By Muhammad Naeem Khan Niazi
LAHORE, Apr 11 (APP):Food, shelter and clothing have been described as the basic human needs by almost all psychologists and sociologists from the early times as these are vital to the self-esteem, security, belonging, actualization and contentment in life.
Prime Minister Imran Khan has been well cognizant of the fact that low income strata of the society could not own home due to various factors. Therefore, soon after his government came into power in 2018, he announced to build five million homes in the country to provide shelter to the people without homes. He also foresaw that the revival of housing sector will bring about economic boom in the country.
Absence of effective foreclosure laws hindered banks from financing in the housing sector but the introduction of ordinance by President Dr. Arif Alvi on July 29, 2019 ‘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 November 7, 2019.
Speaking at the groundbreaking ceremony of LDA City Naya Pakistan Apartments on April 9, 2021, PM Imran Khan said that mortgage financing was almost non-existed in the country due to absence of foreclosure law and this has discouraged banks from providing loans to people to build homes.
“Mortgage financing was mere two percent in Pakistan in the past while it was 80 percent in Europe, America and other developed countries of the world”, he said, adding that his government has provided security to the banks to provide easy mortgage financing to the people so that their dream of a home could be realized.
The foreclosure law provided security to the banks to provide easy loaning facilities to the low-income groups and this has laid the foundation of a revolution in the housing sector. The foreclosure law states a legal suit cannot be filed against a creditor (bank) besides barring the civil courts from any jurisdiction but at the same time it also protects the borrower.
The PM has founded the Naya Pakistan Housing Development Authority (NAPHDA) which has been working with the provincial governments to make the dream of a house possible for the poor. The Punjab government under the LDA City Naya Pakistan Apartments will built 4000 apartments in the first phase while another 31000 apartments will be constructed later.
Talking to APP, the Provincial Minister Housing, Urban Development and Public Health (HUD&PH) Mian Mehmood Ur Rasheed said that the Punjab government has 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 has been funding Akhuwwat to build homes for the poor besides other projects to encourage the private developers.
Vice Chairman (VC) Lahore Development Authority (LDA) S.M Imran has said that the 4000 apartments are being built for the low-income groups and a person earning Rs 25000 per month can own a house by paying easy installments between 10-20 years. He said that on allotment every person will be given a subsidy of Rs 270000 on actual cost of Rs 2.7 million.
“The small installments will enable people to own a home of their own choice instead of living on rent 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 feet apartment will have two rooms with an attached and a detached bathroom, kitchen, small lounge and a balcony while the master plan will ensure that an apartment building has its own park, walkways, sewerage, treatment plants and grid-stations to meet all features of a modern community”, he added.
The Vice Chairman said that for the sake of transparency, the LDA has decided to open an escrow account for the project, adding that such account was opened for a specific purpose and its funds could not be used for any other purpose.
Chief Engineer LDA Abdul Razzaq Chohan said that the project was meant to provide a home to the common man and it would cost very less, adding that the installment will start after the owner is given possession of the apartment which means the owner will not pay anything during the first 18 months of the construction work. He said that the LDA will be responsible for the provision of facilities and maintenance of roads, apartments and completion of the project.
The construction of cheap homes by the Capital Development Authority (CDA), Peshawar Development Authority (PDA), Lahore Development Authority (LDA) and others with the help of private banks will not only provide homes to the poor segments of the society, it would also boost the construction industry and put the country on path to economic prosperity.