?Affordable Housing is Not Possible in Mumbai or Delhi?
Wednesday, July 27, 2011
Vishnu Swaminathan, director of Ashoka Foundation which is undertaking a low-cost housing initiative for the poor, believes that such projects are not possible in the major metros where land costs are too high and delays add to the cost
The government estimates that the country will see a shortage of 26.53 million homes by 2012. Ashoka Foundation, the global association of social entrepreneurs for change, has in one of its several initiatives, launched low-cost housing projects focused on the poor across the country. The effort has been successful in Ahmedabad, but the association believes that a similar programme cannot be replicated in Mumbai or Delhi. Vishnu Swaminathan, director of Ashoka’s ’Housing for All’ initiative discusses the efforts and experience in the housing area.
Moneylife: Almost all the housing schemes for the poor and low-income groups have failed miserably. Why is affordable housing such a difficult aim to achieve?
Vishnu Swaminathan: There are many factors. First, let us consider the situation. Almost 90% of the people living in big cities do not have an income statement, which is necessary to get loans and identity cards. And the ’poor’ is not a homogeneous group, as it is perceived.
The low-income segment is highly fragmented: there are households that earn as much Rs25,000 a month and can afford refrigerators and television sets, but don’t possess identity cards or income statements. Most of the banks will not loan out to such people.
ML: So why not turn to government grants?
VS: Government grants take years to materialise and in many cases projects suffer from poor conceptualisation on the ground. The promise of free or heavily subsidised social housing has undercut market-based housing projects in several countries, where people prefer to wait for a long-promised subsidised home rather than buy an affordable one at market prices. Such programmes disincentivise the private and social sector actors.
ML: So how do you tackle the problem?
VS: The focus should be clear. We are looking at 250-550 square feet homes in urban areas for one family that usually consists of more than four members. So, at the most, these can be 2BHK flats.
Three groups should be on board for these projects. NGOs can arrange for identity cards and persuade banks and financial institutions to allow these people to open bank accounts and provide income statements. The government, on its part, can arrange for subsidies on land or taxes, and clear the projects first.
And, not to forget, the architects should be consulted, because it is they who will design the projects and the homes. For slum dwellers, the community is the centre of life and they would like to be close to some amenities like repairing shops for vehicles and tools and marketplaces. The project should be designed accordingly.