Pakistan, like many other developing countries is facing severe problems of housing shortage. The
population growth rate in Pakistan has, been quite fast and as per official estimates the country
population has increased from 90 million in 1980 to 149 million in 2004. in addition to ever increasing
population demand, the limited financial resources of the government further perpetuates the problem
of housing shortage. According to an estimate, there was a shortfall of 6 million houses in Pakistan
during the year 2004. This gap between demand and supply in major urban areas is rapidly increasing
and people particularly falling in low and middle income classes are forced to live in substandard
housing. The gap between housing demand and supply is met by 25 % through Katchi Abadis, 60 %
through informal sub-divisions of land and 15 % through densification of inner cities. Most of the people
because of their limited incomes, and escalating prices of land and building materials are unable to
afford decent housing in urban areas.
The paper makes use of primary data by studying 15 housing schemes-having minimum of 1000 or
more plots in the Lahore Metropolitan Area (LMA). The data reveals that the majority of households are
unable to afford housing in the schemes provided by the public sectors. This is not just because of the
plot allocation criteria but also due to high land prices in the planned housing schemes. Within the
formal sector housing schemes, majority of plots are lying vacant for many years-thereby dumping
billions of rupees in such schemes. Most of the plots in such housing schemes are in the hands of
investors and speculators who are running their real estate business.