We Are Better Housed Today

The media often paints a gloomy picture of how things are. We often hear that India's housing shortage is severe and that nearly 250 million people are poorly housed. There's no denying the fact that India's housing standards are among the worst in the world. But this should not blind us to an equally important fact. Housing standards in modern day India are way better than in any point in the history. Hence, we are better housed than ever.

This may seem surprising to many, but take a look at movies and photographs. Subtleties aside, does it really seem that houses in the past were better? It may be true that many people live in congested spaces in cities today. But, even in cities, the floor space an average person consumes has risen. This is true of bigger cities like Mumbai too.

A few months ago, HDFC Bank put out the data on how housing had become far more affordable in the past two decades. Many experts refused to believe this data. They found it hard to believe that the cost of housing today is much lower as compared to personal-income levels. It may be true that HDFC data does not capture broader trends, because their sample space is small. But, this does not mean that this is not true. In every society, housing became less expensive in relation to the income levels of people. It is highly improbable that India is an exception. This is because income levels rise as productivity rises. When productivity levels rise, it is more easier to build houses at a lower cost. The logic is irrefutable. This does not mean that housing costs always correspond to falling costs in other areas. This is because the fall in prices in housing may still be rigid if building restrictions and land use restrictions are too severe. But, even in such cases, prices tend to fall in relative terms.

Now, let us look at the figures. In 1961, only 13.3 per cent of the people lived in concrete, permanent houses. In 2011, 77.5 per cent people lived in concrete, permanent houses. Why? People moved into concrete, permanent houses over the past five decades because they became more affordable. Isn't this convincing enough?