‘Not delivering houses is not an option anymore’

KARACHI: Chairman Task Force Prime Minister’s Naya Pakistan Housing Scheme Zaigham Rizvi said that not delivering housing facilities to the masses was not an option therefore whosoever comes in power matters little if the country needs to progress in the right direction.

“The population of Pakistan is increasing at a pace which needs 750,000 or 800,000 houses every year,” said Rizvi, an Expert Consultant Housing and Housing Finance. “Not delivering (housing to the population) is not an option.”

There is an estimated shortage of 12 million residential units in the country; most of it in low and middle income groups. As per Pakistan Economic Survey for FY21, the construction sector contributed 2.5 percent in GDP. Further, 7.71 percent of the employed Pakistani labour force is engaged in the construction sector.

Housing loans extended by commercial banks under the government’s low-cost 'Mera Pakistan Mera Ghar' scheme hit their highest in February 2022 for the most part because of ongoing political uncertainty. Banks credited an amount of Rs9.3 billion, which is 17.5 percent of the total disbursements made so far since the launching of the scheme in October 2020.

The seasoned housing consultant said that 55 percent of Karachi was comprised of slums. If a new government shelves the previous government’s effort then slums would increase further, depleting the nation’s economic potential.

“Slums deplete productivity because of increased chances of criminal activity, lack of education, unemployment and underemployment, which is very common in slums,” he said.

“Situation in Punjab is much better than Sindh and Karachi. LDA (Lahore Development Authority) has done a good job,” he said.

However, Rizvi admitted that the pace with which the housing sector was intended to be developed didn’t happen even in Punjab because of the pandemic and rising raw material – steel and cement cost.

He added that the raw material cost went considerably up, which made it difficult to build respectable low-cost houses and construction happened more in middle and high-end segments. But he reiterated that Punjab and Khyber Pakhtunkhwa performed better on facilitating houses for masses.

Rizvi said that the government worked on three fronts – supply side, finance side and regulatory regime to facilitate construction of houses. To increase supply, builders received construction packages. The State Bank increased the housing finance chunk for banks to seven percent of their total advances while first time buyers also received cheap loans to buy a house.

“Banks advances for house loans increased from Rs90 billion in the last 70 years to over Rs140 billion in the last couple of years,” he said. Banks have disbursed over Rs53 billion since December 2020 under the PM Housing Scheme.

Meanwhile, online approvals for developers were given by improving the regulatory regime.

“All political parties did sloganeering to provide houses to the masses including Bhutto and Nawaz Sharif but Imran Khan got one-step ahead of them on this housing front,” he said.

Rizvi criticised non-revival of Steel Mills saying that a smaller country by population, Iran has a capacity to produce 20-25 million tonnes of steel, but Pakistan couldn’t produce steel more than 4 to 5 million tonnes.

Meanwhile, he said he supports construction of high rise buildings but with proper infrastructure in the surroundings because the country has the same land resource that it had 50 years ago, when population was only 50 million. Now the population has increased by nearly 4.5 times. Per capita land has reduced considerably therefore adopting high rises should be the top option.

“But high-rises should come with proper infrastructure around such as wide roads,” he said. He suggested that the land housing slums should be utilised for high rises to provide people with respectable living.

“There are around 800 to 1,000 katchi abadis in Karachi alone,” he said. “But the situation is much better in Punjab and Lahore.”

Rizvi said houses in slums were made without following any rules and regulations and therefore such constructions were also prone to accidents every now and then, which keep getting reported as well.

He added that they have prepared a feasibility report for one such slum where selling a few acres for malls would make it feasible to provide respectable housing to the slum-dwellers. However, the plan was yet to materialise.