URBAN DEVELOPMENT ISSUES

Lecture at the Institute of Engineers, Pakistan

on October 24, 2007 at IslamabadBy

Riaz Akhtar-Urban Planner

“Our towns and cities are facing a multitude of issues and problems, which are complicated in nature and are growing in number with every day passing”

1. Urbanization and Urban Sprawl

Unprecedented pace of urbanization resulting in increase in size of urban areas as well as increase in their number.

The level of urbanization in Pakistan has gone up from 17.8 per cent in 1951 to 32.5 percent in 1998.

Number and Size of Cities in Different years

Year No. of cities with + 50,000 Population

No. of cities with + 100,000 Population

No. of cities with + 1.0 million Population

1981 32 27 51998 57 48 72007 71 58 7

Source: www.world-gazetteer.com

Reasons

• Migrations from rural to urban areas,• Migration from smaller to bigger urban areas • Natural increase at a high rate, • Urban expansion and change from rural to

urban

There are both disadvantages as well as advantages of urban expansion(big cities).

Disadvantages

• Management problems of a big city are an obvious disadvantage.

• Lack of compact development-uneconomical services provision.

• The travel costs in terms of distance and time also increase significantly.

• In social terms big cities are known for not being on the human scale

• Furthermore, urban expansion is fast converting green agricultural areas in the suburbs into built up areas.

Advantages

• Cities have now been recognized as Engines of Economic Growth.

• We can achieve economy of scale in big cities, as the cities are also consumer markets.

• It is possible to provide highest order urban facilities in big cities where threshold population to support these facilities is available.

• Thirdly, a larger variety of services is available in big cities and a diversification in range of quality can also be achieved.

• Fourthly, very specialized services can also be available, for example a Pain Clinic, Allergy Center, Burn Center, Stock Exchange, international stadium etc.

Appropriate Size of a City

• The spatial distribution of urban services is perhaps the most dominant criteria identified by many theorists to determine the best size.

• The urban services including education, health, employment, commercial areas etc. need to be provided in a hierarchical manner starting from at street level to neighborhood level, to district level and then to the city level and all at appropriate distances (Diagram).

• City Centre or CBD has traditionally played the role of area of centralized and specialized services.

• Cities became multiple- nuclei, where there are more than one city centers. The CBD of Lahore which covered Anarkali and surrounding areas has been supported by similar CBDs at Icchra, Liberty and other local CBDs. This means to have cities within the city.

2. Housing

• National Housing Policy-2001• It covers wide range of issues pertaining to

housing and housing and housing related aspects, but lacks flexibility to address the changing conditions.

The present backlog of housing in Pakistan in the said housing policy is estimated to be 4.30 million housing units and annual need for new housing units is approximately 270,000 units.

• INFORMAL PRIVATE SECTOR• PUBLIC SECTOR• FORMAL PRIVATE SECTOR

• Public sector has largely failed to meet the demand, whereas the performance of the formal private sector has also been insignificant. It is the informal private sector, which has contributed more than 70% in housing stock.

• Area Development Authorities in 10 major urban centers of Pakistan were established to solve the urban problems mainly housing, but their share in the existing housing stock is only fractional.

• Housing for low-income has never been a significant part of any of the housing programs of these authorities. On the contrary, they have mainly catered for the high and middle-income groups.

• The role of the public sector in the housing policy has been defined to be only a “facilitator”, whereas the private sector has to take the lead. On the contrary the public sector is competing and not complementing the private sector and as such acts as a real estate developer.

There has been a BOOM in housing sector as real estate emerged as profitable option for investment.

• This boom was more significant after 9-11 incident

• There was a lack of alternate and secure investment opportunities in Pakistan.

• Corporate banking to consumer banking. The interest rates decreased from 18% to 8%!!! Housing finance also become accessible like it was never before. The finance ceiling also increased to Rs. 10 millions.

• A mushroom growth of housing projects has taken place in all the major urban centers including Karachi, Lahore and Islamabad. (Data)

• The formal private sector grossly misused the

opportunity which were mostly fake and frauds. Many of them owned only a small fraction of land or no land

The formal private sector and housing development by the Area Development Authorities have also created significant land speculation in the real estate market resulting in a large number of developed plots remained un-constructed in anticipation of better profit. For example in 1990 more than 300,000 developed plots were lying vacant in Karachi while there was acute housing shortage at the same time and at the same place.

Hundreds of thousands of people are investing hundreds of thousands of dollars and rupees in real estate business.

Lack of Alternate Investment Opportunities

Pace of Development in Defense Housing Authority,Lahore as an indicator of Housing Development

Development Phase Date of DevelopmentPhase-I Early 70’sPhase-II Mid 80’sPhase-III Early 90’sPhase-IV Mid 90’sPhase-V Late 90’sPhase-VI Early 2000’sPhase-VII 2003Phase-VIII 2004Phase-IX 2004Phase-X 2004Phase-XI 2004Phase-XII 2004

• It is interesting to see that in all cases the plots were sold within days after the opening of the phase. In many cases files were traded and not the plots.

• During 2004 two persons were killed and few others injured as a result of scuffle broke out due the crowd gathered at a bank branch to buy the allotment forms of Bahria Town.

• Innovative marketing techniques are being use to attract people to invest, like the Bahria Town Housing Card and some lottery schemes.

• It is interesting to see that in all cases the plots were sold within days after the opening of the phase. In many cases files were traded and not the plots.

• During 2004 two persons were killed and few others injured as a result of scuffle broke out due the crowd gathered at a bank branch to buy the allotment forms of Bahria Town.

Real Estate Agents Registered with DHA Lahore

Year No. of Registered Brokers

2002 75

2004 263

2007 150

Average cost of plot in DHA Lahore Phase-I

Year Price (Rs. per Kanal)

1984 200,000

1994 2,000,000

2004 10,000,000

Average Rent of Office Space in DHA Lahore Phase-I for Property Business

Year Rent (Rs. per month)

1994 6,000

2004 40,000

2007 12,000

Impacts of Real Estate Boom

• Increased the land prices in a sky rocketing fashion

• This investment has been made at the cost of investment in other sectors of economy, This became more critical as the boom was temporary, superficial, unrealistic and eventually crashed to adjust itself to actual market forces.

• The infrastructure development cost in these housing areas will be an economic waste if they are not built and occupied for a long time due to heavy costs or lack of demand in time.

However, this boom has clearly indicated a great deal of potential in the housing sector, which is rightly known as multimillion dollar industry and requires appropriate government policies to harness this potential and safeguard private sector investment.

Consumer Banking/Housing Finance

• Shift from corporate banking to consumer banking • Offering Housing Finance Facilities at lucrative terms

and conditions. • Interest rate decreased from 18% to just 7.5% a few

years ago which has again taken an upward trend. • The process of financing has also been easy and swift:

sometimes in less than 24 hours. • Attractive schemes like, Ghar Asan Scheme, Shandar

Ghar Scheme, Simplified Scheme, Home Address Scheme, My Home Scheme, Easy Home Scheme etc

Lack of Corresponding Pace of House Construction

While the real estate market has shown a remarkable increase, a parallel increase in house building is not seen.

3. Slums and Katchi Abadies

The urbanization took place at a rate faster than the rate at which the municipal agencies were able to provide different amenities including, water supply, sewerage, street pavements, and education, health and recreation facilities. The result was a mushroom growth of extremely substandard residential areas called slums and katchi abadies or squatter settlements.

• Estimates indicate that as much as 50% of urban population is without access to safe drinking water, 60% have no access to sewerage and on average one third of urban population lives in these slums and katchi abadies.

• The only serious effort made was during the regime of late Prime Minister Muhammad Ali Khan Jonejo in 1985, through the katchi abadi regularization programme.

• Even 20 years later land titles in all the katchi abadies have not been awarded nor development works completed for two main reasons.

• The Area Development Authorities find the job less attractive because of lack of large sums of money involved in project executions.

Many of the katchi abadies have significant real estate value by virtue of their prime locations and potential to be sold in open market for commercial development. Serious disputes about legitimate titleholders frequently exist.

• Urban improvement replaced urban renewal and

slum improvement replaced slum clearance• This was important for two reasons:• A significant proportion of existing slums could

become healthy living urban settlements keeping intact the social and cultural fabric.

• A large number of newly developed planned residential areas were becoming Planned Slums.

Planned Slums

• Planned slums are created in two ways. • Firstly, plots allotted to low-income are soon sold

to middle and high-income groups with high demand of services per capita. The services soon became insufficient causing breakdowns and eventually converting decent housing areas into planned slums.

• Planned slums are also created by formal private sector by not providing the infrastructure services.

Increase in Population against design population

• When population increases many times more than the design population, the utility systems work under pressure and become inadequate and insufficient and eventually fail completely. It is also true in case of education, health, commercial, recreation and other urban services

Commercialization or Commercial Development

Commercialization process is taking place indiscriminately.

• One serious impact of the existing commercialization process is the acute shortage of off street parking on almost all the major roads, creating havoc during the peak traffic hours. The problem is so serious that it is necessary to prepare TIA (Traffic Impact Assessment) in addition to EIA of a project.

• Commercialization fee has in fact become a major source of income for the Area Development Authorities in the major cities.

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Air Port

Landuse MapRawalpindi

1:10,000

Traffic Planning, Engineering and Management

• Traffic is in chaos in most cities and towns where traffic volume is not always the reason of congestion and chaos.

• No relationship between traffic planning and land use planning as a result the traffic generating and traffic attracting facilities are wrongly located

• Transportation plans, new Ring Roads to link lateral roads

• Roads as tool for guiding physical development

Policies, Procedures and Institutional Arrangements

• Urban planning had traditionally a low priority in development process in Pakistan. It is still in infancy stage both in conceptual as well as practical terms.

• Master plans have been prepared for all the major cities including Islamabad and all the four provincial capitals, whereas Outline Development Plans have been prepared for more than 110 urban centers in Punjab by the Punjab Housing & Physical Planning Department during the past 25 to 30 years.

In the absence of an adequate planning process, the decisions were taken by different agencies mostly from top to bottom. Most development related policies were prepared at provincial level and different local level agencies were involved in the implementation.

• Under Devolution Plan 2001 the process of urban planning in Pakistan is now based on the preparation of the following plans:District Development Plans, Tehsil Development Plans, Union Council Development Plans.

• No such plans have so far been prepared; therefore no assessment about them can be made at this stage.

Urban Management

• The urban management functions were distributed among more than one agency in larger urban areas mainly the development authorities and the local municipal agencies.

• Decisions are normally not based on consistent policies in the local government agencies; they are rather “ad hoc” and aim to address the “sore points”.

• These functions do not include health and education facilities, which are kept with the District Government. District Coordination Officer (DCO) is the chief executive of district administration. The TMA’s among other things can levy municipal taxes and take decisions locally. However, four years experience of the new system reflects that little has been changed in terms of the traditional weaknesses of these institutions and there is acute shortage to adequately qualified and sufficiently trained staff, especially the town planners, engineers and financial experts.

Planning Standards & Design Criteria

• There are presently no institutional arrangements to update, revise and develop for adoption a set of dynamic and futuristic planning standards and design criteria to provide various urban infrastructure facilities and civic amenities.

• A Manual of Planning Standards & Design Criteria in mid 1980 and the same are adapted to date.

• Car ownership rate has increased many folds due to car leasing facility by all the banks increasing the traffic volume on roads with same old ROW.

Land use Control, Zoning and Building Bye Laws

• Land use control, zoning regulations and building byelaws are effective and essential tools and regulatory measures to ensure the healthy and conducive living environment in urban areas.

• The Floor Area Ration restriction for example has created enormous demand for new commercial land giving rise to increase in land price and creating urban sprawl, which in turn has become expensive for provision of services.

• Encroachment is one of the serious issues in almost all cities and towns causing great deal of congestion on roads and streets. The effective right of way is reduced from half or one-third because of vendors and shopkeepers place the products in front of the shops on footpaths and pavements

• Need for Adequate and Appropriate data & Mapping

• Coordination among Public Agencies• No Complaint Redressal Arrangements• Lack of focus on Low-Income Areas