Low-Income Housing: A Plausible Framework Pakistan

CSR and Low-Income Housing: A Plausible Framework Triple Bottom Line Magazine Currently, Pakistan has an overall housing backlog exceeding 6 million units with an annual addition of 300,000 units – based upon conservative estimates from the Population Census of 1998 and the National Housing Policy of 2001. Roughly 30-40 percent of the demand is addressed by mainstream developers who cater to the high-end market. The remaining units fall under the category of the low-income segment. The government has made repeated attempts to address this segment through various initiatives – seldom succeeding. The current low income housing deficit within Pakistan is 3 million units with an addition of 150,000 units per annum.In addition to these alarming rates, within the urban context, there is a disturbing pattern. Of those that do own homes, there is a clear pattern of constructing additional rooms as opposed to constructing new homes. This leads to an increase in the density of homes, thus further exacerbating the housing problem. With most homes having been constructed over twenty years ago (58 percent), over 50 percent of the population under the age of 25 , and no solutions in sight, demand in the lower income segments is expected to explode in the next decade.ContextIn order to truly comprehend this problem, one must put him/herself in the shoes (or bare-soles) of the average citizen of Pakistan. An individual is earning between US$ 135-185/month (working in the public/private sector or self-employed) and is responsible for maintaining his/her nuclear family as well as members of the extended family. The average citizen lives with a level of uncertainty on a daily basis, and is constantly faced with a multitude of potential issues to handle relating to running of his/her household and providing for the family.For those living in rental units (30 percent of the population), their average monthly income is US$ 165 and their monthly saving, after all expenses relating to rent, food, utilities, transportation and miscellaneous are deducted, under ideal circumstances, is US$ 15.With the average person saving US$ 15/month and the average 80 square yard plot costing US$ 7,000, it would take nearly forty years before one could afford such a plot.The result, is the current housing crisis Pakistan is faced with.Policy, Poverty and HousingHistorically, low-cost housing in Pakistan has either been the realm of NGOs, the government, or the informal sector.Due to the heavy capital requirements, as well as the level of skill involved in scaling up in the housing sector, NGOs have not gained much ground.The government has been very successful in the actual building of low-income housing developments, but has failed in all subsequent aspects such as effectively targeting the BOP (bottom of the income pyramid) and building healthy and sustainable communities.Traditionally, government models have been based on a lottery system that is generally rigged in favour of the investor community who then exploit the BOP through renting those same units. With those units intended for homeowners, but occupied by renters, there is no ownership within the community. This inevitably spirals into becoming another slum where drugs, prostitution, and crime thrive.The informal sector meanwhile is riddled with problems such as lack of legal tenure, crime, no master-planning, and little or no infrastructure.With poverty rates nearing 50 percent, and population in the major urban centers expected to double in the next fifteen years, Pakistan is in the midst of a massive housing deficit.With housing policies favouring the elite, the development and supply of affordable housing presents itself as both a great challenge and a greater opportunity.The Ansaar Management CompanyTo meet this challenge, a group of professionals from various disciplines have come together to create the Ansaar Management Company (AMC). AMC is driven by a mission to provide high quality and affordable housing solutions to the average citizen of Pakistan. The company targets households earning US$ 85-300 per month and specializes in a community-based approach to development. AMC focuses on nationwide scalability and sustainability through its integrated for-profit, low-cost approach. AMC’s initial projects focus on ten selected cities of Pakistan.AMC’s model, based on a thorough analysis of the issue, effectively improves on what the government has been doing right, and works towards the institution of systems within areas that the government has not paid due attention to. The following features set the AMC model apart from others.All residents must move on site within 60 days;All residents must reside on site for 5 years (they cannot sell, rent, or leave the plot/home empty);Only one plot per family. No bachelors allowed;Active community development is essential for the first five years, utilizing a unique system of resident mobilization requiring residents to live physically live on-site;Various NGOs and organizations are invited to establish initiatives in areas of health, education, and community development;A financially sustainable model that offers 70 percent of the plots at cost, while offering the remaining in the open market.

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