THE vision of former prime minister Imran Khan for the Naya Pakistan Housing Programme was “to deliver five million housing units with allied amenities to all citizens, especially focusing on the financially underserved and middle-income communities, as a measure of comprehensive socio-economic uplift.” That’s written on the official website of Naya Pakistan Housing and Development Authority (NAPHDA) expressing the raison d’etre of the Naya Pakistan Housing Programme.

The creation of 10m job opportunities was also subject to the provision of 5m houses. Because construction of 5m houses would have had to run the wheel of construction and other allied industries of building materials and ultimately led to the creation of more job opportunities.

The PTI government, to meet the above objectives, formed the NAPHDA. The generation of construction activity in the country that will provide stimulus to over 40 housing and construction-related industries is written as an objective on its official website.

However, it is unfortunate that out of 5m only around 59,000 housing units were worked upon across the country out of which 20,000 had been completed under the Naya Pakistan housing initiative at the end of the previous government. In a news report, a NAPHDA spokesperson has confirmed before the media that only the Akhuwat Foundation provided 17,000 housing units to the deserving ones and around 3000 apartments were made with the collaboration of the Workers Welfare Fund.

A whole host of reasons, from rising prices of building materials to lack of digitisation of land records resulted in the project’s dismal numbers

Moreover, the Naya Pakistan Housing and Development Authority, which was made to fulfil this dream by the PTI government, did not deliver a single housing unit to anyone by itself. The former prime minister himself conceded that according to his ‘flagship program’, 5m houses weren’t supposed to be constructed by the government, but by the private sector. The government just had to support the private sector in this regard. One wonders if that is the case, then why the NAPHDA was made.

Notwithstanding, there were multi-faceted shortcomings of the Naya Pakistan Housing Program of the PTI government. These shortcomings jeopardised the workability and sustainability of that flagship program, despite a lucrative construction package in 2020 and sizable growth in housing loan disbursements by the banking sector.

First and foremost, the government’s conception of the construction industry was incomplete, if not incorrect. The construction sector globally includes civil engineering, infrastructure projects and real estate developments both in the public and private sectors. But the general understanding of the construction sector within the government’s package is limited to housing and real estate, that too mainly in the private sector.

Moreover, the previous government never considered that many infrastructural developments like highways, bridges, dams, rural housing and especially annual public support development programs are also vital to move the wheel of the overall construction industry.

Then, PTI announced the programme for the construction of 5m houses without homework. They launched and developed Naya Pakistan Housing and Development Authority besides forming a National Coordinating Committee of Housing Construction and Development to review the progress of developments every week.

But the basic necessity, the availability of land or its acquisition were never insights of the leadership when it came to power. As a result, the government did not get enough land during its tenure to launch low-cost housing and the numbers lingered at a few thousand under-construction flats at the end.

Similarly, the government should have first started with the digitalisation of properties and embarked upon master plans for cities. That would have enabled it to assess land records and figure out accessibility to land at the beginning. But unfortunately, this didn’t happen and it stayed as one of the most significant obstacles faced by the governments, federal and Punjab.

Chairing a meeting of the National Coordinating Committee for Housing, Construction and Development in August 2020, the former prime minister directed to ensure automation, digitisation and simplification of procedures of land to facilitate investors and citizens. However, in December 2020, he admitted that “government departments are (running in) loss. They are in debt. They have land but they cannot benefit by selling it because they do not have land records.”

The provision of banking loans is an essential component of low-cost housing. The State Bank of Pakistan (SBP) had issued a government mark-up subsidy for housing finance to facilitate the provision of subsidised financing to low and middle-income individuals.

“Tax incentives and lower interest rates encouraged participation in real estate,” stated the SBP last year. However, tight standards and strict prerequisites for giving out such loans persisted as a major constraint during the majority of the PTI regime. On the other hand, it was later revealed that banking loans were largely disbursed to the non-residential sector rather residential one meant for home construction, renovation and low-cost housing development.

Lastly, the continual price escalation of construction materials was the main shortcoming that the previous government was unable to contain. Due to the ongoing inflation rate and unstable dollar position in the market, the prices of construction materials increased enormously.

Owing to the sharp uptick in prices, the Construction Association of Pakistan in an advertisement last year declared their inability to execute and continue construction on public sector projects. The builders and developers in the private sector stopped kicking off their real estate projects as well as bookings because of uncertainty in building material prices.

The same situation still persists with the new regime in Islamabad. Let’s see when the new government comes up with its own policy for the housing and construction sector.

Published in Dawn, The Business and Finance Weekly, May 23rd, 2022