VISION:
To develop a permanent sustainable mechanism for providing housing units to the poorer sections of the society in the province of Sindh.
OBJECTIVES:
1. To provide 100,000 affordable housing units for poor house holds within one to two years.
2. To establish a permanent sustainable institutional mechanism along with a plan to provide decent, affordable housing units for low income sections of the society.
INTRODUCTION:
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Pakistan faces a chronic short fall of houses. Official figures relating to population and housing indicate acute housing shortages in the country. In its foreword, the last National Housing Policy made by the Ministry of Housing (2001), the government admits, “millions are caught in the struggle to have a roof over their head in Pakistan.”
Estimated shortage according to 1998 census, was 4.30 million housing units. Against annual additional requirement of 570,000, estimated production is no more than 300,000, leaving a huge recurring backlog of 270,000 housing units annually. Based on these figures, the net shortage at present should be 7.0 million. The household size in Pakistan is 6.6 persons and occupancy per room is 3.3 persons. Adding to the woes is the fact that the existing housing stock is rapidly aging. One estimate suggests that more than 50% of the housing units are over 50 years old and rapidly deteriorating.
Major reasons for this state of affairs are lack of resources, inadequate planning, and wrong land development policies that favour elite at the cost of poorer sections of the society.
While there is need to make policies for resource mobilization, land availability, incentives for homeownership, incentives to developers and constructors and promotion of research and development activities to make construction cost effective, the emphasis should be to create affordability. The people who are affected the most in this field belong to middle and low-income groups. The worst sufferers are the poorest sections of the society in both the rural and urban areas of the country.
In rural areas this shortage is partly shrouded in the culture of accommodation forcing people to live in over crowded houses as well as open areas in pitiable conditions.
In urban areas the problem manifests as unstoppable growth of squatter settlements known as katchi abadis and encroachment of state and private land. It is estimated that 50% of urban population now lives in katchi abadis and slums.
Sindh Province needs about 100,000 housing units p.a. The new Government, established in the wake of general elections is acutely aware of people’s pressing needs and realizes that affordable shelter is a key issue. Accordingly, a housing program for the poor has been selected as one of the key priorities. The short term aim is to provide 1 million housing units in the country. Federal Government has initiated a crash programme for this purpose through Pakistan Housing Authority (PHA) and a Coordinator has been nominated to coordinate similar programmes in the Provinces.
Sindh Government has taken the initiative to provide 100,000 housing units in the province so that the poor homeless citizens living in the grind of poverty may get some relief. Meanwhile institutional arrangements will be undertaken to incorporate a permanent, sustainable housing programme in the province. This includes the setting up of Sindh Housing Authority and long term financing mechanism perception master plan stretching to 2030 will also be drawn up.
It is realized that conventional methods alone would not be sufficient to achieve targets. Sindh Government is therefore ready and willing to try innovative techniques and methods. This will include the introduction of latest low-cost technologies and import of relevant machinery and equipment. Public-Private partnerships with developers and builders and collaboration with NGOs and housing experts will be part of the programme.
TIME FRAME Two time frames are proposed for achieving the objectives:
SHORT TERM
Considering that the needs and aspirations of the people of Sindh have been kept in abeyance for more than a decade, there is need to take some immediate measures so that tangible relief is experienced within the next year. As such, short term time-frame to achieve its first objective i.e. 100,000 housing units may be fixed at 1 to 2 years.
LONG TERM
In order to provide a permanent sustainable mechanism, a perspective plan for 30 years may be appropriate.
GEOGRAPHICAL
DIVISIONS [Back to Main]
For the purpose of development of schemes and models, the Province of Sindh may be divided into three (03) main geographical divisions as follows:
a. BIG CITIES : The main three cities of Sindh are Karachi, Hyderabad and Sukkur. It is believed that the requirements in big cities will be different from other areas of the province. For instance, high-rise buildings may be acceptable in big cities but not in smaller towns. Even within this geographical division, the mega city of Karachi with its cosmopolitan culture and international dynamics may offer completely different solutions to housing problems as compared with other big cities of the province.
HOUSING MODEL - CATEGORY 1 (BIG CITIES ) :
Models for this category will be developed keeping in mind the following characteristics and restraints:[Back to Main]
It is impossible for the government to give absolutely free houses to all the poorest households of the province for the simple reason that the funds required are neither available, nor can be arranged. Even the richest countries of the world cannot afford such an ambition. To give the cheapest house (Rs.200,000) to 100,000 poorest households will cost Rs.20 billion, which is half the total outlay for the province’s ADP.
In spite of the fact that the above point is so obvious, previous governments have tried to do just that for the sake of publicity and quick popularity. We have to avoid falling into the same trap.
Thus, we should aim to develop a housing programme rather than houses.
Based on surveys conducted by NGOs and the experience of experts in low-cost housing for the poor, we may target households that can pay between Rs.2000 to 4000 per month as installment for 15 to 20 years towards the cost of owning a house. A poor household consisting of 5 to 6 persons can reasonably earn up to Rs.10,000 to 15,000 if 3 to 4 of its members are working as house-maids, domestic servants, and unskilled laobour. If such a family has a strong desire for owning a house, they can save up to an average of Rs. 3000 per month for the purpose.
Such a family, however, cannot pay the installment in addition to the rent for the house in which they have to live before they can occupy their own house. Hence the need for an intervention at this point in the form of seed money or some other form of extra loan.
Loans will have to be arranged on easy terms. The government may have to pick up a percentage of the interest and give some kind of guarantee to the loaning institutions regarding repayment in case of delays and defaults. It might not be possible for the loaning banks to go for eviction of the poor occupiers if large numbers begin to default.
Financing Models will have to be worked out backwards after determining (a), the maximum paying capacity of the target population and (b), realistic funding that can be made available on yearly basis by the government. Yearly commitment of funds in the budget must be determined clearly before launching any scheme for housing, because if there is a break for even one year, the whole financing package will collapse and the money spent up to that stage will go waste.
In some areas, the government can subsidize by not charging any price for the land. However, in the case of small houses built on 50 to 80 square yards, the proportion of the cost of land reduces to less than 10 percent. The biggest proportion in the cost of a small house or flat is the cost of construction because of the forbidding escalation in the cost of iron, steel, cement and wood.
The total cost of a housing unit can be further lowered through cross-subsidy by commercializing part of a piece of land and selling it through auction. With a good holistic town planning design, plazas and shopping malls can be developed as separate entities along with other attractive features to lure investors.
A view shared by most experts of low-cost houses is that only white collar workers opt to live in apartments. High-rise apartments built for poor households mostly turn into vertical slums, even in developed countries because the poor people cannot afford the high cost of maintenance.
INNOVATIVE PUBLIC-PRIVATE-PARTNERSHIP FOR SLUM RE-DEVELOPMENT: [Back to Main] At-least one slum / katchi abadi in Karachi may be selected for re-development into a posh modern housing-cum-commercial scheme. A detailed description of the project is given below:
The concept makes use of the paradox that
the value of a piece of land in a slum is almost zero when occupied by the squatter but is worth millions if it has a clean title and is legally and physically vacant.
In theory the solution appears quite simple: Clear the slum, sell part of the clean land to a rich developer/builder and with the sale proceeds build housing units for the original squatters on the rest of the land. Alternatively, government clears the slum, gives clean land to a developer under an agreement to provide stipulated housing units to squatters and to use the rest of the clean land to pay for his endeavour. Both solutions look like win-win situations. The squatter gets a free decent legal dwelling, the government provides housing to its poorest citizens without spending a penny and the city gets a clean environment.
In practice, however, the scheme is not easily workable because:
a. It is impossible to clear a slum without major riots and bloodshed,
b. The squatter does not trust the government when he is promised that if he clears the area occupied by him, he will be given a free housing unit after the lapse of a certain period. Considering the past record of government functionaries, his lack of trust is not entirely misplaced.
c. The developers cannot usually be trusted to deliver on such complicated agreements. Corruption and collusion between government functionaries and private developers/builders in the past have been responsible for the failure of many partnerships of this kind.
The obvious inference from the above observations is that for a scheme to make use of the high potential value of slum land, it will be essential to (a), create sufficient trust in the mind of the squatter and (b), develop a fool-proof mechanism to make sure that agreements between various stakeholders are implemented in letter and spirit and strictly according to schedule.
These objectives can be achieved by establishing a private limited company with legal authority to negotiate with the squatters/lease-hold owners in katchi abadis on the one hand and developers/builders/investors on the other.
This company will be based on private-public partnership, managed by a Board of Governors that includes trustworthy and reputed citizens from the private sector along with senior civil servants charged with the issues involved. The Chief Executive shall be a senior professional with sufficient experience in similar ventures.
The company will approach the squatters and convince them to enter into a legal and binding agreement with the company to “lend” their land for a given period of time. In exchange they will receive a modern housing unit in the form of town houses or apartments. Depending upon the availability of space, they will also get at least one school and one decent hospital within the complex.
The company will evaluate the land through professional assessors and then enter into agreements with builders to construct commercial and residential units as well as other facilities.
The company will need seed money to give rent to the squatters for the period of construction and for other expenses necessary to start its operations. Soon, however it will become self-sufficient and may even start earning profit. Some of the funding resources are ADP 2008-9, Khushali Bank, Poverty-alleviation Fund available with the Federal Govt.
PROJECT OUTLINE:[Back to Main]
After signing legal agreements with all stakeholders, the developer will demolish the selected Katchi abadi and in its place build a state-of-the-art modern complex of buildings consisting of residential units, commercial malls, a school, a small hospital and other facilities like swimming pool, playground, etc, depending upon the space available.
Housing units will be given to the original owners of houses in the katchi abadi proportionate to the area/value of each.
Commercial spaces will be sold / utilized by the developer in accordance with the agreements.
During construction of the complexes, katchi abadi dwellers will be given an agreed amount of rent per month as well as lump sum money for shifting and incidental expenses.
When they return, the katchi abadi dwellers will not only have decent, modern housing, they will also have access to educational and health facilities at subsidized rates at their door-step.
- SMALL AND MEDIUM TOWNS: All other urban centres of the province will fall in the second category. One or two models may be developed for use in all the towns.
HOUSING MODEL – CATEGORY 2 (SMALL CITIES AND TOWNS)
Most of the points mentioned above would apply to this category as well.
Cross subsidy through commercial sale would not be significant.
the capacity to pay installments will be lesser than in big cities, and a figure of Rs.2000 should be considered reasonable, because usually only one member of the family is the earning member.
Small contractors will have to be found for the housing schemes in the small towns.
the system of giving land to the community and asking the to build their own houses needs to be tried in small towns and villages. This has proved successful in Thailand, Central Asia and other places. IIn these countries it brought down the cost of a house by as much as one-third of the cost incurred by the contractor.
Communities may be identified through NGOs and then loans for construction given to them along with land to build clusters of houses for themselves.
only single storey houses on 50 to 60 sq yds may be considered.
the concept of providing only the core skeleton of a house may be implemented on experimental basis. The poor family is given a one-room house with one WC built on a 50-sq yd plot and then given loan to add to it incrementally.
c. Rural Areas: This will comprise the entire rest of the province, including big and small villages, rural parts of union councils and large spreads of remote areas.
HOUSING MODEL – CATEGORY 3 (RURAL AREAS)
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No single model would be served as suitable in rural areas because of waste difference in cultural and ethnicities climatic condition and ways of living.
While designing houses and planning housing program for people in these category, it will be necessary to keep in mind that al most 70% of the population lives in rural areas and that paying capacity of these people is the lowest. Most of the proposed intervention are given below:
SANCTIONED VILLAGE
a. The government sanctioned villages with more than 30 houses / huts each may be identified. From among the people living in these villages, around 10 poorest families may be selected through some transparent mechanism including consultation of DCOs with Nazim, Notable and Elected Representatives of the area.
b. One option would be to supply building material and provide technical help / assistance through a government engineer to build model low cost houses on the villages, already occupied by them.
c. The house may consist of one room, one veranda one kitchen and one w.c.
d. When they complete their houses, ownership papers and title of land may be transferred to the families. Preferably, a wife or a mother.
e. Another option would be to engage a NGO to build housing unit for such family.
f. Destitute family may be identified through NRSP/SRSO. These RSPs are already conducting detailed census in -------------union councils in Sindh Province.
g. A one-to-one dialogue would be held with destitute family to determine whether or not they would like to live in these houses built for them on available estate lands nearly.
h. Model colonies with holistic approach may be built for these destitute families who shown keen interest in settling down and working at the new site to earn livelihood.
i. RSP may be asked to identify 200 to 250 poorest and most deserving people in each union council.
j. Model low cost housing built by a few private progressive land lord as well as experimental low cost housing unit built by some NGOs with help of United Nations agencies shall be utilized model for rural areas.
k. No profit organization and RSPs would be most suited for carrying out the actual construction of housing unit in rural areas.
TARGET
POPULATION
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Although official
figures claim that about 25% of the population is
living under poverty line, surveys by NGOs and international agencies
indicate that 40% of the population of Sindh is chronically poor. This mammoth proportion of population, which is scarcely able to arrange two square meals a day, is unable to purchase houses for their family. Large numbers of households therefore may not be able to participate in the programme to finance houses through mortgage. This band of population requires innovative new models of financing incorporating substantial subsiding and grants.
Other income groups through still rather poor can afford various levels of amounts per month and different models would be evolved for each income group.
It is safe to assume that a typical low income households in Karachi can save an amount of Rs: 2000/- to Rs: 4000/- per month to pay as installment towards a house for 15 to 20 years. Such a household usually consists of about 7 persons out of which 3 or 4 are earning Rs: 3000/- to 4,000/- per month, adding to a total income of about Rs:12,000/- to Rs:15,000/-. A typical urban family living in a katchi abadi probably fits in this category. However, such a family can not pay installment and house rent at the same time. The challenge therefore is to evolve a financing solution where a housing unit can be provided to such a family.
Based on the saving capacity of various levels of low income population, at least three models need to be developed for big cities and towns.
GUIDELINEPRINCIPLES [Back to Main]
The road map for achieving the objectives needs to follow the principles given below:-
a. FAST TRACK : Housing units in all the geographical areas need to be constructed at a fast pace so that supply can meet demand in the next few years. The bag-lock alone runs into hundreds of thousands and the additional requirement per year is several thousand. In addition, surveys have shown that the condition of the available stock is deteriorating fast and about 50% of the existing units are dilapidated, needing replacement. As such it is next to impossible to meet the demand for housing by use of conventional methods.
b. LOW-COST TECHNOLOGY : Break through achieved in the construction industry to reduce time and money is being used by many countries to enhance their housing stocks. Components constructed on mass scale help reducing cost as well as time-frame. New machinery is available for low cost housing. All available resources and technology will have to be explored and efforts made to import them in Pakistan and encourage their manufacturer locally.
c. QUALITY : Quality should not be sacrificed at the altar of cost-saving. Several initiatives taken by past governments failed mainly because quality was compromised in order to save month. For instance the cost of housing units built under Junejo’s Program was capped at Rs: 25000/- each. PWD and contractors were constrained to use lowest quality material with the result that the houses were abandoned by the allottees. Housing units should be strong, functional and practicable. Cultural and environmental needs of the people targeted to use them should be kept high in the mind while designing houses for each area.
d. HOLISTIC APPROACH ;
. Most of the previous schemes failed to benefit the inhabitants because transportation to the work-place was not available. Either the house should be located close to the source of livelihood of the inhabitant or else there should be satisfactory public transport system. Potable drinking water and electricity are also essential requirements.
