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Affordable housing – turning dream into reality

Affordable housing – turning dream into reality

When it comes to the health and vitality of the communities, affordable housing is the key. The need for quality, affordable homes 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 effect of housing issues could be a potential benefit to both low and middle income households. The main challenge to obtain affordable housing in Pakistan is high interest rate and big 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 leaderships, it never moved beyond mere political rhetoric and slogans.

The Program “Mera Pakistan Mera Ghar” is the flagship project of the government that would provide housing facility to the homeless population, accelerate economic activity in the country and provide job opportunities to the youth. It 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. Poor access to affordable housing results in unequal home ownership i.e. proprietorship remains concentrated in the top income bracket, leaving a limited supply of housing for low-income households. Housing insecurity among the bottom income strata of Pakistan has therefore become a compelling public policy issue. Affordable housing has become a buzzword in Pakistan after the government has promised to provide five million new affordable houses to the people in their 5 years term.

Pakistan is the 5th most populous country in the world, occupying 3.20%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 schemes. Pakistan is currently facing an overall housing backlog of around 11-12 million housing units. Research also give 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 housing backlog is around 7-8 million. Based on country’s population, as per recent census of over 220 million, with population growth rate of over 2.0% and household size of 6.5 persons per household, the year-on-year incremental needs is 6 lacs units/year, which includes both urban and rural areas. Pakistan needs to build at least 10 lacs housing units/year just to meet the existing needs plus the incremental housing needs. 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.

Housing plays an important role in economic development by contributing in GDP growth, further, more than 40 industries and 70 percent of unskilled labor are linked with housing and construction sector. Adequate and affordable housing is not only necessary for security and comfort, but is also critical in fostering social cohesion and development of a nation. The housing sector plays a major role in economic growth and stabilization through the creation of job in construction and materials and demand for financial services. The housing and construction industry has the potential of absorbing a large number of skilled and unskilled workforce, significantly mitigating unemployment and, thereby, reducing poverty in the country.

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