By Adnan Adil
In the absence of any regulatory mechanism by the government and a dysfunctional judicial system, the land property mafia has ripped off the middle-class
Our newly rich property magnates keep making quite a splash by building grand mosques and flaunting their charity works. These shows of riches and piety mock the misery of millions of Pakistanis on whose hard earned incomes these tycoons have thrived. The private real estate business has prospered in a country that has a shortage of 10 million housing units according to official estimates, which means that 60 million people need housing on the basis of six members constituting a family. If one takes into account the fact that 80 percent of the 200 million population either lives below or on poverty line, an unofficial but more realistic estimate of this shortage would be 20 million units.
Cheap land and affordable house building finance are two basic requirements of building housing stocks but our state has deprived the people of both. Instead, the ruling elite has exploited the national housing demand to make fortunes for themselves. They are a stakeholder against the basic need of the common man. By adopting a policy of indifference to the housing needs of the low-income and middle-income people, the state has helped the real estate business grow exponentially. A number of top politicians, civil and military officers, judges and media men are either on the payroll of or beneficiaries of real estate developers.
Since the overthrow of Zulfikar Ali Bhutto’s government in late 1977, successive governments have made policies to benefit the land mafia and building companies at the cost of the common man. For instance, during the military regime of General Ziaul Haq throughout the 1980s, the Lahore Development Authority (LDA), by then a source of affordable residential plots for middle-income people, was ignored and neglected so that the military-run Defence Housing Authorities (DHAs) could flourish. For the low-income and lower middle class in Lahore, the last two residential colonies, Green Town and Township, came into existence during the tenure of Zulfikar Ali Bhutto (1972-1977). Since then, during the last four decades, no military or civilian government has taken such a housing initiative.
Successive elected governments have taken some modest housing initiatives but they too were victim to political instability. In 1987, the federal government set up a National Housing Authority with the stated objective of building housing units for the country’s low-income population but gave up these attempts in the 1990s. Mohammad Khan Junejo (1985-1988) was the last prime minister who took some steps for the benefit of the poor. He regularised the squatting settlements (katchi abadis) throughout the country set up by March 1985. In 1987, his government launched the Apni Basti (my neighbourhood) project with the objective to build 150,000 housing units but it had built only 35,000 houses by then time the government was dismissed by General Ziaul Haq. Junejo’s successors abandoned the project halfway through and deprived the newly-set up settlements provision of water, power and gas. As a result, these colonies turned into ghost areas from where people took away the door and window frames of the houses and bricks of the walls.
During Nawaz Sharif’s second tenure (1997-1999) as prime minister, he launched the Mera Ghar (my house) Scheme, the biggest public sector housing scheme ever, with the aim of building 500,000 houses for low-income groups on state land, but the project fell way short of its desired objectives. Prime Minister Benazir Bhutto (1993-1997) initiated the New Islamabad City Project but this faded away with her dismissal in 1997. In 2001, General Pervez Musharraf’s regime approved a National Housing Policy to review the status of nationwide housing and to identify resources for this purpose but he never pursued it.
The incident of September 11, 2001 came as a turning point in the country’s housing scenario. Never before had the prices of urban land and houses escalated so fast and for so long as they did following 9/11, leading to a steep surge in foreign remittances that mostly landed in real estate. During the last 15 years, the price of urban land has risen by 1,000 to 1,500 percent and is still rising. Seeing the boom, real estate developers sold plots in papers — the new term of ‘plot file’ came into fashion in place of land’s registration and transfer. These files are traded like stock market shares. In some cases, developers sell off plot files even when they do not have possession of corresponding land. The state has looked the other way to such irregularities.
Our elite, instead of investing their surplus money in the industrial sector, has put it in real estate’s speculative market. All this investment is exempt from any kind of taxation (such as property tax, sales tax, withholding income tax etc,) except nominal registration or transfer fee on much-depressed official rate of the land. In the absence of any regulatory mechanism by the government and a dysfunctional judicial system, the land property mafia has ripped off the middle-class. For instance, a well-known Lahore-based real estate developer and construction firm launched more than a dozen schemes of built houses during the last 10 years and received the advance money running into billions of rupees from more than 7,500 buyers but did not complete a single project on time.
The entire gamut of the government’s policies militates against the interests of the common man. In Lahore, for example, the LDA left halfway its residential schemes, Jubilee Town and LDA Avenue One, to allow private developers make money. At LDA Avenue One, the authority allotted plots to the owners after 13 years of the scheme’s launch and, to this date, hundreds are still awaiting allotment letters. The LDA has recently launched a new project, LDA City, with the collaboration of private developers, and before any development could begin at the site the private parties have started selling the plots. Instead of providing affordable residential plots to citizens, the LDA, which is run on taxpayers’ money, is now working like a greedy commercial entity.
A major issue hurting the interests of lower and middle-class people relates to the building bylaws in big cities that have made housing more expensive. For instance, in Lahore, only two-storey houses (ground plus one) can be built. In a city with a fast burgeoning population, this policy has resulted in a steep rise in the market price of urban-periphery land. The government needs to amend the building bylaws to allow at least one-plus-three houses in big cities so that people can build more housing stocks in already-developed neighbourhoods.
At present, the state’s several housing initiatives are no more than tokenism. The government has launched Ashiana Housing Scheme in Punjab for low-income people. Not more than a few thousand people, where millions need shelter, will benefit from this scheme if it is completed. In the run-up to the 2013 general elections, Chief Minister Punjab Shahbaz Sharif had promised he would regularise Punjab’s katchi abadis and provide them civic amenities. Like many other phony promises, this one, too, has not materialised. Little else can be expected from the rulers who themselves are the main beneficiaries of the housing shortage.
The writer is a Lahore-based researcher and journalist and can be reached at email@example.com