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A growing number of individuals in Pakistan lack access to adequate, reliable, and cheap housing as a result of the country's fast urbanization and population growth.
The most recent census, in 2024, shows a housing stock of 52.2 million units, 39% of which are in cities.
Over the next 20 years, an additional 2.3 million individuals are anticipated to move into metropolitan areas. With 6.3 people per home, this amounts to a need for 360,000 households.
So, as cities continue to grow and expand, the demand for affordable housing in urban areas has become a pressing issue. The increasing cost of living and lack of affordable housing options has created a significant challenge for many individuals and families, particularly those with lower incomes.
In this blog post, we will explore the challenges of providing affordable housing in urban areas, including zoning laws, rent control, and the effects of gentrification.
Zoning Laws and Affordable Housing
One of the biggest challenges to affordable housing in urban areas is zoning laws. Zoning laws regulate land use and determine how land can be used within a particular area. These laws often prohibit the construction of affordable housing in certain areas, such as wealthy neighborhoods, and require developers to build expensive housing units.
As a result, affordable housing is often located in areas that are farther away from urban centers, making it difficult for low-income individuals to access job opportunities and essential services.
In addition to zoning laws, many cities also have strict building codes and regulations that make it difficult and expensive for developers to build affordable housing units.
These regulations often require developers to include certain amenities and features in their buildings, such as parking garages and elevators, which can significantly increase the cost of construction.
Rent Control and Affordable Housing
Rent control is another issue that affects affordable housing in urban areas. Rent control is a policy that limits the amount of rent that landlords can charge tenants.
While rent control can help to keep housing costs affordable, it can also discourage developers from building new housing units, as the potential profits from rental income are limited.
In addition, rent control can lead to a shortage of affordable housing units, as landlords may choose to convert their rental properties into other uses, such as condominiums or office space, in order to maximize profits.
As a result, many cities have experienced a decline in affordable housing units as in Kuwait Mall as a result of rent control policies.
Gentrification and Affordable Housing
Gentrification is another challenge that affects affordable housing in urban areas. Also, gentrification is the process of revitalizing urban neighborhoods, often through the renovation of older buildings and the construction of new, more expensive housing units.
Gentrification can bring economic benefits to a neighborhood, such as increased property values and business growth.
An Inexpensive Housing Framework
What defines cheap housing for the typical Pakistani household is not entirely clear.
Internationally, a basic dwelling unit is considered to be inexpensive if it can be accessed for 20% to 40% of a household's gross monthly income for rent or a mortgage and offers a minimum number of utilities and personal space (between 250 and 500 square feet).
Here is a basic framework for debates on housing economics and planning policies and strategies that are realistic and well-informed.
It includes a functioning tool for calculating actual and affordable housing prices. For increased accuracy, the list of elements influencing housing costs and, consequently, the "affordable" and "real" housing price, might be enlarged or contextualized.
Ratio of Affordability
The official National Reference Manual on Planning and Infrastructure Standards (NRM) offers models to assess affordability in terms of investment in years of household income, taking into consideration the household inclination to save and the duration and interest rates of loans, among other factors.
According to financial analysis of the loan terms of the Home Building Financing Corporation, which are more favorable than bank loans, a household can afford a total outlay on housing that does not exceed 2.7 times its yearly income.
The general guideline for affordability may be extended to a capital investment equal to 3.5 times the yearly household income if prior personal savings and zero/low interest loans from relatives, etc., are taken into account.
Households per Dwelling Unit (HH/DW) is a unit of measurement used to describe occupancy, or the number of people who reside in a residential building.
Land Cost
The cost of land varies greatly across urban and rural areas as well as within them, and is mostly influenced by how close or far away a given residence is to places of employment, services like hospitals and schools, as well as commercial activity.
As a result, the availability of transportation and social infrastructure affects both the market value of land and the effective cost of living.
Land costs are cheaper in "greenfield" developments, but the actual cost of a home would need to be increased to account for infrastructure construction costs. Both in urban and rural areas, "infill" development makes use of existing infrastructure to cut down on "development" costs, however it would result in higher current land prices.
Price Per Square Foot of Built Area
In addition to variations in final quality, building costs are also highly diverse, primarily due to the materials and technology utilized in the "grey" structure.
Larger land areas are cheaper in rural areas, where land prices are lower, allowing for low-cost, single-story, low-tech buildings.
Land areas per DW are decreasing in upscale metropolitan regions where land prices are high, requiring multi-story building with its associated higher costs.
A thorough review of the literature on affordable housing research revealed that there are no established standards for determining housing affordability, which is thought to be a problem in the provision of affordable housing. Most assessments of housing affordability are based on the income to spending ratio (IER). Yet according to academics, housing affordability encompasses more than just housing costs (such as rent, mortgage, and utility bills) and non-housing costs (such as travel, healthcare, and educational costs).
Urban Development and Housing
Since housing is an important part of the social dimension of sustainable development, its sufficiency in terms of quantity and quality is a key indicator of both a society's level of development and its citizens' standard of life.
So, a major obstacle to urban growth and governance in Pakistan in general, and Sindh in particular, is the need for an efficient housing delivery mechanism to promote progressive urbanization in our cities.
The housing policy's main goals are to provide for the province's present and future housing demands by obtaining a comprehensive analysis of the province's current housing situation and concentrating on the following:
· Housing Finance
· Urban Renewal Program
· Public Private Partnership
· Real Estate Management
· Management of Heritage and Local Construction Techniques
· Improvement of Safety & Security for Existing Infrastructure
· Safety and Security Guidelines for New Housing Plans
· Low-Cost Affordable Housing
· Improving Rural Basic Infrastructure
· Low-Cost Affordable Housing
· Land Bank and its management
Housing in Pakistan must be done properly. First, a stable land and housing market is essential for the nation's development.
Human capital indicators including lower sickness rates, higher educational performance, and lower fertility rates are linked to better housing quality and solid property rights.
Second, real estate and housing development are significant industries whose performance has an impact on the economy as a whole. Finally, the financial markets will become more sophisticated and house finance will become more accessible to Pakistanis who currently lack access to it.
Finally, housing has a significant influence on both the resilience to climate change and the manner that cities are constructed.
The location of homes, their layout, and architecture all have an impact on greenhouse gas emissions as well as how disaster-prone populations are.
So, this trio of land and housing projects is a significant stride forward with wide-ranging positive effects on Punjab's economy, the environment, and society as a whole.
It will start to alter how cities distribute land and provide the necessary infrastructure for cheap housing, making them more environmentally friendly, habitable, resilient, and inclusive for all.
Final Words
Punjab, Pakistan's largest province, has a housing shortage that was estimated at 2.3 million units in 2017 and is projected to reach 11.3 million units by 2047.
Urban housing is under intense strain as a result of the rapid growth of urbanization, especially for middle- and lower-income groups. Particularly for the urban poor, the official sector has been unable to meet the demand for affordable housing.
Pakistan's capital and planned city, Islamabad, began to take shape in 1960. In this planned metropolis, there are a lot of squatter communities that are growing with time.
Hence, seeing the seriousness of the issue, the Pakistani government launched numerous initiatives and took different approaches at various points to solve it.
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