Housing - having a physical, social and cultural infrastructure - is understood to be a place of human habitat, recognized as one of the basic needs for human beings. At present, there are two types of housing prevalent in Nepal. The first one is built by the owner himself/herself and the other is high-rise apartment buildings or colonies constructed by the housing companies. In this context, today housing has increasingly become one of the most prominent businesses, particularly in the capital city of Nepal. The concept of real estate and housing came to Kathmandu around 1990, but it took almost a decade to catch on. Prior to that, the people of the city would plan for almost five years to build their own houses. The housing industry spared them from the burden of long and arduous task of finding a location for constructing a building, collecting materials and so on and so forth. Similarly, the luxurious and well-facilitated housing that offered European and American style dwellings within the colony lured the moneyed class to communal living. Today, the demand for housing - both individual and apartment - is increasing because people can avail of many facilities.

Urbanization and housing situation
Urbanization is also synonymous to migration, land purchase, building construction and infrastructural facilities. The urban population growth rate is almost double that of the rural population. At present, 91.6 per cent and 72 per cent of the people own houses in the country and urban areas respectively. The share of temporary housing is almost half of the total housing and the urban areas and buildings are vulnerable to natural disasters in general and earthquake in particular. The buildings with damp walls and leaky roofs are close to 10 per cent needing up-gradation. The squatter population has almost touched 10 per cent. Urbanization is an indication of transformation from the agricultural to non-agricultural economies and housing is one of the basic needs that hold increased significance because the countries receive more contribution from the urban areas. According to Nepal Living Standards Survey (NLSS) 2004, a total of 22 per cent of urban dwellers felt the provision of housing is inadequate. In Nepal 2.5 million new houses meaning a total of 250,000 new houses are being constructed per year and about 17 per cent (43,653 new units every year) of them in urban areas. Besides, 732,000 units are to be upgraded, 60 per cent of them in the urban areas. The government is expecting 75 per cent contribution to national economy from the urban areas which is not possible unless urban housing is not given due attention. The government should spend more as India spends 4.0 and China 6.0 per cent of their GDP while Nepal spends only 0.3 per cent of GDP in housing. In the ongoing three year plan, it is planning to spend Rs. 6 billion.

Housing and investment
A big portion of national per capita consumption goes to housing and cash saving is the most important source for housing. A total of 63 per cent owners build their houses whereas 47 per cent of the land area is being used for household consumption, 29 per cent for personal use and 24 per cent for business and farming. According to NLSS 2004, the number of urban households stands at 664,507 with 23.5 per cent of the total urban population staying on rent. However, 78 per cent of those households had houses outside Kathmandu. It is revealed that 7,500 new households are constructed every year in Kathmandu alone. Given that 23.5 per cent of households are on rent, there is a shortage of apartments for rent and the biggest constraints are funding and lack of adequately served housing plots. There is very little investment in urban areas in Nepal; it is only 2.0 per cent of the national budget, according to ADB. Previously, housing loan was not available from the financial institutions to commoners. The Karmachari Sanchaya Kosh started providing housing loan in 1971 for the depositors with an interest rate ranging from 8 to 12 per cent. Nepal Housing Development Finance Company was the first finance company established in 1989 to grant loan for the improvement of existing housing arrangements, launching new housing schemes, and providing housing related services with a maximum tenure of 15 years at 12 per cent interest. All loans are payable to the company on an equated monthly installment basis following diminishing balance principle. In the recent days, with growing urbanization and housing needs in the urban areas, most of the commercial banks, insurance companies, financial institutions and cooperatives provide home loan at interest rates ranging from 9 to 16 per cent.

Challenges
There is very little data available on urban housing in Nepal. The first shelter policy was introduced in 1996 and is now under review in the changed context. So, there is a policy gap. The government of Nepal has committed to the MDGs and shelter for all but it is heavily neglected in terms of investment and making it a basic right of the people to have a decent housing for all. The housing companies have been catering to the needs of rich class only; the poor cannot afford the housing in such colonies. So, on the one hand the housing business is increasingly providing shelters, employments and access to modern facilities to the middle and high class people, but on the other hand it seems to have overlooked the core issue of urban poor. Contrary to the scenario of Nepal, housing projects in other countries aim to cater to the needs of economically weaker section of the society. At the same time, the private housing development projects have been suffering from lack of finance, lack of proper legislation on housing development and housing provision for the poor and disadvantaged like orphans, street children and displaced.

Way ahead
The urban housing deserves increased significance because the countries receive more contribution from the urban areas. At present, the urban contribution to the national GDP in Nepal is 62 per cent while rural areas contribute only 38 per cent. The upcoming national plan is expecting a 75 per cent contribution from the urban areas. It would be a farfetched proposition to seek higher contribution from the urban areas if housing is not given due attention. It’s been a decade since private housing schemes have come forward. Recent data shows that as many as 30 private companies have come into being to build and supply the houses, but only 15 companies have got the necessary sanction from the Kathmandu Valley Town Development Committee.

The national housing survey back in the early 1990s and the latest NLSS survey do not provide necessary data about housing. So far as the quality and physical fitness is concerned, the houses built by the housing companies are too costly. Moreover, housing in Nepal, particularly in Kathmandu Valley, is vulnerable in many ways: the first and the foremost, these housing are vulnerable to earthquake and floods. Therefore we can draw a conclusion that many housing projects lack open space, lack of parking, weak management and security and the public investment is almost insignificant. Hence, the urban areas in Nepal are facing serious problems of unavailability of the serviced housing plots and lack of financial resources to own a house; the apartments constructed by the housing colonies are unaffordable, there is a lack of housing for the disadvantaged groups, there is a rise in squatting, and the available housing is vulnerable to earthquake. Therefore, the urgent needs ahead include policy reforms to encourage and strengthen rural-urban relation, provision of affordable housing through partnership with the private sector, use of appropriate technology for making the public buildings safe and cost effective and affordable to make urban life easier, more comfortable and competitive.

by: Rajendra P Sharma