Will Rising Population Result In A Shortage Of Affordable Homes?
On the World Population Day, India's population was 127,42,39,769. If India's population grows at the rate of 1.6%, India would be the most populous country on earth by 2050. Much of India's miseries are blamed on its large and rising population. Many believe that Indian cities are congested and homes unaffordable because Indian population has grown. But, is this true?
In the past fifty years, economists have come to agree that a large population is an asset, and not a liability. Africa is the least populated continent. Europe is the most densely populated continent. But, Africa is poor, and Europe prosperous. Almost all African cities face a shortage of residential property. Traffic congestion in African cities is great too. India is no different.
Economists like Ajay Shah have pointed out that there is no shortage of land to shelter India's population. According to his estimate, assuming an FSI of 1, to shelter 1.2 billion people in four-person homes of 1000 square feet, and two workers of the family into office or factory space of 400 square feet, nearly 1% of India's land is sufficient. The shortage is that of urban land cover. But, urban land cover rises every year in most cities across the world, though this is not necessarily true of Indian cities.
Urban densities or residential property prices do not rise because of population growth. Cities do not become more congested when population grows. The world population has grown tremendously in the past hundred years. But, the densely populated areas of global cities have largely emptied out. In the 20th century, most cities have raised their built up area 16 fold. According to a report of the Lincoln Institute of Land Policy, world population in 2011 will double by 2054. But, the urban land cover will double by 2030.
The population density in Manhattan, the most expensive borough of the New York City, for instance, has declined in the past hundred years. Lower East Side, Manhattan had 398,000 people in 1910. This fell to 303,000 in 1920, then to 182,000 in 1930, and to 147,000 in 1940. From 1910 to 2012, the average number of people per sq. ft. in the Lower East Side fell from 70 to 16. The reason is that when the US economy became more car-based, Manhattan and other populated areas of American cities slowly emptied out.
It is not just that cities emptied out. The floor space per person has risen too. In 1910, typically, a floor had two 46 sq. ft. apartments in Manhattan. In each floor, 16 people lived. Now, typically, a floor has four 230 sq. ft. studio apartments. In each floor, about 4 people live today.
This is by no means unusual. Throughout human history, population densities in the central cities across the world have declined. Ancient Rome and Athens were more crowded than modern cities of the West. People lived crowded in the central city long ago because they wanted to share the infrastructure and amenities. Living in the central city in congested spaces was unavoidable because there were no cheap, efficient means of transportation. People could not move up in buildings either because there were no elevators or electricity. But, all this changed in the 20th century.
In India, however, this has not yet happened to the degree it should. In Chinese cities like Beijing and Shanghai, it is not just that people enjoy greater floor space. Homes cost nearly one fifth of that in Delhi or Mumbai. To understand what this means, let us compare Mumbai and Shanghai.
In Mumbai, the living space per person is 4.5 sq. mt. Since 1951, Mumbai's population has grown from 2.96 million to over 20 million today. But, if building stock rises faster than population, living space would rise too. In Shanghai, the most populated Chinese city, floor area per person in 1984 was merely 3.6 sq. mt. But, in 2010, it had risen to 34 sq. mt per person. But, in this period, Shanghai's population had grown from over 12 million to 23 million. Why?
In 1984, Shanghai made raising floor space a priority. Mumbai never did.