Is India's Housing Crisis A Transportation Problem In Disguise?

Overpopulation does not explain why Indian cities are densely populated, because a certain percentage of land in India is idle or underutilised. While growing  population is a reason to spread out, people have not done that enough. In Delhi, this has happened to some degree, where population has been rising every year and vehicle ownership is the highest in the country. But, the appeal of Connaught Place, Delhi's central business district, has been declining while other markets in Delhi have been luring away people. There is a movement toward other areas in the National Capital Region (NCR), including Noida, Gurgaon and Faridabad.

But, suburbanisation has not happened to the extent it did in the United States and other developed countries. This is true of other Indian cities too, which are overcrowded in the centre. Real estate in Connaught Place and Nariman Point is almost as expensive as real estate in central areas of New York or London. This would have been understandable if Connaught Place and Nariman Point promised amenities similar to that in the CBDs of London or New York. Building restrictions and rent controls in the CBDs of Indian cities partly explains why real estate is so expensive. But this is only part of the story.

Most Indians walk to work. This is especially true of the poor. Even among people who drive or travel to work, only a rare minority uses cars. Low income households are more likely to live near workplace because transportation is expensive and it forms a substantial fraction of their monthly expenses. And due to non-affordability, people with low income live close to where they work, or run small-scale businesses from their own home. But, this still does not explain how they are able to afford living in the heart of Indian cities. How? They sleep on the pavements or makeshift houses, or live in slums or chawls. The absence of property titles and law enforcement has made such land cheap. The poor have learned to get around the high cost of land. But, they have not learned to get around the high cost of transportation. If transportation costs and commute times did not matter, poor people would have lived in better houses in the periphery.

Middle and upper-class Indians face similar constraints, too. The average commute in Mumbai is close to 50 minutes. A large fraction of Mumbaikars spend hours travelling every day. The situation is not much better in Delhi. Personal vehicles do not solve the problem much. In the US, mass transit is slower than personal vehicles, for example.

Why is transportation in India so expensive and time consuming? There are many reasons:

• India does not have enough good surfaced roads. When compared to comparably populated American cities, the length of surfaced roads in many Indian cities is lesser. For instance, when the number of vehicles on Indian roads have grown 628 times since Independence, the length of surfaced roads has only grown 12 times.
• It is not necessary that mass transit should be provided by the government. But, even though the dense population will make mass transit profitable, the government has not built enough mass transit networks in Indian cities.
• Private vehicles have been around in the United States and other parts of the developed West for long. Even in the 1940s, average workers in the US owned cars. But, this has not happened yet in India. So, even if roads are virtually uncongested, people will still find private transport beyond them.
• Even though price of transport seems cheap to Western intellectuals, it is expensive by the Indian standards.
• But, at the same time, parking charges in Indian cities is only 1/40th or 1/60th of that of other major cities. This leads to overcrowding, road congestion and longer commutes.
• As the demand for vehicles in India is not high enough, prices have not fallen enough. The fact that India does not have a long history of car-based living has also prevented suburbanisation.

But, this may change in the next few decades, because of rising income levels and greater investment in roads highways and metro lines.