Housing Inequality in Pakistan: The Case of Affordable Housing

The problem of housing is also skewed in Pakistan for millions of populace especially in Karachi, Lahore and Islamabad.

Urgent need for housing paired with the growing rate of population density, escalation of real estate prices, and disregard for affordable housing have further deepened the housing deficit and made areas appearance become a class divide issue.

Nowadays Pakistani elite lives in luxurious apartments and secured compounds, however, millions of people live in slums or try to rent a reasonable good quality house.

This blog deals with the housing inequality in Pakistan with specific focus on affordability, issues, causes and the possible solutions to this problem.

1. The State of Housing Inequality in Pakistan

The disparities within this context of shelter provision are profound and exacerbate in Pakistan.

The current estimates suggest that Pakistan has an outstanding required housing stock over 10 million units, primarily due to increasing rate of urbanization and population growth; and this required housing stock is increasing at rate of 0.3 million units annually.

This shortcoming has particularly left the poor, the low and middle income earners living insections of the city characterized by poor structural facilities or ‘katchi abadis’ – ‘Pakistan’s slums’.

Other cities and metropolitan areas including Karachi, Lahore, Islamabad and other cities, people mainly migrate from rural areas searching for job opportunities.

However, this has been occasioned by increased people flow into these cities without correspondingly harmonized planning and development in the housing sub-sector.

More than forty percent of the urban population of Pakistan resides in such slum like areas that have no facilities such as potable water, proper sewerage and electricity.

This housing emergency is greatly fueled by the imbalance of interest in real estate developers and investors.

Most of the investments in the housing industry are focused on high-income housing, security compounds, and markets for the affluent or the burgeoning middle class.

This results into a trend where some parts of the population get access to quality living conditions while on the other end people of low income end up in deplorable conditions.

Nowadays the disparity between those who are enjoying their rights to shelter and those who lacks adequate housing is increasing therefore the distinct society and economy.

2. Contributing Factors to the Housing Inequality

There are several reasons as to why Pakistan has become a hub of affordable housing problems.

Some of them are expensive land, no government involvement, unscrupulous activities among owners of properties, and limited and restrictive credit market for lower income residents.

High Land Prices:

High cost of land, especially in urban areas is one of the factors that have led to increase costs of housing.

Price of houses for sale or rent in the cities such as Karachi and Islamabad has risen tremendously and it is very hard for low income earners to afford housing units in the formal sectors.

The private developers mostly focus on luxury projects, which are more rewarding as compared to the affordable housing projects.

Government Policies:

Another cause is the absence of good government policies and interferences which have not encouraged the provision of cheap and decent houses for the public.

While several housing projects have been planned and announced in the past, these include the current government’s flagship Naya Pakistan Housing Program (NPHP), implementation has fallen short of expectation.

Furthermore, most of the current policies lack mechanisms to ensure that private developers invest on the low-cost housing sector since most of its left unattended.

Speculative Real Estate Practices:

Betting involving real estate is another reason for the escalation of housing cost since many people and developers are more interested in investment with the hope of getting short gains.

Habitat for profit results in artificial inflation of the price of land and housing, which in turn constrains the access of low income families to formal housing markets.

This is not the sort of bubble that can improve the living standards of the society; on the contrary, it aids a select group.

Financing Issues:

Lack of reasonable and easy obtainable funding to aid homeownership also aggravates the housing conditions, thus giving rise to housing inequality.

The mortgage financing is restricted and most of the times it’s unaffordable for the lower income earners hence they cannot afford to make the purchase.

Very often, rigorous credit constraints on loans or mortgages together with high interest rates keep low income families away from home purchase.

3. Addressing Housing Inequality: The Path Forward

Overcoming the existing housing inequality issue in Pakistan along with providing affordable housing for all is a complex issue where the government and its policies, public initiatives, researches and development, and several far reaching steps need to be taken by the major stakeholders.

Policy Reforms

Instead what needs to be done is for the government to play a much more active role in the formulation of the right policies which will address the challenges of housing inequality.

First of all, the government should pay special attention to the creation of affordable housing on upcoming urban areas and within the framework of developing policies.

Governments should encourage developers involved in affordable housing projects through ways such as tax exemptions, grant of land or by providing them with a low interest loan.

Public-Private Partnerships (PPPs)

Government has made significant efforts on public participation in affordable housing delivery system and partnerships between public and private entities will be vital in closing the affordable housing deficit and housing inequality.

This way, the government can bring housing plans with the help of private developers in order to achieve affordable and green housing solutions.

Government support can help to ensure that PPPs for the development of affordable house building and funding of housing schemes for low and middle income individuals meets their need.

Increased Mortgage Accessibility

Access to cheap and relatively priced mortgages is the solution whereby low income earners will be able to own homes.

Financial institutions should provide feasible means of financing for accommodation for lower income earning households.

However, the government could consider lower interest rates of housing credit or down payment assistance thus admitting more families to homeownership grants.

Upgrading Informal Settlements

In regard to those people who are already housed in the informal areas, attempts should be made to enhance their areas by developing their structures and services.

Governments should concentrate on in-situ improvement where authorities upgrade the dwelling conditions as well as enable the residents remain within the given locality.

 Sustainable Urban Planning

It also means that housing inequality for the foreseeable future will need sustainable urban planning that will predict population growth and tendencies towards urbanization.

Thus, expanding the housing stock in the districts, developing transport connections, and providing people with an access to socially significant objects such as schools and hospitals will explain the demand for those areas growing among the lower-income population.

Conclusion

It must be mentioned that the inequality in the provision of housing is a big problem in Pakistan which needs constant attention.

To overcome the lack of affordable housing it proposed will not only enhance the quality of life for millions of Pakistan people but also the stability and development of the society.

With proper polices, support in PPP and focusing on sustainable development of cities, Pakistan can start reducing the housing deficit and give an equitable society.

Also read: Affordable Housing and Inequality in Rural Britain