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Friday, February 16, 2024

Can Naya Pakistan Program prove a game changer in housing market?

Naya Pakistan Program can prove a game changer for the low income housing market in the country but it needs wider understanding by the public and clarity from the government.

Naya Pakistan Housing Program (NPHP) has not dented into the public consciousness – not yet. Opposition leaders and media pundits, in tv debates, keep asking rhetorically: “where are the five million houses and ten million jobs?” But the Naya Pakistan Program is moving ahead and sources familiar with the workings and progress of Naya Pakistan Housing Authority (NPHA) that have spoken to GVS off the record, believe that this has all the potential of a “game changer” for country’s housing market.

Naya Pakistan Housing and Development Act (2020) envisaged active collaboration between the public and private sectors to create what an expert calls “Enabling Environment” for the low income housing to kick start in the country. Detailed deliberations have taken place between the Prime Minister’s Office (PMO), Naya Pakistan Housing Authority (NPHA) headed by Gen. Anwar Ali Ashghar, State Bank of Pakistan, key financial institutions, provincial governments and the Association of Builders and Developers (ABAD).

Enabling Environment for the Low Income Housing:

GVS has learnt that as a result of these institutional deliberations time bound tax incentives for real estate development and construction have been designed and the concept of a “land bank” is moving ahead. To help the revival of construction industry federal and provincial taxes have been relaxed through a time bound package; State Bank of Pakistan has persuaded the commercial banks to make 5% of their respective domestic private sector credit available for housing finance and construction related activities.

Ministry of Finance has approved a mark up subsidy to facilitate banks to provide loans for 5 Marla and 10 Marla housing units at 5% to 7% interest rates for up to 20 years – as is the practice world wide. An automated project approval regime has been evolved and development authorities are working to evolve “one window digital portals” to facilitate approvals.

So far the public and private sectors of the country have offered almost 200 site to build low-cost housing units to provide affordable accommodation for the lower middle class under Naya Pakistan Housing Programme (NPHP).

Out of these, more than 70 sites have been offered by the private sector entities to build around 104,912 houses and more than 130 sites have been offered by the government sector entities which are being evaluated, an official in the Ministry of Housing and Works told Associated Press of Pakistan (APP).

Official familiar with the plans said the present government intends to facilitate, through robust policy measures, construction of five million housing units to cater to the needs of the shelterless and low-income people in the country. However he argues that this does not mean that the government itself will be building all these housing units. Government may participate actively in some schemes but its overall goal remains proving an “enabling environment” in the country to facilitate this construction boom.

Read more: LDA to build 4000 apartments under Naya Pakistan Housing scheme

The official said the government has received so far over two million applications, out of which 1.8 million are eligible. He said that various schemes are being launched to initially accommodate these applicants.

He said the housing schemes by Naya Pakistan Housing and Development Authority (NPHDA) in Islamabad and Lahore are being finalized. The official said that so far, 6769 houses have been completed under various schemes.

Naya Pakistan in need of wider understanding? 

While even this figure of around 7000 housing units has not been absorbed by the media platforms the fact remains that this number is far too small a figure when measured against he political commitment of five million housing units.

The official, familiar with the situation, argues that much time has been spent in creating an institutional framework and the initial circumstances including the foreclosure law and a nascent mortgage market. It is now expected that within short period of time, many more planned housing schemes will be launched. Many of the eligible applicants who have opted for housing units in Islamabad and Lahore would be allotted units.

Official in the Ministry of Housing and Works told APP that the Federal Government Employees Housing Authority (FGEHA) headed by Dr. Waseem Bajwa, has launched several projects under the Naya Pakistan Housing Program (NPHP) including: Kashmir Avenue, G-13, Islamabad, Skyline Apartments, New Airport, Islamabad, Chaklala Heights, Chaklala Scheme-III Rawalpindi, Sky Garden Scheme, Bara Kahu, Islamabad and Life Style Residency, Bedian Road, Lahore.

Read more: Bank of Punjab (BOP) & Reall Limited sign MoU to promote affordable housing in Pakistan

To execute these housing schemes, official said that the documents have been prepared by NPHDA. These include: service regulations-2020, PPP regulations-2020, procurement regulations-2020, negotiated procurement for PPP schemes on private land, approval of interest rate subsidy and cost subsidy on housing units and others.

However the business community feels that much more needs to be done to bring the public on board and to encourage rapid development of housing. Mr. Gahur Ejaz, Patron in Chief of APTMA, and founder of the Lake City Lahore, appearing in a tv discussion argued that mortgage market needs to be facilitated for all Pakistani citizens irrespective of whether they are part of the Naya Pakistan Housing Program or not. Perhaps the government is already moving in that direction but its various initiatives need more clarity and wider understanding.

Sources: APP with additional input by the GVS News Desk and Editorial team.