Performance Report – 2010 - Ministry of Finance and Planning

The quality of a country’s housing sector isconsidered a good proxy for the status of itseconomy and the wellbeing of the people.Therefore expansion and improvement in thehousing stock, with relevant infrastructurefacilities in both rural and urban areas are abig challenge to the government. Changing people’s attitudes towardsaccepting government’s changing role offacilitator and regulator instead ofdepending on government to providehouses and encouraging a self helpstrategy to construct their own houses. Short supply of quality and affordablehousing for rent. Government alone cannot meet thehousing needs of the vulnerable group.Therefore, the government has to identifyalternative means of financing toconstruct decent and comfortable houseswith the participation of the privatesector, civil society, NGOs and INGOsfor vulnerable groups.Difficulty in finding suitable land forsettlement development in urban areas.Further, the private sector is expectingsuitable land in urban areas from thegovernment to invest in housingdevelopment. Lack of interest by the formalcommercial banking and financial sectoris providing loan facilities to irregularincome earners, contract migrant workersand the self employed.Continuously increasing land price andbuilding material prices.Lack of coordination among the variousagencies that provide services to housingand related sectors such as localauthorities, water supply, sanitation,healthcare, and transportation.The strategies are - Assist low income families and destitutepeople to construct houses on an ownerdriven basis.167 Reconstruction of houses affected by theconflict Construction of 65,000 housingapartments for underserved settlers inColombo city Construction or improvement of housingfacilities for the estate community. Construction of semi luxury houses formiddle income families in the ColomboMetropolitan Area by strengthening thehousing finance market and by anaccelerated release of public lands inareas designated for strategicdevelopment to private sector investment. Construction of luxury houses for highincome earners in the ColomboMetropolitan Area Addressing impediments to the growth ofthe rental housing market by providingtargeted incentives to low and middle renthouse developers, and by rationalizingthe legal framework to protect the rights /interests of both tenant and ownersequally.Encouraging the formal banking sector tointroduce new housing financing productsto meet the middle income and highincome earner’s housing needsTo address the above challenges thegovernment investment in the housing sectorhas shown an increasing trend from 2006 to2010. This includes investment in the ruralhousing, fishery community housing,relocation of underserved settlements, estatehousing, reconstruction of war damagedhouses and relocation of IDPs. All theseinvestments are particularly targeted to meetthe housing needs of vulnerable people.Table 24 - Public Investment on Housing DevelopmentYear Investment (Rs. Bn)2006 4.452007 5.702008 5.942009 5.42010 6.38