Housing issues

With questions growing over the PM Imran Khan’s flagship Naya Pakistan Housing Project, there has been some good news from the PM. On Thursday, Khan laid the foundation stone of the housing project in Islamabad’s Zone-IV, where 18,500 homes will be built at affordable rates. The PM has promised to keep the costs low to ensure that salaried individuals as well as the poor will be able to afford the homes. As part of a project to build five million new homes, this will be a paltry number, but it is good to see the project deliver some results. The allocations themselves will take place through a lucky draw, with the promise that the homes will be handed over a year and a half after allocation. The details of the public-private public partnership formula being applied remain unclear. What has been revealed for now is that the government will be responsible for procuring the land, while the private sector will construct the housing units. For the first project, the land was procured from a private housing scheme, which will proceed to build the homes. How many other private housing schemes will offer land to the government – and at what rates – will be one of the questions we will need transparency for.

If PM Khan is correct is claiming that government land would be used, then why was it not available for the first project under his flagship housing scheme? Moreover, the larger questions about the government’s objective to promote housing loans remain. The absence of mortgage has allowed for Pakistan’s housing market to retain some stability as well as protection against speculation. Mortgage facilities could push housing prices higher by increasing what low-income households can afford on paper. It would have much better for the government to offer the housing on instalments that are directly payable to it or the private developers involved. Instead, the government is looking to tighten foreclosure laws and open up the housing market to banking and private developers.

What also remains to be seen is how the government will manage to keep the costs low at a time when the price of all commodities is spiralling higher by the day. The fact that the government is proposing to replace slums with proper planned housing schemes across the country itself is an issue that could affect his government. If the homes of poor people are going to be demolished to build housing schemes, the project better deliver – and fast.