Affordable Housing Institute

Yesterday’s post commenting on the Economist‘s lengthy year-end article about Dharavi (Asia‘s largest slum) had reached the point of asking, how can one bankrupt a slumlord? 

It takes the output from the government factory: laws and money. 

 

It has become safer for two main reasons.

 

Laws.

[1] One is that in 1976 the state government gave the slum-dwellers limited rights over their hutments. They were recognised as “identified encroachers”, a status guaranteeing compensation in the event that the government bulldozed their shanties. In return, the government began collecting peppercorn rents—currently around 100 rupees a month for each hutment—on the encroached land.  

 

Money, in the form of free infrastructure.

 

[2] It also started supplying Dharavi with mains water and power, which the gangsters hitherto had stolen from the city and sold in the slum.

 

Infrastructure creates community.  Housing leads infrastructure.

 

This step put the slumlords out of business, and started a modest property boom. Today, tiny hutments in Dharavi are sold, without title, for 500,000 rupees.

 

The best proof of a successful municipal government is rising values for urban land.

 

The evening is darkening. And beside a barrow heaped with bright orange vermicelli—a sticky fibre eaten during the Muslim festival of eid—Mr Korde introduces a local celebrity. He calls himself Raja Bhai, or King Brother. A handsome Bihari, and comic, Raja Bhai has in 15 years built a garment business employing 200 people. His success is impressive. Yet it has left him exposed to the predators of the informal economy: rent-seeking officials. To protect himself, he is now launching a second career, in politics.

 

In Dharavi, Raja Bhai is looking for a ticket with the Congress party, for the next municipal, or even state, election. Meanwhile he is campaigning for the Lok Jan Shakti party, a champion of low-caste Biharis, in his native state. Either way, he is sure he will soon get elected office—and with it the clout he will need to drive away the shake-down merchants.

 

For thousands of men like these, Dharavi is a wonderful opportunity. But for millions of Mumbaikers, it represents a cost. Their city, South Asia‘s biggest, is choking. Its infrastructure is a crumbling disaster. And yet over the next decade, the UN says the population of Mumbai will almost double, making it the world’s second-biggest city after Tokyo. Massive urban redevelopment is required—starting with Dharavi, at the city’s heart.

 

Improving a slum is so easy on a glossy wallboard

 

By one estimate, the slum’s land alone represents $10 billion in dead capital.

 

And much of that wealth is extracted and invested outside the slum:

 

Rent day

 

Out goes a torrent of wealth, a concentrated beam going to the slumlords, almost none of whom ever live in the slums they exploit.  Their rent collectors may live in the neighborhood, much as every prison has trusties, but there are the thin upper crust little different from those whose rent they collect. 

 

From the slumlord’s perspective, therefore, a slum is a place efficiently to extract rent from those who must live somewhere and will live wherever it is cheapest to live. 

 

Tent extraction depends on the customer’s income, not the quality of accommodation — where else can the poor live?  Thus a slumlord suffers no penalty for not improving his property.  In fact, because the slumlord lives elsewhere, in the land of property and plenty, he has no positive incentive to reinvest in the community. 

 

(Now you understand why “absentee landlord” is so often a pejorative — the absentee landlord’s economic incentives can be diametrically opposed to the neighbors’ and the community’s.)

 

That’s why government plays an essential role; it competes the slumlord out of business.

 

Co-operative housing being built in Mumbai: Oshiwira 2, going up

 

For a decade, the state government has tried coaxing the slum-dwellers to let it bulldoze their hutments and build high-rise apartments instead. Each dispossessed family is entitled to a flat of 225 square feet. After 30 years, they will be allowed to sell it. But only a few have accepted this offer. So now the government is trying to enforce it. In August it put the bulldozing and redevelopment of Dharavi, in six parcels, out to tender. The work was due to begin this year. But it has been stalled by bad press nationally and local protests, organised by Mr Korde.

 

Change is disruptive but not always bad — in fact, it’s usually good.

 

So, these may be the last days for Dharavi. If so, much that is wretched will be lost. And, who knows, maybe something better will arise. Most of the slum-dwellers doubt this. And a few high-rise blocks, scattered across the slum, do not inspire great hope. Many are half-built and slowly mildewing. Lots of their residents, it is said, have already sold up illegally, and moved back to the slums, seeking things that town-planners cannot provide: a sense of history, community and freedom. Dharavi has these, as well as many horrible problems. It is organic and miraculously harmonious. It is intensely human. Unlike the random tower-blocks, Dharavi makes sense.

 

Actually, so do resident co-operatives, like Mankhurd in east Mumbai.

 

Mankhurd resettlement co-operative, built by the National Slum Dwellers Federation, in east Mumbai

 

The issue is financing, maintenance, and incentives — but those are posts for another day.

 

For small businessmen like him, the redevelopment plan is a nightmare. The slum’s hutment factories, havens from tax and regulation, would be destroyed. In their place would be purpose-built workshops, for rent at commercial rates. “I will be finished,” says Mr Khan, the scholarly looking tailor. For poorer residents, like Ms Ishwar, the widow living in rubbish-blown misery, the story would be different. Her new apartment, unlike her current hovel, would be fit for human habitation. If she, or rather her relatives, sold it, they would be rich. Either way, Mr Korde admits, the scheme will eventually happen.

 

Count me among those who believe it should happen, because Dharavi is a fixable slum:

 

We think of land as immutable, but it changes, including its topography, and the presence or absence of clean water is a crucial element in urban success (which is why so many cities are built on rivers). Dharavi was always in urban Bombay, and as other parts of Bombay were built and filled, Dharavi’s sanitary viability plummeted. That dropped land values, making it a promising place for immigrants.

 

Time and again we see affordable housing — whether slum or almshouse or mobile home or public housing — situated in the worst physical land located closest to the urban core. ‘Worst land’ means lowest, dankest, softest, least serviced (by roads or water/ sewer or power). 

 

Why do the poor come there?

 

Because that’s where the money is, and they have to walk to their work.

 

To fix it, the residents need to be at the table making it happen:

 

People are smart; communities of people always have some very smart people. Communities can be even smarter than individuals, if the community is knowledgeable and participates constructively — not naively but with an ability to engage and debate and negotiate and learn. That takes some doing, and some time, and the right mix of community people in the community leadership. It’s hard to define how to achieve it, but easy to recognize when it occurs — when the community group or resident council is participating actively in the deal structuring with the explicit goal of making happen not the best possible result, but the best result possible.

 

To do that, the residents will need both political savvy — which in Mumbai they have, and plenty of it:

 

Jockin and his colleagues explaining their high-rise co-op to a USAID delegation

 

And also a financial advisor, and some working capital.  Did someone say Thanksgiving miracle?

 

Gates millions, slum-dwellers: Thanksgiving miracle?

By NEAL R. PEIRCE

Call it, if you will, the unlikeliest marriage in the world — high-flying capitalist dollars earned by multibillionaire Bill Gates flowing to a network of Asian, African and Latin American slum dwellers who are often obliged to struggle for shelter, fresh water, even access to a toilet.

 

But in a Thanksgiving Day announcement, the Bill and Melinda Gates Foundation have made it official: It is making a $10 million operational and development grant to Shack/Slum Dwellers International.

[…]

 

Affordable housing expert David Smith defines the breakthrough in other words: “SDI has cracked the problem of creating bottom-up pressure that catalyzes the poor from inchoate mass into an effective, intelligent counterpart of government and the private sector.” Smith’s nonprofit Affordable Housing Institute will help SDI implement the Gates grant.

 

Me and my laptop, in Mumbai traffic, as I try to sketch the elements of an International Urban Poor Fund 

 

Here’s to better tomorrows in Dharavi:

 

Santa Cruz slum, Mumbai, night

 

It is 2am, and a violent drumming erupts outside Mr Korde’s house. Booming in a six-beat rhythm, it ends in a crashing roll. This is repeated, again and again, rising as the drummers approach.

 

The sound is thunderous. A few huge rats rush by the window, fleeing the noise like driven pheasants. And suddenly the drummers appear, parading through the slum, dragging on wheels a huge statue of Durga—a Hindu goddess, a multi-limbed and multi-coloured giantess, astride a tiger.

 

Flower stall near the temple of Mahalaxmi

 

On the drum-roll, the processors pause, and golden flares explode either side of the statue. In every doorway, along the alley, slum-dwellers are watching in silence. It is a thrilling and dream-like sight. This is apparently quite normal in Dharavi.

 

A living place — that can be made better.

 

I’m hoping to soak up some serenity from the garden Buddha