By 2050, 55% of India’s population is expected to live in cities. While it has been noted that the influx of people into cities shall create a high demand for housing, it’s important to highlight that much of the immediate demand is going to be for rental housing. Given that rental rates in cities like Mumbai are sky rocketing, the demand for affordable rental housing for the lower income groups is often fulfilled by slums.
The slum serves as peculiar kind of rental housing market. The affordability of rents in a slum hinges on its “informality” and lack of services. Hence the paradox that any kind of attempt to formalize/regularize/improve the slum threatens to gentrify it. I use the term gentrify to speak about the process of displacement of the poorest renters by those who are willing to pay a higher rent. I understand that gentrification is not a term that can easily be transported to a slum because the literature, that I am familiar with, speaks very particularly about the American inner city. Yet I feel that it’s a useful term as it helps draw attention to the difference between the renting slum dwellers and the ones who come to “own” homes in the slum. The upgradation/redevelopment projects in some ways benefit those who come to “own” a house in the slum leaving tenants sensitive to rent changes at risk of displacement.
The Indian governments Rajiv Awas Yojana (RAYs program) authoritatively lays out “guidelines to create slum free cities”. It directs the local governments to increase the level of infrastructure in slums to match that of the formal city and to bring slums under formal systems of property ownership . I shall not get into the absurdity of bringing back the slum free rhetoric, but I would like to point out that the report does not examine the complexities of rental housing within slums and the fact that this process of formalization would be accompanied by a loss of affordable housing to gentrifying forces.
This brings me to the question, under these circumstances, can we find ways to preserve rental affordability? How does an upgrading city beat its inherent tendency to gentrify? I wish to begin an inventory to record the ways in which rental housing can/has been kept affordable in formal cities around the world. Any additions/subtractions/critiques to the list would be appreciated.
Ways to keep it cheap :
1. Crowd it:
The simplest way to bring down rents is to increase the number of people sharing the space. Needless to say there is a limit to how far this could go!
2. Designed for affordability: eg. Chawls, Mumbai.
Certain housing typologies tend to remain affordable because they could be inconvenient places to live in. The chawl is one such example. The chawl is a 3- 4 story walk up, dorm-like housing typology. Households rent 180-200 sq foot rooms strung around an open central courtyard and each floor shares common toilets and bathrooms. The Chawl typology makes efficient use of space and services and has successfully managed to stay affordable even in places which have soaring real estate prices. However as every household shares a common toilet, renters lack privacy.
State enforced affordability: eg Rent Control
For rent controlled apartments, the State seals the rents form rising above a fixed affordable price. However economists are quick to point out that the system is highly inefficient as it provides landlords with below market returns and discourages them from renting. This eventually brings down the total supply of rental housing in the city and pushes the rental prices even higher.
State built/ maintained: Public Housing
Public housing is affordable rental housing owned and maintained by the state. Renters pay the state affordable rents and in turn the state maintains the building. Continued maintenance is important for public housing projects to succeed but often difficult to ensure.
State subsidized: eg Section 8 housing USA
Section 8 programs, which may be project or voucher based, pay rental housing assistance to private landlords on behalf of low-income households to enable them to rent housing in the city. However this program requires continued expenditure on behalf of the state and most states are reluctant to take on the burden of rental housing subsidies.
This is a preliminary list which shall see further additions and analysis in future blog posts.