Pakistan: Low-Income Housing Experiences

Introduction

Pakistan, with a population exceeding 240 million, faces a severe housing shortage, particularly for low-income groups. Rapid urbanization, rural-to-urban migration, and economic instability have exacerbated the crisis, leaving millions in informal settlements (katchi abadis) or substandard housing. Government initiatives, NGO interventions, and international collaborations have attempted to address the issue, but systemic challenges persist.

This summary explores Pakistan’s low-income housing landscape, examining key policy frameworks, financial constraints, successful models, and persistent barriers to affordable housing.

1. The Housing Crisis in Numbers

• Estimated housing deficit: Over 10 million units, growing by 300,000 annually.
• Urbanization rate: Nearly 40% of Pakistanis live in cities, with 50% projected by 2050.
• Informal settlements: 40-50% of urban dwellers live in slums lacking basic services.
• Affordability gap: Over 60% of Pakistanis cannot afford formal housing due to low wages and high construction costs.

The demand far outstrips supply, pushing low-income families toward illegal subdivisions, rented slums, or homelessness.

2. Key Challenges in Low-Income Housing

A. Financial Barriers

• High land prices: Speculation and limited urban planning make land unaffordable.
• Lack of mortgage financing: Banks rarely offer loans to low-income earners due to perceived risk.
• Construction costs: Materials (cement, steel) and labor remain expensive relative to incomes.

B. Policy and Institutional Weaknesses

• Fragmented governance: Multiple agencies (e.g., HBFC, Naya Pakistan Housing) lack coordination.
• Bureaucratic delays: Approval processes for housing projects are slow and corruption-prone.
• Weak enforcement: Building codes and tenant rights are often ignored.

C. Infrastructure and Service Gaps

Many low-income housing projects lack:

• Water, sanitation, and electricity
• Schools, hospitals, and transport links
• Secure land tenure, leaving residents vulnerable to eviction.

D. Sociocultural Factors

• Informal economy dominance: Daily wage earners struggle with long-term financial planning.
• Cultural preferences: Many prefer extended-family living, complicating standardized housing solutions.

3. Government and Private Sector Initiatives

A. Naya Pakistan Housing Programme (NPHP)

Launched in 2018, NPHP aims to build 5 million affordable homes through:

• Subsidized mortgages (low-interest loans via banks)
• Public-private partnerships (PPPs) with developers
• Direct construction of units for low-income buyers

Progress: Over 100,000 units approved, but delays in execution due to funding shortages.

B. Akhuwat’s Interest-Free Housing Loans

The NGO Akhuwat provides Sharia-compliant, interest-free loans for low-income families, emphasizing:

• Community-driven construction
• Cost-effective designs (e.g., single-room expansions)
• Repayment flexibility (adjustable timelines)

Impact: Thousands of homes built in Punjab, but scalability remains a challenge.

C. Orangi Pilot Project (Karachi)

A community-led slum upgrading initiative focusing on:

• Self-financed sewage systems
• Microcredit for home improvements
• Advocacy for land rights

Legacy: Improved living conditions for 2 million+ residents, though limited government support hinders expansion.

D. International Collaborations

• World Bank: Funds urban regeneration projects (e.g., Karachi Urban Mobility Project).
• UN-Habitat: Supports disaster-resistant housing in flood-prone areas.

4. Lessons from Successful Models

A. Incremental Housing (Progressive Building)

• Allows families to expand homes gradually as finances permit.
• Reduces upfront costs and encourages ownership.

B. Community Participation

• Slum Dwellers Federation (SDF) in Karachi empowers residents to negotiate land rights.
• Cooperative housing societies pool resources for collective buying power.

C. Alternative Construction Technologies

• Compressed earth blocks (CEB) and bamboo housing cut costs by 30-40%.
• Prefabricated units speed up delivery in post-disaster scenarios.

5. Persistent Obstacles and Future Directions

A. Land Reforms Needed

• Release of state-owned land for affordable projects.
• Anti-speculation laws to curb price inflation.

B. Strengthening Financial Inclusion

• Expand microfinance for housing (e.g., Karandaaz Pakistan).
• Government-backed guarantees to reduce bank risks.

C. Climate-Resilient Housing

• Flood-resistant designs (e.g., raised foundations in Sindh).
• Solar-powered units to offset energy poverty.

D. Political Will and Long-Term Planning

• Cross-party consensus on housing as a priority.
• Metro-level urban plans integrating housing, jobs, and transit.

Conclusion

Pakistan’s low-income housing crisis is complex but solvable. While initiatives like NPHP, Akhuwat, and Orangi show promise, systemic issues—land scarcity, financing gaps, and weak governance—require sustained action.

The way forward? A mix of policy reforms, community-driven solutions, and innovative construction can bridge the gap. Without urgent steps, urbanization will deepen inequality, leaving millions without shelter in the coming decades.

Also Read: Housing Policy Options to Tackle Urban Inequalities