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There have been a lot of news coming about the newly launched affordable housing programme, Naya Pakistan Housing Programme (NPHP) from the real estate sector of the country. Pakistan is currently facing a massive shortage of housing. Meanwhile, to address this issue, the government has made several efforts over the past few years to overcome this issue but such attempts have usually been failed.
The newly elected PTI government has decided to fulfill one of its pre-election promises of constructing 5 million affordable homes. After the formation of the government, soon it was announced that the projected would be starting soon. The project was named as “Naya Pakistan Housing Programme” with a core aim of overcoming housing shortage and providing affordable homes to deserving ones.
Pakistan is not the only country suffering from the housing shortage. There are many other countries who tackled the housing shortages in past such as China, India, Singapore, and Indonesia.
China’s housing program and provident fund
In the late nineties, the government of China decided to finish direct housing distribution to employees through the already established employer-based system and embarked on an affordable housing project of its own. This move was the real need of the time back.
One of the initiatives the government of China introduced was providing housing cash subsidies to new employees and established a Housing Provident Fund. This was a compulsive savings system for housing that allows subsidized loans to employed homebuyers.
The country also introduced an affordable housing programme named as “Economical and Comfortable Housing.” The project is specifically designed to make housing affordable to middle and low-income families.
The local government does most of the work in the Economical and Comfortable Housing project. They allow free of cost land for building houses, lessen government duties and tax, and fix profits for the developers to lower the housing price. These reforms drastically increased the homeownership to 82.3 percent in urban China in 2007.
Singapore’s triumph
Singapore is one of the most successful players in providing affordable housing to its residents. The country stands at greater than 90% homeownership ratio.
Singapore authorities established the Housing and Development Board (HDB) in 1960 with the aim of resolving the city’s housing crisis. The initiative starts with rented apartments which were built in large numbers for the low-class income families who could not pay rents back then. By 1980, the country was slum-free.
The success of Singapore is essentially attributed to the long-term approach toward public housing and planning. One of the key value-adding factors of the programme is that it made it legal to take loans on your personal pensions-funds right when you start earning. This step allowed even low-income groups to buy their homes.
India’s PMAY
Neighboring country India is also facing the similar housing shortages as Pakistan. The country launched their major affordable housing programme named as “Pradhan Mantri Awas Yojana (PMAY)”. The govt has planned to build 20 million low-cost homes under the project to ensure housing for the urban poor families of the country by 2022. Essentially, PMAY has been divided into further two categories.
For citizen’s belonging to slum: ISSR (In-situ slum rehabilitation component). The aim of this category is to provide houses to those who are eligible and live in slums by rehabilitating the existing slums.
For citizen’s belonging to non-slum:
Beneficiary led construction (BLC): If they already own the land and interested in construction, this category allows central assistance of INR 150,000 per family for new construction or extension of existing houses for lower-income groups.
Credit Linked Subsidy Scheme (CLSS): If they can afford to construct/purchase/enhance their home using a home loan, they are provided a subsidy on the home loan.
Affordable Housing in Partnership (AHP): this category will cater to those who do not have any land for construction and/or cannot afford a home loan. This will provide them with financial assistance to private developers to incentivize the development of affordable housing projects, which will then be provided to the citizens.