The Housing and Physical Planning Department (H&PP) was established in August, 1973 by replacing the West Pakistan Housing and Settlement Agency with a single attached department named the "Directorate General Housing & Physical Planning" at Lahore. Later, during 1973, the Improvement Trusts at Faisalabad, Gujranwala, Multan, Rawalpindi, Sargodha and Murree were placed under the administrative control of Housing & Physical Planning Department. Improvement Trusts ultimately were converted into Development Authorities except for Murree and Sargodha.

In 1978, Public Health Engineering Department (PHED) was placed under the administrative control of Housing & Physical Planning Department while the Department was renamed as Housing Physical & Environmental Planning (HP&EP) and Environmental Protection Agency (EPA) was established as its attached wing. In 1996, Environmental Protection Agency was detached from Housing Physical & Environmental Planning Department and was given the status of an independent provincial Department. Finally, Housing Physical & Environmental Protection Department was named as Housing, Urban Development & Public Health Engineering Department (HUD&PHED) in 1997 to depict Urban Development Authorities and Public Health Engineering Department as its main organs.

The Directorate General of H&PP Punjab has been revamped to Punjab Housing and Town Planning Agency (PHATA) under the PHATA Ordinance, 2002. The said Agency has been effectuated wef., April 01, 2004 with the objective of rejuvenating the housing sector in general and provision of shelter to shelter-less, low income groups in particular.

The vision of the department is to harness the inherent potential of cities in order to make them the engines of economic growth in line with vision of Government of the Punjab and provision of low cost housing, water supply and sanitation coverage across the province, particularly focusing on brackish and barani areas.