The promise of new and shiny housing

This project can be a real beauty. Its real charm lies in the scale of its ambition. Even if the government is able to hit 25 percent of the target, it will have achieved a lot by the end of its tenure.

Five million homes can provide shelter to 30 million people, which is close to 15 percent of Pakistan’s population. What’s more, it promises housing to the precariat – those living on the boundary – and the poor. We have all the time to debate and criticise the small print, but the Naya Pakistan Housing Scheme deserves a warm reception.

It was not without reason that Bhutto’s promise of roti, kapra aur makan (food, clothing and shelter) carried such charm. For thousands of years, the powerful in South Asia have used housing as a weapon against the powerless, ensuring their own authority while keeping others in marginality and poverty. As the land in villages belonged only to the farming castes, members of artisan and ‘serving’ castes lived in houses that were technically owned by the dominant caste. Under constant threat of eviction, their obedience was guaranteed. It was as late as the 1960s that members of such castes started building their own houses.

This cultural heritage means that a huge population in Pakistan has never owned their homes and their poverty is mainly rooted in homelessness. In the 21st century, land has remained a major tool of exploitation with the difference that victims now include the well-off middle class as well. The bond between politics and real estate and a housing sector firmly based on speculation has made it impossible for most people to own their own homes. Imagine how the PPP, the party of the poor, set aside land for social housing and then gave gifted it to one of the most expensive elite housing scheme in Karachi.

The Naya Pakistan Housing Scheme can go a long way in improving this situation, provided that the government also takes policy action to reverse the causes that are making people homeless in the first place. Like all other policy promises, the PTI appears totally unprepared for this ambitious plan at this stage. The relevant departments have yet to do their work. Land has not been identified; the Ministry of Law and Justice and the Ministry of Housing and Works have not done their home-work yet. The provinces have not been taken into confidence and the financial model has not been finalised yet. Even the Naya Pakistan Housing Authority will be formed in ninety days.

Perhaps, the PTI chose to make the announcement a bit prematurely to counter the criticism related to the country’s worsening economic indicators and the decision to take a loan from the IMF. Whatever the reasons, the time lag can be used to plan the initiative better, consult experts and stakeholders and join hands with provincial and local governments. The housing problem can be segmented into different parts, and multiple solutions can be launched under the scheme.

According to Anil Musarrat, the British-Pakistani entrepreneur whose name has been associated with this scheme from the beginning, approximately $180 billion would be required for building five million homes for the project. This kind of amount is not available in Pakistan’s economy, unless Dr Farrukh Saleem finds it in some vault.

According to experts close to the government, the State Bank has instructed commercial banks to set aside five percent of their total advances for low-income housing finance. This will amounts to less than 400 billion rupees or $3 billion dollars a year. In all, banks may be able to spare $15 billion over a period of five years. However, we do not have to take Anil Musarrat’s mathematics too seriously.

If 2000 billion are diverted to social housing sector through the banking sector and the government can spare a similar amount on its own, Pakistan can move to ensure shelter for a large section of its population. The real challenge in the mortgage model lies in the fact that the interest is too high at this stage and may go up even further. Any mortgage that is way above the rental value becomes unsustainable for a low income family. The government, at least in the short run, will have to subsidise these loans by paying a part of the mark-up, at least for a section of consumers, till the interest rates come down.

The government can achieve the scale and use the scheme as a major solution for poverty alleviation by focusing on the homeless population and the poor. Rather than following World Bank standards, the scheme should focus merely on ensuring basic shelter with the scope of upgrading in the future. If the government takes care of the land, a developer may deliver a basic house within Rs100,000 to Rs200,000.

Both builders and banks will be shy of dealing with this segment of population because the management cost goes up as loans get smaller, and this section is considered too risky by banks. That’s where the housing authority will have to join hands with the non-profit sector and consult those housing experts who have spent their lives in providing housing solutions to the poor.

For landless farmers, farms and houses are the same thing. Government land that is routinely allotted to government officials in southern Punjab and Sindh should be allotted to landless farmers as part of this scheme. That would give them housing and a means of livelihood in one go.

Effective targeting and keeping speculators out has been a challenge for all such schemes. In a country where only a small number of people pay taxes, it is very easy for a well-off family to make false claims about its income. Many measures may be need to guard against the elite capture of the scheme including prohibition on sale for a long period and ensuring that the owners live in these houses.

Perhaps the most important actions can be based in policy. The PTI has a huge challenge of dealing with the land mafia that is spreading homelessness in the name of providing posh housing. A new legislation can make it compulsory for elite housing societies to partner with the communities whose land they buy and develop. To end speculation, it must be made binding upon owners of plots to build their houses within a stipulated time or give up ownership of their plots. Like other major parties, the PTI has its desi Mansha Bomb and other more invincible smart and nuclear bombs associated with land grabbing and property development in its ranks. Can the PTI move against their interests?

And if the Ashiana case teaches us something, the PTI must prepare for NAB-related consequences. It is quite probable that some mistakes will be made along the way since the Naya Pakistan Housing Scheme is an innovative project. Some builders will fail to deliver in time or may even leave the project without completing their work.

The writer is an anthropologist and development professional.

Email: zaighamkhan@yahoo.com

Twitter: @zaighamkhan