Going by the Public Accounts Committee’s report to the Joint Sitting of Parliament last week, our housing problems are not going to end any time soon.
Two years after the national housing policy came into effect, the Public Accounts Committee reported that we don’t have national-level data to plan and address the country’s housing needs. Thimphu city’s haphazard growth has not kept pace with its growing population and has today exceeded its carrying capacity.
GNH Survey 2015 showed that an increase in sufficiency level of housing, assets, and income contributes to an increase in GNH. According to the survey, 31 percent of households have poor access to housing and housing loans are the most common debt for many. Urban areas are overcrowded and a large number of houses are vacant in rural areas. Hence, the 12th Plan focuses on sustainable human settlements.
Members of Parliament pointed out why the problems persist. We lack a holistic approach to housing development.
Solving the chronic problem is easier said than done. High cost of land acquisition and construction, expensive development finance, and developers’ inability to repay commercial housing loans even with high rental incomes derived from the housing properties are the key problems impeding housing development. They eventually lead to a high rent burden in our urban areas.
The high rent set by private house owners in Thimphu, for instance, has resulted in a significant impact on the low and middle-income groups who spend more than 30 percent of their salary on rent. The government rental houses are inadequate to meet the demand of low-income groups. This has resulted in the practices of shared accommodation with inferior living standards.
With inflation growing and livelihoods being affected by the pandemic, many are falling below the poverty line further aggravating housing issues.
Major towns like Thimphu and Phuentsholing are sprawling with bungalows and duplexes at a faster rate than residential apartments for the low or the middle class. This is one reason why there are squatter settlements even within the core city areas.
Schemes and programmes aimed at developing housing have come to a halt due to an overall economic slowdown. Builders and investors are fighting court cases. Unless there is a major initiative, the situation would remain, if not worsen.
Shifting even one ministry out of Thimphu could ease the housing crunch in the capital city. Can big corporations under the Druk Holding and Investments not function from Gelephu or Samdrupjongkhar? With technology, meetings and consultations can be done instantly as we have witnessed after the pandemic began.