ABSTRACT

Housing societies construction is an important component of economic development. This study examines the multifaceted challenges confronted by both builders and residents within the context of extra-legal housing societies in Islamabad, Pakistan. It addresses the role of Capital Development Authority’s (CDA) in the context of market and state failures, demonstrating the complex interplay of regulatory burden, bureaucratic delays, information asymmetry and sludge that underlie the proliferation of these extra-legal housing entities—neither entirely legal nor explicitly illegal, marked by a lack of necessary paperwork and the No Objection Certificates (NOCs) that the CDA requires for full legitimacy. Our research employs a mixed-method approach, incorporating both qualitative and quantitative data collection techniques, including validated questionnaires, surveys, and face-to-face interviews. With the goal of promoting sustainable urban development and prioritizing the well-being of consumers this analysis offers possible solutions like strengthening the capacity of the Capital Development Authority (CDA), establishing a specialized unit, ensuring compliance with initial plans, digitizing procedures, implementing a single-window system, and addressing non-compliance tendencies.