Why we will not be seeing any high rise buildings in Pakistan any time soon is because they are expensive? That is only one part of the puzzle that entirely depends on the market. Other parts of the puzzle are the regulations that are not allowing the market to act freely. The rules of high rise are cumbersome and developing societies far away from the city center is low hanging fruit for the developers. We have the glooming examples of Alamgir Tower in Lahore and One Constitution Avenue Tower in Islamabad, both projects have not seen the light of day.
Regulations that make it costly for developers will ultimately lead to higher costs for end-users. So these regulations dis-incentivize high rise buildings and actually lead to more urban sprawl. Expansion of cities that defies all economic logic. In this piece, we discuss these two very important issues.
There is a big and never-ending debate of vertical growth in high-density Urban centers and horizontal urban sprawl. Vertical growth means buildings become mixed-use and theoretically having no height limit while being close to the city center. Horizontal urban sprawl means cities expand away from the city center, thus increasing distance from it.
Lahore Development Authority (LDA) has devised new rules of business in its two cardinal documents called LDA Building and Zoning Regulations (2019) and LDA Land Use Rules (2019). On that account, Dr. Nadeem ul Haque, Vice-Chancellor Pakistan Institute of Development Economics (PIDE) with the collaboration of Dr. Salman Shah – Economic Advisor to Chief Minister Punjab conducted a roundtable. As Milton Freedman says one of the great mistakes is to judge policies and programs by their intentions rather than their end results. Intentions are never judged and only results are discussed at length. However, two aspects are very central to planning mumbo jumbo; one is limiting urban sprawl and second developers providing the parking.
First is to put an end to urban sprawl. Currently, there is no working boundary of Lahore City. In the past attempts were made to include Nankana Sahib, Kasur, and Sheikhupura in Lahore. Development authorities argue that these draft laws are put after due consultation of the stakeholders on the premise that current infrastructure does not support high rise construction, this is a classic example of hen or egg which one comes first infrastructure or the high rise building. The government can count on revenue generated, jobs and construction industry through encouraging societies but long-term effects are detrimental for city life and the environment as a whole. Like for example, LDA first gives NOC to a society situated far from the city and then provides the necessary road infrastructure like a road for cars, sewerage, electricity, gas, etc. So the vicious circle of societies developed far from the city center continues to bloom without any check. We can count the high rise building on our fingers in Pakistan because of the cumbersome process to get the necessary permissions. Several times attempts were made to simplify the process but it is still not enough.
The cost of the urban sprawl is more than double the cost of inner-city development because in the city center most of the infrastructure is already laid down and only needs to be upgraded rather than putting whole new infrastructure. Just to take into account the cost of outer city sprawl; the Lahore Ring Road cost Rs. 35 billion – won’t that amount be enough to upgrade the city center for high rise construction. The most important infrastructure here means roads, sewerage lines, water, and emergency response. Cities can only act as an engine of economic growth if urban sprawl is curtailed. Our urban policies have long been in favor of urban sprawl by disincentivizing density and high rise construction.
So what rules are basically implying is, you can have your cars and live far away. City authorities will provide you with carpeted roads and free parking to park them in the city centers. Let’s see how it is deteriorating our city centers. All the developers are needed to provide parking at their expense which eventually subsidizes car parking. Providing per square of land in the city center costs money. Surface parking costs developers $5,000 or more per space, underground or structured can range between $20,000 and $50,000 per space. So who will be paying for these costs, obviously the end-user, thus increasing the costs of the whole project multiple times and forcing everyone to pay for it,
On the other side, if our authorities incentivize high buildings in the city center the ownership of cars will naturally decline. If developers still sense a good market for car parking spaces, let them do it on their own market analysis, and charge the user separately. If LDA needs to provide car parking then it should charge it as well as parking is not a constitutional right, LDA can generate a lot of revenue through parking fees. There are more than 2 million cars registered in Lahore lets say on conservatively 40% stay in Lahore and LDA earns Rs. 10 per day as parking fee, it is a lot of revenue. Cities like Lahore are earning millions of Dollars through parking revenue and it is not a new thing. So in short through parking fees, car use will be discouraged and developers will be more inclined towards better use of that land. These two important problems can lead to Prime Minister Imran Khan’s desire to improve liveability in our cities.
Vertical expansion as directed by Prime Minister Imran Khan on multiple instances. More than 10 times he reiterated on the push for high rises in Pakistan since last March when he first tweeted but the progress is still abysmal. The most important consensus in the roundtable was the need to put a full stop on urban sprawl as PM Imran Khan is actively very interested in sprawl being curtailed. I hope that after the current exercise a working boundary of Lahore city will be devised by the PIDE team and LDA so urban sprawl can be contained.