The Yapalanaya Government completes its fourth anniversary today. It is pertinent to mention the accelerated programme for the development of middle-income housing and infrastructure conceived by the Prime Minister for a new country in 60 months, introduced in the run-up to the General Election 2015.
The Prime Minister promised to launch a massive housing programme to constructs 500,000 housing apartments at a reasonable price for the middle class in urban and suburban areas. Today, this commitment has become a reality as a public–private partnership effort under the direct intervention of the Housing and Construction Minister.
The Government’s Middle–Income Housing programme provides developers with State land at zero cost and provides infrastructure at the development site. These support services by the State have increased the demand for houses in the middle–income category of government servants and employees of the private sector.
Human settlement policies, issues, and activities are by their very nature are cross-sectoral, inter- institutional and involve a multitude of sectors. Therefore, it is necessary to identify the key subject areas of physical and service elements in human settlement. The following are such important subject areas identified by Housing Ministry.
* Sustainable land resources management
* Housing development
* Urban development and management of urbanisation
* Provision of environmental infrastructure (sewerage and drainage, etc)
* Development of sustainable energy in human settlements (eg., bio gas, etc)
* Implementation of transport policies supportive of sustainable human settlement development
* Improvement and development of the construction industry with special emphasis on maintenance of existing housing and building stock
* Development of the building material industry
* Community participation and mobili sation
Urbanisation in Sri Lanka is proceeding at a rapid pace where it is estimated that by 2025 half of the estimated population will be living in urban areas. To meet this challenge, the responsibility of the State is to make available land for housing in rural centres with urban facilities. This will curtail the rural poor migrating to the urban capitals in search of employment.
Urban land issues
Shortage of serviced land due to the inability of the State and the local authorities to expand services. Incompatible use of urban land, disregarding the zoning and land use regulations. Inadequate use of private sector resources by the State/local authorities to increase the supply of serviced lands (State agencies holding on to lands). The inability of the present land tenure systems to respond quickly to change from non-urban to urban uses. Lack of tenure rights in law-income settlements.
Identified shortfall
Lack of integrated approach and the formulation of projects in development of infrastructure like roads, water services, drainage, telecom services, electricity, etc. Ineffective enforcement of land use regulations. Inadequate incentives for compliance and lack of penalties for non-compliance with land use regulations. Lack of declared policy on enforcement. Lack of coordination between government and private sector projects to increase the supply of serviced lands. Lack of enabling legislation or local authorities to embark on joint venture partnership with the private sector. Lack of state guarantee on title to land.
Solutions
Develop sites and services projects with private sector participation at affordable prices. Adoption of a cost recovery principal on the basis of the repayment affordability of the identified recipients/buyers. Arrangement of loan facilities to buyers of serviced land through the banking system. Provide tax incentives to promote compliance with land use regulations and impose penalty taxes to discourage noncompliance. Promote land reclamation and development by private sector in the urban areas. Enact legislation to facilitate joint ventures between local authorities and private sector. Title registration system to be simplified. Modernise the Land Registry operations. Make use of the surplus underutilised and unutilised state land for housing on joint venture projects.
Where is the land available? With the state. Who are the biggest landowners of the state? The Land Commissioner’s Department, NHDA, Railway, SLTB, Plantation Ministry, LRC, Army land in Colombo.
Housing development
Policy initiatives to promote public–private partnerships need to be developed. Development of appropriate and affordable land transfers to the informal and the formal private sector is being streamlined.
Issues identified in housing sector
Inadequacies and inconsistencies in planning and zoning regulations. Heavy reliance on State delivery system. High cost of buildable land. Inadequacy of infrastructure and utilities – eg. water, drainage, sewerage, etc. Limited access to development finance for housing and services. Lack of focus on multiple housing options, eg., rental, freehold, incremental and condominium. Affordability versus cost factor; solutions are often beyond the reach of many. Lack of effective public–private partnership.
Private sector participation – housing development
The private sector housing development has two strands:
1. The informal private sector
2. The formal private sector
The first category refers to individual homebuilders and the formal private sector refers to organised private sector enterprises in housing development.
Private developer and the state role
Government’s key institution involved in the provision of housing should play a meaningful role as a policymaker, planner, a consultant and a service provider to the private builders (formal and informal). Private sector developers should be consulted in the formulation of policy; make them an integral part of the overall national shelter programme.
Lack of a clear-cut policy on part of the State appears to cause considerable hardship to property developers with a sense of responsibility. The State must have regulatory and supervisory powers over the real estate realtors and real estate agents. A set of guidelines and a code of ethics must be laid down. State must control and monitor the activities of the private developers and help them to overcome obstacles if any.
State and private sector participation
Government and private sector collaboration in the field of housing development will help a large section of middle and upper middle-class people.
The State must seriously consider making available state lands for housing development. State lands should be made available at an affordable price range targetting the prospective takers.The aim of such a programme should be to cater to the public and private sector employees within an income range of say Rs.150,000 per month. To make these efforts a reality,
- State should enter into joint venture housing projects with the private sector
- State must step in to provide basic infrastructure free of charge to housing estates – more than 25 housing units constructed on state land for middle-income groups.
- State sector (means all relevant agencies under the Housing and Construction and Megapolis and Urban Development Ministries)
- Private sector research programmes should be conducted with the assistance and support of the professional institutions like the Institute of Architects, engineers, planners, surveyors and valuers and lawyers to obtain the services and skills of the resource personnel of both sectors with a view to promoting housing development.
Role of CMA
The CMA has already embarked on condominium development in the city of Colombo and its suburbs. Since the CMA has limited resources it has maximised promoting the private sector in the development of condominium apartments. The CMA is exploring the possibility of complementing the industrial zones and economic and agriculture centres presently been developed in the periphery of the city.
The private sector will become involved only if generates a profit. Profit is possible only if cost of production is less than the going market rate.
The private sector has been traditionally involved in upper and upper middle-income housing, as there is a profit in the venture. However, they are reluctant to embark on lower-middle and low-income housing since costs tend to exceed affordability. This is more apparent in the rural areas.
Hence, the objective of the NHDA should be to act as a catalyst and assist the private sector to provide affordable housing in rural areas through the concept of gam udawa of the Housing and Construction Minister.
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