Transcript A model for low-income housing in Pakistan

A model for low-income
housing in Pakistan
September 2009
Our vision
• Healthy, happy communities across Pakistan
• Affordable housing for all
• Sustainable delivery of housing
Housing
scheme
Housing: A Global Crisis
Slum housing as a percent of total housing stock (select cities)
Karachi, 40%
New Delhi, 18%
Lahore, 35%
Tunis, 27%
Caracas, 52%
Dar us Salaam, 49%
Rio, 15%
Housing
scheme
Typical Developments
Our Developments
Most developers build houses
…we build communities
AMC innovations solve housing issues
Formal
Affordability
Informal
AMC
• Low cost, <30%
monthly income
• Flexible financing*
Market
coverage
• Appropriate stock for
majority of housing
demand in Pakistan
Ease of
titling for
the poor
• Safe, easy process of
securing property title
Quality and
infrastructure
• Masterplan with int’l
environmental and
construction standards
*Loan amount for all construction costs available at 15% effective interest rate over 15 years
Feedback from customers
“After years of living in a physically
abusive environment with my brothers
and their families, I am now able to
afford an independent home on a
minimum wage salary”
Muhammad Akram
Security Guard
Monthly income: PKR 6000
“With two mentally retarded daughters,
I used to often worry about where they
would go after I die. After 20 years of
paying rent, my dream of a secure
future is a reality”
Naveed Ahmad
Driver
Monthly income: PKR 10,000
June 2007
Kala Shah Kaku
•12 KM from Lahore
•3 KM off GT Road
•20-acres
June 2008
June 2009
Today: (2 years from start)
Continuous Improvement by the Community
•Over 65% plots sold
• Nearly 1000 active residents, with many more
in process of moving in
• Mosque, schools, commercial area, income
generation and community development
programs available
f
How do we do it?
For-Profit Sustainable
Venture
Treat people as
customers
Sell premium lots
Build
communities,
not houses
Understand the true
nature of demand
Filter for speculators
Provide flexible financing
Focus on low-cost land
and pre-development
13
Product
Includes
•water & sewer
•electricity
•roads
•community
infrastructure
Rs
430,000
Rs
320,000
Rs
255,000
Rs
80,000
Plot only
Monthly
N/A
payment*
1 Room
2 Room
3 Room
Rs 2820
Rs 3540
Rs 4760
*Loan amount for all construction costs available at 15% effective interest
rate over 15 years
Our Homes
Our Senior Team has >35 years experience
Jawad Aslam, Chief Executive Officer
• MBA graduate (USA)
• 12 years of work experience
• 4 years in low income housing in Pakistan
Amjad Awan, Chief Marketing Officer
• MBA graduate (UK)
• 18 years leading organizations in Pakistan
• Most recently heading the main CNG rickshaw company in Pakistan
Saad Irfani, Chief Financial Officer
• Graduate (USA)
• Over 5 years of investment banking and consulting experience (USA)
Housing
scheme
Our Investors
Team
• USD 90 million non-profit venture capital fund
that addresses poverty through market-based
solutions
• US based
• USD 40 million for-profit social venture capital
fund that supports social enterprise globally
• Geneva based
• First
commercial
financial
institution
to
systematically extend mortgages to lower income
people at Khuda-Ki-Basti Lahore.
• Partnering in future projects.
Under
consideration
Deutsche Bank, World Bank, Soros Economic
Development Fund, Aman Foundation, GreyHousing
Matters
Capital, PPAF, Cities Alliance
scheme
Our Advisory Board
Zubyr Soomro – Acumen Fund Representative. Former Citibank Pakistan head
Tasneem Siddiqui – Chairman of Saiban
Nadeem Hussain - CEO of Tameer Microfinance Bank
Babur Rafiq – Managing Director of Levis Pakistan
David Kyle – CEO of School Finance Company; Former COO of Acumen Fund
Adnan Asdar – CEO of Pakistan’s leading project management company
Zaighum Rizwi – Housing Finance Consultant, World Bank
Housing
Public-Private Partnership Structure
Private
Investors
Finance land and infrastructure
• 49% Ownership
Profits
Punjab Land
Development
Company
• 51% Ownership
Private Limited
Company:
Low Income
Housing Project 1
Finance Home
Construction
AMC
Mortgage
Company
Profits
A Typical Development
Land size
Housing units
Project Duration
Government of
Punjab investment
Private Investment
Mortgage Lending
Institution
Financial Return
Lives Directly
Impacted
120 acres
3,000
3 years*
PKR 100M
PKR 100M
PKR 720M
15%
20,000
*From the time of land purchase and approvals
Way Forward…
Create a corporate structure that provides:
– Transparent regulatory framework
– An acceptable platform for private sector
investors
Private Sector Requirements
• Corporate structure required
• Minimal government involvement in operations
• Well defined regulatory framework
• Clearly identified roles and responsibilities
Establish the Vehicle
– Formation of Punjab Land Development Company
• A for profit company registered under SECP
• Paid up capital of PKR 200 million by the Government of
Punjab
– Execute detailed study
– Finance first project
• Appointment of Board
– First low cost housing project inauguration – 100 days from
release of funds
Punjab Land Development Company (PLDC)
– Approval of Board and Management
Khalid Rafique (Chairman/CEO)
Shaukat Ellahi
Ibrahim Qureshi
Dr. Tahir Masood
Alman Aslam
Balighur Rehman MNA
Secretary HUDD
SMBR
Nadeem Babar
Chairman PIEDMC
Amjad Riaz (ACE)
Pervaiz Qureshi (Unicon)
Zafarudin Mehmood
Kh. Imran Nazir MPA
Secretary Finance
PLDC shall …
– Create a regulatory framework for each development
– Devise mechanisms for partnerships and JVs with 3rd parties
– Follow strategic planning for scaled development
– Formulate standards for agreements with developers
– Define a monitoring and supervisory system
– Put in place a community management program and ensure its
sustainability
Thank you