Affordable Housing Policies in Pakistan: Current State and Future Prospects
Accessibility to affordable housing is still paramount in Pakistan due to increased Urbaneness, population pressure and rising house prices to non-affordability levels.
This need has been well understood by the government and hence it has formulated some key measures towards ensuring affordable housing to the needy groups of people.
In this blog, we’ll discuss more about the current status of affordable housing policies in Pakistan and how it has faced certain issues and speculate what the future may be for affordable housing in Pakistan.
The Need for Affordable Housing in Pakistan
Housing shortage is most severe in Pakistan with shortage estimated to be around 10 million units.
Growth of the population and the increasing rate of urbanization has put pressure in terms of shelter especially in urban areas.
Most of the population in low and middle-income earners are therefore unable to afford good housing due to high property costs, poor access to own-source funds and limited state subsidies.
This unmet demand has resulted in squatting the habitable structures in urban area without any form of infrastructure such as water and sanitation and electric power.
There is a severe deficit of inexpensive accommodations, and solving this problem is critical to social and economic progress and the growth of people’s quality of life.
The government has therefore launched several affordable housing policies to ensure that there is adequate stock of affordable homes.
Current Affordable Housing Policies
In the past few years, the government of Pakistan has come up with affordable housing policies that enhanced affordable house construction.
One of them is Naya Pakistan Housing Program (NPHP), initiated in 2018 aimed at building five million affordable houses for low and middle-income family.
NPHP is one of the key initiatives, dedicated to solve the problem of housing deficit and encouraging private developers, financial institutions and other governmental organization.
Mera Pakistan Mera Ghar (MPMG) is another focal government’s partner of State Bank of Pakistan initiating cheap or affordable rates of house finance services to low and middle income families for buying or constructing their house.
Through these financing schemes funded by the agency, homeownership has become more possible, although other issues on the actual implementation have been always present.
Challenges in Implementing Affordable Housing Policies
Government policies are still insightful, though there several difficult that hamper their implementation.
The major problem is availability and costs of land especially in the urban areas since lands are limited and are expensive.
Many affordable housing projects are located on the outskirts of cities where often underdeveloped areas are with little amenities wanted by occupants.
Moreover, several tiers of government and other levels of bureaucracy translate into long procedures and send development costs up.
These are some of the most convoluted regulations that many developers encounter hence they discourage investment in affordable housing.
Thirdly, access to credit and high interest rates remain decisive factors that go against those targeted by such housing schemes – low income families.
The Role of the Private Sector and Public-Private Partnerships
Regarding the scarcity of affordable houses, it is imperative to attract the participation of the private sector, and it should be part of affordable housing policies in Pakistan.
In this respect, one of the most effective solutions to this problem is the use of Public-Private Partnership (PPP) mechanisms that will enable the government join forces with private developers/ investors to combine efforts, distribute risks, and optimize the management of projects.
The strengths in PPPs are that the government can offer land or tax incentives in return, the private sector can offer investment and experience.
It will also be mutually beneficial when designing compact living environments characterized by better infrastructure and access to public service, amenities in urban areas that will make residents more inclined towards living in such structures instead of expanded homes.
Many other countries have featured decent models in PPPs in their affordable housing policies with housing development and therefore, Pakistan needs to follow examples from these countries learn from them regarding ways of improving on affordable housing projects.
The Future Prospects for Affordable Housing in Pakistan
The future of low cost houses depends upon the policy continuity in the government’s platform.
To sustain a movement towards affordable housing policies there should be an emphasis placed on the integration of people in to the cities, increase access to funds and proper integration of the housing project with necessary infrastructure such as transport, health and education etc.
The digitization programmes initiated under the able leadership of the government to go digital and also to digitize the land records can undoubtedly hasten the validation of property ownership to check fraudsters and ease the development processes.
In addition, as there is increased emphasis on green housing, cost-effective housing solutions should embrace the use of energy-conserving construction methods for cost benefits to tenants in the future.
Recommendations for a Sustainable Affordable Housing Market
For the state-lead policy to midwife an affordable housing market in Pakistan, the following measures needs to be undertaken and should be made part of affordable housing policies in Pakistan.
Here are some recommendations:
1. Expand Financing Solutions:
Increasingly making more flexible microloan credits for low income households and using Islamic models will address the affordable housing deficit.
2. Incentivize Private Sector Involvement:
Some of the ways the government can facilitate private developers to be involved in the provision of affordable houses include the policies such as tax policies that would allow the developers to be rewarded by the government for their participation in the undertaking, removing formalities, bureaucracy, and procedures that might slow the progress of the construction of affordable houses to be carried out by the private developers.
3. Promote Mixed-Income Communities:
The integration of low-cost units with higher-income housing through mixed-income housing projects again guarantees better facilities, social interaction, and a sustainable physical environment for the metropolis.
4. Focus on Infrastructure Development:
The growth of the affordable housing market has to be accompanied by the investment in the development of the peripheral zones as to make it comfortably inhabitable.
5. Invest in Digitalization:
There is need to scan and convert the land records and ease the processes of registration to check fraud, increase on transparency, and thus, credibility on the real estate market.
Conclusion
Housing is a basic need that is still unmet in Pakistan, especially the affordable housing – though there are several potential affordable housing policies for improving the situation, it still demands more efforts to address the issues hindering and deliver better results in the context of implemented policies.
Application of best public private partnership models, adequate infrastructural development and proper funding frameworks are vital elements of a sustainable affordable housing market in any region.
Therefore, there is a need for Pakistan to leverage on the above mentioned strategies and encourage more partnership between government, private sector and communities in relation to affordable housing.
This has made commitment to affordable housing as a crucial key for development of enabling economic environment, reduction of inequality and improving living standards of Pakistan population.
Also read: The Naya Pakistan Housing Policy: An Economic Analysis