1. Setting Foundation for Social Empowerment
Prime Minister’s Low Income Housing Program A commendable Initiative Seeking strong and Fast Track Implementation
Apna Ghar
Housing
Setting Foundation for Social Empowerment
March 2, 2015

2. PM’s Apna Ghar program Emergent Initiatives xx
Apna Ghat Ltd: Since the announcement of Apna Ghar program in mid 2013, the work done so far is setting up of Steering Committee and five Working Groups. The Steering Committee had finalized its set of recommendations in Oct. 2013, which have been adopted by Apna Ghar Ltd for implementation and Way-Firward.
Other initiatives needed in Pro-Poor Housing:
Rural Housing Program
Housing Microfinance Program
Solar/Alternate Energy solution for Pro-Poor Housing
Mortgage Guarantee Program
Strengthen Housing Finance Function:
Apna Ghar Program is likely to need housing finance in the range of Rs 600 Billion. Govt. alone can not take that financial burden, except for interest subsidy.
A pro-active role is needed to be ensured by SBP, Commercial banks, HBFC etc so that such massive long tern funding could be arranged through market based sources.
Issue: So far the slow progress is due to absence of stewardship with responsibility and authority.
Answer: Since now its stewardship has been assumed by the Board of Apna Ghar Ltd, xx

3. Pakistan: Low-Income Housing CHALLENGE
For a population of 190 mn, household size of 6.6 and population growth rate of 2.5%, the incremental demand for housing for new household is 0.7 mn units per year.
Urban population is nearly one-third of the total population.
With changing socio-economic norms, household size will shrink from 6.6 to lower levels, leading to more demand for housing units for the same population. (India 5.6)
Overall housing backlog is 8-9 mn
The Urban Housing Shortage is around mn, nearly all of which is in the Economically Weaker Section (EWS) of the population.
The yearly housing supply is around mn, therefore, short supply is adding another mn every year to the existing backlog every year.
Depletion of old housing stock will further widen the shortage.
The Rural Housing Shortage is 5 mn units, being neglected so far.
Rural Housing calls for a different approach to address the issue of Housing Supply and Housing Finance. 3

4. PM’s Low Income Housing Program-PMLIHP
1,000 satellites having 500 units each
The Housing Program addresses the low-income housing shortage from three different aspects:
Demand Side (Shelteress Poor Housing Finance),
Supply Side (RE Developer Industry) and
Regulatory aspects (SBP, SECP, Building Codes Regulations, Fiscal/Tax Regulations of FBR).
Housing has three market segments:
Market Housing: People with affordability who are being attended by market forces. Not a target market for the Program
Squatter Settlements – Rehabilitation/Resettlement of squatters and discouragement of further squatter settlements. Under the new Housing Policy being proposed the Govt. will also launch programs to address this segment as well.
Social Housing: Low-Income Pro-Poor Affordable Housing, needing Government support.
THIS IS TARGET MARKET of PM Low Income Housing Program

5. Housing Supply Targets (No of Housing Units)
Year-1
Year-2
Year-3
Year-4
Year-5
Total
Public-Public
10,000
20,000
30,000
40,000
50,000
150,000
Public-Private PM Program
75,000
100,000
125,000
500,000
Sub total (Govt)
85,000
120,000
130,000
140,000
175,000
650,000
Private-Private*
315,000
380,000
470,000
660,000
825,000
2,650,000
Grand total
400,000
600,000
800,000
1,000,000
3,300,000
* The Private Sector is currently supplying housing units at 300,000 per year and it needs to be facilitate/enabled to enhance its production over the years, totally on market basis. 5

6. What is needed to be done:
Apna Ghar, a commendable Initiative Seeking Strong and Fast Track Implementation
Actions taken so far:
Steering Committee and its 5 Working Groups had worked out set of recommendations, Policy and Business Plan in Oct
Apna Ghar Co. Ltd, as vehicle to deliver on the program has been registered and its Board of Directors is now functional.
The Board of Directors of Apna Ghar Ltd, in its second meeting, has adopted the set of recommendations of the Steering Committee and of 5 Working Groups for onward implementation and move forward.
What is needed to be done:
Housing is a Provincial subject sine land is a Provincial Subject.
Procurement and development of Land for development of housing under different modes including PPP Mode.
Execution of Low-Income Housing Program (LIH Program) would involve different stakeholders, both at the Federal and Provincial level
Regulatory Agencies like Fiscal (FBR), Finance (SBP), and Building Control Authorities are to taken on board etc.
Set up a lean but strong function at MoH to execute, monitor and facilitate Apna Ghar Ltd for execution of the Program

7. Steering Committee for PM LIH Program
For the purpose the Govt. had set up a high level Steering Committee, headed by the Finance Minister.
The Steering Committee had set up five Working Groups to address issues and answers in the related areas, which are:
Working Group on Policy, Planning and Building Codes
Working Group on Housing Finance & Fiscal Incentive
Working Group on Private Sector Participation and Innovative Models
Working Group on Legal Reforms Governing Housing Sector
Working Group on Land Identification, Allocation and Notification

8. Regulatory Role of SBP, SECP and other Stakeholders:
SBP to be directed to play a pro-active and effective role in promotion of housing and housing finance, with a target to improve MD:GDP Ratio from 0.5% to 5% within 5 years.
SBP to complete various regulatory initiatives in hand which are essentially needed for successful implementation of housing mission of the Government.
SBP and MoF to ensure that HBFC and Commercial Banks are fully geared to play their due role in providing housing finance to the beneficiaries/clients under APNA Ghar Program Housing specific Prudential Regulations
SBP to ensure fast-track launch of Mortgage Finance Guidelines, Housing Microfinance Regulations and Guidelines, Pakistan Mortgage Refinance Co, Long Term Liquidity Instruments like REITS, Mortgage Backed Securities and Developer Finance Regulations

9. Regulatory Role of SBP, SECP and other Stakeholders:
The SECP, as a regulator of the corporate sector, is to play a proactive role in promotion and regulation of housing supply agents like Developer Industry, Construction Materials Industry etc.
SECP to launch Real-Estate Regulatory Authority/Regime: In Pakistan currently there is no specific regulatory regime for establishment and monitoring of Developer Industry in Pakistan.
SECP to launch Real Estate regulatory initiatives under process like Real- Estate Regulatory Regime, Guidelines on Private-Public Partnership, Guidelines on Property Valuation etc.
Guidelines on Private-Public Partnership Business Models, and development of Standardized PPP Contracts
Guidelines on Property Valuation, Title verification, registration, Transfer etc
Alongwith other areas, the regulations should ensure that Residential Housing Projects are delivered as per approved specifications and time schedule 9

10. Role of Developers and Academia
Developer Industry to play a key role in production of Low-Income Housing on manufacturing scale production to provide economies of Scale.
Developers to maximizing use of Role of Construction Technology and innovation and standardization of Construction Materials.
The Developer Industry may need to have technology transfer under joint ventures with large scale developers in the region
Developers may also develop and promote Low-Income Housing Schemes outside PM’s LIH Program
To enhance role of Universities and Academia in finding economical solutions for Low-Cost Housing, the Govt to set up Housing and Urban Development Departments at Universities.
The Govt to set up Housing Information System ( Housing Observatory
The National Policy on Slums to cover policies and programs on slums rehabilitation and resettlements

11. Role of other Stakeholders
Role of FBR: Fiscal support to low-income housing by way of lower Income Tax, Sales tax, Levies etc
Role of Building Control Authorities: Relaxed regulations like FARs for Low-Income Housing, Fees etc
Role of Architects and Civil Engineering Designers
Role of Urban Planners in Housing: Urban planning to cover development of new habitat, social and physical infrastructure etc.
Developers Associations: Involve them in planning and development through Private Public Partnership etc.

12. Housing Microfinance, Women Empowerment
Pakistan needs Housing Microfinance Supply and Finance Institutions, and a HMF Regulatory Regime
Currently there is no Rural Housing Finance Program. The Banks and ZTBL, NRSP etc to be geared to play a lead role for the purpose.
In order to ensure effective participation of women in low income housing program of the Government, Govt. can ensure equality and empowerment of women in all housing activities and policies.
For women empowerment, in houses where the property title is in women’s name or where she is a joint titleholder, the government should further subsidize interest rates.
APNA Ghar Housing Schemes may be equipped with Solar and alternate energy solutions, cost of which to be merged with monthly mortgage payments. 12

13. NATIONAL URBAN RENEWAL/ REGENERATION PROGRAMME
Major metropolitan / cities in Pakistan are faced with massive urbanization leading to mushroom growth of illegal habitats / slums / Katchi Abadies.
A considerable number of government owned housing settlements in major urban centers have been converted into slums due to lack of maintenance. All housing in these areas is horizontal in design. These settlements are located in central locations having real estate value among the highest in the world.
National Urban Renewal Plan to be prepared focusing on a strategy which may include smart land use planning, vertical housing/mixed development, development of commercial area enabling the government to meet increasing housing demand.
Under PMLIHP the existing government owned housing settlements will be replaced by walkable apartment blocks (ground+4 stories).
The additional housing units could be allotted to retiring government employees/low income families.
Affordability through Efficient Land Use, Smart-Subsidies and Cross-Subsidies 13

14. Role of HBFC and Commercial Banks
May be directed to play an active role in housing and housing finance for lower and high income segment housing.
Commercial Bank’s lending for Low-Income Housing, to be made by SBP the Priority Lending segment, as is in India, Thailand etc.
HBFC to be put on track:
HBFC, established in 1952 as a specialized housing finance institution to serve Small and Lower-Middle Segments of Society.
During last few years HBFC has lost track of the very purpose it was established, that is housing finance to low and middle income segment of population.
Its yearly loaning is much less than its operational expenses
Such specialized housing finance institutions proudly successfully operate around the globe and more so in Asia-Pacific region e.g., HDFC- India and GH Bank, Thailand.
Indeed HBFC needs to be made a viable and sustainable entity to continue, being the only institution in the country to serve shelterless poor with a wider financial inclusion and geographical spread. 14

15. Solar and Alternate Energy for PM’s LIH Housing
Other Initiatives
Solar and Alternate Energy for PM’s LIH Housing
Promote large scale Rentable Housing
Housing as an Asset
Housing as Investment
Sponsor a Shelter Foundation for Poor of the Poor
Promote Community Housing Programs
Mortgage Guarantee Program for LIH
Labor Colonies and Student Hostels Schemes 15

16. Emergent Initiatives needed by Apna Ghar Ltd
Complete legal formalities as per Corporate Law to make its business within the law.
Induction of market based professional staff in the Company.
Availability of needed funds to Apna Ghar for commencing business.
Procurement of Land, and equip the “raw land” with External Infrastructure including Physical Infrastructure (Roads, Transport, Communication etc.), Social Infrastructure (Health, Education), and Economic Infrastructure (Income and Employment etc.)
Develop business models for construction like Private-Public Partnership.
Mechanism to ensure availability of market based long term funding for the projects.
Criteria for selection of Developers under different modes.
Development of standardized Contracts for execution with the Developers, based on international best practices.
Criteria for selection of beneficiaries/clients, and mechanism for ensuring transparency in selection.
Define Low-Cost Housing and ensure recognition of the definition.
Initiate dialogue with different stakeholders like SBP, FBR, Building Control Authorities, and other related agencies on what support AGL would need from them.
Dialogue with Provincial Authorities on smooth execution of the projects.
Approach International Agencies like World bank, IFC, ADB, DFID etc. for Technical and Financial Assistance.

17. Low-Cost Affordable Housing Issues we know, Answers we need
Zaigham M. Rizvi
Secretary General: Asia-Pacific Union for Housing Finance- APUHF (
Housing Consultant World Bank, UNHABITAT, CMHC-Canada, ShelterAfrique
Senior Advisor Housing Encludes, Washibngton-USA (ShoreBank Int’l )
Advisor Housing, State Bank of Pakistan