Low-cost housing: a viable option? by Ali Wahab
Source: Express Tribune
Shelters of millions were wiped out in the devastating floods of 2010. With the numbers still coming in, it has been estimated that more than 0.7 million homes have been destroyed across Pakistan till now.
In a country where there already exists a gap between demand and supply of housing in the vicinity of 2.5 million units in urban centres (according to a World Bank study conducted in 2009), this is definitely not good news for planners.
Due to the massive scale of destruction, increased pressure on urban centres is inevitable because of migration from affected areas.
However, it seems reconstruction should not be much of an issue as the cement industry currently has an idle capacity of 10.63 million tons (as of June 2010). With an increase in demand we may see cement prices come down if manufacturers increase utilisation.
But what we need are sustainable, low-cost housing initiatives that are not only suitable for low-income families but also fall under the ambit of micro-finance institutions for them to be funded.
Low-cost housing is gaining popularity in India, Malaysia, Indonesia, the Philippines and Thailand. All these countries receive substantially higher annual rainfall than Pakistan.
Developers in India are coming up with projects that provide affordable housing for as low as INR200,000 (approximately Rs370,000) in a city like Mumbai.
People with a monthly household income between INR7,000 and INR 20,000 can purchase these units with necessary financing from micro-finance institutions, house-finance providers or even the developers.
An important aspect of low cost housing is that as such initiatives employ economies of scale by constructing housing units in thousands. Hence, speculation on land prices gets mitigated.
In a many countries Wood Wool Cement Board (WWCB) is used as construction material. It is a building material made from wood wool and cement. WWCB has been available in certain countries in Europe for over 70 years now, but it was in the 1950s that demand began to increase rapidly. The Philippines and Malaysia have been increasingly using the material to enable low cost housing.
Similarly, the use of other materials like aluminium may be considered to fulfil the needs of low cost housing in the time need.
There are many low cost housing solution providers around the world. Pakistani developers should not shun the possibility of working with Indian businesses like Tata and DLF or Homex from Mexico to provide the much required low-cost housing solutions and replicating their capabilities.
International agencies like the World Bank, Asian Development Bank and International Finance Corporation, amongst many others, have supported various initiatives in the housing sector which have a long-term impact on developing economies.
If a well-planned initiative is presented to these funding agencies, the seed money needed to fund the projects should not be an issue.
It is about time we started taking focused decisions that have long term results, perhaps over the course of next 15 to 20 years. Overnight improvements are never long lasting and it is important for the right foundations to be established.
The necessary capital will follow the opportunity.
Published in The Express Tribune, September 6th, 2010.