August 6, 2021PIDE Blog

Illegal Housing Societies in Islamabad

Views: 3,660

By Lubna Hasan, Aqeel Chaudhry and Hanzla Jalil

Private housing societies and their legality is an issue that has gained much traction in popular media lately. CDA estimates that there are 140 illegal housing societies within Islamabad alone. The authority has published a list of authorized societies, numbering 64, to inform the public and refrain them from investing in illicit societies. We studied this list of 64 “authorized” societies and found that only 22 have an NOC. This puts legal societies at 10 percent of the total.

Figure 1: Percentage Distribution of All Housing Schemes in Islamabad (by NOC)
Source: CDA

According to a government report, CDA has not been able to launch any new residential sector in the past twenty years (GOP, 2019). The private sector was encouraged to enter the housing market to cater to rising housing demand in Islamabad. An extensive regulatory regime governs the development of private housing societies in Zone-2, 4, and 5 of ICT[1]. A sponsor must follow 19 major steps and a multitude of intermediate steps (29) for the registration of a society. The average time taken by CDA for NOC approval is two-and-a-half years. The average time for development work after the approval of NOC is 12 years, extending to over two decades in most cases. These lengthy and cumbersome procedures push sponsors away from seeking permission. 

CDA has broad powers to regulate the development of housing societies. The scrutiny of the Layout Plan (LOP), issuance of NOC, and regular inspection of the quality of work, among many other requirements, all provide CDA an overarching framework to monitor housing societies. CDA can even take possession of a society if the sponsor cannot complete it within due time.

 Status of Housing SocietyNumber
1Valid NOC22
2 Approved LOP, NOC is yet to be obtained24
3NOC canceled due to non-conformity with CDA rules. LOP is intact6
4Canceled LOP10
5Both LOP and NOC are canceled2
6Not approached CDA for LOP/NOC (Illegal)[2]140
Total 204
Table 1: Housing Societies by Legal Status
Source: CDA

A special audit of the Housing Societies Directorate of CDA for 2011-16 by the Auditor General of Pakistan (AGP) uncovered serious irregularities and non-compliance in issuing of NOCs (AGP, 2017). They issued NOCs without proof of ownership of land, based on fake documents, or for areas outside of ICT. A weak internal audit system could not identify financial irregularities within the department, and lack of checks and balances failed to fix responsibility for losses to the public. The Housing Directorate of CDA is neither adequately equipped to inspect the area for illegal construction nor has the powers for demolishing illegal constructions.

CDA had issued only 22 NOCs in the past 30 years in Zones 2, 4, and 5. These schemes cover only 6.8% of the total land of these zones. 1.26 million kanals of land are under illegal possession and being sold under the garb of housing societies, and 99% of these illegal societies are incomplete. People have lost their hard-earned money to the tune of PKR. 5200 billion (AGP, 2017) in these illegal societies.

The mere fact that more than 90% of land in the above mentioned zones is not under the purview of CDA speaks volume about the efficacy of the regulatory body. Chief Justice, Islamabad High Court, remarked that the writ of the statutory regulatory authorities has eroded (W.P. No. 3877 of 2019). In all this mayhem, it is the ordinary buyer of a plot and the future homeowner that bears the brunt of all that is played in the name of a housing society.

[1] Revised Modalities & Procedures (2020) framed under ICT (Zoning) Regulation, 1992 (As Amended) for Development of Private Housing/ Farm Housing Schemes in Islamabad Capital Territory Zoning Plan [https://www.cda.gov.pk/documents/docs/revisedZone234Regulations1992.pdf]

[2] These 140 societies are neither registered with SECP nor have they approached CDA for approval of LOP and issuance of NOC.

About the Authors:

  • Lubna Hassan is Senior Research Economist, PIDE
  • Aqeel Chaudhry is Lecturer, PIDE
  • Hanzla Jalil is Research Economist, PIDE

68 comments

  2. In the final outcome, investor in the scheme bears the financial loss. Hard earned money over a life time gets sunk which is deeply frustrating.
    Housing Societies Owners and CDA collaborate in cfinancial crime.By cancellation of LOP,or NOC or both pressure is built on the investors to throw away plot at less than the booking price and that too after agony of long wait.
    Suggest, CDA should take over all defaulting Societies and protect the investments of middle to lower class.
    Moreover,those granted LOP and NOC should be irrrevocable by the CDA.
    At best take over by the CDA should be the leading option.

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