#RailBudget2016: To Make Housing Affordable, We Need Super-Fast Trains On Dense Traffic Routes

While many romanticise about cities where most people walk or cycle to work, and traffic congestion and pollution are almost non-existent, such cities may not exist in the real world. Why? In a city like Mumbai or Delhi, for example, houses are often situated in areas where there are job opportunities nearby. When a household newly migrates to such a city, they are not likely to search for jobs only in firms which are close to their home. Similarly, companies need a large labour pool from which they can choose employees; they do not search for employees in the same neighbourhood. It is in this context we should examine the Railway Budget 2016-17.

Announcing the Budget for the financial year 2016-17, Railway Minister Suresh Prabhu said there would soon be super-fast trains on dense traffic routes. This announcement is important because companies and employees need to easily find one another.

Housing will become more affordable when transportation is faster.

People do not like commuting too much. This is true even for low-income households, partly because commuting is expensive and partly because commuting is tiring. Let us, for the sake of an argument, assume that one hour is the acceptable commute time in a city like Mumbai. If the speed of the trains on the Mumbai suburban network is 50 kms per hour, the effective radius of the city is about 50 kms. Job opportunities should be situated at a distance not far than 50 kms from the nucleus of the city. However, if the speed of the trains become 100 kms an hour, the effective radius of the city will become 100 kms. Then, jobs could be situated at a distance not far than 100 kms from the nucleus of a city.

In such a city, housing will be far more affordable for people who want to be part of the larger labour market. When the effective land supply doubles, the price of valuable urban land will decline, too. This is because land prices are dependent on the supply and demand for land. When there is more land available, prices are quite likely to fall. In developed nations, the acceptable one-time commuting time is 25-35 minutes. In New York, for instance, about seven per cent of the people travel more than an hour to reach their work place. In Mumbai, for many people, travel time ranges from one to three hours. It is important to note that New York is a highly populated and dense city. Few Indian cities are comparably dense.  

The average commute time in Mumbai, according to the latest estimates, is 47 minutes. This is because large numbers of people live very close to their workplace as transportation cost is highly expensive relative to their income levels. One way in which people can cut down their commute times in Mumbai is by traveling by trains, which are overcrowded. (Due to this, on an average, about nine people die on Mumbai's suburban railway network in a day. Also, in a Mumbai train there are 14-16 people packed into one square metre space during peak hours.). Unlike cars, trains offer speed but they are still not fast enough. Making trains faster will not solve all the problems that Mumbaikars face but will definitely cut down travel times, allowing people to access a much larger labour markets.

Even though buses carry most public transport users to their workplace in most Indian cities, in cities like Mumbai, suburban trains play the role of buses. In fact, in Mumbai, the suburban railway network plays the role metro plays in Delhi. Some studies suggest that in Asia and Western Europe, a 10 per cent increase in speed will expand the labour market by 15 per cent and productivity by three per cent.  In fact, the major reason why many Indians live closer to their workplace and are constrained in their job opportunities because they cannot afford fast transportation. This would become even more important when Indian cities become more dispersed.

Cities like Chennai and Delhi are already dispersed, with jobs and houses located over large distances. In such cities, faster trains are even more important, because the distance between houses and offices is already huge.