it comes to the health and vitality of the communities. It is an important part of sustainable development goals of Pakistan. The poor management of the growth of housing cost in Pakistan has been affecting negatively in terms of finance. Therefore, reducing the impact of housing issues could be a potential benefit for both low and middle income households. The main challenge to get affordable housing in Pakistan is high rate of interest and large gap between house prices and level of household income. Earlier on, housing sector has largely been neglected by various governments in Pakistan. If at all it got any attention of the political leadership, it never moved beyond mere political rhetoric and slogans. “Mera Pakistan, Mera Ghar” program is the flagship project of the government that may provide three-pronged benefits: housing facility to the homeless population, accelerate economic activity within the country and provide job opportunities to the youth.

As per UN estimates, Pakistan’s population has been estimated approximately at 220,892,340 (220 million). Moreover, it is also considered as the 5th most populous country in the world, occupying 2.83% of the total world population. Further, its population is growing at a rate of 2.4% per year. In this scenario, Pakistan’s is in the dire need of housing scheme. A housing backlog of 10 million units exists in Pakistan as per the Association of Builders and Developers Real Estate Research 2016. In connotation to this, in 2017, urban population was estimated to be 75.5 Million, hence creating a housing demand of 350,000 units per year. Due to the dearth of housing units in metropolitan and other big cities of Pakistan, there has been a rise in slums in peripheries of these cities, which are also devoid of basic necessities of life and create many socio-economic problems along with highlighting a widening gap of income disparity. To mitigate the grave consequences of rising slums, back in 2015, the Ministry of Housing and Works, introduced the construction of 500,000 houses for low-income groups. The sites, which were identified included Charsadda, Banu, Lakki Marwat, Dera Islamil Khan, Lahore, Jhelum, Karachi, Hyderabad, Quetta and Gwadar. However, due to the weak regulatory measures and poor governance, the initiative was not materialized to the fullest. Nonetheless, the PM housing scheme pins hopes in this grave scenario where many are forced to sleep on footpaths – barefooted and bare-bodied.

Pakistan is currently facing an overall housing backlog of around 11-12 million housing units. Research also gives the number of 32 million households without any shelter or with very poor housing. The urban housing shortage is estimated to be around 4 million, while rural and urban housing backlog is around 7-8 million year-on-year housing need of Pakistan. Based on country’s population, as per recent census, of over 200 million, with population growth rate of 2.0% and household size of 6.5 persons per household, the year-on-year incremental needs is 6 lacs units/year, which comprises of both urban and rural areas. To meet the existing needs plus the incremental housing needs, Pakistan needs to build at least 10 lacs housing units/year.

The writer is a Karachi based freelance columnist and is a banker by profession. He could be reached on Twitter @ReluctantAhsan

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