By Muhammad Naeem Khan Niazi
LAHORE, Apr 10 (APP): The promise of ‘Roti, Kapra aur Makan’ (Food, Shelter & Clothing) has remained unfulfilled during the past many political regimes despite being part of their election manifestos. Food, shelter and clothing have been described as basic human needs by all psychologists and sociologists from the early times as these are vital to the self-esteem, security, belonging, actualization and contentedness of man.
Prime Minister Imran Khan has been well aware of the fact that low-income strata of society could not own homes due to various factors. One of the major hurdles was the absence of unavailability of mortgage finance facility in Pakistan. Soon after taking over as the prime minister in 2018, Imran Khan announced building 5 million homes in the country to provide shelter to homeless people. He also foresaw that the revival of housing sector will bring about economic boom in the country.
The absence of an effective foreclosure law restrained banks from financing the housing sector earlier. However, the signing of an ordinance by President Dr Arif Alvi on July 29, 2019 titled ‘An Ordinance to Provide for the Efficient Recovery of Mortgage-Backed Securities by Financial Institutions’, laid the foundation of a new era in home financing in the country. This ordinance became a law after it was approved by the National Assembly on Nov 7, 2019.
Speaking at the ground-breaking ceremony of LDA City Naya Pakistan Apartments on April 9, 2021, PM Imran Khan said mortgage financing was almost non-existent in the country due to absence of the foreclosure law which discouraged banks from providing loans to people to build their homes.
“Mortgage financing was mere 2 per cent in Pakistan in the past while it was 80 per cent in Europe, America and other developed countries of the world,” he said, adding that his government had provided security to banks to provide easy mortgage financing to people so that their dream of having own home could be realised.
The foreclosure law provided the banks the security to provide easy loaning facilities to the low-income groups and this has laid foundation of a revolution in the housing sector. The foreclosure law states that a legal suit cannot be filed against a creditor (bank) besides barring the civil courts from any jurisdiction, but it also protects the borrower.
The premier founded Naya Pakistan Housing Development Authority (NAPHDA), which has been working with the provincial governments to make the dream of a house come true for the poor. The Punjab government, under the LDA City Naya Pakistan Apartments, will build 4,000 apartments in the first phase, while another 31,000 apartments will be constructed later on.
Provincial Minister for Housing, Urban Development and Public Health (HUD&PH) Mian Mehmood-ur-Rasheed said the Punjab government had assigned all development authorities in Lahore and other big cities of the province to build homes for the low-income groups. He said the government had been funding Akhuwwat [an NGO] to build homes for the poor besides other projects to encourage the private developers.
Vice Chairman (VC) Lahore Development Authority (LDA) SM Imran said that the 4,000 apartments are being built for the low-income groups and a person earning 25,000 rupees per month can own a house by paying easy installments between 10-20 years. He said every allottee will be given a subsidy of 270,000 rupees on the actual cost of 2.7 million rupees.
“The small installments will enable people own a home instead of living in a rented house and making the landlords richer every month,” he said, adding that all private banks are providing loans as per the Islamic banking laws of the State Bank of Pakistan.
“A 650-square-foot apartment will have 2 rooms with an attached and a detached bathroom, kitchen, small lounge and a balcony while the master plan will ensure that an apartment building should have its own park, walkways, sewerage, treatment plants and grid-stations to meet all features of a modern society,” he elaborated.
SM Imran said that for the sake of transparency, the LDA has decided to open an escrow account for the project, adding that an escrow accounts is opened for a specific purpose and its funds cannot be used for any other purpose.
Chief Engineer LDA Abdul Razzaq Chohan said the project was meant to provide a home to the common man and it would cost very less, adding that the installment would start after the owner is given possession of the apartment, which means the allottee will not pay anything during the first 18 months of the construction work.
The LDA chief engineer said the Authority would be responsible for provision of all facilities and maintenance of roads and apartments even after completion of the project.
The construction of low-cost homes by the Capital Development Authority (CDA), Peshawar Development Authority (PDA), Lahore Development Authority (LDA) and others with the help of private banks is sure to provide homes to the poor, strengthen the construction industry, revolutionise housing sector and put the country on road to economic prosperity.