Housing the urban poor
Housing for the urban poor - the mantra for a round of back patting for the politician, raised eyebrows for the bureaucrat, and eternal hope for the poor! How tenable is this laudable goal?
Unfortunately, urban housing is trapped in the gridlock of outdated policy prescriptions and bureaucracy. Successive governments have taken up housing as a priority welfare activity, built a large number of houses, and allotted them to the urban poor. Most such units are heavily subsidized, with the remaining cost shared between a bank and the beneficiary.
Many problems, however, plague the existing arrangement.
With growing urbanization, demand has far outstripped supply. Further, since land is scarce in cities, its use needs to be optimized. Next, migration is a definitive trait of the urban poor and any urban housing policy needs to account for it. Finally, in the present arrangement, it is common place to find people selling away their allotted units, and moving back into squatter slums.
A substantial portion of houses in government colonies are generally sold or leased out, thereby defeating the very purpose.
Housing policies need to meet the broader economic objectives, and ensure regulated urban development. How do we help our fast-growing cities, already constrained by lack of basic civic infrastructure, to cope with the massive, unregulated influx from rural areas, without appearing unsympathetic? Ultimately, poverty elimination and other goals will be achieved only if the city is on a vibrant growth trajectory.
Any urban housing policy should prioritize that category of urban poor who are essential foot soldiers in the urban growth engine. We need to build an adequate stock of housing and create a market in rented housing for the poor. A database of beneficiaries can be prepared and they can be allotted rent vouchers. These can be allotted for one year, and then renewed, thus keeping a check on fraudulent practices such as sales and subleases. As an incentive, the house can be finally transferred to the tenant after a period of responsible habitation, under certain conditions. This arrangement will legalize the reality of sales and rental transactions of the houses allotted to the urban poor.
Residents of such colonies would not suffer from the problem of uncertainty in tenure, and will have access to all basic civic facilities. In any case, all government housing schemes now have a significant bank loan share, which the beneficiary has to repay in monthly installments. Rental vouchers would only substitute this with the rent.
A public private partnerships should be encouraged to help us leverage private resources. Given the huge demand for lower income housing and the plethora of long-tenure financing options, these ventures also offer vast potential for real estate developers.
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