100,000 homes a year

PM’s target of 500,000 homes in five years is not all that new

The latest housing census showed that the housing shortage, already at over 10 million units, is growing at about 400,000 units a year. Seen within this context, the latest Apna Ghar scheme’s target does not seem ambitious at all. Indeed, the scheme only fills about a quarter of the increase in housing units needed to keep the shortage from growing, and unless there is some other construction, the shortage will have gone beyond 11.5 million units. The scheme comes without some important questions answered, at least revealed for public scrutiny. The first is where the land is going to come from, the next is where the money is going to come from.

The PM said the government intends to commit Rs 321 billion for 50,000 homes in the first phase in the first year, which would put the total cost of the five-year project at Rs 3.21 trillion. This is a large sum of money, and apart from the need to bring the IMF on board before committing the funds, requires a massive effort to mobilize that kind of money.

The logic behind this scheme is not new. Constructing houses not only creates demand for bricks, cement and a wide array of products, but also employs labour of all kinds, skilled, semi-skilled and unskilled. The previous PTI government had the same idea, with its Rs 3.2 trillion Apna Ghar scheme to build 500,000 low-income houses and apartments. The expected boom did not take place. Another problem with the sort of construction contemplated will involve increasing exports on a large scale, something the country would have serious difficulties with in the best of times, let alone now, when the Gulf is aflame. That has a particular relevance, for there is no certainty that overseas Pakistanis in the Gulf will be able to mobilise the sort of resources needed.

The real issue is that there is no developed credit market for housing. Mortgages in principle are a good idea, as they can be serviced in place of the monthly rent. However, with only 11.9 percent of housing rented, house ownership seems to be something that is inherited. The path to ownership offered by the government must be adequate to handle the democratic boom that is fuelling it.