Affordable Housing Institute

As begun in yesterday’s post, the Economist‘s lengthy year-end article about Dharavi (Asia’s largest slum) vividly and sympathetically show us life for Mumbai’s poor, and also illustrates so many of the principles about which I’ve previously posted.

Slums are where housing has outrun public infrastructure, and since there ain’t no such thing as free infrastructure, private infrastructure is relatively low quality:

 

Here beginneth the housing implications – because it provides us a bridge into the relationship between housing and municipal infrastructure.

 

The house and home is a private good.  My home, my plot of land.  All of its essential benefits are private goods.  My cost of improvement, my appreciation, my security of tenure.

 

But the modern home is not complete without access (meaning roads) and utilities – meaning power, and water/ sanitation (which we in the developed world call ‘water and sewer’; either way it’s W&S) – in a word, infrastructure.

 

In the developed and formalized world, these are the province of municipalities – indeed, the whole term ‘municipal finance’ refers to all these variations of infrastructure.  As with many public goods, the ultimate source of repayment is very seldom user fees (which include things like bridge or road tolls); rather, it’s a pledge of municipal revenues (that is, taxes).  The credit markets have concluded that they are willing to finance big immovable infrastructure only if the government stands behind it.

 

This is telling, for it says that public-good infrastructure cannot pay for itself out of user fees. 

 

Infrastructure is critical to family health and well-being:

 

All along the street, water is gushing into blue plastic tanks and aluminium tubs, washing sticky breakfast dishes clean. It flows down the street in a rippling sheet. Bisecting it is an open drain, which gushes torrentially, flushing away the detritus of the previous day.

 

Business is piling up for the recyclers

 

From the stink of this, it includes a lot of human excrement—which tiny naked children, squatting with their backsides jutting over the torrent, are busy adding to. In fact, it is not supposed to be used for this purpose. The locals are instead supposed to take their turn at a block of 16 public latrines, serving 300 hutments (or 3,000 people). It costs a rupee a visit—or 30 rupees (75 cents) for a monthly family ticket.

 

I’ve previously posted about Dharavi’s for-profit co-operative communal toilets.

 

Hallway of a Dharavi communal toilet (one rupee per use)

 

Outside the men’s side of the block, a line of bleary-eyed dalits are silently waiting. Most are still dressed for bed, in cotton shawls and sarongs—for custom dictates that they purge before washing. Wordlessly, they usher this foreigner to the front of the queue. And he remembers words of welcome uttered by another Dharavi Marxist, Raju Korde: “A guest is from God, but I’m worried that you won’t like our toilets.” Happily, the Asian-style loos are as clean as they could possibly be.

 

At 7am the early shift begins in Dharavi’s 15,000 hutment factories. Typically, they consist of one or two jerry-built storeys, stuffed with boys and men sewing cotton, melting plastic, hammering iron and moulding clay. Indeed, it is for its industry, not its size, that Dharavi is most distinctive.

 

As I said in Cryptobiotica:

 

Please understand, I am not praising slums as places for people to live.  They can be and often are wretched.  Nevertheless, slums are economically rational, they serve a natural market purpose within cities.  To see them as the byproducts of evil landlords or shiftless residents is to miss the point.  Slums will disappear only when the conditions that make them sensible disappear, and that is a function of government plus time.

 

And they serve a purpose, most particularly the purpose of forming urban society.

 

This is the central discovery of microfinance.  A conventional bank originates a loan to a person who has a formal job, a birth certificate, a bank account, a known address, a credit history … all the accoutrements of our formal world.  Ask a banker to make a loan to someone with none of those things, and he cannot do it. 

 

Yet a microfinancier can, and can make a profit doing it. 

 

How?  By harnessing the wetware credit bureau, the slum community’s distributed intelligence and knowledge.

 

Slums create urban jobs:

 

DVD player repair shop, the railway slums of Mumbai

 

The clothes, pots, toys and recycled materials its residents produce earn them millions of dollars in annual exports alone. As the sun climbs over Dharavi, a rising timpani of metal on metal, a whirring of small machinery, indicate that the working-day has begun.

 

Ramesh Kadam is at his desk in the Peela Bangla (Yellow Bungalow) tannery company. One of the oldest in Dharavi, it occupies the same factory, beside a stinking black creek, that Mr Kadam’s grandfather founded in 1918. The site was chosen for its proximity to the main slaughterhouse of Bombay, as Mumbai was called.  

 

Slums are usually founded on poor land. 

 

Handling meat and tanning leather are considered unclean in Hinduism, so the factory was built out of sight, on an island, with villagers of the lowly Koli fishing caste mending their nets on its shore.

 

‘Those people’ are always encouraged to live out of sight.

 

Ever since I started in affordable housing thirty-plus years ago, knowing nothing about it but what I observed and deduced, I’ve been confronted with prejudice against ‘those’ people:

 

Those people aren’t like us.

Those people are lazy and just don’t want to work.

Those people are just out to beat the system.

Those people have too many children.

 

Pots for sale, Kibera, Nairobi, Kenya

 

This makes them vulnerable to climate than better neighborhoods.

 

Indeed, much of Dharavi was underwater at that time. And so it is today when the monsoon comes, flooding the slum with black creek water and sewage.

 

Dharavi is where these migrants claimed—or reclaimed—a plot. Shashi’s parents were propelled from Karnataka by a drought, arriving in the city with five small children in 1976. “In the village we were starving,” says his mother, Shantabai, creator of the tasty bean curry. “Here, we were poor, but we could eat.”

 

Slums are exceedingly complex.  Cities are interdependent, and slums are their most interdependent part:

 

Recently I was in Mumbai for a few days, meeting Jockin Arputham, head of India’s National Slum Dwellers Federation (about which more in future blog posts).  Mumbai traffic being what it is, Jockin’s principal office is his car. 

 

Life in the fast lane – if it looks like we’re not moving, it’s because we aren’t

 

We were bouncing around from here to there, and Jockin was either regaling, persuading, cajoling, chiding, negotiating, wheedling, praising, and brainstorming (he does more or less all of these more or less all the time), via his bucket brigade of cell phones. 

 

Jockin Arputham, hard at work

 

Idly I picked up that day’s issue [October 8, 2007 – Ed.] of the Times of India, and read a series of pieces, placed adjacent to one another, that together represent an extraordinary demonstration of how, in cities, everything is connected to everything else, and in rapidly urbanizing or growing cities, everything comes back to land and property.  Mumbai is about as big a city as there is – 18,000,000 people and rising – and when you are there, the contradictions and aspirations and squalor are well-nigh overwhelming.  And they’re all in one issue of the local newspaper.

 

Slums and cities are where strangers live peacably side by side.

 

With this history, Dharavi’s population is diverse. Tamils, Andhras, Assamese, Biharis, Bengalis and local Maharatis; all India‘s peoples are here. Perhaps a little over half belong to India‘s poorest groups: dalits and Muslims. They tend to live semi-ghettoised, as in Shiva Shakti Nagar, within the same language group. Indeed, the poorer Dharavi’s residents are, the more caste-sensitive they are likely to be. Mr Kadam is a dhor, of the dalit tanning caste. Yet as his business thrived, his family became middle class, a powerful identity. Last year Mr Kadam exported 25,000 leather belts to Wal-Mart in America. He has moved his family from Dharavi to a smart suburb of Mumbai. Laughing proudly, he says his teenage son refuses to visit the ancestral factory, which he considers dirty.

 

The four children of Venkatesh Dhobi, all aged ten years and under, cannot shun their ancestral pool of filth. They work every day in this well of brown water, beside a litter-strewn railway line.

 

Crossing the railway tracks, east Mumbai

 

They pass unwashed clothes into the pool, where 20 adult dhobis—of the dalit washer caste—soak and scrub them. With an explosive grunt to keep rhythmic time—a sound not unlike that emitted by Japanese Noh theatre actors—together they thwack the heavy sopping clothes onto smooth stones. The children then strew them between the railway tracks to dry.

 

Venkatesh Dhobi, swamped with work

 

They are the fifth generation of Dhobis to work at this pool. The first, says Mr Dhobi, was his great-grandmother, who arrived from Mehaboob Nagar, in Andhra Pradesh, a century ago. “For 100 years, we have served this city,” says Mr Dhobi, a short 35-year-old with the torso of an underpants model. And yet their rural roots have survived. All the dhobis in the pool—which is called Dhobi Ghat—are from Mehaboob Nagar. Aged 14, Mr Dhobi was married there to a local girl. The big changes of the past century, in his view, seem to be that Dhobi Ghat has got much dirtier and people send fewer clothes to be washed in it. India‘s swelling middle class—people like Mr Kadam—prefer washing-machines. Together, Mr Dhobi, his wife and four children earn less than 200 rupees a day.

 

Dharavi’s diversity can be a problem. In 1992 communal rioting swept Bombay, sparking battles in the slum between Hindus and Muslims. Around 200 people were killed. But multi-culturalism is also a blessing. Unlike the city’s more homogeneous shanties—including a rusty sprawl of 300,000 mostly Maharatis along the runways of the city’s airport—Dharavi is too fractured, and massive, to be claimed as a vote-bank by any gangster-politician.

 

The slums abutting Mumbai airport

 

Slums are the redoubts of crime

 

I’ve previously posted about the societal cost of clandestine occupancy — people who use homes as a shield for illegal activities.  

 

When a whole neighborhood becomes a haven of clandestine occupancy, not only does it threaten its own denizens, it endangers all around it.  Unless the downward spiral of insular lawless tyranny is reversed, the consequences are appeasement, accommodation, or violence, as described in a horrifying New York Times story on the raids into Haiti’s Cite Soleil.

 

Slums are a place for clandestine occupancy:

 

But the slum has known gangsters. In the 1970s a godfather of the Bombay mafia, Vardarajan Mudaliyar, more or less ruled it. Using the slum’s large Tamil community—his own—as a base, he ran moonshine and prostitution rackets. He also claimed ownership over thousands of illegal hutments, and extracted rents from their occupants. So did his gangster rivals. In those days, Dharavi was dangerous.

 

Slums are a wealth extraction machine:

 

For a slum, what we see is squalor, as shown by the definitions in the Free Dictionary (“A heavily populated urban area characterized by substandard housing and squalor”) or Wikipedia (“A slum is a district of a city or town which is usually inhabited by the very poor or socially disadvantaged”) — but these are only the manifested symptoms.  Slums reconstitute themselves, seemingly without effort, restoring themselves to their previous squalid state.  They do so because they are economically rational, and their economic reason is wealth extraction.  Slums are a giant wealth-extraction machine, distilling human beings to their financial essence and pumping that value off-site. 

 

Slums disappear only slowly, as government makes change to put slumlords out of business:

 

To improve a neighborhood, raise the rent-paying power of its inhabitants.  To do that, raise their ability to earn money, and with it their choices about where to live and what to invest.

 

How do you eradicate slums?  You drive them bankrupt.

 

The way to win

 

And how can one bankrupt a slumlord?

 

[Concluded tomorrow in Part 3.]