For a house to become a home

The poor often spurn government housing programmes because they do not want to risk losing their social networks.

Written by Rohini Pande | Published:January 30, 2017 12:02 am
PMAY, Pradhan Mantri Awas Yojana, slum development, government housing programmes, government housing, government hosuing plan, urban housing, house for all, housing, indian express news, india news, indian express column n his New Year Eve address to the nation, the prime minister announced two new interest-subsidy schemes under the PMAY; some anticipate further breaks in the upcoming budget. (Representational image)

Today, a majority of the world’s population lives in cities, and the global urban population is on track to double by 2050.

In much of the developing world, the first residence for a migrant in the city is in the slum. Life here is often fraught with significant health risks. The illegal nature of housing makes slum dwellers susceptible to extortion by slumlords on the one hand and government officers on the other. The fact that slums are often located on prime real estate compounds the problem: Governments lose significant revenues they could otherwise redistribute to the poor.

Reflecting these realities, the agenda of “Make cities inclusive, safe, resilient and sustainable”, which was enshrined in the UN’s Sustainable Development Goal 11, was complemented in the October 2016 Habitat III summit in Quito, Ecuador by a “New Urban Agenda” of giving slum dwellers upgraded housing with basic services by 2030. How to accomplish such ambitious goals? A common approach is to build higher quality, affordable housing for the poor on the city’s periphery. This is a central pillar of the Indian government’s housing initiative, the Pradhan Mantri Awas Yojana (PMAY), which aims to achieve “Housing for all by 2022”.

But a report in May last year put the vacancy in urban housing built under the PMAY at 23 per cent. Why are slum dwellers and new urban migrants rejecting this housing? One possibility is the lack of affordable housing finance. In his New Year Eve address to the nation, the prime minister announced two new interest-subsidy schemes under the PMAY; some anticipate further breaks in the upcoming budget. But reality is more complex. In my research with Sharon Barnhardt of Flame University and Erica Field of Duke University, we tracked female beedi workers drawn from Ahmedabad’s slums who had entered a lottery to receive improved housing at far below market cost, 12 km from the city centre. In 2007, 14 years after the lottery winners received their houses, we conducted detailed surveys with lottery participants.

Winning the lottery represented a financial windfall and a chance for home ownership in cleaner, safer environs. The monthly mortgage payments, which were guaranteed for 20 years, were roughly half the monthly rent that the lottery participants paid for their slum dwellings. Yet, 34 per cent of the winners chose not to move to the colony. A further 32 per cent returned to the slums within 10 years.

Poor people were turning down an apparent golden opportunity, and it wasn’t because of high interest rates. What’s more, this group represented a best-case scenario, compared to typical PMAY participants: Beedi work is done at home, so one of the family’s earners didn’t face a long commute. In another housing complex in Ahmedabad — where houses were also assigned by lottery — we found only 46 per cent of the winners were living in the units two and a half years after winning the lottery.

Research pointed to the importance of social networks in the housing decisions of the participants. Relative to lottery losers, the winners lived farther from their adult children and saw them less often. They reported feeling isolated, and were six to nine percentage points less likely to know someone they could rely on for borrowing needs. Lottery losers, but not winners, reported receiving money through their social networks during hard times.

Slum dwellers give each other material and psychological support along with informal insurance in ways that, for now, the state cannot provide. Low take-up of PMAY housing suggests that the programme, in its current form, risks some of the same failures as the one we studied. Studies of “Moving to Opportunity” — a programme in the US in the 1990s that gave lottery winners vouchers to move from high- to low-poverty neighbourhoods — provide another useful benchmark. These studies found no financial or employment benefits for participants or their adult children. In our study, we found that lottery winners were not better off on a variety of socio-economic measures, including income, labour force participation, household health outcomes.

It may be that such benefits only materialise among those relocated at an early age. A new study on “Moving to Opportunities” uses tax data to show that while those who moved in adolescence showed negative effects, those who moved as children were more likely to attend university and less likely to end up a single parent.

This suggests a need to be more aware of what individuals stand to gain or lose through relocation, and how they will behave, given those tradeoffs. Policies can be designed and tested to allow people to preserve their social networks even as they are relocated. One approach is to move entire communities to new developments. Another is to focus less on relocation and more on giving slum dwellers rights,
investing in the development of slums.

However, such approaches will require greater upfront investment by the government, not in interest-rate subsidies, but in collecting data on the preferences of poor migrants and targetting a smart programme at those who need and want it. The broad strokes the government is making — subsidies directed imprecisely towards the poor and even middle-income recipients — may well lead to more unoccupied units in undesirable locales.

In some cases, local authorities have demolished slums and provided residents with rental subsidies until PMAY housing can be built.

Governments should be aware these are not just rickety structures falling under bulldozers, but also strong and deeply beneficial social networks.

The writer, a professor of public policy at Harvard Kennedy School, co-directs the Evidence for Policy Design Initiative

For all the latest India News, download Indian Express App now

  1. H
    Hemant Kumar
    Jan 30, 2017 at 5:41 am
    Beggars cannot be choosers. In India everything meets with resistance. Individuals like Kanhaiya Kumar of JNU think themselves above nation and even voices against army are raised. Nationality is being restored by Mr. Modi as demonetisation has seen support nationwide as compared to Venezuela, a tiny country, where rioting forced govt. to withdraw demonetisation. After Mahtama hi, only Mr. Modi can lead this country to greater heights.
    Reply
    1. K
      K SHESHU
      Jan 30, 2017 at 2:29 pm
      Good points raised
      Reply
      1. D
        Dipak
        Jan 30, 2017 at 3:51 am
        So why are you complaining? Don't go to the cities. No one forces you. The writer seems like a Communist Khangressi.
        Reply
        1. H
          Harsh
          Jan 30, 2017 at 12:47 pm
          Where big industrial houses not interested in relocation to rural area, it is unfair to expect poor people to relocate in jobless area or where transport becomes more than wages. The need is to relocate the industry from the city and not slum as it will go automatic. Therefore, the question is not slum, but the real question is why there are slum and who created it. In general, any construction activity migrate huge labourers from villages to a city and after completion they remain unattended. Although the buildings rates may be very high, but labourers gets very marginal to meet day to day need. Once they uprooted from village they cannot go back as they have to stay in a city to meet their day to day need. This led to the construction of slum as they do not have that much saving to buy a flat and local people take money from them and allow them to have a roof on their head. The real problem is the wages they get, how much we really pay for our housemaid out of our total income and expect them to stay in building is really too much. We have to learn to respect the labour and give the proper wages for their services. Then, the problem of slum will be over and overall sanitation will improve, which is essential for normal human survival.
          Reply
          1. H
            hbn
            Jan 30, 2017 at 4:58 pm
            if you want the govt to take the responsibility, then you should also let formulate laws for potion control, etc., and other measures so that the resources can be shared and managed, right??
            Reply
            1. H
              hbn
              Jan 30, 2017 at 11:30 am
              the author should do some research...any migrant who hasnt planned and/or doesnt have the means to sustain the lifestyle of the city he choses, will end up in slums.lt;br/gt;This is the case even in developed countries.....lt;br/gt;lt;br/gt;just because you are a prof at harvard doesn't mean you lose your com.mon sense.
              Reply
              1. R
                Rajendraprasada Reddy
                Jan 30, 2017 at 4:19 pm
                Very good article
                Reply
                1. D
                  Deepak Raj
                  Jan 30, 2017 at 6:23 am
                  Only Modi can lead this country to plunge from great heights the country achieved during the boom years of UPA-1 into a cesspool of bigotry, ultra nationalism and pliant fools. And comparison of demonetization situation in India with Venezuela is like comparing Apple with faeces. Remember Venezuela was the most murderous place on earth in 2015 it is a country where corruption and crime is so rampant that their govt doesn't even release crimes data, so the hooliganism that resulted there was inevitable. lt;br/gt;Ask your Modi to hire better informed people into his cyber bully team because as of now I only find cucks and horny teenagers leading his vully team not even worth a dime.
                  Reply
                  1. S
                    Suren Singh Sahni
                    Jan 30, 2017 at 9:41 pm
                    In the Developed world as well people begin their life in low cl areas.IF one works hard and stop relying on divinal help you will succeed
                    Reply
                    1. T
                      Thomas George
                      Jan 30, 2017 at 11:53 am
                      I forget, a guy who lives in a hut in a village, and has the option to do slave labour *must* plan before he moves to the city. Yes, this guy has a *choice* not to move to the city. Why does he move? He has no education, thanks to the *great* schools in his village, and forced to toil for more than 12 hours a day for a pittance, thanks to the *fantastic* government machinery that provides him justice against exploitation. Think before commenting on ideas articulated by people who have spent a lifetime on an issue.
                      Reply
                      1. V
                        V. Ramaswami
                        Jan 30, 2017 at 3:13 am
                        There are many "professionals" living essentially in what are essentially slums in New York and the Bay Area, California. There was recently the story of the Google employee who lives in his car in the company parking lot. Many Ph.D students from India (and the Indian post-docs in America slogging for pennies) live in what would p for terrible housing facilities. Thus, this holds also in the affluent society and is not unique to the developing world.
                        Reply
                        1. Load More Comments