- Requirement for 900,000 houses
- Construction cost challenges persist for builders, prospective homeowners
- Questions about condominium building standards remain
Amid increasing population numbers and urbanisation, Sri Lanka continues to grapple with a deepening housing crisis compounded by an outdated policy framework, leaving low- and middle-income families unable to afford housing.
The total number of census units reported at the Listing Stage of the Census of Population and Housing (CPH) 2024 was 8,377,895. This figure has more than doubled over the past 42 years or increased by 144.7%, rising from 3,423,486 census units in 1981.
Census units are any building, part of a building, or several buildings used for the same purpose that are classified into four categories: Housing Units, Collective Living Quarters, Residential Institutions, and Non-Residential Units.
The number of Housing Units reported in the CPH 2024 shows a 17% growth compared to the number reported in the CPH 2012. The number of Housing Units in the CPH 2024 stands at 6,762,644, in comparison to 5,773,678 in CPH 2012. In addition, there are 46,376 Collective Living Quarters, 57,186 Residential Institutions, and 1,511,689 Non-Residential Units.
The highest number of persons living outdoors without a place of usual residence, identified as roofless, at 841, was reported from the Western Province. The lowest number of roofless persons – 73 – was reported from the Eastern Province.
A history of promises
Many governments have championed providing housing to the masses. For instance, the pre-election manifesto of the National People’s Power (NPP) notes the growing severity of the housing issue in Sri Lanka, particularly in urban areas, especially for low-income families.
“In Colombo alone, approximately 65,000 homes in low-income settlements are spread across 1,000 acres. Residents in these areas have been largely neglected by previous governments and suffer from a lack of basic amenities such as water, electricity, sanitation, and clean air,” the manifesto states.
In terms of rural housing, it notes that approximately 2% of Sri Lanka’s rural population lives in estate housing, leading to significant social issues as the number of households within these communities increases.
Accordingly, it pledges to “construct multi-storey housing complexes wherever possible, efficiently managing the limited land available and addressing the needs of the people”.
Moreover, recognising that adequate shelter is a fundamental right of citizens, the objective of the National Housing Policy, last revised in 2017, is to chart the course towards achieving the goal of ‘Shelter for All by the Year 2025’ through a nationwide People’s Housing Movement with the active participation and action of all stakeholders.
Despite this, housing issues remain unresolved. Speaking to The Sunday Morning, National Housing Development Authority (NHDA) General Manager K.A. Janaka acknowledged that while there was a lack of housing for the vulnerable, they intended to provide more funding next year to resolve the issue. “We are in a position to solve the matter in a couple of years.”
“According to census and district secretariat data, there is a lack of 900,000 housing units for all sectors, including lower-income, middle-income, upper-income, estate sector, etc.”
He noted that these issues were being addressed through grants and loans, with one example being a housing project being undertaken by the Urban Development Authority with a Chinese grant, stressing that the Government was keen to resolve the housing issues impacting people.
Janaka however pointed out that while there was a national policy on housing, it needed to be revised based on present-day needs, since it did not align with the situation at present. Accordingly, the revision is under discussion at the ministerial level.
Fixing the urban sprawl
Nevertheless, Sri Lanka’s housing crisis continues to grow, with Chamber of Construction Industry Sri Lanka (CCI) President Archt. Jayantha Perera noting that one main concern was the demand for housing in the urban sector.
“One issue we anticipate is that supply might exceed demand and prices may come down. The other issue is that a recent survey found that about 3,000 housing units in and around Colombo are either underutilised or simply closed down. The reason is that the current generation is overseas and their houses are either occupied by their parents or security guards.
“As the older generation disappears, those who are abroad will not return, so they are likely to sell these properties. Within the next 5-10 years, there could be surplus housing available. And for the first time in Sri Lanka, in and around Colombo especially, the property market might come down,” he said.
Meanwhile, University of Colombo (UOC) Department of Economics Head Professor K. Amirthalingam noted that the country’s housing needs were being impacted by rapid urbanisation.
“Due to urbanisation, there is pressure on urban areas. Many are moving towards cities in search of employment opportunities and better education for children. As a result of this internal migration, cities are overloaded. The solution is vertical housing schemes for urban areas,” he stated.
However, CCI President Perera noted that as far as construction of housing was concerned, there was no major issue except that material prices had risen and people, especially those within the middle-income segment, were struggling to build houses.
He also noted that there was a trend to decentralise in terms of housing, which would allow housing development to take place in other areas, which was an option that policymakers must decide on. “High-rises are only a solution for the urban sector, because space is a problem. However, decentralising is the main thing that can resolve this housing issue to some extent.”
Policy failures
Noting the impact of stagnant national housing policies on the construction sector, Perera said: “In the past, there were many benefits, especially for first-time house builders, which is why people about 20 or 30 years ago were able to build houses. But now the younger generation tends to purchase apartments. The housing market is there, but affordability is the issue.”
An issue with apartments, based on information received from the Condominium Management Authority, according to Perera, is that over 70% of the apartment buildings in Colombo lack a certificate of conformity. Without a certificate of conformity, transferring deeds, etc. becomes an issue.
He attributed this to approval delays on the part of authorities. “You can’t blame the developers. It is because the authority approval process is so lethargic. For instance, to get an approval for a project, it sometimes takes three years. Foreign direct investors are not going to wait for three years to get approval.”
According to Prof. Amirthalingam, there are also supply and demand issues with housing in the country, such as ownership concerns of the estate sector, the massive destruction in the north and east, pressure on urban cities due to people moving towards urban areas, and increasing prices. All these are being given temporary solutions, which are insufficient, unlike large-scale efforts in the past to provide housing for the masses.
“During President Ranasinghe Premadasa’s tenure, housing units were constructed and distributed based on income level. We don’t have that type of housing project now, which is also due to the economic crisis,” he pointed out.
Addressing the current state of the housing market due to skyrocketing land prices in urban areas, he said: “There are housing units and ongoing constructions, but the issue is about who is purchasing these. Only businesspeople are making purchases. Yes, there is supply and demand, but the high price of housing units, especially in Colombo, means that middle- and low-income families cannot afford to purchase these.”
Moreover, he noted that in the north and east, when the Government resettled Internally Displaced Persons (IDPs), they were provided up to Rs. 1.2 million per housing unit on an instalment basis while the individuals built the houses with their own labour. Since this allocation is insufficient, people are compelled to borrow, leading to debt.