Urban development - housing its core

by Sapumali GALAGODA

'The government has taken measures to meet the housing and urban infrastructure demand due to urbanisation.

As land is scarce, the focus now is on urban development to better the quality of life and to facilitate commercial activities in the centre of cities' states the Central Bank Annual report.

Severe flooding after torrential rains in many areas of the country including Colombo, highlighted the importance of urban planning.

The primary reason for flooding within the Colombo city is unauthorised construction which has given rise to increased incidents of health hazards such as dengue and other serious environmental issues.

An apartment complex in Colombo

Last year the Urban Development Authority (UDA) played a proactive role in urban development.

Colombo, being the major administrative city, requires strategic development to boost commercial and housing activities in an environment friendly and effective manner.

The Development Plan, formulated by the UDA, focuses on development issues in the City of Colombo that have emerged as a result of rapid urbanisation. A comprehensive planning approach, including all urban issues, has been taken to address the current and future infrastructural needs of the city.

The UDA implemented urban development and urban renewal projects for under-served settlements to improve their living standards.

These projects will release nearly 250 hectares of land within the city of Colombo and its suburbs for investments targeted at urban development. Projects worth Rs. 3.1 billion were carried out in 2010 and the UDA made a self-financing debenture issue of Rs. 10 billion to provide a low income housing scheme for shanty dwellers in Colombo metropolitan city limits.

The housing finance market faces several issues which inhibit its growth.

The failure to include low and middle income groups and other self-employed categories in the formal housing sector, due to various reasons, takes a significant toll on the physical infrastructure of developing urban areas such as Colombo.

The maturity mismatch characteristics of lending institutions, legal and other institutional issues, problems relating to land titles, high cost of construction materials and lack of skilled labour inhibits the growth in the housing sector.

However, it should be noted that the cost of housing financing has reduced with the reduction of interest rates on housing loans in 2010.