By Moin Qazi
We have a dream for 2022. The poorest of poor should have a house of his own. And that house must be equipped with electricity, water and other facilities. There should be hospitals and schools in the neighbourhood.
-Prime Minister Narendra Modi
Housing for all
The housing reforms introduced by the government mark a new epoch in Indian polity and may turn out to be Narendra Modis greatest achievement yet. The ambitious Housing for All programme, launched in June 2015, aims to build 20 million urban homes and 30 million rural houses by 2022. It has generated a new housing boom which brokerage CLSA India Pvt. estimates could reach $1.3 trillion in the next seven years. CLSA also expects 60 million new homes to be built between 2018 and 2024, creating about 2 million jobs annually.
However, the present reforms are inadequate in addressing the needs of all the segments. The real issues in housing world over have less to do with access to finance and more to do with property rights. A reform in land rights is an important prerequisite for ushering in a housing revolution.
Roadblocks in the way of equitable housing
Indias housing space, particularly the lower tier in the economic pyramid, has remained largely unaddressed. Lack of proper documentation is a major obstacle as many families may not have had it for generations. The process of obtaining and putting it in place is an impossible mission to accomplish without nimble titling, mortgaging and a financing system.
In poor urban areas, many people who live in slums have little to no control or ownership over the property they live on. Once titled, they could obtain access to several public benefits.
These households cannot provide mortgage-able collateral for a loan and third-party documentation of their earnings. The formal financial sector is unable to serve them. Excluded from formal financing, many households delay or are unable to make investments in housing.
Land ownership is often the bedrock of other development interventions: owning land boosts nutrition, educational outcomes and gender equality. The converse is equally true.
Room for improvement in policymaking
There are various suggestions from experts that can serve as useful markers for policymakers while designing government programmes for housing. One such suggestion is that the government should improve the legal and regulatory environment related to housing and increase the supply of affordable, legal shelter with tenure security and access to basic services and amenities. The government should undertake physical upgradations of informal settlements. Informal urban settlements can be provided open public space, water, sanitation and power networks. These services create a high level of perceived tenure security without a formal change of legal status and have encouraged local improvements and investment.
In other cases, successfully integrated outlying informal settlements, through a process of mutual compromise, can bring unplanned settlement into an acceptable relation with the planning norms. The process can help in the regularisation of title in exchange for adherence to agreed urban planning guidelines. Governments should officially recognise slums or informal settlements. In India, slums classified as unobjectionable are eligible for upgrading. Objectionable slums are those in non-residential zones, on low-lying lands, or where roads and other public infrastructure have been proposed.
The National Housing Bank should leverage microfinance to reach remote areas. The main hindrance is the high cost of credit from such institutions. It takes time for them to build a low-cost capital base so that they can provide affordable credit.
All residents in unobjectionable settlements have a basic form of tenure, which is sometimes accompanied by the provision of public services, such as access to roads, electricity, water supply and sanitation. Typically, the poor are granted land from the government or live on land passed down to them by their ancestors. These are known as para-legal titles. In this regard, the state governments should use an out-of-the-box approach to break down the thickets of red-tapism.
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