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Expansion of slum areas and high property prices

Published on 16th Mar, Edition 11, 2015

 

A major reason behind the rapid growth and expansion of slums around major cities in Pakistan is the skyrocketing prices of real estate. It is unaffordable for common man to buy a property for his residence. If one resorts to banks for loan, the mark-up on such loans is so high that he/she finds it almost impossible to payback the borrowed money. This dismal situation is promoting and encouraging growth of slum areas in major cities including Karachi, Lahore, Quetta and even Islamabad. The unplanned constructions in slum areas created plethora of problems like environmental mismanagement, filth and garbage, out-flowing drains, poor sanitation, congestion, development of unhygienic and hazardous practices and rise in crime rate. The power theft, contamination of water, illegal connections of Sui gas, electricity and water developed as culture in these slums. The corrupt officers of the relevant department made quick millions for providing illegal water and power connections to the people of slum areas.

Serious security threat

Slums continue to increase in major cities, while property prices are consistently going up. There is no check and hence major townships in the country have been converted to slums, to say precisely. Slums serve as sanctuary for militant outfits. They become the breeding places for criminal mafias, which create law and order situation. Better housing is also needed from security point of view in the country, which is facing an insurgency-like situation in its southwest and northwest. Slum areas in major cities like Karachi pose a serious security threat.

Let’s have a glance at growth of slum areas in Balochistan for instance. Balochistan is the poorest and most backward province of the country. Territorially, it is the country’s largest province, with a thinly dispersed population of around 7.7 million. There is no infrastructure, no industry, no viable road network, no agriculture extension services and no technical training centers and quality education institutions in the region. The people of the province are technologically backward. People in Balochistan mostly live in mud-houses. Even Pakka houses (solid and permanent) do not exist in many areas inside Quetta, the provincial capital of Balochistan, and its slum areas. People lack proper housing to live a decent life. They are still deprived of decent living in the 21st century. The recent earthquake in Awaran district destroyed hundreds of Kutcha houses (makeshift) rendering thousands of people homeless. The weak infrastructure added to the devastations brought about by the recent earthquake in different areas of the province. Lack of decent living is a potent factor contributing growth of extremism and militancy in the country.

 

No housing schemes in Balochistan

Balochistan was denied housing schemes and hence the people of this province could not find the employment opportunities. Former government of president Pervez Musharraf had launched ‘Sasti Basti’ (cheap) housing scheme in Quetta to provide the government employees their own houses at easy loans. The economic and social backwardness could not create a middle class in the Balochistan. The absence of a middle class and urbanized leadership led the province’s politics to center round a few big guns of the area, who could not effectively press the government for better housing for their people.

According to one estimate 89 percent of population in rural Balochistan resides in high deprivation areas. The entire urban population in Balochistan resides in high deprivation districts and the province’s share in low as well as medium deprivation districts is zero. The provincial capital, Quetta does not even qualify for medium deprivation status. Nearly one half of the population of Balochistan relies on unprotected wells, ponds, canals, or streams for their drinking water needs. In rural areas, only 39% of households have access to improved water sources within a 2-kilometer distance from their homes. Drinking water is often polluted and distributed without treatment. According to an estimate, only in five districts (out of 30 districts), sanitation is accessible to more than 51% of the population; in nine districts adequate sanitation is available to 26-50% of the population, and in 13 districts, household sanitation coverage is only 4-25%. Access to sewage disposal infrastructure is largely absent. In most districts, less than 3% of the population has access to wastewater disposal facilities.

Better planning

Growth of slums is somewhat linked with high property prices. Provision of better housing should be the priority of the government. Government should make such arrangements with State Bank that would enable people get loans to build or buy houses. It is highly expected that availability of loans on easy terms would result in development of this sector. Various incentives should be announced to promote housing and construction sector in the country. The private sector may come forward and take the advantage of the incentives if announced by the government.

The housing sector holds strong backward and forward linkages with other industries. No doubt, its growth unleashes growth in these related sectors. The construction of houses gets at least 40 other industries involved creating enormous job opportunities for the people. Successive governments could not launch the housing schemes for the complex and time-consuming process the housing sector development involves. The government spends more than US$5 billion on construction from its annual development budget. The housing sector, however, gets less than half of the amount allocated for construction each year.

For the development of housing sector, government must reduce excise duty on cement, eliminate excise duty on wires and cables, increase in limit of tax exemption on mark-up, bring improvement in lending ratio and increase in maximum limit of loan.

The burgeoning population and rapid urbanization calls for more housing schemes in the country. Constituting two percent of the country’s GDP, the real estate sector can still grow and account for 5 percent of GDP. Efforts should be made by the government to revive the real estate sector. It must announce a drop for interest rates of mortgage loans in a move to encourage potential investors to invest in properties. It must take serious steps to check speculations in the property market and should bring the prices of the real estate within reach of the common people. Such steps will also check the growth of slum areas in the cities.

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