Is Homelessness In India Rising Because Of Urbanisation?

The Narendra Modi government is on a mission to house everybody by 2022. Countries across the world have tried to build houses for everybody, but there are few success stories. Even when some countries like Singapore have succeeded, this is because Singapore is a small country -- a city-state. When governments try to build houses for the poor, they ignore many facts. The biggest problem, of course, is the scale of the problem which is enormous. In urban India, according to the government, there was a shortage of 18.78 million homes as of 2012. In rural areas, the figure was much higher. According to the government, a fifth of the Indian population does not enjoy decent living standards.

Governments usually do not have the resources to build houses for teeming millions. This is especially true of the Indian government, because per capita income in India is much lower than global standards. Ninety-five per cent of the housing shortage in India is among economically weaker sections and the low-income groups. As such households are large in number, it is not feasible to build houses for everybody. But this should not bother us because there are many other ways in which governments can make housing affordable for them. First, sell idle or underutilised government land. Second, repeal floor area ratio restrictions. Third, remove restrictions on converting land for other purposes. Fourth, remove rent-control laws. Fifth, remove the regulatory barriers that make housing affordable. And last, abolish unnecessary taxes. Many developers claim that 40 per cent of the cost of housing is related to taxes.

In India, slums are concentrated in some states. Maharashtra, which has the largest number of slums, is one of the rare Indian states that did not repeal the urban land ceiling Act even when other states did. The urban land ceiling Act prevented people from owning large tracts of land in urban areas. This led to concentration of land in the hands of the government, and eventually as slums. Besides, people had to allow slum-dwellers to settle on their land to prevent the government from confiscating it. Though Maharashtra repealed the Act nearly a decade ago, builders still believe that the uncertainty prevents real estate development. Also, the government still owns a large chunk of valuable land in central Mumbai. Migration to urban areas also led to more people living in substandard houses because people were willing to live in such houses to be able to be in cities. When the number of people in cities rose, the number of decent houses in cities did not rise proportionately.

India's case is exceptional because people typically move to urban areas when a country becomes prosperous. It is, indeed, true that India is becoming more prosperous, too. But this has not translated into better living standards for people who move to cities seeking greener pastures. This is odd because even the people who live in chawls and slums in large cities earn more than people below the poverty line. In many ways, Indian cities are not equipped to allow migration. For one, there is an upper ceiling on the number of houses that can be built. Building height regulations in cities have ensured that people cannot build any more houses in many parts of the large Indian cities. When demand rises and the supply is nearly constant, it is normal to have an acute shortage. If we strip this to bare essentials, we would be able to see what to do about this.

But we cannot go on like this for long. Already over 32 per cent of Indians live in cities. The Ministry of Housing and Urban Poverty Alleviation thinks that 40 per cent of India's population will be urban by 2026. This is more optimistic than the estimates of bodies like the United Nations and World Bank. But this is not an unreasonable exception. Urbanisation in India is underestimated because the status of many migrants is not clear. For example, a migrant in Mumbai may be a permanent resident of Bhilai according to official records. So, the Indian government is certainly not overestimating the demand for housing.

Migration in India is still much lower than in the first world. But the proportion of migrants in urban areas is rising. For example, the proportion of migrants in urban areas in 1983 was 31.6 per cent. In 2007-08, it rose to 35.4 per cent. This is a modest increase, but this is still more than a third of the population. The process will accelerate in the next few decades.

The growth in migration in India will soon be higher than that in virtually any other country. Under normal conditions, this should not bother us. But if the infrastructure in Indian cities is not upgraded, if enough measures are not taken to decongest roads and strengthen transportation networks, and if real estate development is not encouraged, the effects could be disastrous.