The Puzzle of Affordable Housing in India - What Do We Need to Understand About it to Solve It

Affordable housing is a subject that can generate a lot of passion from every walk of society. Yes, affordable housing is a need. But what is it needed for? Who is it needed for? Where should it be? No one seems to be able to answer it properly. What constitutes affordable housing? What is the paradigm through which it should be seen? These are questions that fundamentally need to be addressed.

Housing is a function of demand and supply, or so is the thinking usually. However, it is not so simple. Housing is a response as well to the economic functioning of any city. Economic geography’s Bid Rent Theory, despite its limitations, points out that housing prices decrease with distance from a city center due to competition for prime land. This theory came up to explain the lack of affordable housing in the city centre, and was primarily linked to the idea of a “Central Business District (CBD)” driving a city’s economic growth. On the surface, it seems a fair theory, and one may assume that the CBD model is an indicator of how cities should be “planned”. However, a natural corollary has been adopted to the full for Indian cities - attempt a “spread out” of the city by creating several “mini CBDs”, consistent with the principle of multiple nuclei theory of Harris and Ullman from 1945 that advocated for multiple CBDs instead of one in a city. Of course, even this idea would have some limitations, but you see elements of it playing an important function.

The idea that there should be an economic anchor to the city is not alien to India. Shilpa Shastra talks of the city design, and conceives that the site should be divided into grids or mandalas ranging from 2x2 to 10x10. Planned according to the Prastara type of layout, which gives prominence to the cardinal directions. As a result, the plan of Jaipur’s walled city was a grid of 3x3 with gridlines being the city’s main streets.

Prastara Layout Style for Cities as per Shilpa Shastra

 

Key Plan of the Walled City of Jaipur 

The Example of Mumbai Metropolitan Region

Let us take the example of the Mumbai Metropolitan Region (MMR). The Bandra-Kurla Complex (BKC) helped expand office space and eased the burden on South Mumbai. However, contrast this with Navi Mumbai, standing since the 1970s, which saw growth only after the SEZ was created. What it shows is that simply creating housing does not solve a problem - housing demand tends to follow economic activity instead. Kalyan, Thane and other regions around Mumbai however still continue to depend on the original city boundaries of Mumbai for sustenance, particularly the original southern Mumbai - a look at the commercial map use speaks for itself on this fact.

Commercial Map of Mumbai. Note the South Mumbai concentration

This brings us to a contrast. Despite the concentration of economic activity and the spread out, we still see patterns of organic growth - the decentralization of economic activity fails to take place. This is a contrast to the idea that you can plan economic growth. So should housing follow economic growth, or should economic growth follow housing? 

The ideas of Patrick Geddes’s triad framework of “Folk, Place, and Work” representing the interconnected elements of organism, function, and environment  influenced urban planning of India deeply. As per biologist and urban planner Geddes, the environment influences the organism through functional interactions—where geographic and climatic processes shape human lives. Conversely, human activity, through economic processes such as farming and construction, transforms the environment. Thus, people and places are dynamically linked and constantly evolving through the element of work. As a result of this framework’s centrality to our planning, we have a situation where we attempted to build housing away from centre of economic activity. This creates a fundamental situation where we kept pushing out affordable housing towards the edge of the city boundaries, usually the peri-urban areas, which makes it difficult for people to commute and subsequently lose wages.

Going back to the Mumbai example, it is well know that affordable housing was not a priority for the posher centres of Mumbai - as a result, a sprawl of slums came up closer to those places. Again, looking at Mumbai, it is well known that Dharavi is located in the heart of Bombay, in the original seven island map. 

Dharavi literally forms the heart of today’s Mumbai

The Struggle to Plan is a Struggle to Control a Resource

Clearly, the struggle of conventional Indian urban planners to control housing and the quest to “plan out” zones seems too good to be true. That is indeed the case - it is too good to be true. Planning is a structured, deterministic exercise that rests on the premise that you can “predict” the number of people who will live in a certain area, a prediction that is always off target. Zoning of course is not an old, ancient idea for India - if you look at Arthashastra, the concept of a city layout is eerily familiar to the Geddes framework, albeit thought from a purely statecraft perspective.

Kautilya’s layout plan for a city 

Furthermore, in recent years, it has been realized and advocated that work places should be closer to places of residence. While the original self sustaining community model of city neighbourhoods remains popular, the centrality of locality has once again come to the fore. This is not a new theory of course - the 15 minute city theory has derived from the historical belief that any city in the past used to be designed such that you could reach the city centre from the periphery within 30 minutes. 

This brings us to a fundamental question that pretty much premises the very raison d'etre of urban planning - Should we treat land as a finite or an infinite source? We see this question becoming an important anchor to justify various kinds of decision making. Mumbai planners will always argue that there is scarcity of land; yet, when it comes to radiating outwards, there has been no dissimilarity with any of the other cities like Hyderabad or Bengaluru, albeit in the sense of shape and direction. Clearly, this inherent contradiction comes from the interpretation of the definition of urban planning objectives that many theories, be it Geddes’ framework or even Ebenezer Howard’s garden city concept, or many other concepts come about - creating healthier, high-quality living environments to counter the overcrowding and pollution of industrial-era cities. 

For most urban Indian planners, there has been aversion to free land availability. Bear in mind that land availability should not be seen the same as land resource availability. During the third plan period of 1961-66, urban planning as conceived in the western countries was visualized. Industries being kept far away to maintain environmental aesthetic became the norm. Government became the land aggregator, owner and distributor to ensure stable, orderly development and control the price of land in cities. Further, measures such as freezing of land prices, acquisition and development of land and taxation of vacant land were suggested to control and regulate the urban lands. Further, focus came up on “improving the slums”, inspired by Indonesia’s Kampung improvement program. What it caused was the opposite - further growth of slums happened non-stop in Mumbai, while affordable housing continued to remain in short supply. A colluded, convoluted, corrupt and till recently extremely inefficient real estate market instead cropped up that continues to dominate the skylines of Mumbai to this day. Thus, for the same mass of land, its availability per capita kept reducing in Mumbai, as institutionalization of substandard living kept getting mainstreamed in the names of rights. Subsequently, it led to the model that any builder could collude with a handful of people to “open more land” for development at high prices in the name of removal of unauthorized slums. However, neither was the land ownership done successfully by the government for Mumbai’s housing market, nor was infrastructure to support housing built accordingly. 

Will Freeing the Resource Make it Easier to Construct Housing?

The answer to this question is a mixed bag. The processes and red tapism, especially at land authority, safety, municipal and many other departments helps to raise the price of any project in India. Then there are issues related to taxation that also keep this market a problem segment for real estate players, as Niranjan Hiranandani pointed out in a statement last year. 

One point in particular in the case of Mumbai was the Ready Reckoner Rate or Circle Rate. In most cases, it is a fact that circle rates keep getting increased by municipal corporations to ensure correct taxation on property at the time of registration. However, the perverse effect of the rate system is that it creates an artificial inflated bottom. The system that seeks to label properties based on their locations instead of their worthiness ends up creating an artificial prop to the real estate market. For illustration purposes, a house in Colaba, whether built by Lodha or MHADA will have the same minimum price only because of their location. This is an absolutely insane system that creates serious distortion.

As an example, slum redevelopment effort in Dharavi being led by one of India’s largest entrepreneurs can definitely become a lighthouse project. Long overdue, there are many layers to it that can significantly alter the way redevelopment takes place. The test case for what happens is going to set precedent for the rest of India. Can there, for instance, be a situation where the resettler is given an option - a smaller house there or a larger house elsewhere - to choose from? The idea that slum workers are unproductive is a myth in Dharavi - what is needed instead is to give them houses in mixed use zones.

Speaking of which, mixed use zoning is another major problem that really can solve a large number of our problems. In India, mixed use zoning in urban planning has been a dirty phrase meant to be looked down upon. The irony is that the same planning community often appreciated the European cities that mainstreamed the mixed use zoning system, leading to amazing walkable, lively districts that also have affordable houses at least in terms of rent if not price. Mumbai has done well with it, as seen in the case of BKC and Lower Parel - the same should be a mainstream everywhere. The model of the way the city of Tokyo emerged, however, gives us many lessons on how organic growth, coupled with innovative thinking, can create impressive results.

A vibrant Tokyo that has many aspects to it is a great inspiration (sources given in text above)

Having said that, land availability will definitely create an impetus. It is not so much about land being acquired by the government; the deal is to ensure that land acquisition is not a pain. India’s land acquisition laws need a new paradigm which includes redevelopment for housing in urban areas as well. The system as such makes it expensive and cumbersome. Instead, redevelopment should be a free business the same way old bungalows get redeveloped in cities like Delhi - entirely the business of the tenants. Sharing agreements can be suitably discussed and drawn up, and such projects should also have the option of significantly higher Floor Space Index (FSI) options. In a city like Mumbai, the FSI should be at least 5 for all projects, and not just for slum redevelopment. Of course, the plan should involve utility service providers to ensure adequate upgrade capacity if the load is increasing significantly, but in most cases, that rarely is a challenge too difficult to handle.

There is no standard solution or single silver bullet that can solve the complex problem. However, to solve the problem, the first step needs to be taken, which is identifying the root cause correct. Hopefully, we will see that soon.