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The city of Mumbai suffers from an acute shortage of affordable housing. According to sources, in 2008, about 2.3 million households in Greater Mumbai could not afford a basic housing unit. It is estimated that six out of every ten people live in slums. Against the backdrop of continued population growth, rising incomes and appreciation of property prices, the challenge facing the city of Mumbai, in ensuring access to quality housing for all, is increasing. Despite several promises by the government to build affordable homes for Mumbai’s poor, the city’s urban housing shortage hasn’t been catered to. This shortage has further led to rampant illegal construction by developers using cheap materials and shoddy methods in order to offer low-cost homes to low-paid workers.

What is called for is a fundamental rethinking and reshaping of urban plans, regulations, and policies to incorporate the working poor. As the living conditions of the poor often determine their work conditions, the expansion of urban infrastructure needs to take into account the basic needs of this large population. This will require an inclusive, rather than exclusive approach to urban infrastructure and services; urban zoning; urban regulations and laws; and urban plans and policies. This, in turn, will need inclusive urban planning processes in which representatives of the working poor have a voice in policy-making. Hence it becomes extremely necessary to develop a strategy that delivers sustainable affordable housing solutions to the diverse constituents of the region.

Concept of Affordable housing

The basic aim of the affordable housing scheme is to provide stimulus to economic activities through affordable housing programmes in partnership. Its immediate objective is employment generation of the urban poor, especially construction workers, who are experiencing the adverse impact of economic downturn. The Scheme will also strive to ensure equitable supply of land, shelter and services at affordable prices to all sections of society, and thereby to prevent the growth of slums in urban areas.

We aim at highlighting the existing issues that the city is facing in terms of housing shortage as well as affordability. It is our vision to promote “housing for one and all”.

Major issues
The shortage of adequate housing in Mumbai is already acute. About 60 per cent of households in the Greater Mumbai reside in unsanitary slums. Meanwhile numerous households continue to reside in extremely congested conditions in chawls and in dilapidated buildings. Since adequate, affordable formal housing supply for the urban poor is not a priority for the government, squatting appears to be the only housing option for poor in near future. At the same time, land values are escalating so sharply, that the only housing that is formally coming up is the high-end variety.

Scarcity of developed and serviced land, high land prices, rising prices of materials and resource constraints of government agencies are some of the factors which force the urban poor to live in substandard housing and unhealthy environment. Land in urban area, on one hand, is a scare resource which needs to be utilized appropriately in order to achieve balanced development and on the other hand, there is a very big need to supply land for housing the poor. Steep increase in land values and the growing interest of realty sector in land is perhaps making less and less land available for slums. Resettlement policy should lay down guidelines to minimize development- based, market induced displacements and insure rehabilitation of project affected persons based on human rights to adequate shelter.

Cities are getting spatially fragmented into high quality formal developments and informal areas marked by insecurity and acute deficiencies. Government needs to play a more proactive role to provide for the poor rather than relying on and facilitating the “market”.

Non willingness by developers to help the poor: The low-income market isn’t serviced for three basic reasons:
1. The inability to assess credit risk: no pay slips, no tax returns, uncertain cash flows;
2. Lower profit margins due to smaller transaction sizes and fixed costs; and
3. Lack of clarity on recoveries, especially given uncertainty over land ownership.

The cost of land is a very significant component of the cost of housing, and in cities like Mumbai it always amounts to more than 90% of the housing cost. Historically the development plans and planning policies have not made such provisions for housing the poor. In fact, some states and urban development authorities have resorted to auction of the limited land available with them in cities, setting exorbitant benchmarks for the market price of land – the best example of which being the case of mill lands in Mumbai. There is need for a well-defined policy for allocation of land to EWS and LIG segments to compensate for the ‘historic lack of earmarked space’ for them in the formal master plans. Rajiv Awas Yojna (RAY) emphasises that 20%-25% of developed land in all new housing colonies should be allocated to EWS/LIG housing, in addition to the other reservations in the Development plans. With respect to the land occupied by informal settlements – RAY states that the occupied land or a part thereof should be allocated to the slum-dwellers to enable them to have access to housing and basic amenities.