This paper demonstrates how the design of standards, pricing and finance must be integrated if affordable housing is to be achieved in a sustainable and replicable way. The paper does this by identifying basic principles in achieving affordability and applying these principles through a simple, computer-based integrated-design model to a ‘model’ housing project in Pakistan. In most instances, where there is not a development grant or forgivable loan, affordability must be combined with cost-recovery if projects are to be sustainable and replicable. Keys to such projects are the use of market prices, incremental construction using sweat equity, efficient and affordable standards, differential pricing, and financing using market interest rates but with affordable down payments and repayment rates. The paper demonstrates that the ‘model’ project in Pakistan, as designed, is not affordable. Through examining several alternative designs using different land-use standards, pricing and financing systems, the paper shows what needs to be done to make such projects affordable. In doing so, it illustrates how affordability, standards, pricing, finance, and cost-recovery can be integrated in the design process. While applied to Pakistan, the relevance to Canada of this integrated-interactive design process is explored.
Figs 1 and 2. Views of the Surjani township. Unnecessarily high housing construction standards and wasteful land use (e.g. unnecessarily wide streets) makes the project unaffordable to the poor.
This paper is based on work done by the author for governments and international agencies over several years and, in particular, for the World Bank Pakistan Shelter Sector Review. This paper owes much to two World Bank colleagues: Alain Bertaud, who developed the Affordability Model and introduced me to it, and Jim Wright, with whom I worked with when first using this model in India and Pakistan. I am also most grateful to two of my University of Guelph colleagues for their insightful comments on early drafts of this paper: Professor David Douglas, of the University School of Rural Planning and Development, and Professor Marion Steele, of the Economics Department. Thanks also to Dr Tom Carter of the Institute of Urban Studies, University of Winnipeg, for his very useful comments. Any errors, omissions or questionable statements are, of course, entirely my responsibility.