All in the name of construction

By Nadeem Khurshid and Muhammad Shoaib

As a Pakistani, one must have professed that ‘plot’ is so central rather the most imperative part of our daily discourse. Whether drawing rooms, workplaces, messes, state corridors, or social meet-ups; schmoozes would stay still fractional without plot related propositions.

We, as a nation, are overwhelmingly plot-centric rather plot-fixated. Our sparing is a plot, we prize our achievers with a plot-the way Mughals used to bestow their loyalist courtiers with the land. Some spend all life in a service that was indisposed otherwise if not coetaneous with a retirement reward- again obviously a plot. Courts are struggling to settle heaps of pending cases, not certain, but believed to be most are urban land/plot related. Individuals get fixed through plots, plots are utilised as kick-backs, and a larger part of the black economy is being parked in plots as well. Indeed, even our players would get a plot on the off chance that they win a final for us. The best lifetime exhortation parents would provide to their children would be to set aside some money out of their salaries to get a plot. Diaspora works hard round the clock abroad to set aside extra cash to purchase plots back home. Even universities reward their best brains with plots in their housing schemes after retirement, forces and numerous other public-sector organisations do same as to benefit their retirees. In this piece, let’s attempt to understand why plots are so central to us and hold Pakistanis in a socio-economic status quo.

Plot development and related investments have always been considered the most enticing and safest choice either for a corrupt official, white collar jobber or a business person. Ever wondered, why such a tendency exists in Pakistan for the investments in land and plots; the answer lies in the faulty laws, building regulations, high demand appetite for housing and overall poor governance regulating the land economy. The returns being offered on investments in plots are huge and quick rewarding as compared to the returns in the usual financial investments such as financial institutions, stocks, bonds of somehow regulated type of alternatives.

The regulator-cum-developer urban development model has been exhibited over the decades by City Development Authorities or the state-owned welfare organisation for expatriates like OPF, PGSHF, etc, all prefer to invite investments in plot economy and in return provoke individuals to steer their savings in flourishing the unregistered and unregulated plot economy. Another reason that furthers plot economy might be seen as investing in entrepreneurship has always been doomed risky, cumbersome and less profitable as compared to the investments in real-estate.

Ironically, plotonomics has always wrongly been sloganeered as housing and perhaps contributed largely negatively to the economy, construction climate, the marred shape of our cities and even housing market itself. The cities are sprawling horizontally without any planning but the uncolonized plots are emerging sturdily, silently contributing in the aggravating environment, law and order and food security. Current in-practice Punjab housing schemes/housing development regulations are appallingly pro sprawl plotonomics. It is always easier to get approval for a housing scheme than getting a building permit for a high or even a mid-rise apartment building in present regulatory regime.

Construction of a five storeyed apartment building on a half an acre (four kanal) land can yield 40 apartments (the same amount of land could only yield a maximum 10 five marla plots) would cost as much 300 million rupees roughly

Construction of high/mid-rise housing projects never been incentivised and it is always easier for developers to float plot based housing schemes to make quicker, highly speculative and tax free returns. And, by the way, a most chanted argument against high/mid-rise construction always heard around is “Hamara Culture Nahi Hey”, this misleading tenet also needs to be challenged now… Folks; smart phones, cloud computing, fast food, SUVs and golf courses have also never been our culture. One must visit the Walled City of Lahore to see and understand what our culture is, and was. Shibam (Yemen) is another good reference from history, for those who really are not interested to change the mindset.

Some estimates state that around 200,000 plots have been developed in past 8-10 years in housing schemes of Lahore Metropolitan Area alone and mostly lying un-colonised. Covering around 100 sq km of precious urban land handled wastefully but shrewdly to park around 2,000 billion rupees (assuming all plots are of 10 marla average and each costs 10 million) for years and don’t know for how much more time. This plotonomics never escorted any social good apart from assisting the political economy to park huge monies that never being translated into any further economic activity. While utilising this parked money we could have constructed as much as 400,000 apartments while only needing one tenth of land wasted and yielding annual rental potential of more than 144 billion rupees (assuming 30K rupees rent per month per apartment) and providing housing for as many as 2.5 million people straightway.

Construction of a five storeyed apartment building on a half an acre (four kanal) land can yield 40 apartments (the same amount of land could only yield a maximum 10 five marla plots) would cost as much 300 million rupees roughly, including the cost of land and construction, and can take around 5 months to get completed. Any such construction project can employ as many as 300 workers (providing indirect livelihood to 1500 other dependents for at least 6 months) in different kind of activities for the same period.

So, the need of the day is to boost the construction industry and make housing, as a social good, accessible to many in the sprouting economy, the government may disincentivise plot making regime by imposing taxes if not permuted to housing by triggering construction; generating billions of rupees as seed money for various other municipal projects. Regulations must be revisited to curb suburban plot-making and incentivise building/housing construction instead. Existing lots in city centers under less productive uses (such as dilapidated public residences of colonial period) may be regenerated to yield premium housing through mixed-use vertical construction rather choosing suburban state land for unsustainable housing. This will not only help curb plotonomics but also result in making cities engine of economic growth in real terms and truly in line with PM’s vision for the delivery of five million housing units and the promise of the creation of 10 million jobs in shortest possible time and even without investing any public land or money.

Nadeem is an Urban Development Professional with a vast background in public and private sector practice.He can also be reached on Twitter @nadeemkhurshid

Shoaib holds over 15 years of professional experience within Pakistan and the Middle East. He can also be reached on Twitter @crpshoaib