Affordable Housing
What is Affordable Housing?
Affordable housing is housing that a household can pay for, while still having money left over for other necessities like food, transportation, and health care. Though different countries have different definitions for affordable housing, on a broad scale it is the same, i.e. affordable housing should address the housing needs of the lower- or middle-income households.
It has become a pressing issue especially in developing nations where most of the population isn’t able to buy houses at the market price. The rent or home price that is affordable may vary from one household to the next, but the need for housing that is affordable is shared by everyone. The repercussion of high housing costs goes beyond a single household’s wallet to affect entire cities, towns, and counties.
Affordable Housing in Pakistan
Undoubtedly, affordable housing is a key issue in developing countries like Pakistan where most of the population can’t buy houses because of the high market price. In Pakistan, it is appropriate to define affordability in housing as being a function of three broad parameters which are the monthly household income of prospective buyers, the size of the dwelling unit and the affordability of the home buyer i.e. the ratio of the price of the home to annual income.
According to Iqbal Institute of Policy studies the buying power of 68 per cent of the Pakistani population cannot meet ninety-nine per cent of housing in Pakistan. Therefore, Pakistan needs a decent affordable housing which is fundamental to the health and well-being of people and to the smooth functioning of the economy.
The current government’s manifesto involves provision of low-cost homes and this can help drive growth in 40 or so connected industries. According to some estimates, the construction of 100,000 housing units in the country can increase GDP by around 2pc. Nevertheless, housing shortages in the country have grown and are now estimated to have reached 10m units.
What can be done?
Disposable income of the people remains the primary factor in determining affordability. As a result, it becomes the increased responsibility of the government to cater to the rising demand for affordable housing. As our country is going through an economic transition characterised by demand for better housing facilities, there is a widening gap between the demand for houses and its availability. Both in the urban and rural areas, there is a lack of proper housing facilities.
It is important to identify, evaluate the needs of, and address the challenges faced by the largest chunk of urban housing consumers with the most pressing needs i.e. the Affordable Housing customer whose grave concerns are purchase price, ability to finance mortgages, housing occupation costs, and ability to finance service loans.
For affordable housing to become a widespread reality in Pakistan requires a unified and sustainable approach by all stakeholders with one common goal in mind i.e. Quality Housing for all.