Karachi’s precarious land market

The Supreme Court (SC) recently initiated measures to effectively implement the judgments passed with respect to Bahria Town Karachi (BTK). For many who believed this real estate initiative to be ‘a transformative landmark’ in the land market of the metropolis, all was not well.

For instance, an SC judgment passed in May 2018 directed the realtor to pay Rs460 billion according to prescribed terms and conditions. This did not happen.

The initial area under the control of BTK was 16,896 acres. A survey by a high-powered government team informed that it actually stood at 19,931 acres, and 813 acres of this additional land was in Malir, while 2,222 acres were reported to be in Jamshoro.

This episode informs us that Karachi’s land and property market needs enormous reforms through appropriate interventions and corrective measures. It has been found that the land market in Karachi, or for that matter, the entire country, functions as a marriage of convenience between powerful stakeholders. It does not evolve into an equal opportunity enterprise, which is the desirable status the entire society wants.

Powerful stakeholders manipulate the market, depriving the poor of access to land and housing

Land is viewed as a precious resource from the elite to the ordinary. Policymakers view land as a commodity that can be traded for short-term financial gains. From a city planning and sociological perspective, this is not correct. Land is a finite asset which can only be used for public benefit. Its utilisation is best determined through a professionally sound and socially appropriate planning process.

A healthy urban life can not be imagined without a proper utilisation policy for land with a well-detailed land use plan to lay down all the proposed functions in relation to existing constraints and potentials.

Given the ongoing crisis of infrastructural decay, poor governance, and declining urban management capacities, it is crucial that any new venture be examined for its operational viability and sustainability in the short- and long-term periods. For example, the lands where parts of BTK stand were to be utilised for housing the urban poor.

To effectively reach out to the real needy people, a procedure of incremental housing development was prescribed. This method has been tried and tested in the well-known ‘Khuda ki Basti’ (God’s settlement) in Hyderabad, Gharo, Karachi, Lahore and many other parts of the country.

The brainchild of eminent housing expert Tasneem Ahmed Siddiqui and team, this model had acquired global acclaim to beat speculation and serve the urban poor. However, the clandestine deals deprived the poor and benefited the private interests of the powerful.

It is found that the land policies do not reflect the range of quasi-legal situations existing between formal and informal housing. Various intermediate situations have been discovered in the land and housing scenario, which can not be described as legal from the statutory standpoint.

As per standard definitions, the land or housing formally registered through the registrar’s offices after completion of the title’s formalities are recognised as legal properties. According to another definition, the property which can be accepted by a housing finance institution for mortgage financing is a legally valid property. Spot field studies have shown that there are many lacunae where land and housing units fall short of meeting any of the two conditions.

In reference to land, the plots floated in any scheme of development authorities, legally constituted cooperative societies or any other land-owning agency are termed as formally titled land. Legality of such land parcels is only verified and accepted when the leasing conditions of the concerned neighbourhood/locality are completely fulfilled.

Katchi abadies which have been approved for regularisation but await the initiation of the leasing process, neighbourhoods which await the notification of amelioration plans, localities where the change of land use has taken place and areas that have a change of status or jurisdiction are only a few types which can not be compared with a normally leased area.

Owners and prospective buyers have to suffer due to indifference of planning and development agencies. However powerful groups acquire such properties at lower prices and harass the stakeholders — including legal heirs — to submit to their demands. These examples inform us about the perennial inefficiencies in our land market mechanisms.

Development authorities often announce public sales schemes to shore up their internal finances. The launch of land sales schemes is so designed that speculation automatically evolves in the process. Land development agencies allot land parcels at a very low selling price. As the owner completes the formalities, he already possesses the opportunity of delaying construction and accruing profits on idle land.

Since powerful interest groups benefit from this in-built procedural defect, they are averse to changing the practice. Regulatory controls in the form of non-utilisation fees or any other form of levies are either non-enforceable or too miniscule to bother the property owners. A simple outcome is the artificial rise in property demands that results into a rush supply of land and housing without any urban planning blueprint.

Apart from government and semi-government agencies, some ‘preferred and privileged’ realtors attract substantial investments from local and overseas clients on a routine basis. These instances render land management and control an even more uphill task. Such a laissez-faire market mechanism does not allow the real shelterless and needy to benefit from land supply.

Close coordination, access to information and open communication among the stakeholders and customers are prerequisites for an efficient land market. It is assumed that by revising the statutes and regulations of building and city planning, land management strategies would emerge automatically. The realities are otherwise.

Building and city planning controls affect a small minority of urban areas of our cities. Federal districts, cantonments and military estates, port authorities, railways, katchi abadies of various ages and profiles are not under the city’s writ of the building control mechanism.

Thus the land market and construction boom generated from these locations soon exert pressure on other city areas. Building code violations, blatant changes in land use and mindless adoption of street commercialisation policies play havoc in the domain of land control.

Land is an invaluable public asset which requires very carefully utilisation, largely on the basis of social needs. Any land transaction that is initiated must be finalised after inviting views and observations from the concerned stakeholders. Major-scale transactions must be controlled by the provincial government as per standing statutes.

To instil transparency in the routine processes, the various government departments — including the military authorities — must be requested to publish the details of the land owned or controlled by them.

The provincial government must create an autonomous planning agency for Karachi to deal with land management, infrastructure and planning issues for the city. This step shall greatly help streamline the otherwise haywire scenario of misappropriation and ill managed utilisation of land in Karachi. Conflicts in the society can largely lay to rest if our land market becomes and transparent.

Published in Dawn, By Noman Ahmed The Business and Finance Weekly, November 27th, 2023