Why Are Living Spaces So Small In Rural India?

India's housing crisis is seen as a national calamity. But it is always important to identify the rootcause of a problem before doing something about it. There are many problems which most experts, politicians and activists associate with housing shortage in India.

To begin with, India is a developing country with a per capita income of $1,497 (2013). Let us suppose that an affordable house should not cost more than 30 per cent of a person's income. What does this imply? The cost of housing for a person should not exceed $450 a year, or Rs 30,143. Is it possible to build a decent, formal house at the cost of Rs 30,143 a year? Whatever you think about the ethical aspects of the matter, it is clear that it is unrealistic.

In a 2010 paper of former World Bank researcher Alain Bertaud and his collaborators, the thinktank estimated that it would cost at least 20-30 per cent of India's GDP to build houses for everybody. This is a moderate estimate, even if we assume that everything falls into place. Housing policy experts estimate that it would take about a generation for the Indian generation to house everybody, even if they do the best job possible. Only a handful of countries on earth have built houses for low-income households. Virtually all the countries which did a fairly decent job in building houses for the poor are very much on the top of Transparency International's ranking of the least-corrupt nations.

But this only proves that we are underestimating the challenges before the Narendra Modi government's mission to build houses for everybody. There are many other problems as well. Urban policy thinkers often conflate India's transportation crisis with a housing problem. If the urban poor prefers to live near the heart of a city in an informal settlement, even when they can afford formal settlements in the periphery, what does this mean? It is transportation that they find unaffordable, and not housing. Moreover, experts conflate a shortage of urban floor space with a shortage of land. As much of the land in India is idle or underutilized, this is inane.

But, shortage of urban floor space does not seem to be the single biggest factor underlying India's housing shortage. According to the 2011 Census, in rural India, the average person consumed about 40.03 square feet of space, while in cities, the average person consumes about 39.20 square feet space. This means that a household of five persons live in a slightly larger house in rural areas, but the difference is nearly insignificant. Shortage of land cannot be the major reason why people live in small houses in rural areas.

The average person consumed about 48 square feet space in Mumbai in 2009. This is significantly higher than the average floor space consumption of 39.20 square feet in villages, even though there is plenty of land in villages. So, there must be more important factors that prevent rural Indians from living in spacious houses. 

It is not just land per square feet which is high. The cost of construction per square feet seems to be high too. In 2010, Alain Bertaud estimated that building a small structure would cost only $50 per square feet in India. But, building a multistory structure would cost about $150 per square feet. This itself would prevent the construction of multistory buildings, even if the government permits such construction. In much of rural India, land is cheap, but construction is far more expensive than land. As the cost and initial investment involved in building a multistory structure is impossible to meet for a majority of rural Indians, the only solution before them is to build a small structure and consume less floor space. So, they consume less land and less floor space.

For regular updates on real estate, click here