- Written by Dr Lindsay Kutan, Senior Research Fellow, Sustainable Land Development Research Program (formerly Property Sector Development Research Program), PNG NRI Dr Lindsay Kutan, Senior Research Fellow, Sustainable Land Development Research Program (formerly Property Sector Development Research Program), PNG NRI
Papua New Guinea is experiencing housing crisis especially in cities such as Port Moresby. The rapid growth of the urban populations has continued to exert pressure on the housing sector. According to the National Capital District Commission (NCDC) Urban Development Plan Review 2020, it was estimated that Port Moresby’s population is likely to be over one million in 2030. Port Moresby will need between 27,000 and 62,000 additional houses to meet this housing demand within that period. However, the housing sector is currently faced with several challenges which include shortage of affordable houses for low-income earners, extremely high house sale prices, and fast-growing informal squatter settlements. More importantly, these challenges are reflective of the lack of a holistic National Housing Policy. There is no clear direction by the government and the responsible housing agencies in the provision of adequate and affordable housing in the urban areas. Though National Housing Policy 1994 has been under review since 2017, it has not been completed because there was no fund provided by the Government of Papua New Guinea (GoPNG) for regional consultation with key stakeholders. If the intention of GoPNG is to move the housing sector forward, it should fund the regional consultation so that review of the National Housing Policy 1994 can be completed.
In the absence of an updated National Housing Policy, interventions on housing initiated by the government were undertaken in an ad-hoc and mismmatch basis. This resulted in the following challenges:
- Lack of consistency and coherence in government’s decisions and housing programs. For instance, the almost failed government-initiated housing projects such as the Duran Farm and Gerehu Affordable Housing are reflective of the inconsistency from successive governments to adhere to sound technical recommendations which include allowing the private sector to lead in the supply of houses.
- Lack of coordination and the understanding of the roles and functions of key stakeholders. Delays has often been experienced in the supply-chain of houses as the processes require inputs from various stakeholders. These include Department of Lands and Physical Planning, National Housing Corporation and State-Owned Enterprises such as PNG Power and Eda Ranu (Water PNG). This often contributes to pushing-up of house prices.
- Lack of support to the private sector. The expertise and the financial resources needed in the supply of houses are captured in the private sector. For instance, the development of Skyview and Edai Town are all private investments that were stimulated by a good Government initiative such as the First Home Ownership Scheme introduced in 2013. However, they had little or no government support in the provision of trunk infrastructure.
The roles and functions of key stakeholders can be clearly understood within the supply and demand framework as the following:
- Supply side. The primary role of the government is to provide land and trunk infrastructure (good road networks, piped-borne potable water and electricity) while the private sector construct and supply houses to the housing markets.
- Facilitating and regulatory roles. The role of the government is to provide holistic National Housing Policy and other regulatory strategies to provide conducive environment for the private sector to operate. The facilitating role played by the government will reduce long delays currently experienced in the supply of houses.
- Demand side. Housing affordability is a major determinant of an individual’s decision to purchase a house. Home ownership schemes must be fair and equitable, ensuring that all income categories, particularly the low-income earners have equal opportunities to own houses.
The lack of a proper National Housing Policy in PNG, has exacerbated the housing issues in urban areas. There is a need to complete the National Housing Policy 1994 being under review since 2017 by implementing regional consultation as a matter of urgency. The policy will assist us in addressing some challenges associated with the housing sector.
This article was first published in the Post-Courier’s 4 March 2021 edition and on its website’s commentaries and features page.