India's Housing Challenge May Be Underestimated

In large Indian cities, homelessness is not always a fleeting problem. This may not be true of cities elsewhere; in New York City, for example, only six per cent of the homeless remain so for more than six months. But in Indian metropolises, people live on the streets for decades.

Estimates vary, but in 2005, World Bank researchers estimated that there were about 1,00,000 such pavement dwellers in Mumbai's Island City, and many of them had been around for over 20 years. World Bank researchers also found that 10 per cent of Mumbai's police force lived in slums and that 60 per cent of the slum-dwellers were above poverty line. According to Society for Promotion of Area Resource Centres (SPARC), a non-governmental organisation, about a third of such pavement dwellers are not poor. This means that low income levels do not fully explain even permanent homelessness. The problem lies elsewhere.

The Narendra Modi government's 'Housing For All by 2022' mission is based on the assumption that there is a shortage of nearly 18.9 million houses in urban India. While debating homelessness in India, politicians, activists and journalists often point out that about half the people in Delhi and Mumbai live in slums. Nearly 20 per cent of urban India lives in slums. But pavement-dwellers are not slum-dwellers. This means that the scale of the problem is much larger than government estimates indicate. According to government figures, the number of pavement-dwellers in Mumbai in 2014 was 57,416. But activists who work on the problem of the homeless claim that there could be over 300,000 such pavement-dwellers.

One of the reasons why official figures underestimate homelessness is that the economic reforms of the early 1990s made India vastly more prosperous. This led to a greater migration to urban areas, even if this does not always show in official figures. When people moved to metropolises, the demand for housing was much greater than the supply.

Indian cities, however, are unlike major cities of the world that allowed the supply of housing to rise. There are too many restrictions on what to build, where to build, how to build, and how tall buildings ought to be. The people who live in informal settlements are often evicted, or live in the fear of being evicted. This contributes to the problem, forcing many to live on the pavement. So, it is not surprising that the shortage of housing became a problem that is difficult to resolve. The Indian government considers 249 million Indians as homeless.

No other country faces a housing  problem of such a large scale. So, it is not surprising that the Modi government's mission to build houses for everybody is seen as the most ambitious housing programme in the world at present.

The fact is that no country was able to solve the housing problem by building houses for the homeless. The only exception, though, is Singapore, whose mission to make housing affordable was more successful than those of other countries, though the system has some major flaws. It is important to note that Singapore is a city state. It is fairly easy for the government in a prosperous city state to build houses. But this is not true in a large, diverse country like India, which has a population of 1.25 billion people, of which 249 million are homeless.

The scale of the problem is not the only factor that makes India's housing challenge unique. India's low-income households pay more per unit for housing than the wealthy do. This may seem counter-intuitive, but this is true. Even though the wealthy live in expensive houses and the poor in inexpensive ones, the price the poor pay is greater relative to the land they occupy and the quality of housing. What does that imply? In Indian cities where it is difficult to build tall, low-income households pay more while competing for living space.

When the government considers nearly 20 per cent of the population homeless, the best it can do is to ensure that the land markets are free, property titles are secure, the real estate developers are free to build and that mortgage markets function properly.