Understanding Public Housing in Pakistan: Have the Initiatives Been Worthwhile?

The housing shortage has always been a daunting public policy concern for Pakistan.

Public housing, as the name implies, is a low-cost and affordable housing program, launched by the government that aims to help the disadvantaged in getting access to decent housing. Besides improving housing affordability, public housing also has other benefits.

For instance, in public housing schemes, government regulations can ensure housing quality through proper maintenance and cleaning. It can also address titling issues by ensuring thorough documentation and restrictions on property sale to ensure that the house remains occupied. Most importantly, however, is that it can reduce housing inequality by providing homeownership to low-income groups.

To uplift the condition of the housing sector in Pakistan, many governments in the past have tested developing public housing schemes. Some of them worked, some did not, while some were successful only when supported with the necessary infrastructural developments.

Successful Public Housing Initiatives in Pakistan

Some examples of major public housing projects launched in the past in Pakistan include The Korangi Town project, Surjani Town, Liyari Expressway resettlement program, Taisar, Baldia as well as Hawksbay Town. A brief history of some of these housing programs is given below.

Under the greater Karachi resettlement program, Korangi Township was launched in 1958 for the rehabilitation of squatters. The project was completed within six months. Initially, important services such as transport and healthcare were not available there, due to which many house owners sold their rights. However, over a time span of only a few years, infrastructural development took place, ultimately making the project a success.

Similarly, Surjani Town was launched in Deh Surjani in the late 1980s. It included the construction of 10,000 housing units, comprising of 1 to 2 rooms each. The government subsidized the land and allotted it to different builders/developers. Construction was done using low-cost technologies and material, while HBFC provided the mortgage financing.

However, due to missing infrastructure, residents found it difficult to commute to work, due to which most of the units remained unoccupied for a long time. As a result, loan default rates went up. It was only when infrastructure was subsequently developed that eventually enabled interested people to occupy the houses.

Under the Lyari Expressway resettlement project, an expressway was built over the Lyari river due to which encroachments around it had to be removed. These displaced families, over 24,000 units (about 147,000 persons) needed support with resettlement. For this purpose, the government built three colonies.

Families were given various incentives to ensure cooperation. 80 sq. yards plot per family was provided free of cost and Rs. 50,000 in cash were given to each family as facilitation money. Moreover, resettlement in a more conducive environment was ensured, as important services such as transportation, drinking water, sewerage system, and electricity were provided. The project ultimately proved to be successful.

Public-Private Housing Partnerships in Pakistan

Aside from public housing, governments in Pakistan have carried out housing projects in partnership with the private sector as well. Al-Azam and Maymar builders, for example, pioneered the idea of low-cost apartments in Karachi. They have made a substantial contribution in closing the housing gap among low-income groups.

Khuda-ki-Basti (KKB) by SAIBAAN is another example where a micro-housing scheme titled “Incremental Development Housing Scheme” was launched. Initially, it was implemented and managed by the Hyderabad Development Authority (HDA), until SAIBAAN registered as an NGO.

The initiative aimed to meet the housing demand of the lowest income quartile of society. Again, HBFC provided housing loans for development. These schemes, equipped with infrastructure, utilities, and public transport were attractive to buyers from the lowest income groups.

Examples of Public Housing Across the Globe

Around the world, many well planned and well-executed public housing programs have proved to be successful. Some of these programs are discussed below:

The government of Korea, for example, engaged its private sector within a regulatory framework to provide public housing. The government provided land on a large scale, extended financing, regulated the production and allocation of new houses, and also incentivized suppliers and consumers through taxes and subsidies. Potential first-time homebuyers were given priority in the distribution of new housing.

Similarly, Canada provides social housing in high-rise clustered buildings, mainly in working-class neighborhoods. Lately, Canada has been trying to integrate social and market housing, with the hope to improve the connection between different income groups and to promote cultural diversity.

China provides public housing through the utilization of abandoned properties and old apartments by constructing new houses in their place. These houses are then rented at a reduced price. Moreover, the land is provided free of cost to developers, whereas buyers are granted exemptions from real estate developer fees.

There are, however, some demerits to public housing as well. Studies have shown that the cost of public housing is relatively higher as compared to private housing.

Also, without proper infrastructural facilities, public housing stock often goes unoccupied as people show reluctance to move in since there is a lack of economic opportunities and services in isolated areas.

Moreover, public housing schemes often rely on subsidies that can sometimes prove to be unaffordable for governments.

Thus, while public housing is not the ultimate solution to the housing crisis, it can help reduce the housing shortfall. However, it is preferable if the government works in conjunction with the private sector to provide housing to low-income groups. The experiences from the projects in Pakistan, as well as abroad show that public housing has the potential to raise living standards, in comparison to people living in informal settlements such as slums. However, the success of public housing schemes is highly dependent on the availability of complementary facilities and public services such as transport, market and schooling facilities.