Housing facility for the middle and low income groups long remained political slogan, but if the country is to attain inclusive growth and tap its human potentials, the government must fulfill this promise to the underserved populace, says a latest World Bank (WB) report.

Interestingly, the WB report -- Expanding Housing Finance to the Underserved in South Asia - launched Thursday acknowledges that the existing status and mechanism of housing market will not help the countries in the region to attain that because real estate and housing market, despite growing at an average of 30 percent, has done nothing to cater to the needs of middle and low income groups.


"It is for this factor, one out of every seven people in South Asia is homeless," said Ernesto May, the WB´s sector director for poverty reduction and economics management.

The report states that the region currently faces shortage of 38 million units of housing. Of the total shortage, housing deficiency in India alone stands at 27 million and in Pakistan it stands at 8 million.

Given the average household size, 212.5 million -- more than 14 percent of the total population -- of the dynamic South Asia are homeless or living in squatters and slums. Still worse is, even the 45 percent of the people owning houses do not possess adequate space and facilities needed to assure quality living, the report added.

Despite such vulnerability and poor facility, the WB report states that personal residencies account for 75 to 90 percent of the total household wealth in the region and makes up 6 to 10 fold of the annual income of the families.

The report studied the status of housing finances in the five South Asian countries, including India, Bangladesh, Pakistan, Sri Lanka and Afghanistan, and hence, is silent on the backlog and deficiency of housing facility in Nepal. But it acknowledges that the situation of the country is no better than other South Asian neighbors.

"The housing market in the country has become dynamic, but its reach is limited, as it is largely catering to the high income group only," says the report.

And challenge for the country, like other SA neighbors is to increase the reach of middle and low income to the facility, develop tools to increase access, enhance regulation and ensure access to long term loans.

Janamitra Devan, the WB´s vice president for Finance and Private Sector Development, however, cautioned that the government-based solution was highly unsustainable way out of the problem. Instead, he emphasized on the need to develop tools that encourage the market to make a shift in focus.

The report tags access to good housing facility as basic human rights and also key to social stability. On a brighter side, it even portrays that the existing deficiency is also the potential the housing industry carries in strengthening financial system and contributing to overall economic growth.

"It can create mass employment in construction and manufacturing sector, make infrastructure development vibrant and uplift social dynamics," said Devan. "But to attain that, good housing finances are critical."

In this connection, Tatiana Nenova, senior economist and the author of the report, urged the governments and private sector players in the region to work together and come up with innovative low-income financial products like fixed-income mortgages, low-cost products and saving for housing schemes to serve the underserved population.

She also laid emphasis on the need to initiate long-term funding, improve land administration, focus on foreclosures and disseminate credit information.

Washington, Oct 9:
source: Sharma, M.M. (2010),"Housing key to growth, development", myrepublica, 9 October 2010