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Housing Problems in Sri Lanka

Info: 4284 words (17 pages) Essay
Published: 20th Apr 2017 in Economics

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Sri Lanka is an island in the Indian Ocean in South Asia, 65 610 square kilo meters in area, divided into nine administrative provinces. Colombo is the capital city of Sri Lanka. It has approximately 21 million populations. The country’s urban population has been steadily increasing over the past few years to its present level of over 15% of the population. The urban population is expected to increase from the present 15% to35% of the population in 2015. Sri Lanka has been gradually changing from an agricultural based economy to an industrial based one over the last few decades. The industry sectors contribute 27% of the GDP, agriculture sectors 17% of the GDP and services sectors contribute 56% of the GDP.

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There are wide regional disparities regarding housing sector in Sri Lanka. It can be divided as three major part name as urban, rural and estate sector housing problems. Mainly industrial sector and service sector are represented by urban sector and agricultural sector represented by rural and estate sector.

1.2 Research Problem

Housing problems in Sri Lanka

There has a proverb as “Fools build houses, and wise men buy them”. Although people are wise if they haven’t enough income they cannot buy or built a house. The present housing requirement in Sri Lanka is estimated to be around 4.95M where as the existing housing stock is nearly 4.35 M. There is a gap of approximately 600,000 units. (Source: Mahinda Chintana, Department of National Planning, Ministry of Finance & Planning, 2006). In Sri Lanka only 8.1 million included to labor force out of 21 million total populations. Although this 8.1 million people earn income it is not enough to live in good wealthy according to living expenditure in country. According to Sri Lanka Central Bank annual report, savings rate, % of Household Income in 2006/2007 is 11.1%. Its mean country labor force also is suffered from better housing problem.

1.3 Research Objective

The main purpose of this research is to propose to the local authorities or government to solve these housing problems by giving a proper solution and rebuild the cities as a modern and beautiful city in line with the bustling cities of Asia.

1.4. Research Field

Housing problems can be found all over the country. But in this research has mainly concerned about urban, rural and estate sector housing problems in Sri Lanka. According to the Time limit has concerned about data in sector wise.

1.5 Research Methodology

In this research may use only secondary data. They are,

Statistical information from Statistical department in Sri Lanka.

Websites. Information about other countries

Annual reports – Central Bank of Sri Lanka / Colombo Municipal Council

News paper articles

Email information’s

1.6. Research Limitations

The limitations of this research can be identified as follows,

1. Secondary data

In considering about place and time limit has difficult to use primary data.

2. Analysis of the problem

In this case I do not discus about housing problems relevant to country labor force. I focus my attention about housing problems relevant to self employed or unemployed peoples. It can be divided as major three parts.

Urban Sector housing problems

Estate Sector housing problems

Rural Sector housing problems

2.1 Urban Sector housing problems

When considering about urban sector housing problems Colombo became more congested and the city selected moved out into more large residential areas than other cities. An estimated 65,000 families in Colombo alone live in underserved settlements. (Source: Guidelines for Housing Development in Coastal Sri Lanka, NHDA, 2005). ‘Under served settlements’ are slum settlements and populations living in dilapidated buildings that are unhealthy to live in. Other cities in Sri Lanka are not that bad. But because of commercial opportunities, more and more people are moving into cities. According to Censes Department information, 54% of the Colombo city population lives in huts, slums or unauthorized structures or designated unsuitable for humans. The central part of Colombo became characterized by mainly low-income residential areas, mainly slums, and the northern and eastern parts contained most of the shanties. According to statistics, some 1,000 acres of state land and other reserves are being occupied by these people and that means they are illegally occupied. Out of the estimated 1,000 acres, 71% have been taken over by those living in shanties and huts. Colombo has some 63 slum areas which reflect a massive housing problem. These urban informal settlements are characterized by poor quality housing and inadequate water, sanitation, drainage and solid-waste infrastructure, resulting in pollution, ill health, and poor social wellbeing.

Narahenpita Usaviwatte slums Railway settlement in Colombo, Sri Lanka

2.1.1 Reasons for Urban shanty and slums

The important reason is poverty. According to Household Income and Expenditure Survey – 2006/07, Department of Census and Statistics Sri Lanka, there are 184000 poor persons and 32000 poor households in urban sector. They are suffering with a good shelter for their head.

Migration to Colombo. Most of these people are settlers who have come to Colombo looking for jobs. People move because they expect to have a better life.

Street vendors. There are about 20,000 street vendors in Colombo and most of them live in slums around Colombo. The slum dwellers are increased in every year around the Colombo and one reasons for that this street vendors.

The tsunami has added a new dimension to increasing population and problem in Colombo. The tsunami displaced over 500,000 individuals and destroyed or damaged about 150,000 houses.

Banks are constrained by the very systems when they pass a housing loan. Their financial analysis is biased towards people with bank accounts, formal sector jobs and a proven credit history. As part of disqualification of these requirements the poor people are pushed to words slums, shanty or other temporally shelter.

Slum dwellers are more likely to have less education and fewer employment opportunities. Most of slum dwellers get married without considering house and they also established in these slums as a new family.

2.1.2 Significant of this problem

Exceeded the carrying capacity of capital city. The poor slum dwellers, required to live with limited infrastructure and resources. Scientists have already warned that Sri Lanka has actually exceeded the “carrying capacity. Today, facilities are sadly disproportionate to the number of beneficiaries. These people, the entire 54%, fall into the category of low-income groups. This also means that they do not pay any taxes like property and water, that are payable by ordinary citizens. This means they place a huge burden on the city’s resources besides being an economic burden.

Unplanned urban population growth has exerted pressure on land and water resources in the cities as well as surrounding areas, with impacts on the water supply, sewage disposal, waste management, surface drainage and environment related health problems, vehicle traffic, etc. Living in cities does not translate into a better life.

Most of these slums area are popular for illegal activities. Most of people in these area are doing under world activities because of cannot find a good job for them.

Sri Lankan government had taken many steps to evict more than 70,000 residents in order to clear land for commercial development. But problem was government didn’t have 100% complete answer for this problem. After eviction from one place these people are going to another place.

2.2 Rural Sector housing problems

Agricultural productivity of small-scale farms has declined over the past decades due to irregular rainfall, recurrent drought and neglect in maintaining irrigation infrastructure. Rural population in Sri Lanka takes a higher component on total population. It takes 80% on total population. Most of these rural people are depending on agriculture sector which represent 17% on GDP. According to their farming income they also suffer with housing problem. Although they are farmer actual profit receive by intermediary. After fighting the living expenditure they also haven’t enough money to build a good house.

2.3 Estate Sector housing problems

Lines Room

On total population 3.6% peoples are living in plantation settlement as estate laborer. The plantation workers live in “line rooms,” which are 5 or 6 small adjoining units. They live in line-rooms which belong to the estate. The dwellings were first built by British colonial planters for workers brought from South India-forebears of the present plantation workers. Each family’s unit measures just 6 x 4 meters. With the expansion of workers’ families from generation to generation, the tiny units have had to be partitioned with thin brick walls or polythene to provide accommodation for married couples. In some cases, two to three families have to share a single line house. They receive salary based on harvesting tea leaves amount is around 150-200 rupees [$US1.50 to $2] a day. They have no possibility to save money and to buy food in sufficient quantity and quality and also no access to land ownership and decent housing.

But in many of time government did promise to them to improve their living conditions. Despite numerous past promises to improve living conditions, the situation facing workers continues to deteriorate.

2.3.1Facilities in this Line room Water facilities

There are only limited water taps for these families, and some of these operate for just 90 minutes each day. Workers are forced to queue to collect water for their families, and in the dry season they must go to a nearby village in search of water. Only plantation management staffs are supplied with water from a tanker. Sanitary facilities

Sanitary facilities are in a terrible state. Two or three families are forced to share a single toilet, which has no water supply. Education facilities

Education facilities for Tamil-speaking plantation children are extremely poor. Most of plantation youth have to abandon their education by grade 6 or 7, and in some cases even before then. Youth unemployment is rampant. Young people have lost all hope of finding work on the estate. Boys have left to find servant jobs as waiters or helpers in small hotels and shops in surrounding towns or in Colombo. The girls often have to work as domestic servants in the cities.

2.4 Government contribution to solve this problem

As a government Sri Lankan government has taken many steps to solve these housing problems. In every year, Sri Lanka’s national budget allocated funds to facilitate house for low income peoples. The National Housing Development Authority (NHDA) is the only Government Agency that launches housing projects in the country. It focused its attention on the construction of individual houses, apartments and community buildings for low income families.


Ragama housing scheme

Although government did take the steps to solve these housing problems in the country, the problem is today also can see low income people are living in many slums, shanty and unsuitable settlements in all around the country. Government has no a proper plan to solve this problem. In 2009, government used military power to evict more than 70,000 residents from the cities in order to clear land for commercial development. But problem was government didn’t give a place for these evicted people. According to the elaboration on the government’s plans on November 28, 2010 the government is faced with the challenge of relocating 75,000 families who are mainly occupying the most valuable land and strategically vital canals in Colombo. The government expectation of these evictions is they want to develop the city to attract global investors and to make it a beautiful capital.

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The government is facing to this problem in same way from over the past decades. After eviction people from illegally occupy government land within two or three month another group was settled in that area because of lack of government planning. Although government had facilitated to these people, government did not have a proper idea about how to use these land for the economical growth of the country. 

3.International Case study about Housing Problem

According to United Nations Human Settlements Programme (UN HABITAT) the world’s population stands at 5.7 billion people in 2009. According to that over 100 million people in our world today have no housing. Millions more people, about 25% of the world’s population, face a severe housing problem. They live in homes without adequate sanitation, with an irregular electricity supply, built out of flimsy materials, and without adequate security. Millions more live in solid and serviced accommodation but in overcrowded conditions. Housing problems affect both large and small cities. The following table expresses information about slum population as % of total urban population. According to that information on world urban population 31.6% is slum population. It means they are suffering a big problem with home.

3.1 South Korea

With rapid economic development in South Korea after 1960, was faced a big problem regarding shanty house. Korean government estimate is that there were 320,000 illegal households in 1976. The proportion of the population was lived in slums and squatter settlements. The formation of vinyl house communities has been centered in Gangnam district (south of the Han River). Between 1970s and the early 1990s there were massive eviction programs in Seoul Metropolitan Region (SMR). But since the 1980s, the number of illegal dwellings has decreased substantially. The Korea government did try to tackle this problem in many ways. Especially in the 1988 Summer Olympics game was changed the Korea economic system. There was some solution for slum and shanty .One issue is landowner and construction company partnership. The projects were initiated on a voluntary basis under the direction of a committee of landowners and construction company officials, selected by representatives of homeowners’ cooperates, theoretically to build high-rise flats, sharing the profits.

Since 1989, a permanent rental-housing (social housing) program has been implemented. A total of 190,000 units had been constructed by 1992. The Korea National Housing Corporation (KNHC) has been on the expansion of state-developed housing for sale rather than the provision of rental accommodation. The proportion of housing for sale to total housing constructed between 1962 and 2000 was 62%. Even though the corporation produced rental dwellings, these houses were sold after a 5-year period passed.


Over the past 20 years, Thailand has been transformed rapidly into a modern country. Many of poor rural migrants have come into cities searching for jobs. This rapid urban growth has also led to problems of environmental degradation, over-crowded residential areas and the propagation of slums in all Thailand’s main cities, particularly in the Bangkok metropolitan region. According to the survey in 2000, there are altogether about 5,500 low-income communities and squatter settlements in Thai cities, where 6.75 million people, in 1.5 million households, live. Another 1.5 million poor people (370,000 households) do not live in communities at all, but find shelter within the compounds of temples, in scattered rental room or in the factories or construction sites where they work.

In 2003 Thai government was created a program name as Baan Mankong (Secure Housing) Program as solution for support community-led slum upgrading in low income urban and rural communities of Thailand. In January 2003, the Thai government announced a policy to provide secure housing to one million poor households within five years. This ambitious target was to be met through two programs.

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In the first, the Baan Ua Arthorn Program (“We care” in Thai), the National Housing Authority designs, constructs and sells ready-to-occupy flats and houses at subsidized rates to lower-income applicants on a “rent-to-own” basis. The second, Baan Mankong Collective Housing Program (“Secure housing” in Thai), channels government funds, in the form of infrastructure subsidies and soft housing loans, directly to poor communities.

Instead of delivering housing units to individual poor families, the Baan Mankong Program encourages existing slum communities to form co-ops and develop their housing in a collective way; each participating community would end up having a collective land title.

The Ban Mankong housing project has provided 440 housing schemes comprising of 54,000 households and eradicated 773 slums in the previous four years.

The beneficiaries of this project include about 213,000 people and it aims to provide 12,353 houses to the general public this year.

3.3 Singapore

Singapore’s highly successful public housing program, which provides homes for 85% of the population, has been an important aspect of its planned urbanization strategy for economic development. Only incrementally did the public housing authority develop housing estates and new towns further away from the city center. The first new town developed was located some 6 to 8 km away. To compensate for the longer distance between their new homes and the city center, this new town was planned with a full range of neighborhood facilities and services, including public bus transport. Furthermore, the new town was located along highways connecting the town center to the city, thus facilitating relatively convenient and fast transportation to workplaces.

In the late 1960s a financing scheme was introduced to enable households to buy public housing units through the use of a part of the money in their retirement savings fund-Central Provident Fund. In the beginning, the homes built were small. In 2000 whereas that living in the larger four- and five-room apartments has increased to more than half among public housing residents.

Public housing apartments have been allocated to applicants on a first come, first served basis. Furthermore, public housing estates in Singapore have been equitably developed throughout the city-state providing location choices. When searching information about housing problems in worldwide, can identify there are many proposals, solutions for the housing problems but problem is it cannot be solve in 100%. The world is changing towards urbanization and increasing poverty level in relevant countries.

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Housing and Development Board Project-Housing and Development Board Project, Singapore Housing and Development Board Project, Singapore Housing and Development Board Project, Singapore


Singapore’s Slums. 87% of the population live in them.Singapore’s Slums. 87% of the population live in them.

4. Conclusion

4.1 Past Policy Implication in Sri Lanka

When comparing Sri Lanka situation with other relevant countries, mainly can identify there was no a proper program to solve these housing problems. Although did introduce a good program, after changing political environment the program also was discontinue. The influence of political power is high in Sri Lanka. That is the one of main reason for every problem in country. Even the most popular or successful programs were ultimately terminated because of changing political power. Although government introduced many policies to solve these housing problem the problem is today also around 600,000 households are suffer from housing problems.

4.2 Solutions and Policy Implications

According to William C Apgar “Which housing policy is best?” Housing policy debate 1 (1990), (page28) , he explain about best housing policy as, “not best at all times and under all situation”. The best policy varies across metropolitan areas and within metropolitan areas, depending on market condition. Also author has explained that the best policy depends in a critical fashion on the nature and the extent of program induced price increases and externality effects. That explanation is entirely correct.

When considering Sri Lanka, a solution to the urban area it is not matched for the rural sector housing problems. According to that government should establish housing policies in separately.

National Housing Policy

National Housing Policy is the most important policy in every country. National Housing Policy is basically focusing on economically weaker segments of the population. But present in Sri Lanka around 600,000 families are suffering with housing problem. It means current policy is not match with current situation. The current government has recognized that should change housing policy in country and according to that did start to revise in year 2009. In this revise stage government should consideration all important information to leave aside these housing problems from the country.

4.2.2 Public Housing

Public housing mean is managed by local housing authorities, subject to rules adopted by the central government. When considering about other countries solution for housing problems public housing or public housing apartment is good solution for urban and estate sector housing problems in Sri Lanka. There have around 60,000 units in low income houses in urban area and around 200,000 units in estate sector. The Sri Lankan government should build apartment as state level or local authority level in every relevant cities under control of The National Housing Development Authority (NHDA) to solve these housing problems.

Financing Capital for public house

This capital investment on public housing delivers its benefits for many years or decades. According to the current situation in country to finance this capital investment can use a bonds issue. A bond is basically promise to make repayments to the buyer on a regular, prearranged basis. Most of people in country will provide their support to solve these housing problems in the country.

Encourage the private sector to build low cost housing

One alternative to public housing is private sector low cost housing method. Government should provide infrastructure and incentives to private sector programs for build low cost housing.

Government can also use system of subsidies to encourage the private sector to build and manage low income housing. This system will help to reduce rural sector housing problems. In rural sector housing problems are spread out all over the village. Then this low cost housing system mostly will useful to solve these rural sectors housing problem.

Land Use zoning

The basic idea of zoning is to separate land uses that are “incompatible” in some sense. (Source: O’Sullivan,urban economics (seventh edition) “Zoning and Growth Controls” (page 226). Cities implemented zoning to separate industry from homes. However in Sri Lanka do not use this system in proper way. According to Urban Development Authority Act (UDA act) every local authority must developed a land use zoning plan regarding to their administrative limit. But most of local authorities do not follow that rule. Relevant to that in some local authorities cannot explain what can do in some area and cannot do. As a result they gave approval for use land as mixed.

As a solution, each Local Authorities must develop the Land use zoning plan under the Urban Development Authority. This activity must take into consideration land use policy. Zoning can shape the urban pattern by blocking or limiting growth in some areas and thus, in effect, diverting it to other areas. This system will be helpful to reduce this slum problem in urban area.

Lending facilities

Banks and housing finance companies in Sri Lanka are constrained by the very systems when they pass a housing loan. Their financial analysis is biased towards people with bank accounts, formal sector jobs and a proven credit history. As part of disqualification of these requirements the poor people cannot obtain loan from these institutions.

As a solution the government can do involve to this function as a state level or local authority level. To encourage financiers to lend for low-cost housing, government can issue mortgage insurance behalf of loan applicants. It will be helpful for the poor people.

Finally can be achieved target of rebuild the cities as a modern and beautiful city in line with the bustling cities of Asia.


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