Pakistan faces a critical shortage of housing units. According to conservative estimates, there is already a backlog of 6 million housing units, and the backlog increases by 270,000 units every year. This shortage, together with the less-than-satisfactory conditions of existing housing facilities, contributes adversely to the quality of life of the general public, especially the urban working class. Already, the national average occupancy rate per dwelling is over six; whereas the per-person room density is 3.5 as compared to the international standard of 1.1 per room. The housing shortage is especially burdensome in urban cities and towns, where more than half of the population lives in slums or irregular settlements.

In recent years, due to the high rate of economic growth and nearly quadrupling of remittances after the terrorist events of September 11, the housing sector is facing a problem of not only supply shortages but also escalating prices. Investment in housing in recent years has resulted in a higher ratio of urban property prices to purchasing power, which typically occurs in densely populated cities such as Bombay and Hong Kong.