Sri Lanka continues to grapple with a housing crisis that has only deepened in the face of rapid urbanisation, population growth, and poor policies. Despite decades of promises and policy frameworks, the dream of ‘shelter for all’ remains elusive for many, particularly low- and middle-income families. Other communities who are significantly affected are those in the North and Eastern provinces, and the Malaiyagam community in the hills of Sri Lanka.
The latest Census of Population and Housing (CPH) 2024 reveals a stark reality: While the number of census units has more than doubled over the past 42 years, the gap between housing supply and genuine affordability continues to widen. This, while issues like the Covid-19 pandemic and the economic crisis have pushed more of Sri Lanka’s urban poor below the poverty line. The census data is revealing. There are now over 8.3 million census units in the country, a 144.7% increase since 1981. Of these, housing units have grown by 17% since 2012, now totalling nearly 6.8 million.
These numbers mask the underlying crisis. The Western Province, Sri Lanka’s economic heart, reports the highest number of people living without a permanent roof over their heads. Meanwhile, rural and estate communities continue to face acute shortages and social challenges, with around 2% of the rural population still residing in estate housing.
Successive governments have made grand promises. The National People’s Power (NPP) party, for instance, has highlighted the plight of 65,000 homes in low-income settlements across Colombo, where basic amenities such as water, electricity, and sanitation are often lacking. The National Housing Policy, last revised in 2017, set an ambitious target, ‘Shelter for All by the Year 2025’. Yet, as that deadline approaches, the reality on the ground tells a different story. The National Housing Development Authority (NHDA) estimates a shortfall of 900,000 housing units across all sectors. While there are ongoing efforts – such as grants, loans, and projects supported by international partners – these measures have yet to make a significant dent in the crisis. The NHDA itself admits that the current policy framework is outdated and in urgent need of revision to reflect present-day realities.
Urbanisation has only intensified the pressure. As more Sri Lankans migrate to cities in search of better opportunities, urban areas are becoming increasingly congested. Experts argue that vertical housing – multi-storey complexes – offers a practical solution for maximising limited urban land. However, the construction sector faces its own challenges. Rising material costs have made it difficult for middle-income families to build homes, while approval delays and bureaucratic inertia have stifled new developments. Over 70% of apartment buildings in Colombo reportedly lack a certificate of conformity, complicating property transfers and undermining confidence in the market. Recent fires in and collapses of several buildings in highly urbanised areas point to possible risk factors which may manifest into another crisis soon.
Ironically many homes in Colombo remain underutilised or closed. Often owned by Sri Lankans living abroad. This could lead to falling prices, but it does little to address the core issue: Affordability. The current market serves businesspeople and investors, not the families who need homes the most.
The failures of policy are evident. In the past, first-time builders benefited from government support, enabling more people to own homes. Today, such benefits are scarce, and the younger generation is increasingly pushed towards apartment living, often at prices beyond their reach. The lack of large-scale, income-based housing projects – once a hallmark of previous administrations – has left a void that piecemeal solutions cannot fill. Sri Lanka must move to address this issue quickly.
Bold and modern approaches are needed. Policymakers must prioritise the revision of the national housing policy, ensuring it is responsive to current economic and social realities. This includes streamlining approval processes, incentivising affordable housing developments, and decentralising growth to ease the burden on urban centres. High-rise solutions may work for cities, but rural and estate communities require tailored interventions that address their unique needs. Housing is not only a commodity, it is also a fundamental right.