[Continued from yesterday's Part 2 and the previous Part 1.]

As we continue reviewing where urban Indians live (a companion to my previous two-part snapshot of India’s housing situation), and where they will live in the future, we started at the bottom, where the poor are making their own housing and communities entirely independent of government, then looked at all the affordable homes being delivered, in one way or another, with some government assistance. Now, finally, we come to the purely market solutions:

Ad for Ambuja cement: such billboards are ubiquitous throughout India

[Unless otherwise noted, all photos in this multi-part post were taken by David Smith on visits to India.]

7. Market walk-up

Most Indian cities are expanding rapidly.  The market’s fastest means of creating additional formal housing is for low-skilled labor to build two and three-story homes.  Neighborhoods like this are common all over Gujarat and Rajasthan:

Indian sprawl: expanding Jaipur

Sprawl is nothing unique to America – it happens whenever people have the chance to urbanize across land that is not too expensive:

Like many Indian cities, Jaipur keeps expanding until it hits natural barriers like mountains

When land is cheap, by far the easiest form of construction is a walkup, and in India, with its wealth of cement and sun, walkups are easy to build, hence cheap to buy:

However built, that’s a structurally credible three-story house

Once built, they become homes and neighborhoods:

Pride of ownership in the paint and stucco, and more homes coming behind

In most of the world – and for that matter, throughout most of history – a home is a process, something to be continuously improved:

Behind the streetscape, people keep building informally

The home is also the boundary of private space:

People make their own private urban spaces

8. Middle-income high-rise

As the city grows, its core becomes progressively more valuable, and that means it has to go further up:

High-end apartments, Mumbai: protected by concertina wire

Much of these are high-end:

Your enclave in the air: Mumbai

Much of Indian affordable housing is in the form of co-operatives, and judging by at least this one sign, the problem of free riders is universal:

A remarkable testament to ineffectuality: co-op fee defaulters

Throughout India, we see mid-rise and even high-rises springing up in the newer districts of growing cities:

High-rise, Ahmedabad

I didn’t go inside so I cannot be sure, but I expect these flats to be much larger than the low-income, perhaps 45 square meters to 70 square meters:

Balconies, piazzas, wide staircases: external signs of luxury

The goal is always the same: ownership.

A universal happy face: homeowner with keys to the new home

9. Market-plus subdivision

Name that country?

By now you might be forgiven for thinking that something in the Indian national character compels either a small flat or at minimum residence in a high-rise.  Prepare yourself for a surprise:

You’d think you were in Abilene, not Ahmedabad, wouldn’t you?

These apartments not only look Western-style on the outside, they are the same in the inside – anywhere from 80 to 120 square meters (850 to 1,300 square feet), laid out in a form and with amenities that would make any American feel completely at home.

These will still be quality homes in twenty years: Ahmedabad

I was personally agog at seeing them, they seemed so thoroughly incongruous – but then I asked myself, what housing will still be market-quality in twenty years?

High physical density but low people density: Ahmedabad

10. Havelis and palaces

Back in the eighteen and nineteenth century, when India underwent its first wave of urbanization, the great textile merchants and import-exporters lived in sumptuous townhouses called havelis.  Bikaner and Mandawa, two towns in western Rajasthan, have large concentrations of them.  Most are today crumbling into ruin – the caravan routes having been severed after the India-Pakistan partition created a barrier to land traffic – but a few are being restored, such as Haveli Nadine Le Prince:

Urban luxury, nineteenth-century style

A few have been converted into historic or heritage hotels:

Pal Haveli, Jodhpur

They are right in the center of town, meaning all of organic India is just outside the front door:

Pumping water right outside Pal Haveli, Jodhpur

Inside is private serenity:

In the afternoon cool …

And that is my takeaway from housing in India.  The outside is nothing, it is the grimy and weatherbeaten face one shows the world at large.  One keeps one’s soul inside:

Urban luxury, nineteenth-century style

Yet, just outside the gates, lies rambunctious India:

Exit your gated community, and you’re back in India

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[Continued from yesterday's Part 1.]

Does Does it matter where they live if they all go to the same school?

In yesterday’s post laying out a typology of where urban Indians live – a companion to my previous two-part snapshot of India’s housing situation – we started from the bottom up, looking initially at the purely private, purely informal solutions that people create out of necessity.  The photos demonstrate that given enough incumbency, people acquire an implied political legitimacy, and the municipality takes small steps to rationalizing the public-space aspects of the urban infrastructure. 

[Unless otherwise noted, all photos in this multi-part post were taken by David Smith on visits to India.]

4. Slum-relocation community

As slums are a place where private investment outpaces public infrastructure, with continuous urbanization there usually comes a moment when the informal settlements have overrun the available transportation or utility infrastructure, and a portion of the slum must be demolished to create space, such as for a railroad right-of-way.

Alleyway through a slum: that’s a train going by

Commuter train, Mumbai – the municipality required ten meters right-of-way either side of the tracks

Under Indian law applicable to Mumbai, the slumdwellers had a right of access to housing, meaning that to relocate them required their consent, and to obtain it, the government promised to build them new affordable high-rise co-operative flats (which we’ll see later in this post).  But that would take time, and in the meantime, the right-of-way had to be cleared, so the municipality built relocation flats – transitional housing:

Relocation flats, Mumbai

Naturally, people living in transitional housing have little motivation to beautify their public space:

Relocation flats, Mumbai, the trash does tend to pile up

Yet they keep clean their interior space:

Flats arranged around a courtyard, and it is fairly clean

When in their relocation settlement, they conduct business.

Pipe scavenging and recycling business

5. Affordable co-op

Because housing – its location, quality, production, and affordability – will be a driver of Indian global urban competitiveness, at some point a government – usually a municipal government – decides as a kind of civic economic self-defense that it must create affordable housing. 

Mankhurd co-operatives, funded through World Bank Loan repaid by railway surtax (see below)

As cities densify, there is only one direction to go – up. 

Oshiwira 1, affordable co-operative built by SPARC, Mumbai

The city becomes vertical, and to become vertical, that requires structural framing, which implies formality. 

The scaffolding may be casual but the building is reinforced concrete

Similarly, cities mean traffic jams, and bad cities have worse traffic jams, so the municipal competitiveness – to say nothing of quality of life – requires the addition of public transportation, and depending on location, that often means railways.

In Mumbai, for instance, people relocated away from municipal infrastructure (previous grouping) benefitted from affordable new-construction high-rise co-operatives whose principal loans were repaid through a surtax on railway tickets – thus drawing a direct financial link between the improvement of middle-class infrastructure (in this case, the railroad right-of-way) and increased affordability for the poor.

Once the government is involved, formality also implies certain basic amenities.  Even though the flats are tiny, they have all the necessities, such as a flush toilet:

Toilet, which will be two footprints in the floor

The toilet lacks fixtures – for the time being, it is merely a ceramic hole into which people make their deposits – but the configuration allows for a later retrofit of an individual seat toilet.  The apartments are extremely small, averaging 25 square meters (about 270 square feet), which compels design-size limitations such as showers rather than tubs:

Bathroom: designed for just a handheld shower

Concrete, though strong, is brittle, and extremely difficult to retrofit.  (Ever try drilling into concrete?) 

Wiring running outside the structural concrete, Oshiwira 1

[We see a similar phenomenon in pre-WW1 English homes and apartments, where the plumbing and electrical run outside the structure because there is no room inside the building – and its narrow walls – to accommodate hiding the piping.]

Because increasing lower-income Indian affluence changes people’s housing consumption expectations, the embryo apartment that is an acceptable size today may be functionally obsolescent in a decade, and if so the retrofitting will be a challenge.  Even though I am delighted to see these high-rise flats going up, I worry just a little about their eventual economic or physical obsolescence. 

6. Affordable high-rise market flat

With such an enormous shortage of housing – of all configurations, particularly the affordable ones – it’s no wonder that major Indian conglomerates are rapidly entering the field of new housing production, such as with the Tata nano-house.  Sometimes it seems as if the entire nation is one gigantic construction site:

Affordable high-rise in construction, Ahmedabad, January 2010

Built, building, and planned to be built: Ahmedabad

)

Affordable new-construction high-rise flats, south Ahmedabad

Affordable new-construction high-rise flats, south Ahmedabad

Remarkably, much of the construction is being done by women:

Women are a large portion of the construction workforce

The goal is a fully formal, mortgageable house in the price range of Rs 150,000 to Rs 300,000 [Roughly $3,500 to $7,500 US – Ed.], an income band for which there is already a huge demand, one showing no signs of abating.

)

Recently built affordable market flats, Ahmedabad

The developments are well designed and highly dense:

Site plan and floor plate, Ahmedabad affordable high-rise

Though small, the apartments are fully formal:

On the inside, it’s fully formal

They have a modest but serviceable toilet:

Two footprints today, a ceramic bowl tomorrow?

In addition to the utilities – water, electrical, and heat if required (often it is not) – there is a fully practical if tiny kitchen:

Everything including the kitchen sink

Indeed, so rapidly is India urbanizing, and so inexpensive is large-scale small-apartment construction, that just above the government’s level, the marketplace is exploding with new housing:

[Concluded tomorrow in Part 3.]

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Where do urban Indians live?  In almost every configuration and tenure imaginable, from living in ramshackle sticks-and-tents to Texas-style-subdivisions, with everything in between.

Tents in the foreground, gated subdivision in the background: Ahmedabad

A little while back, returning from my three-week trip to northern India, I posted a two-part snapshot of India’s housing situation, focusing on the confluence of events across political, economic, and urbanization dimensions.  This mainly visual post will slice through the onion by income and tenure configuration levels, giving a typology of the different forms of housing now present in Indian cities.

At the South Asian Housing Finance Forum, Delhi, January, 2010

[Unless otherwise noted, all photos in this multi-part post were taken by David Smith on visits to India.]

In a country of a billion-plus people, undergoing what is probably the highest rate of urbanization (measured in total population moving to cities), we can certainly expect to discover every imaginable type of urban residential accommodation – and that the nation is in fact greatly short of quality affordable housing.  Indeed, the Government of India officially estimates a ‘quantitative deficit’ of more than 25,000,000 homes. 

Further, because housing demand is elastic, as India becomes richer and as more new homes are created, people will consume more housing, household size will shrink, and households will increase much faster than the population does.  The result is that over the next 10-15 years India will have the ability to absorb the all-but-unthinkable number of more than 100,000,000 new homes, mostly in urban and urbanizing areas. 

Where does he live?  Where does his family live?

The India we see today is a nation in transition – exploding through the carapace of nineteenth-century soot, filth, pollution, and bustle into a twenty-first century powerhouse. 

If slums are a phase through which rapidly urbanizing cities pass – as I think they are – then we have to expect and calibrate India’s urbanization from the bottom of the pyramid on upward, starting with housing built entirely by poor people, for poor people, in the face of government indifference or hostility:

1. On the streets: pavement dwelling

We start with those who have come to the city despite having nothing whatsoever, and who live on the streets.  In Mumbai and in Delhi, one can find small or larger families some of whom live on the streets.

Family gathered on a Mumbai sidewalk

In America and the European cities, one can find the homeless, but in these developed nations, being homeless is always accompanied by a mental or behavioral problem; in India, it can be a condition of simple urban poverty. 

I’ve taken only a few photographs of Indian pavement families, because there is something so intrusive about using a long lens to peer into a household’s workings, even if the family has chosen to live their lives in public.  Still, there is also something homelike and practical, such as cooking:

Pavement family rice pot

Living on the street necessarily means evacuating on the street:

Man urinating discreetly into the gutter, Bikaner, Rajasthan

Men and boys urinating in public are so commonplace that a convention has evolved: if you turn your back to the street and hold yourself still, it is somehow understood that people should look away.    But male urination is the least of the sanitation challenges, for it can be done relatively discreetly and relatively hygienically.  More challenging is the effort to protect women and the related campaign to eliminate open defecation, which is not just a matter of esthetics but also of health – both for the evacuator and for the water supply, a risk that has been known since the dawn of history.

2. Impermanent slum (’landing paid for urban immigrants?’)

Pavement dwelling is the lowest economic form of urban existence because it is the least safe, the least private.  One notch up is the ramshackle urban slum, made entirely of found materials, and invariably located on publicly owned low-value land – usually next to the river, the stream, the paper mill, the cement factory, or the dump – where people can settle and create their own intra-community, a world of their own inside the world of the city.

I profile one such in A day in the life of a slum [Post to come – Ed.]:

Ahmedabad and the Sabarmati River

Throughout history, people have been lured to cities by the promise of higher money income, a promise that is usually true, and they imagine that when they move to the city, they will be able to keep the animals they have raised in the countryside.  That was true of the Irish who came to Boston during the Potato Famine, and it seems evidently true of the Gujaratis coming to Ahmedabad whom I photographed outside my hotel room window:

Keeping goats, most likely for milk

Critical to these households is that by moving to the city, they can earn money, give their children a better education, and expand their horizons, if not for themselves then for the next generation.

Slums adjacent to Mumbai Airport

3. Permanent slum (’informal settlement’)

Slum community built on the infill outside a truck distribution warehouse

Slums improve, though; given time, people gain a perception of security of tenure, and as they come to expect that they will be there longer, they bring more durable found materials into buildings and rebuilding their informal settlement.

Informal settlement, Mumbai

The house is made into a home, with a waterproof roof, laundry drying on the line, and herbs being cultivated in plants:

Note the plants being grown in pots

Characteristic of these slums is that they are, in general, ground-floor:

Self-built settlement, Oshiwira neighborhood, Mumbai

Buffalo yard in the Oshiwira informal settlement

People keep animals immediately outside the family home.

After a while, the slum becomes sufficiently permanent that people invest in structural materials to add a second story:

Work on the ground, live a flight up: Mumbai

Often a residence over a business:

New urbanism, home-grown: Dharavi, Mumbai

Given time, these neighborhoods become physically formalized:

Would you call that a slum?  After having seen the previous photos?

Sometimes the municipality also recognizes the legitimacy of a long-standing urban settlement, by adding public infrastructure like paving:

Jadibanagar, Ahmedabad: note paving and water tank (blue)

Jadiabanagr, Ahmedabad

Have you noticed what’s happened in this sequence of photographs?  All within the realm of purely informal housing – self-built, self-organized, self-perpetuated – we have the first faint stirrings of a civic response.  It starts with tolerance – visual aversion of their presence – and then rises to the gradual formalization of public space, for community hygiene or out of charity, it moots not.

What happens when the community decides it has a duty to these urbanites, whether or not it wished for them to arrive?

Ahmedabad: community center in informal settlement

[Continued tomorrow in Part 2.]

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Pirates have a real estate problem and a capital problem. 

We’ve got the capital, now we need the real estate!

Like highwaymen (land pirates) and kidnappers (wilderness pirates), for their business they need a work environment of vast uncharted spaces and complete lawlessness – for which the high seas often serve admirably. 

We’re ordinary fisherman … until we attack you

The pirates’ real estate problem is that, conducting their business in a place of no law – and hence no monetary or economic resources – they must nevertheless equip and base themselves in a place of monetary and economic resources – and hence of some law.  As James Blish put it in Cities in Flight:

And bring your built environment with you

The pirates eventually died out when sailing ships were replaced by fueled ships.  The fueled ships were faster than the sailing vessels – but they couldn’t themselves become pirates because they had to touch civilized ports regularly to coal up.  They could always get food off some uninhabited island, but for coal they had to visit a real port.

– Earthman Come Home, page 292

Aside from a supply problem, pirates also have a capital problem, in that whatever they steal – usually small and portable, like cash, gold, or gems – is valuable only if monetized – and once again, that drives the pirates backs into the realms of law.  These, however, must be different from their equipment bases – the base must be hidden, while the place one spends money has to be part of a lawful society.

There’s gotta be a place to go straight with our money, isn’t there?

Money conversion, in short, is an essence ancillary business to piracy.  You have to convert your loot and booty into legitimate cash, and like any other fencing operation, you’re willing to pay a heavy discount from notional fair value to change your dirty money into clean assets.

Missing from the diagram is how you invest your money

For instance, by buying real estate, which can suck up mountains of cash and turn them into annual revenue streams, with unexpected consequences as reported in this Associated Press story from Yahoo News:

NAIROBI, Kenya – Property prices in Nairobi are soaring, and Somali pirates are getting the blame.

Eastleigh, Nairobi: “Little Mogadishu” – note apartment high-rises for sale

This is bad news and good news.  Bad news directly in that soaring real estate values complicate affordability:

The hike in real estate prices in the Kenyan capital has prompted a public outcry and a government investigation this month into property owned by foreigners.

And bad news indirectly in that acquiring properties probably means the pirates have in fact consolidated their ill-gotten gains:

The investigation follows allegations that millions of dollars in ransom money paid to Somali pirates are being invested in Kenya, Somalia’s southern neighbor and East Africa’s largest economy.

Did piracy provide the construction loan for that high-rise?

 … but good news for civilizing pirates and reducing future piracy.

Even as housing prices have dropped sharply in the United States, prices in Nairobi have seen two- and three-fold increases the last half decade.

“There is suspicion that some of the money that is being collected in piracy is being laundered by purchase of property in several countries, this one being one of them,” said government spokesman Alfred Mutua. “Especially at this time when we are facing global challenges of security such as terrorism and others, it is very important for us to know who is where and who owns what.”

To be crystal clear, I am not condoning piracy – rather, observing that this is a harbinger of declining piracy.  For when pirates start sinking their capital into real estate – which, he reminded his blog readers profoundly, is immovable – they are on their way to going straight.  Turn booty into buildings and you have no choice but to rely on formal government to protect their asset values.  Moreover, while you can carry off your booty, you cannot carry off your real estate.

Portable wealth: where shall we transport it?

The investigation will also help the government catch tax evaders, he said.

Property, being collateral, can be seized.  Al Capone was convicted of tax evasion.

I wouldna been caught if I hadna spent the dough

Kenya may be the most attractive spot for pirates to launder their money because it shares a roughly 500-mile (800-kilometer) border with Somalia and has investment opportunities and a large Somali community of up to 200,000 people, Mutua said.

Investment opportunities abound?

Thus capital flows in an underground river of remittances: smuggle it into Kenya, then use stooges and front men to buy property on your behalf.  Result: asset transfer and asset legitimization.

In a neighborhood of Nairobi now called “Little Mogadishu” because of its Somali community, large business and apartment buildings have sprung up. A similar explosion of real estate development can be seen in higher-income areas of the city.

There’s no point being a pirate if you cannot spend your money and then retire from piracy.  Real estate and homeownership have the essential benefits necessary for retirement: security of tenure, improvability, and economic appreciation.

Somali pirates have been paid more than $100 million in ransoms the last two years (great map here), said Roger Middleton, a piracy expert at the London-based think tank Chatham House.

Jolly Roger Middleton thinks it’s $100m

That’s a lot of treasure to bury.  Income-producing real estate is a great place to bury it.

The average ransom is also up, from $1 million per vessel a year ago to about $2 million today.

In prior ages, pirates either had sovereign protection (e.g. Sir Francis Drake) or sought to cache their treasure far out of sight, to return to it later when they had rehabilitated their image or reinvented themselves as gentlemen. 

“Letter of marque” sounds much more distinguished, doesn’t it?

The Somali pirates also have their own sovereign protection, which they undoubtedly buy:

Kenya also does not have stringent laws against money laundering, though a bill to curb the practice is being debated in parliament. The U.S. State Department in its annual report by the Bureau of International Narcotics and Law Enforcement Affairs describes Kenya as major money laundering country.

The Pirate’s Dilemma – how do I legitimize what I have illegitimately obtained? – led to the irony of vast treasures so well hidden they were permanently lost.

Some day, lad, all this will be legal

Pirates in Somalia say they invest their ransom money outside their war-torn country, including in Kenya. One pirate who gave his name as Osman Afrah said he bought three trucks that transport goods across East Africa.  

From preying on transporters to becoming a transporter himself.  Set a thief …

A second pirate, who only gave his name as Abdulle, said he’s investing in Kenya in preparation for leaving the pirate trade.

Crime is a desperation anti-poverty strategy because the risks are so great.  No wonder rational criminals make their nest egg, then get out of the business as fast as they can. 

Making money from this …

… is much safer than making it from this

They also diversify:

“Pirates have money not only in Nairobi but also other places like Dubai, Djibouti and others,” said Abdulle. “I have invested through my brother, who is representing me, in Nairobi. He’s got a big shop that sells clothes and general merchandise, so my future lies there, not in the piracy industry.”

We have to see piracy as economic desperation. 

Not the typical real estate risk, is it?

This does not exculpate it but does explain it and suggest that reducing chronic structural poverty can also reduce piracy.

The investigation has drawn angry reactions from the Somali community, and business leaders said Somalis would not cooperate with the investigation and may go to court to try to stop it.

“This is very, very unfair discrimination,” said Hassan Guled, the chairman of the Somali business community. “We consider this order rubbish.”

Bah.  How then do you explain the doubling of prices?

Funded solely with savings, no doubt

Guled said Somalis living in Kenya have acquired property by pulling resources together and borrowing from banks.  

This is quantifiable, and if someone were to do it, I’ll bet that the total to be raised in such fashion couldn’t possibly equal the market capitalization of the property acquired.

Somalis here also depend on money sent by a large Somali population in Europe and America who cannot invest in those economies because of religious beliefs, Guled said.

In my religion, we worship money

As I posted more than two years ago in Filling a sieve?, the de-materialization of capital allows foreign aid to be eviscerated by being electronically stolen and routed straight out of the country into Swiss bank accounts.

Bellow Kerrow, a former member of parliament and a Kenyan national of Somali descent, said it is high demand, not money from piracy, that is behind the rise in property values. But Pius Khaoya, a real estate agent, said factors outside the economy are influencing property prices.

“The prices have gone through the roof and it does not tally with the performance of the country’s economy,” said Khaoya, who works for Crystal Real Estate.

Nor are the price rises generally distributed; instead they concentrate in Somali neighborhoods.  Occam’s Razor says it’s piracy money being repurposed.

The money has to land somewhere

A real estate agent who spoke only on condition he wasn’t identified so as not to draw the wrath of Somali customers said some Somali businessmen pay double a property’s worth just to easily and quickly complete the sale.

Preferably in cash.

It’s cash and carry

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[Previous Months In Review here: Oct 09, Sep 09, Aug 09, Jul 09, Jun 09, May 09, Apr 09, Mar 09, Feb 09, Jan 09]

The more I write about housing, the more entangled it becomes with the fabric of cities, formally and informally.  Housing is what makes places into cities, because cities are where people live in close proximity, and when the people move to the city faster than the city is willing to cope with them, the result is an explosion of informality and slums. 

A global phenomenon

In the formal city, the government defends my property – police, firefighters – and services my property – roads, utilities.  In the informal city, the government at best ignores my property – Kibera, Africa’s largest slum, is on no city map.  Because of this, political nature abhorring a vacuum, when government is absent, other power structures occupy the space, which as we saw creates more enemies of slum upgrading within the slum itself, as profiled in Slums, the enemy within: Part 3, Illicit landlords, and Part 4, fifth columnists:

In yesterday’s post, we discovered that despite its many palpable benefits, and the visible reality of its construction, many Kibera residents are greeting Kibera’s first slum upgrading with fear.

Kibera in 2005: Whom can you trust?

Background: A while ago [Early September – Ed.], Kenya’s newspaper The East African Standard published a great and extensive series on the proposed upgrading of Kibera: Africa’s largest slum, which I visited in 2005.

Kibera in 2005: photo taken during my visit

The articles covered community resistance in the Standard, Kenya, the indignity of having no toilets, slumlord exploitation, slumdweller fears, an idealist’s critique, the power of savings, the potential to reform building codes, and an editorial endorsing affordable housing (which the Standard mistakenly but understandably calls ‘rent control’).  Woven throughout the series were the main themes that show why slums, though hard to eradicate, are also hard to upgrade. 

Although the program will provide the lucky relocates with much improved housing at only a small increase in rent from what they are paying structure owners, these residents – some of whom have known little else their entire lives – have a seemingly inexhaustible supply of fears.  Where do these fears come from?  From those who win from a slum, such as landlords – or, as they prefer to be called, structure owners.

Kibera in 2005: Most of what you see is owned, according to somebody

You might expect such slumlords to be embarrassed, or to voice their objections through useful mouthpieces like the residents.  Instead they’re visible and belligerent:

As we saw in November, sometimes the best thing that can happen to a slum is for it to suffer a physical catastrophe, like a fire, that strips away the utterly inadequate housing and reveals thousands of people who suddenly have an urgent need, as we profiled in a four-part post on the conflagration that destroyed the Joe Slovo slum in Cape Town, in The urban palimpsest: Part 1, wiping the slate:

The man for whom the settlement is named: Joe Slovo, South Africa’s first democratic housing minister

The best thing to happen to the informal settlers of Cape Town’s Joe Slovo township began with a spark:

March 9, 2009

On 9th March 2009, a fire razed 500 shacks to the ground, and left 1,500 homeless. 

(Unless otherwise captioned, all photos are from iKhayalami and cover the March 9-11 rebuilding days.)

What evolved was a partnership between the community and iKhayalami, where an entire section of Joe Slovo was planned, cleared and rebuilt using materials and expertise supplied by the NGO, and the labour and community access supplied by the leadership – all done at just 10% of the cost of more formal housing developments.

The story that follows (a large set of pictures is here, from which this post’s images are drawn) is remarkable for what happened but even more for what it demonstrates about why slums are both resilient and change-resistant, how they become political and economic stalemates, and what becomes possible when tragedy cracks options open.  It also flashes insights into the role of Mission entrepreneurial entities (MEEs) and the responsive power of networks.

Part 2, gridding the vision, Part 3, building the grid, and Part 4, writing the lessons:

The story has a happy ending:

In conclusion

While these shelters are not perfect, and certainly dissimilar to more formal housing projects, iKhayalami was able to re-shelter a significant number of people:

Joe Slovo, March 2009

1. In conditions far above what they had before

2. In situ

3. In a way which prepared the site for future introduction of basic services. 

All these are enduring achievements.   Because slums are places where private investment has outrun public infrastructure, the rationalization of informal private settlements should lead public investment – in fact, it should induce public investment.  The city has granted the Joe Slovo residents tacit citizenship by handing them disaster packages and working with them in their deployment; it will be hard for them to retract it when the infrastructure can now be laid down logically.

Joe Slovo, March 2009

This was all done at a cost of less than 10% of what more formal structures cost and in just a few weeks.

Self-built means self-labored, which means cheap.

Remarkably given the circumstances, it was the community that came to the table in this instance and not government. 

Not remarkable at all: networks and markets always move faster than government.

Joe Slovo, March 2009

In South Africa, decent housing is a fundamental right enshrined in the ANC Charter, but that doesn’t mean everyone is well housed.

Estimates suggest a government house may only be delivered 30 years after being on the waiting list. 

Or until there’s a cleansing fire, which creates the urban palimpsest.

Joe Slovo, March 2009

An alternative approach to tragedy is the one being adopted by Manila in its efforts to bring the city to the people:

In a similar way, the typhoon-battered city of Manila is now proposing to grow by relocation, moving those who lived on its squalid and polluted river banks out to a new city a-building.  As reported in Bulatlat:

16 Oct 2009: Relocation Solution Poses a Dilemma to Slum Dwellers Made Homeless by Ondoy

Days after Ondoy struck, the government declared that it would no longer allow these poor Filipinos to return to their shattered homes.

Manila waterway slums before the typhoons

What is the ‘home’ to go back to?  Disaster can create an urban palimpsest, wiping away everything but the land itself.  So, as in Joe Slovo in Cape Town, we have the tension – an urgent need to do something very quickly, and a unique opportunity to do something very profound.

MANILA – In the aftermath of typhoon Ondoy, many were quick to blame the urban poor living along the creeks, waterways and riverbanks of Metro Manila. Their shanties and their garbage block these sewage systems, hence worsening the impact of the typhoon, so goes the familiar criticism.

Nonsense.  While I have not toured the now-destroyed riverbank slums, the pictures I saw at the Asia-Pacific Housing Forum, coupled with the scale of flooding, make this claim just about impossible. 

Days after the disaster, the government declared that it would no longer allow these poor Filipinos to return to their shattered homes.  Vice President Noli de Castro, who also chairs the Housing Urban Development Coordinating Council, confirmed in a news report that the families who were living along waterways and riverbanks would no longer be allowed to rebuild their homes in those areas.

Mr. de Castro’s long been interested in housing and slums

Anti-poor, or another reason?

Once the city embraces our exurbs, it makes an economic trade – the city will provide services, and the property owner will pay taxes, the arithmetic of which can be made transparent, as provided by my own city of Cambridge in our fair city’s fair taxes:

If only municipal government came with one of these certifications

In Our Fair City of Cambridge, as Click and Clack like to call it, nothing is as fair as our taxes are fair – and that’s fair enough, isn’t it?

Not just a law firm, a motto: the Harvard Square offices of Click and Clack

Roughly a month ago, there was mailed to our house a handy and glossy pamphlet, Understanding Your Taxes (link in .pdf, and highly recommended) that lays out, in English so plain it might as well be soporific, the basic facts about Cambridge’s city budget, and the role that local real estate taxes play in it.  As we’ve seen before, the basic budget algebra of real estate taxes requires the municipality to raise as much in annual revenue as it spends on city services. 

As Understanding Your Taxes puts it:

Basic facts about the real estate tax levy

Three major factors are responsible for calculating a tax bill:

1. The City Budget

2. Commercial-Residential Property Tax Classification

3. Property Values (Assessment)

That order is not happenstance: the city’s budget is built up uses first:

In city budgeting, you eat the pie before you pay for it

At the other end of the spectrum, when a neighborhood ceases to generate meaningful tax revenue because its property values are in decline, the city government can be dazzled by the prospect of using eminent domain to sweep away the hodgepodge of declining uses in favor of a master-planned upscale revitalization, only to miss its economic launch window, as shown in Collective failure: Part 1, the city loses, and Part 2, the company loses:

Who won in New London?  As far as I can tell, nobody.  New London lost: the jobs crossed the river to Groton.  Pfizer lost: it spent $294 million on a property that is now vacant and on which it will lose $75 million or more.  Ms. Kelo lost:

“In all honesty, I’m not happy about what happened to me,” Ms. Kelo said. 

Financially, she would have been better off selling when NLDC came calling.

But, she added, “With 43 states changing their laws, in that sense I feel we did some good for people across the country.”

Everybody lost.

The little house that became a symbol: relocated and refurbished

Naturally, when the real estate markets seize up, government tries to lubricate them, occasionally without success, as explored in mutual stalemate:

If to a hammer everything looks like a nail, to a government everything should be solved by lawyers, guns, or money.  So when the government factory wants to achieve particular public-policy results, it manufactures either or both of its products – laws and money – to motivate private participants, principally Mission Entrepreneurial Entities (MEEs), as essential actors in affordable housing delivery to do its work for it. 

I’ve given you every chance to move, Black

As revealed in a recent Guardian (UK) article, if the private participants don’t move, the government can find itself stalemated.

Why aren’t you moving?

It was a £1.5bn cash injection that was supposed to make a dent in England’s 5m-strong housing waiting list.

Five million waiting list?  In a country of 60 million total? 

The NHF, which represents housing associations, estimates that households on the waiting list in some areas would have to wait 280 years for a home.

Time to wake up, Rip; your home is ready

As the city’s economy grows, housing affordability shrinks, and the city’s finances improve, which combination gives elected officials a chance to bestow largesse, or even better, to promise to bestow largesse, as did Boston mayor Tom Menino in Praiseworthy intentions:

Is there harm in trumpeting something one has not done?

The city has not yet negotiated a price with Bank of America, but the money to buy the five buildings will come from $8.2 million in federal funds set aside to buy and renovate foreclosed homes.

Here we have an advanced form of political vaporware: a pledge to do something in the future, in exchange for your votes – your political equity – today.  That’s outstanding political calculus, of a type I’ve encountered before, most memorably in Egypt, when as a subcontractor to a USAID prime contractor, I designed and built financial projections for a 500,000-home affordable housing production program that President Hosni Mubarak announced one Pharaonic day on the campaign trail, seeking to keep his winning plurality above 90%.  I designed the program; I wrote the financial model; I highlighted the key decision variables; I sent the proposal forward.  President Mubarak got elected overwhelmingly, and I never heard further if the program ever advanced beyond that initial conception.

“What did his models say it would cost?”

The properties will then be resold to homeowners, nonprofit groups, or private developers.

Otherwise known as “people we haven’t located yet.”

City officials said they have also applied for [A deflective version of 'maybe we will get' – Ed.] another $39 million under the federal Neighborhood Stabilization Program.

Otherwise known as “money we haven’t got yet.”

Can we apply for money too?

City officials aren’t the only ones playing fast and loose with consistency – our Federal government showed remarkably flexible situational ethics, insisting on executive compensation caps for all banks – except the one we really, really need bailed out – as revealed in Do as I say, not as I did: Part 1, what I say, and Part 2, what I did:

Yesterday we had brave words and sound logic from Kenneth Feinberg, Treasury’s ’special master for compensation,’ who as quoted in the Wall Street Journal (quotes in blue Times Roman), hopes his new standards “will be voluntarily picked up” throughout corporate America.

You’ll pick it up if you know what’s good for you

He might’ve tried starting with Freddie Mac:

The government-controlled mortgage finance company is giving CFO Ross Kari compensation worth as much as $5.5 million. That includes an almost $2 million cash signing bonus and a generous salary that could top $2.3 million.

We also featured the return of Sherlock Holmes in What makes a good consultant? Part 3a, attributes of character:

[Continued from the previous Part 2b and Part 2a, which dealt with services and activities.]

[A previous trio, Part 1a, Part 1b, and Part 1c, covered the rules of engagement with clients.]

Now we come to the most interesting part of my narrative.  Not all those who are clever are cut out to be consultants.  One may learn the skills, but one does not spend thirty-three plus years in affordable housing finance, as the Compleat housing finance consultant, without being temperamentally suited to the role.  That my friend was, sometimes to my exasperation:

But with me there is a limit, and when I find a man who keeps his cigars in the coal-scuttle, his tobacco in the toe end of a Persian slipper, and his unanswered correspondence transfixed by a jack-knife into the very centre of his wooden mantelpiece, then I begin to give myself virtuous airs. I have always held, too, that pistol practice should be distinctly an open-air pastime; and when Holmes, in one of his queer humours, would sit in an armchair with his hair-trigger and a hundred Boxer cartridges and proceed to adorn the opposite wall with a patriotic V. R. done in bullet-pocks, I felt strongly that neither the atmosphere nor the appearance of our room was improved by it.

The Musgrave Ritual

He never threw anything out …

And the much more practical problem of water intrusion Only when it rains: Part 1, leaky roofs, and Part 2, pricy torts:

The queen of torts was out of sorts

Evidently building code does not require a property to be leak-free – if it did, probably no property anywhere would meet code.

When it becomes clear that a building has problems that go beyond punch-list items — a kitchen drawer, say, that won’t stay shut or a closet door that sticks — the first thing owners should do is hire an engineer.

Or a capital needs assessor.

“You have to get a top-to-bottom assessment of the building — the interior, the exterior, all the systems,” Mr. Sladkus said. “That creates a record and tells the board where things stand.”

The sooner this is done, the better, he added, because it takes away a sponsor’s potential claim that problems were caused by the apartment owners. Depending on the size of the building, an engineering report could cost $10,000 to $50,000.

It’s not cheap – and you get what you pay for.

“Why are you complaining?  All your limbs are reattached!”

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