Government plans to invest in housing sector
The government is planning to enter the housing sector which has been the domain of the private sector. As a hint of things to come, the new budget announced on Saturday said, “A policy will be adopted in respect of savings mobilizing agencies for constructing residential buildings under joint venture and selling them to the targeted group on a priority basis.”
“This announcement by the budget is the extension of the ongoing People Housing Programme introduced by last year’s budget,” said Bodh Raj Niraula, joint-secretary at Ministry of Finance (MoF).
As per the plan, the government will join hands with private financial institutions and cooperatives to build residential buildings
under joint venture to sell them to the targeted group. “The move has been taken to increase investment of the private sector in housing,” said Bodh Raj Niraula, joint-secretary at the Ministry of Finance (MoF).
Apart from marginalised communities, even government employees and other people could be potential customers under this scheme. The government would provide land for the purpose, either by allocating its own land or by purchasing land.
Till now, the Employees Provident Fund (EPF) is the only government institution involved in housing and commercial building development. The EPF has recently started a 130-unit residential complex in Kalyanpur, Chitwan. “Members of the EPF will be given higher priority,” said Ramesh Kumar Bhattarai, administrator of the EPF. “The rest will be sold to others.”
As mentioned in the budget, Bhattarai said the EPF can move ahead in a joint venture. “We can move ahead in coordination with the private sector,” said Bhattarai. “There could be various models of coordination.”
The budget has taken a tough stance against housing developers delaying the construction of apartment buildings after receiving bookings. It says individual or companies willing to construct residential buildings by developing land need to complete the entire construction work ready for sale within five years. “Of late, there is a growing trend of opening bookings for apartments but delaying construction,” said one member of the Nepal Land and Housing Development Association.
The government has also come up with a commercial land use policy by redefining the existing land classification system. Land will be classified into six categories — agricultural, industrial, forestry, commercial, residential and public community.