ISLAMABAD: Pakistan’s urban areas face a looming housing crisis, with 47 percent of households living in overcrowded housing units in informal settlements with inadequate infrastructure and services, says the World Bank.
The Bank issued a report, “Behind on Rent or Left Behind: Measuring Housing Poverty in Urban Pakistan,” in response to the growing housing shortage.
The report pointed out that the government of Pakistan launched Naya Pakistan Housing Program (NPHP) in April 2019 with the goal of providing 5 million housing units across the country in five years, with a priority for those in lower income brackets for whom affordable housing is out of reach.
As per the report, Housing is considered unaffordable if it consumes more than 30% of a household’s total income, according to the 30 percent rule (the ‘ratio’ method).
This benchmark, however, is arbitrary and does not take into account variations in the cost of living or individual preferences, it said.
The Residual Income Method (RIM) has been proposed to determine whether households have enough ‘residual’ income after paying for housing to meet their basic needs.
Furthermore, a provincial breakdown also reveals significant differences between the two methods. In urban Khyber-Pakhtunkhwa, the rate of housing unaffordability nearly doubles when the housing poverty metric is used.
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