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This paper examines the policy options for India as it seeks to improve living conditions of the poor on a large scale and reduce the population in slums. Addressing the problem requires first a diagnosis of the market at the city level and a recognition that government interventions, rather than thwarting the operations of the market, should seek...
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Context 1
... If all new housing is built using TDRs, it would take 23 years for TDR projects to provide apartments for the households currently living in slums in Mumbai. The provision of housing for slum dwellers would come at a cost of roughly 5 lakh (500,000) rupees paid by households purchasing new apartments. Assuming that the average floor space of incentive apartments is about 700 square feet, each buyer of new apartment on the formal market will have to pay, in addition to the cost of its own dwelling, for the dwelling of 2.5 slum households. Obviously, a number of new apartments will be built without using TDR, and this will further lengthen the period over which housing would be provided to today‘s slum dwellers . Meanwhile, during these 23 years, the slum population of Mumbai could have grown by an additional 3.4 million at today‘s rates. Those new slum households, more than double the number in Mumbai in 2001, do not receive incentive apartments in this scenario. TDR schemes and EWS quotas are appealing because they have no direct budgetary implications, but they would be costly for new households entering the formal housing market. Without changes to the market dynamic that is generating negative growth in formal households and slum growth at greater than 4% per annum, these schemes merely establish a game of catch up that never ends. TDR schemes have the additional cost of aggravating the funding deficit for basic network infrastructure needed to support city growth. Charging an impact fee for new developments is one of the most effective and manageable instruments for financing infrastructure improvements in growing cities, especially when intensity of land use is on the rise. (See American Institute of Planning: 1997) Merely trading higher FAR for apartments for slum dwellers without extracting charges for the infrastructure that is essential to supporting new developments will aggravate the already substantial shortfalls in urban infrastructure. FAR schemes should not be an excuse for continuing the unfortunate past practice of urban development on the cheap. Just as the Development Authority business model has done, TDRs designed to focus only on provision of low cost housing without recognizing the need for additional infrastructure miss an opportunity to use the fiscal potential that these transactions offer. There is also reason to believe that a large number of today‘s slum dwellers will not stay in the housing offered under developer incentive schemes or public programs for a 270 square foot home. As discussed below in the case studies, much of the new housing provided in Mumbai that will be the basis for incentive schemes is located in the distant suburbs. Public housing programs seeking to economize on costs will tend to locate in these areas too, because land is less expensive there. Housing located in such areas imposes commutes to work that are too costly for many current slum dwellers. Both our case studies for Mumbai and Ahmedabad suggest that slum dwellers locate in slums at least in part because they are close to their place of work and are unlikely to stay for long in far flung locations. When housing supply is very inflexible, as it is in major Indian cities, the impact of providing subsidies to improve household purchasing power or offering interest rates subsidies for mortgage loans are blunted, as illustrated in Figure 7 . Most of the impact of a subsidy directed at improving purchasing power is absorbed in higher prices, because supply is not responsive. The few countries that seem to have significantly improved the housing conditions of the poor and decreased the percentage of households living in slums have done so by focusing on developing infrastructure to increase effective land supply, allowing intensive use of urban land, and in the initial phases, allowing decent, but low standard housing for the poor. In parallel, these governments focused also on increasing the income of the poor, through heavy investment in general and vocational education, in health services and more generally in increasing urban productivity. This was the case in large cities of Asia like Hong Kong, Bangkok and Seoul. All of these cities were able to accommodate a large influx of poor migrants for decades while the percentage of slums was decreasing. It is only when the supply of housing is quite flexible, as in the case of Chile, that targeted demand side subsidies can reduce the residual of very poor households who cannot afford a formal home. (Bertaud: 2010) Figure 6 in section B. sets out a framework for a strategy to make housing more affordable and improve living conditions on a large scale in urban India. In this section, we sketch out how this strategy could be applied using two city examples: Ahmedabad and Mumbai. Aside from illustrating how specific data on real estate policies and market outcomes can be used to formulate a strategy, these examples demonstrate how important it is to design policy based on each city‘s unique real estate market conditions. National standards and templates offer blunt edged and potentially expensive or redundant tools for resolving the slum problem. The first task in defining a housing policy in a metropolitan area is to understand the parameters of the housing affordability problem in the city. Essentially, this involves measuring purchasing power in comparison to prevailing prices. This analysis must start by obtaining the distribution of income among slum dwellers and the population living in formal dwellings. The task is not easy because many slum dwellers work in the informal sector so their income is difficult to measure with accuracy and can be quite variable. However, in India there are many surveys on income and consumption of slum dwellers that have been conducted by universities and NGOs, so it should be possible for every major city to have a fair idea of income distribution within the slum community and how these incomes overlap with the rest of the population. The distribution of income among urban households is indispensable to assessing housing policy. The distribution of income evolves constantly and in a different way in each city. Earlier, the establishment of the traditional income categories such as EWS, LIG, MIG etc. were an attempt to understand housing needs based on income. Unfortunately these categories have been used as ―norms‖ to establish prospective benefits or even housing ―rights‖ rather than to quantify demand and capacity to pay. We suggest that each city establish and constantly monitor the distribution of households‘ income in order to ensure its housing policy is responsive to changes in demand. With the data available we have estimated an income distribution profile for 9 Mumbai and Ahmedabad (Figure 4a and b). Incomes are shown at INR 2,500 intervals from 0 to INR 100,000 per month. Each income profile includes 2 graphs, an histogram showing the number of households in each income interval (on the primary vertical axis on the left) and a cumulative curve showing the percentage of total households below a specific income (expressed on the secondary vertical axis on the right). The data shown on Figure 4 shows how useful accurate information on city- wide income distribution can be for setting housing policy. The profiles of household income in Mumbai and Ahmedabad are markedly different. In Mumbai is a more prosperous city (median income is around INR 20,000 per month and average income is 40,000 as compared to a median of 15,000 and a mean of 28,000 in Ahmedabad) but Mumbai has a far more substantial slum ...
Citations
... Historically, Indian city planners have had an implicit bias toward low-density development (Clarke Annez et al. 2010;Patel, Byahut, and Bhatha 2018;Gray 2022). Through building regulations, planners have stunted the growth of cities-vertically and horizontally. ...
... Beyond widening the implication of the private sector, slum policies framed in the neoliberal paradigm appeal for the market inclusion of slum residents demanding their participation to finance the slum redevelopment. While some criticise such neo-liberal emphasis on market and the changing role of the state from provider to enabler, others recommend to review the role of the state and to facilitate the efficient functioning of markets (Annez et al. 2010). ...
... 27). On the contrary, the house design allows to leave the courtyards open and to share them between more households, in the intention of Hunnarshala of favouring a collective use of the space. ...
... This was possible because they built by themselves the houses, they have no contractors" 26 .While each family built its house, few beneficiaries working as contractors helped related families to prepare the centering and to manage the construction site of their houses. For example, K.M. (group 6), who had experience as a contractor in Kacch, built only his own house but helped his brother to design his joint house where he lives with the father, as well as some houses of other families27 . The households' autonomy to build their own houses facilitated by their employment in the construction sector, allowed the majority to realize the project in a shorter time compared to the other project sites: in six months, around 30% of the households managed to finish the construction of the roof and occupied the houses even though they were not finished, and a year later more than 80% of the households were already living in the houses. ...
This thesis studies the role of small cities in transforming slum policies in India. The aim is to examine the emergence of an owner driven model of slum rehabilitation in Bhuj, an Indian small city, capital of the Kacch district in the Gujarat state. This city was largely rebuilt after a severe earthquake in 2001. The thesis analyzes the implementation of a pilot project in Bhuj within the framework of the national policies for "Slum-free Cities" and seeks to understand how the planning and management system underlying the model are responding to the specific conditions of slums located in small cities, which are rarely studied. The research is based on several sources and methodologies: on the one hand, semi-structured interviews with the inhabitants, NGOs, builders, local government officials and political and economic actors, on the other hand, the analysis of project documents and development processes in the city and its slums. The research shows how the slums in Bhuj have been at stake since post-earthquake reconstruction. The engagement of a local elite mobilizing slum dwellers to adapt national policies to the context of small cities is linked to the recent globalization of the region. However, far from appealing to outside investors, this policymaking process highlights the influence of the ideas of co-production, sustainable and progressive urban development and respect of the regional identity. The partial success of the pilot project prevented to scale-up the model. Shortcomings emerged in the management system and diverging interests among stakeholders have hindered the central role of the inhabitants in slum redevelopment.
... Urban land markets have remained unresponsive to housing needs in India (Brueckner and Sridhar 2012, Annez et al. 2010, Bertaud 2014. Indian cities have some of the most stringent urban land regulations, which reduce the elasticity of housing supply and tend to raise prices (e.g. ...
We use data from the universe of approximately 3,000 ongoing formal real estate projects in Mumbai to show that 27.3% of the projects and 42.9% of the built-up space is under litigation. Average construction time is 8.5 years. Using OLS and matching techniques, and controlling for other factors determining time to completion including location, developer experience and project size, we estimate that litigated projects take approximately 20% longer to complete than non-litigated projects. A variety of robustness tests are consistent with this finding. We address potential endogeneity concerns using an instrument ’ the neighborhood’s propensity to sue. The increase in time to completion increases the total cost of building by at least 30%. We identify a small number of litigated projects in the Bombay High Court dockets and find that so-called Public Interest Litigation, litigation begun by people outside the contractual process (i.e. not apartment purchasers, residents, or contractors), appears to be responsible for a significant share of project litigation.
... Dharavi lacks proper sanitary facilities, toilets, and adequate potable running water, yet the population size continues to grow. Annez et al. (2010) in her study remarked that land markets and land policy, namely, the Maharashtra Rent Control Act of 1999, were major causes of the bottlenecks to affordable housing supply for the urban poor as it highly regulated the market and mismatched prices and household incomes. Patel (2010) highlighted that despite the poor living conditions in Dharavi, the area has a strong pull owing to its unique characteristics of an estimated 1.3 billion land value, location at the intersection of two major railway lines, and close proximity to Mumbai's CBD and affluent suburbs. ...
Kibera and Dharavi shanty towns typify many other slum conditions as they developed from the early twentieth century. In addition, they allow for a comprehensive picture of the root causes and driving forces for shanty towns which can significantly inform the designing of slum upgrade projects and show-case relevance of shanty towns in national development. This paper provides a historical assessment of slum policies in India and Kenya and further aims to unravel the fundamental endogenous and exogenous factors that affect the development and subsequent growth of shantytowns in Dharavi and Kibera. The findings of the study show that the success of shanty town management strategy depends on whether the root causes of shanty towns and the significant economic and social value to the urban poor are understood.
... Economically irrational building regulations have also been shown to fuel the formation of slums as well as restrict the supply of affordable housing (Patel, Byahut, and Bhatha 2018;Lall, Wang, and Mata 2006;Annez et al. 2010;Sivam 2002). Even in Chinese cities, there exists a significant gap between what is the permissible quantity of privately optimal land development determined by the market for land value maximization and the regulatory FAR which imposes a highly restrictive constraint on urban land development. ...
This paper examines the urban morphology and built form of Ahmedabad, a large and rapidly growing Indian city, to determine land utilization efficiency. It provides a nuanced understanding on how sub-optimal land development patterns emerge and how land is consumed under private and public domains. Several urban form parameters are analyzed, including public streets, building footprints, and public and private open spaces. The results show that land utilization in Indian cities is sub-optimal, with much less land available under public domain, and much more land consumed as private open spaces in the form of margins and setbacks where there is excessive fragmentation. It suggests that Indian cities should examine and rationalize their planning processes and regulations to improve land utilization outcomes.
... Data assimilated from various secondary sources (such as newspaper articles, report and field surveys), show that, the average cost of one bedroom kitchen flat (625e750 sq ft) in the city is around eight million Indian Rupee and that of a two bedroom kitchen flat (850e1250 sq ft) is around 15 million Indian rupee. With the distribution of monthly household income shows that 25percent of the households in Mumbai have income that is less than INR 12,500, a median monthly income of INR 20,000 and nine percent have income in excess of INR 60,000 per month (Clarke Annez, Bertaud, Patel, & Phatak, 2010). ...
... Moreover, making room for more urban amenities such as open spaces, social infrastructure, parking areas, and ancillary activities along roads (bus stops, kiosks, paratransit stands, and so forth), and accommodating the vast informal sector in urban spaces will be a challenge. Policy changes are required to remove the constraints on the supply of land and to increase the possibility of formal housing markets to reach lower-income groups (Annez et al. 2010). ...
Higher average population density, which is a compact city ingredient, is one of the major characteristics of Indian cities.
However, there will be an increase in urban built-up area in growing Indian cities, and gross densities may decline, resulting in sprawl.
As an adverse impact, more land for urban use and more fuel for transport will be consumed. This study explored the possibility of handling
urban densities to contain the expanding cities through compact city policies. It examined the recent changes in built-up areas and the pattern
of population density in eight selected million-plus cities in India between 2000 and 2010. The spatial distribution of population within these
cities was studied through density profile, density gradient, Hrel, average travel distance, and dispersion index. This paper concluded that
built-up area densities in a majority of the million-plus cities studied are increasing and the cities are perceived as becoming compacted. The
patterns of changes in density distribution indicate that, in half the cities, the increase in density is largely in peripheral areas, and hence the
cities are perceived as dispersing. The paper examined the possibility of allowing densities to increase in Indian cities
... As per the current scenario, there is a deficiency of affordable housing for low-income groups (LIGs) in the formalised housing sector. As per Clarke Annez, Bertaud, Patel and Phatak (2010), in Mumbai, almost 65 per cent of the available affordable housing stock is 'informal' in nature, out of which 63 per cent amount to 'slums' and 'chawls'. Only 35 per cent of available housing stock is formal in nature, including LIG, high-income group (HIG) and medium-income group (MIG) housing. ...
Urbanization leads to the densification of built-up areas, and thereby increases surface heat island intensity—which is one of the growing concerns in the rapidly urbanizing cities. Another notable aspect of cities like Mumbai is the uncontrolled growth of informal slum housing clusters, which have emerged as a significant urban built form in the landscape of cities. This study presents a case of Mumbai that aims to explore the linkages between slum housing—here referred as ‘slum urban form’ (SUF)—and surface urban heat island (SUHI) supported by spatial-statistical analysis. The magnitude of the impact of urban form on SUHI, measured by land surface temperature (LST), is examined using Cohen’s d index, which measures the effect size for two groups—SUF and ‘formal’ housing—on LST. The results confirm a ‘large’ effect indicating a significant difference in mean LST between the two groups. The spatial analysis reveals a statistically significant spatial clustering of LST and SUF (p-value < 0.05), and bivariate local indicator of spatial association (LISA) confirms that the spatial association of SUF is surrounded by ‘high’ LST (Moran I: 0.46). The exploratory spatial analysis indicates that the contribution of SUF in elevating SUHI intensity is more than the formal housing areas and has increased vulnerability to heat stress. The results were validated on the ground using environmental sensors, which confirms the susceptibility of SUF to heat stress.
... Much of the discussion on affordable housing 3 in India has focused on the supply-side constraints within urban land markets that raise the cost of serviced urban land, making housing unaffordable. It is well understood that land is limited and is being used inefficiently, resulting in high cost of both land and built space (Sivam 2002;Bertaud 2010;Annez et al. 2010;Gandhi 2012;Gopalan and Venkataraman 2015). However, unaffordable housing is more than a factor of restricted land supply or low FSI stipulation. ...
... For instance, in Mumbai, severe shortage of land and restrictive regulations have pushed up property prices so much that only 5-6% residents can afford a formal sector home and 54% live in slums (Gandhi 2012;Patel and Phatak 2014). Local governments are not able to realize larger public benefits such as providing affordable housing to millions of poor slum households (Annez et al. 2010;Bertaud 2010;Sridhar 2010). ...
... Formal housing supply is determined by compliance to a variety of regulations, including land ownership and title, conversion of agricultural land to urban use, land-use zoning for residential use, layout and subdivision regulations, site planning regulations such as minimum lot size, ground coverage, setbacks, density, FSI and parking, and building and construction standards (Patel and Phatak 2014). Regulations directly influence the quantity and cost of affordable housing built within the formal housing market (Annez et al. 2010). They determine the cost of construction and the quantity of livable space that can be built on a parcel of land. ...
Cities in developing countries seldom consider the cost increases that regulations
impose on development. To build legal housing, developers must meet a high
minimum cost threshold established by mandatory standards. Many standards impose
costs on building construction, make them less affordable to low-income households,
deprive them access to legally built housing, and fuel the formation of slums. This
study analyses the impact of relaxing a few mandatory building and site planning
regulations on the cost of small two-room homes in Ahmedabad by developing two
alternative layouts for the same site, one in accordance with prevalent regulations, and
another after modifying a few regulations. It shows that rationalizing regulations can
reduce housing cost by 34% and increase supply by as much as 75% without
significantly lowering quality or compromising safety. It also shows that for a large
portion of poor households, the costs imposed by mandatory standards are not trivial,
and have a high impact on the affordability of legally built housing. It recommends that
if municipal authorities are interested in tackling the rapid growth of slums by
expanding the supply of affordable housing, they should critically examine their
building regulations and modify them to address the housing needs of their low-income
residents.
... And surprisingly, around 11 million stocks are lying vacant or unused (MHUPA, 2012a). On the other end, researchers have shown that "the units vacated are precisely the ones that would allow the more affluent slum dwellers to move out of slums and afford older units in the formal market" (Annez et al., 2010). If that was true, 11 million housing stock would not have been left vacant or unused. ...
Affordable housing for urban poor is one among the hot button issues among all policy makers and planners in countries of global south. Grand schemes with extravagant promises in the formal sector and gigantic hope for informal sector, to capture the opportunity at bottom of pyramid, are simultaneously trying to curb the problem of affordable housing shortage for urban poor. Even though private sector does not purposely seek to cater housing for lower income sections, yet large quantum of investment have been witnessed in housing for the urban poor. It is well known that in a free market tussle, the highest bidder is always the winner. This has been a major reason for creation of artificial shortage of housing for poor. And the scenario is worse in case of public housing, where, half of the units are either left purposeless or used by ineligible users, largely due to risk of impoverishment and improper post occupancy vigilance. The magnitude of post occupancy problems being unexplored, the objective of paper pertains to looks at the challenges and issues in sustaining targeted outreach to intended beneficiaries in housing supply models for urban poor. The paper elaborates distinct challenges through three housing supply models in Ahmedabad, India. The models are Rehabilitation Housing, Subsidized Housing by government and market provided Housing. The method is mixed method i.e. qualitative and quantitative research using primary and secondary data sources. The critical analysis of effective outreach is carried by studying policy rhetoric in each of the models to on ground veracity in the post occupancy stage of model by assessing end user satisfaction in each model.
