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The Challenge of Housing for All by 2022

A.K. Jain

 

The Urban Homeless

Private Housing

On an average in India about one-fourth (one-sixth in Delhi) of the population is living in the slums, bastis and jhuggi-jhompri clusters, which are mainly the settlements of the poor. The pavement dwellers/homeless comprise (about 1 per cent of total population). Traditional areas, villages and old city have about one-third of population and unauthorised colonies have about one-sixth of the population. Public sector housing and site and services provide housing to about 32% of Delhi’s population. The role of private sector in EWS/LIG housing had been almost negligible.

Slums/Basti have about one-sixth of total urban population of Delhi

The Government of India, led by Prime Minister Narendra Modi, recently unveiled the National Declaration on urban governance and housing for all. It has committed to develop 100 smart cities and housing for all by the year 2022, along with toilets, electricity, drinking water and other amenities. According to the Ministry of Housing and Urban Poverty Alleviation, the total housing shortage in India in the year 2011 was about 18.78 million dwelling units (DUs), out of which 95% DUs relate to social housing, i.e. economically weaker sections and low income group.

Evolution of an Unauthorised/Illegal Colony

An Illeagal Colony: Dense & Compact without Open Space, Community Facilities and Utilities

About one-third to one-half of the population of India’s major metropolitan centres, like Delhi, Kolkata, Mumbai, Bangalore and Chennai are living in various types of illegal, informal, unplanned and slum settlements. The following main types of areas provide housing to various income groups in Delhi:

• Slum clusters/basti
• Unauthorised colonies
• Old City /villages
• Public Housing/ site and services,
• Public Housing /built up units

Notes:

1. Figures have been rounded up for clarity
2. Government staff housing (3%) , Homeless/pavement dwellers (1%) have not been shown.
3.  As per MOHUPA (2014) EWS covers a family having income up to Rs. two lakh pa and LIG above Rs.2 lakh up to 3 lakh pa.
   

Sources: Census of India 2011, Delhi Development Authority and A.K Jain (2014) Smart Cities-Vision and Action, Discovery Publishers, New Delhi

The unauthorised colonies generally have illegally sub-divided plots, non-conforming land use and unapproved buildings. Slums and Jhuggi Jhompri/squatter clusters and illegal colonies are predominantly on public land, except few on or private lands. The illegal colonies have an average plot size of 60-200 sqm which largely cater to the MIG, while average size of a jhuggi in a slum cluster is a meagre 8 to 12 sqm, which caters to EWS. The increasing number of homeless, squatters and slum dwellers reflects inadequacy of delivery of social housing by public housing programmes. The informal solutions to the deficiencies of housing and urban development programmes in open defiance of planning legislation illustrate the extent to which popular measures regulate the process of change and provide shelter to the poor. Most of the poor live in the unplanned areas, in the slums, old city, villages, illegal colonies, etc., which remain ignored while the authorities are more keen to develop green-field areas. The informal, illegal and squatter settlements continue to face the threat of demolition and hence generate huge corruption. The people in these settlements provide essential services to the city without asking much. They have the right to city and deserve shelter and city services.

Ministry of Housing and Urban Poverty Alleviation guidelines define affordable housing with dwelling units between 21 to 60 sq. m. carpet area for EWS and LIG categories. The household income ceiling for these categories for eligibility has been fixed at Rs 8000 and Rs 16,000 per month respectively in 2012, which is now 16,000 and 25, 000 respectively (2014). Housing is intimately connected with land policy, infrastructure development, concepts of planning, land use, tenure and building regulations.  There is a need to adopt innovative systems of land pooling and to harness community and private sector resources in services, housing and development.

Land for Housing

Skelton Prefab Social Housing, Architect. A.K. Jain

According to the Town and Country Planning Organisation (TCPO) estimates, to meet the current housing shortage in the form group housing, on average density norms, 84,724 Hectares to 1,20,882 Hectares of additional land would be required. Land is the basic platform for all human activities and housing. It is the starting point of urban development, infrastructure services, utilities, public facilities, transportation, corridors, etc. With the changing times, the acquisition of private lands has become extremely difficult.  The recently notified Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 necessitates minimizing the need for land acquisition by way of planned development and controlling the urban sprawl by optimum densities, intensive development and redevelopment of existing urban areas. This is also essential for equitable distribution of the land resource and to minimize the infrastructure cost and carbon footprints of urbanization. Such an approach is visible in Singapore, Hong Kong, Shanghai, Tokyo and even in Dubai, which otherwise has vast tracts of lands. It may be suggested that owners of large land parcels contribute proportionate land for public purpose (transport corridors, parking, social facilities, social housing and public greens) against grant of incentive FAR/FSI.

There is a need to devise new options of giving compensation to the land owner by way of conversion of land use, land pooling and return, Transferable Development Right (TDR), Floor Area Ratio (FAR/FSI) and/or cash. Compensate locational disadvantage due to land return by grant of incentive FAR/FSI.  Vijaywada Municipal Corporation (VMC) under the BSUP component of JNNURM partnered with land owners of the villages and built over 18,000 dwelling units (DU). Under the MOU 40% land given to VMC was used for housing for poor under BSUP and the other 60% was returned to the owners as developed layout. Under the RAY Toolkit for preparation of Slum Free City Plan of Action (SFCPoA) models for land banking and sharing have been provided for in-situ redevelopment of slums.

High Level Task Force (2008) suggested that necessary first step is to treat “Affordable Housing” as a “Public Purpose” in order to make it a development project. The ‘public purpose’ for acquisition of land needs to be redefined. It may comprise of transport corridors (airways, railways, roads, highways, parking, freights, etc.), public utilities/infrastructure services, public greens/parks, community and public/semi-public facilities (such as health, education, defense/security, fire safety, sports, recreation, etc.) and social housing.

Planning and Design Norms

Massive development plans to get Delhit more than 10 lakh houses by 2021

Planning norms, land use, zoning, density, FAR, and building controls have direct implications in the housing affordability and costs. These need to be framed or reviewed so that these open up a new avenue for social housing and the redevelopment of existing areas. It is essential to optimise utilization of land by rationalizing the FAR and residential density. A fixed density and FAR could lead to under-utilisation of land potential and imposition of artificial limits to optimal use of scarce urban land. This is necessary to make in-situ slum rehabilitation feasible and retrieving the encroached land, part of which can be used for public facilities, utilities and green reservations.

The myth of low rise slum rehabilitation has to be abandoned, as it usually leads to illegal transfer of the subsidised plots and creation of new slums and squatter areas. Also four to five storeyed walk ups pose the problems for the elderly, sick, and disabled. It is not correct to presume that the poor cannot handle the lifts or afford their maintenance. It is an impressionistic view that high rise buildings are not energy efficient, or environmentally less sustainable. Higher FAR and densities give a range of environmental benefits, reduce travel distances and transmission losses and reduce the pressure on land, public transport and services. The Twelfth Five Year Plan (2013) cites a World Bank study explaining how FSI and ground coverage can be combined to increase densities. However, in high rise housing due care be taken to provide flexibility in use of space, creating ‘streets’ on upper floors, social space, especially for women and children and integrated facilities, utilities and work places.

The norms of mixed land use, zoning, density, FAR, and building controls should encourage and open up new areas for social housing and for the redevelopment of existing areas. To optimise utilisation of scarce urban land, differential residential density norms should be adopted. A fixed density could lead to under-utilisation of land and FAR or imposition of artificial limits to optimal use of land. The following density norms, with corresponding category of dwelling units (DU) have been stipulated in Delhi Master Plan-2021:

1. ·         Slum/EWS housing (to 30 sq.m)                         -600 to 900DUs/Ha
2. ·         Category I (above 30 to 40 sq.m)                       -500 DUs/Ha
3. ·         Category II (above 40 to 80 sq.m)                     -250 DUs/Ha
4. ·         Category III (above 80 sq.m)                               -175 DUs/Ha

In-situ slum rehabilitation pilots, Tekhand Project and Kathputhli Slum Rehabilitation Project in Delhi envisage PPP in social housing which is based upon: (a) using land as a resource, (b) market sale component of housing to subsidise social housing (maximum one-third of total FAR and land), (c) part commercial use (FAR 10%) (d) optimum FAR (400) and density pattern (500 to 600 Dwelling Units per Ha).

According to National Urban Housing and Habitat Policy (2007), in every housing scheme at least 15 per cent of the saleable net residential land and FAR should be reserved for social housing and pooled on a zonal basis to have an even spread in different parts of the city and not concentrate at one place. In all areas, sufficient land should be reserved for housing of low income and weaker sections. Incentive FSI/FAR, ground coverage and liberal density norms have been recommended to create more housing stock, while reducing the cost of land component in housing.

In order to streamline the land market and transactions, as well as to discourage encroachments on public land, it is necessary to make property registration, mutation and transfer simple, transparent and quick. The city-wide Spatial Data Infrastructure should be mandatory for all urban areas and new townships. Vertical ownership of independent floors/flats and the concept of air-rights should be adopted. Computerization of land records and property registration should be completed in a specified time frame.  It will help in creating a transparent property market.  To bring in accountability in real estate sector, rating of developers and projects and licensing of real estate agents/brokers/realtors need to be implemented, as proposed in the Real Estate Regulation Bill, 2013. To deal with the problem of property titling, it is necessary to introduce Torrens System of property title certification by the government, which would avoid litigations on the question of property titles. To encourage land assembly and social housing development, it is necessary to put in place a unified regulatory mechanism, simplifying the procedures for project approval.

Inclusive Housing Development

Inclusive housing development entails provision of education, healthcare/social infrastructure, utilities, services and transport. Along with basic physical and social infrastructure, security, health and education facilities, housing development should aim at attaining a self-containment, viability and integrity. The organisation of urban space that allows the formation of ‘communities’ and ‘neighbourhoods’ is a key to cross-sectoral commitments and spatial coalition of social, economic, environmental and governance systems. Social housing projects need to focus on environmental foot-prints, community development and health package, covering the following:

• Infrastructure improvement: roads, drains, water, sanitation, street lighting and community halls;
• Health: promotional and preventive via maternal and child health clinics, health awareness and health volunteers;
• Education: pre-schools, non-formal education, literacy and adult literacy;
• Housing with Basic Services
• Facilitating community based participatory planning;
• Community development, institution building, gender awareness, vocational training and economic support;
• Encouraging small home-based occupations;
• Promoting micro-credit facilities; and
• Networking among slum communities.

A GIS based inventory and total station survey of all potential lands suitable for social housing, redevelopment and resettlement should be prepared. After identification of potential sites, it is necessary to assign suitable land use for such sites, and provide proper services and linkages. The plans of housing development, regularisation and resettlement should be based on the assessment of ground realities, existing land use, land ownership, land values, socio-economic characteristics and physical conditions of the settlement, reflected by updated digitised maps and data. Based on the land and housing inventory, the community can access the land and housing fund for the infrastructure development and the construction of dwelling units. The criteria for selection of specific strategy of relocation or in-situ upgradation have to be based on certain indicators, and a database. The site selection should consider employment generation and community welfare as the most important elements.

The community development plan should address to specific local issues and provide flexible choices of in-situ upgrading, relocation, land sharing or re-blocking. The local area plan should network all the settlements, where the local stakeholders plan together.

Water and Power

JNNURM Slum Rehabilitation (Thane) Financial Contribution: Central Govt: 50%, State Govt:25%, Local Body & Development Rights:9% amd Slum Dwellers 16%

Slum Rehabilitation under JNNURM (Chandigarh)

A critical concern in redevelopment, redensification, slum rehabilitation, regularisation and infill development (unauthorised colonies) is water supply and power, which are under severe stress. These require strategic interventions, such as given below:

1.  Preparation of services plan of redevelopment, slum rehabilitation, social housing and regularisation projects
2. Mandatory adoption of waste water recycling and renewable energy, water conservation, energy efficiency as per ECBC and Green Building Code, which can save 10 to 15 % of water and energy.
3. Checking of leakages, thefts and transmission losses which can save about 15 to 20 % of water and power
4. Enhancing organisational efficiency.

Finance

According to HUPA Ministry, to meet the total shortage of 18.78 million houses in the country, 10.55 million houses needed for EWS and 7.41 million houses for LIG category an investment of about 18 lakh crore is required, without taking into account land cost. With the Central Government’s contribution through various schemes, and matching contribution  of the State Governments, local bodies and beneficiaries, the social housing and slum rehabilitation schemes have become viable and affordable. Under the JNNURM (BSUP) around 16 lakh houses have been sanctioned. A fund of Rs 45,000 crores has been sanctioned for Rajiv Awas Yojana. Simultaneously to make loans available to the poor Rs, 1000 crore Credit Risk Guarantee Fund (CRGF) has been created. Under CRGF money will be given as collateral security to those who seek loans from the banks for EWS or LIG houses. It is estimated that with this fund around 1.2 million affordable housing units will be generated in the country.

The JNNURM-BUSP project in Thane is a typical example, where only 16 per cent of the house cost is borne by the allottees. The funding pattern of the project is four layered-Government of India contributed 50 per cent, Government of Maharashtra 25 per cent, TMC 9 per cent and remaining 16 per cent by the slum families.  TMC has also used Transfer of Development Rights (TDR) and Floor Space Index (FSI) for funding the viability gap. Smart cards were issued to slum families so that benefits reach to the genuine people.

However, the cost of land has to be met by cross-subsidy, compulsory reservation, land pooling and reconstitution, TDR and similar instruments. In view of the recently notified Right to Fair Compensation and Transparency in Land Acquisition, Resettlement and Rehabilitation Act, 2013, the acquisition of land is going to be more costly and difficult. As such cities should first explore option of redevelopment and recycling existing urban areas, including slum and squatter settlements and encroached lands. Land is the most expensive component of housing. If land cost is excluded, social housing becomes affordable and viable. This implies mandatory reservation of land for EWS/LIG in all housing projects/layouts, the cost which is excluded from the cost of the house (which could be as much as 80 to 90 percent of total house cost).

The financing of the social housing can be supplemented by mortgage guarantee fund, social housing fund, micro financing, land-housing-infrastructure bundling,  Mutual Fund, Provident, Insurance and Pension Funds, General Obligation Bonds, etc.  Rationalization of Stamp Duty, both in terms of uniformity and reduction to a reasonable level of maximum 5 percent, as stated in National Urban Housing and Habitat Policy and JNNURM reforms, is necessary for greater transparency in property transactions. Value Added Tax (VAT) for Stamp Duty would avoid repeated taxation. It is also necessary to revise the cost ceilings of LIG and EWS and slum resettlement housing, taking into account the cost of land component.  Social housing should also be available on rental basis as many poor families cannot afford huge down payments and EMIs.

Housing finance is a long-term investment and asset liability mismatch is a major problem for housing finance companies.  Access to long-term funds from Provident, Insurance and Pension funds, will ease the situation.  Real Estate Mutual Fund (REMF) approved by SEBI would boost supply of fund to housing sector.  National Housing Bank can raise funds through capital gain bonds.  The banking industry and the HFCs can address the needs of poor sections by subsidizing interest rates, pooling funds and relaxing mortgage requirements as also through instruments such as micro-financing, community pool funding, land mortgaging, and annual installments for loan repayment.

Financing of social housing or slum redevelopment need not be the sole responsibility of the government. To make such schemes self-financing, the incentives like additional FAR, development rights, commercial component, etc. can be very helpful. To make social housing schemes bankable, it is necessary to take advantage of mandatory reservations, optimise utilisation of land by higher density and FAR, besides reducing the cost and time in land development, construction and infrastructure provision. The Twelfth Five Year Plan and Union Budget (2014-15) suggest a set of instruments to finance affordable housing. A new proposal is Home Owners Mortgage Equity Subvention Scheme (HOMES) under which loan limit has been raised from Rs 5 lakh to Rs. 10 lakh for EWS and Rs 8 lakh to 15 lakh for LIG category, along with 5.5% interest subsidy on these loans.

In the recent, the housing output of the government sector has been diminishing, which is progressively moving towards market led production. This is resulting in non-affordable housing, monopolies and profit oriented market, besides lack of a sense of ownership. In order to create a competitive housing market, it is necessary that as a rule at least one-fourth of housing is built/developed by individual plot owners, one fourth by cooperatives/ slum community, one-fourth by government/local body and one-fourth by the private sector/PPP.  National Urban Livelihood Mission (NULM) can be linked with social housing to integrate housing and livelihoods.

The Government is already implementing PPP projects of roads, airports and slum rehabilitation, where a component of land is allowed for market sale by the developer to compensate and finance the development of social housing, public utilities/greens or infrastructure. Social Housing Schemes can be structured on similar lines, where the Floor Area Ratio can be divided for market sale housing and slum rehabilitation. As a thumb rule at least one-third site and floor area can be reserved for slum tenements and social housing, one-third for community greens, facilities, etc. and about one third for market sale housing and mixed use. Thus in place of conventional subsidy, a new framework can be worked out, where the land development right and DCRs act as the major resources.  In order to promote the delivery of social housing on private lands, the land owner/developer can be given a mandatory component of social housing, against an incentive Floor Area Ratio (FAR).

Security of Tenure

‘Tenure’ is a pre-requisite to enable and empower the poor in transforming their lives and climbing up in the socio-economic ladder.  Without a legal right, poor cannot use their property as collateral and do not get a loan. As such granting ownership rights is essential in all slum resettlement and low income housing schemes.  A common fear is that the formal housing of the poor changes hands and is bought over and the poor remain homeless.  To overcome this problem, it may be suggested that such housing may be leased out to the cooperatives or in the name of joint family members at nominal rents, instead of sale.  This also needs redefining the concept of shelter which should include transit accommodation, dormitory, hostel, camp, paying guest, etc. The industry, educational, offices and other establishments may be encouraged to provide residential accommodation to the workers.

The challenge of land tenure and transfer of ownership of government land under slum clusters and illegal colonies is a major issue and a determinant of its planning and development. This needs to be reviewed with reformed law and procedures of ownership/tenure rights so that the poor become the legitimate owners. This will encourage legitimate approval of the layout plans and building plans, facilitating a gradual conversion of informal/illegal settlements into planned areas. In slum areas rental tenancy can be given for an initial period which can be subsequently converted into ownership rights. For the promotion of collective community development, land can be jointly owned by all the residents.

To curb the resale of social housing and its speculation, it is necessary to review the tenure and design options of the dwelling clusters with a view to:

• Reduce the cost and enhance affordability;
• Provide toilets, common space, etc. in a manner, which would dissuade the beneficiaries to go for quick sale of, stand-alone houses;
• To licence shelter units initially on rental basis, convertible into tenure after 10 years, or so. Alternatively, the land tenure can be given jointly to husband and wife/parents, or to the co-operatives/resident associations;
• An evolutionary pattern of dwelling, which can be expanded with the needs and resources.

Management and Maintenance

The nodal project management agency may be carefully identified keeping in view its track record and performance during last five years. To obviate the risk of failure in executing the commitments, the government departments and undertakings should be selected by competitive bidding so as to ensure delivery within time, cost and quality parameters. The nodal agency should be capable to dismantle various barriers in delivery, viz., administrative, procedural and financial. Special Purpose Vehicle may have to be created for this task which aims to transform the lives of millions of poor.

Effective management and maintenance of social housing schemes can be brought by partnership among private sector, NGOs and community-based organisations/co-operative societies of end users. The management and maintenance of the services need to be ensured through the following measures:

• Creating awareness among the communities and involving them as partners with the emphasis on Community Action Plan (CAP).
• Contracting out the maintenance of physical and social infrastructure services
• Working out a systematic maintenance cycle (daily, weekly, monthly, etc).

The Central Government has approved the Real Estate (Regulation and Development) Bill on 5^th June 2013. The aim of the Bill is to create a Real Estate Regulatory Authority and an Appellate Tribunal that will act as a watchdog for the housing sector, primarily towards protecting consumer interests while creating an alternative redressal mechanism for any disputes that may arise. The Bill demands greater disclosure from the developer community and a higher level of project accountability to remove the information asymmetries from the housing market. The Bill mandates the compulsory registration of real estate agents, which is likely to provide protection to buyers, while also preventing concerns regarding money laundering by the non-organised broker community. A major provision of the Bill is the standardisation of area measurement, with carpet area to be the measure. Developer would need to provide the status of all approvals as well as sanctioned plans to buyers and will not be able to sell their project without obtaining the required approval. The Bill has also sought to ensure that the buyer’s payment is utilised for the development of the particular project by necessitating the creation of an escrow account, where 70% of the customer advance will be used only for that project. The Bill also seeks to make the developer responsible for adhering to the timelines and conditions committed for the project. However, there are some concerns of the real estate developers, which need to be addressed. These relate to a level playing field, escrow account and stringent penal provisions.

For participatory and coordinated maintenance it is necessary to work out an accountable structure and take up regular monitoring of the physical and financial targets on short term, mid-term, and long term basis. Effective involvement of the community organisations at grass root level will help in the process of motivation and the beneficiaries to sustain and manage day to day issues such as drainage, solid waste management, water supply, electricity, public health, sanitation, education, security, skill development, etc.

Author

A.K. Jain as Commissioner (Planning), worked on Master Plan for Delhi-2021, National Urban Housing and Habitat Policy and National Urban Transport Policy, protocols for green Commonwealth Games, New Delhi 2010, plans for Dwarka and five Sub-cities for Delhi 2021. He was a member of the Advisory Board of the UN-Habitat and contributed in its reports- (2013).  He was awarded 2nd Urban Professional Award 2014 at World Urban Forum in Medellin, Colombia in recognition of being an exemplary city changer. He can be contacted at : ak.jain6@gmail.com