Unlocking State-captured Real Estate - The Case Of Islamabad

Nadeem Ul Haque, Azwar Muhammad Aslam and Ahmed Waqar Qasim
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Nadeem Ul Haque: Pakistan Institute of Development Economics, Islamabad
Azwar Muhammad Aslam: Pakistan Institute of Development Economics, Islamabad
Ahmed Waqar Qasim: Pakistan Institute of Development Economics, Islamabad

No 2024:18, PIDE Research Report from Pakistan Institute of Development Economics

Abstract: Islamabad has 17,471 public housing units of various categories. (47.7 million sq. ft.) in prime locations. The market value (Zameen.com and w/o rezoning) approximately PKR 2,577.6 billion (USD 9.3 billion). Besides these Minister Enclave, Parliament Lodges, and Provincial Houses in the G-5 sector occupy 238 acres (8.5 million sq. ft.) which is equivalent to a minimum market value of PKR 648.0 billion (USD 2.3 billion). Islamabad Club area of 425 acres, estimated minimum value of PKR 2,507.8 billion (USD 9.09 billion). The study explores the alternative utilization of this prime land through monetization of housing facilities followed by mixed-use high-rise development on 40 percent of released land. Important note: Monetization means withdrawal of all non-cash benefits while giving the full cash equivalent to the concerned position so that there is no welfare loss to the concerned. But this means that there are no loopholes that allow people to collect the benefit as well as use non-monetary benefits. Estimates suggest that monetization on this principle would cost the federal government an additional PKR 135 to 741 billion annually. With rezoning, i.e. allowing the development of mixed-use and high-rise, the potential investment could be PKR 16,228.8 billion (USD 58.8 billion). In addition, there would be a large and permanent stream of rents and taxes. Crude estimates roughly USD 1.7 billion in rental income and about the same amount in taxes. The development activities will also generate more than 351,000 new jobs, directly and indirectly, in the economy. The total opportunity cost of the state-captured land contemporary use is 31,712.4 billion (USD 114.9 billion), which is approximately 34% of the GDP of Pakistan

Pages: 23
Date: 2024
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