How to bridge the housing shortage in urban India

A new way of calculating the urban housing shortage in the country has yielded a remarkable insight. Urban India faces a duality. Even as there is a huge shortage, of 18.67 million houses, as many as 11.09 million are lying vacant and their number is growing.

The latter is largely because many who are better off have barely-used second homes -- some are holding on to houses for purely speculative reasons and many will not rent out for fear of being unable to get them back, courtesy rent control laws.

The good news is that in the last decade the urban housing stock has grown by 51 per cent. The bad news is that over 95 per cent of the housing shortage is accounted for by those at the bottom of the pyramid -- economically weaker sections and low-income groupings.

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It is possible to argue that if you take care of urban poverty, the housing shortage will take care of itself.

But urban poverty is not easily banished. Poor people migrate to urban areas in search of jobs and remain there to get a higher income than what they would get in rural areas.

What is more, the urban poor – maids, vegetable sellers, lower-end drivers, etc – perform economic functions without which the urban economy will be disrupted.

Make it possible for them to live in better housing, and you will end up incentivising higher migration. This is a central dilemma.

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Good statistics are the first step towards better policy, but two points need to be made. There is a unique attempt to distribute the homeless into those living in self-occupied houses and those living in rented houses.

How can you be renting a roof over your head if you are homeless? The other oddity is that there are only half a million homeless people in entire urban India.

All the pavement dwellers and migrant workers living in shacks at construction sites should add up to much more.

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What is of real consequence is the solutions being mulled to meet the official goal of removing much of the housing deficit by the end of the current Five-Year Plan (2012-2017).

The technical committee that has come up with the new housing numbers has suggested bringing vacant houses into the market through taxation and incentives.

This will not immediately help the po#8744 however, through a trickle-down effect everyone will move up a step or two, bringing up the lowest rungs with them.

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Another key suggestion is to design subsidies for those at the bottom so that they can own, or live in, proper houses.

But the report also discounts the potential of what can be achieved by encouraging in situ improvement, like adding a room to accommodate a married couple or put a pucca roof to replace plastic and tin sheets.

But, more importantly, a housing ministry official has been reported as saying that a new affordable housing policy, expected in a month, will increase floor space index (you can build higher) and introduce transferable development rights, ease density norms (a major demand of builders) and relax compulsory parking norms.

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If this is all, it will do nothing to ease the housing shortage among the urban poor, which is where it really exists. It will worsen urban congestion and create greater pressure on infrastructure in areas where it is already highly stretched.

It will only oblige builders who are in league with politicians. They ensure through various devises that the supply of urban land is carefully regulated so that property prices do not crash with large new housing stock coming into play.

A lot can be done if the housing ministry heeds ideas contained in its own programme, Rajiv Awas Yojana.

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The Rajiv Awas Yojana outlines the scope for in situ development of slums, which can meaningfully change the lives of the poor. The way to go about it is to involve slum dwellers.

They will have to take ownership of their area's development, to create better homes that they will not want to sell and move into another slum.

This will happen if a developer is given a slum to build so many houses for slum dwellers and flog the rest of the floor space at market rates.

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What can slum dwellers do? They can first go for drainage, sanitation, paved walkways and drinking water.

Then comes redoing shacks so that the rain and the damp do not make them incubators for diseases.

The Rajiv Awas Yojana speaks of viability gap funding and property rights for slum dwellers. In an improved slum, a maid can then live with dignity and work in the apartment block nearby.