Ruban Selvanayagam

At Rio+20: Will the Realities and the Possibilities for BoP Housing Truly Be Addressed?

Amongst the various high-level meetings at the Rio +20 summit this week, the underlying hope is that the delegates will not only (temporarily) steer themselves away from the ongoing global economic turbulence, but also from the theoretical dialogue that frequently characterizes events like this.

With it being statistically demonstrable that base of the pyramid housing demand will have increased by some 291,200 new units by the end of the three days, key strategy building within such a short time is simply not going to be achievable. At best, therefore, we should probably expect affirmations of the seriousness of the problem combined with token discussions related to initiatives such as “Cities without Slums” as well as the complementary work of UN-HABITAT, UNEP, the World Bank, other multi-laterals and organisations involved in the sector.

Indeed, governments – which are rarely put on the spot in relation to the matter – are well aware of the fact that the UN Millennium Development Goal of reducing slum presence is very behind previously stipulated targets, but continue to adopt an “arm´s length” attitude. Yet the issue of slums cannot be disguised so easily and their rapid expansion continues to remain one of the largest thorns in the side of achieving genuine global environmental sustainability. To make matters worse, a growing consensus is also emerging that insalubrious living conditions may well have to be accepted as part of the developing world´s future.

On the one hand, such outlooks certainly move against the grain of “advancing social equity,” stated as one of the core objectives of the conference and present good reason to raise serious questions about what sustainability actually means in the wider context of international development. Yet on the other, the lagging state of the sector does not solely stem from a distinct lack of willpower, but also a number of fundamental micro and macroeconomic bottlenecks that continue to place a heavy weight on achieving even negligible progress.

Primarily, with the majority of intense slum presence and growth occurring in metropolitan regions and the emerging “mega-cities” – in the trade-off between low and high-income real estate development objectives, the latter invariably prevails. Fuelling the fire are the entangled complications related to land tenure and ownership and, in regions where housing deficits are particularly acute, corruption is the norm. Indeed, the delegates will not have to look too far to see that in Rio de Janeiro itself, a number of communities are currently in an ongoing battle related to their rights to remain on land “allocated” for the upcoming World Cup in 2014 and Olympic Games in 2016 – a microcosmic indictment of the minimal protection offered to the BoP when push, quite literally, comes to shove. (For more on this issue, check out a New York Times opinion piece here).

The viability of BoP real estate construction business models further makes creating a holistic framework a challenge. Along with this speculative behavior of developing world land markets unable to cope under the intense pace of urban sprawl, inflationary pressures on other core construction inputs make returns when catering to this demographic unattractive – despite a growing presence of support initiatives such as Brazil’s Minha Casa, Minha Vida (“My House, My Life”) and the unprecedented demand levels. At the same time however, in the last year in particular, the impact of this lack of interest has come to light as sector interests have witnessed the implications of saturating (over-supplying) markets with middle- to upper-income housing stock – reinforcing the short boom-bust cycles from which many developing countries long to remove themselves from.

Perhaps the most fundamental transformation necessary is the eradication of the “blind-eye” attitudes: with high-quality housing for low income groups being dismissed as an impossibility, even by many prominent sector leaders, it is little wonder why there is hardly any cohesive progress. While some notable work is being undertaken in relation infrastructure that may directly and indirectly benefit those at the BoP, the pace is considerably behind what is necessary and is often clouded in undedicated and insufficient planning as well as a lack of transparency amongst other delays and complications. Then there are the so-called “alternatives” such as housing microfinance and single-storey peripheral solutions that have emerged as a result of limited budgets, risk avoidance and a lack of real ambition to truly tackle the issue headfirst.

Moving forward, therefore, there is a vital need to embrace concepts that incorporate the needs of all stakeholders (particularly harnessing the voices of the BoP themselves) via housing models that can handle market immaturities whilst building both at the necessary scale and to globally recognized quality standards. Let´s discard with the concepts that only focus on the short- to medium-term and examine how it is genuinely possible to tackle the complexities of the sector and offer every family a good quality, well located home and accompanying standard of living. For example, instead of how housing microfinance can be used to support the weak business-economic fundamentals of slum reform strategies that are increasingly filling the space, should we not be discussing how the BoP can access genuinely affordable housing finance via the world´s leading lending institutions?

This, of course, is not to be flippant about the enormity task – yet nor is it being idealistic when considering how bad circumstances really are. Brushing the issue under the carpet is no longer an option and much of the political pressure that needs to be applied at seminars such as the Future Cities & National Urban Policies must be focused beyond mere rhetoric and bare-boned ideology that is having very little force on the ground level.

Base of the Pyramid, housing, infrastructure