PMAY’s ‘Affordable Housing’ - The Theatre of Absurd

‘Brexiting’ has many explanations, one of them being a housing crisis amidst many other ills of globalization, felt across England including in London. As Pratap Bhanu Mehta states (Indian Express June 25, 2016), “if this is a revolt against globalisation, then this vote should be read, above all, as a vote against the city of London which has come to epitomise open immigration, financialisation of the economy, elites that are out of touch, a home for crony capitalism driven by real estate speculation ….”.

The signs were there of disaffection in the housing market even in London. The Housing and Planning Act, 2016, which when introduced as a bill in 2015, invited huge protests particularly from those who could live in London due to Council Housing (social housing), that was available on rental basis. The bill, now an act, sought to sell off council housing to the occupants through provision of Right to Buy, which meant that those who cannot buy had to leave main parts of London to live in suburbs, which was already happening.

The city of London was also demolishing council housing for high-end real estate projects that were extremely expensive. Anna Minton writes in the Guardian on April 20, 2016 that the cheapest one-bedroom apartment in Elephant Park development on former council housing at Heygate Estate in South London would cost £608,000, absolutely unaffordable to large segments of population. And a quarter of it was to supposedly ‘affordable housing’, to be made available at 80% of the market rent! Affordable housing has become euphemism for incremental privatization in housing, promoting paradigm of ownership housing. A large segment of population prefer to live in rental housing as they cannot afford ownership housing and the Housing and Planning Act, 2016, did not have anything for them.

‘Affordable Housing 2022’ named now as Pradhan Mantri Awas Yojana (PMAY) too is promoting ownership housing when only 61% of urban households have ownership housing and 35% live in rental housing as per the 69^th Round of National Sample Survey data (of 2012) in India. In an urbanizing economy, when continuous rural to urban migration is expected, housing programme should be addressing needs for both, rental as well as ownership housing. In particular, public housing, as Britain and other European countries’ experience shows, is rental, with rent subsidy paid to the housing corporation (developer) directly by the government.

The PMAY has two important components, one in-situ slum rehabilitation (ISSR) through private sector participation using land as a resource and second Affordable Housing in Partnership (AHP). The ISSR is the new name of the famous (or infamous) Slum Rehabilitation Scheme (SRS) introduced in Mumbai in 1995. Since 1995, 0.33 million dwelling units (29% of the total slum dwelling households of 2011) have been sanctioned (upto 2014 August) in the city under the SRS and none after the announcement of the ISSR under the PMAY. Only 82,000 units have been completed making SRS tenements available to only 7% of the households living in slums.

In Ahmedabad, SRS has been approved in only 12 of the total 834 slums in city. Ahmedabad’s SRS scheme was announced after Gujarat “The Regulation for the Rehabilitation and Redevelopment of the Slums 2010”. After the ISSR, about 30,000 dwelling units have been sanctioned in Gujarat under ISSR, which would be about 8% of the total slum households enumerated in 2011 population census in the state. At all India level, just 41,200 dwelling units under ISSR have been sanctioned, which will reach 0.3% of the total slum dwelling households in urban India. The numbers are so low because the SRS is viable only in the locations where the land prices are very high as private sector does not step in without certain minimum assured margin of profit. The former SRS and now the ISSR has not been successful because of it is its total dependence on the private sector to deliver what in other context could have been called ‘social housing’. The Rajiv Awas Yojana (RAY), which now has discontinued, had various options available for slum redevelopment and not just SRS, and had possibility of success except for its unnatural death on the change of national government in 2014 May.

The Affordable Housing in Partnership (AHP) is private sector led construction of new houses for the Economically Weaker Sections (EWS), defined as those whose annual household income is Rs 3 lakhs or below. Total of about 423,000 dwelling units have been sanctioned across India and which would reach only 3% of those currently living in slum housing. But, the AHP housing is expensive, costing any price between Rs. 7.5 lakhs to Rs. 10 lakhs and this would require the household to pay Rs. 7,000 to Rs. 9,500 monthly instalment for a loan of 15 years, that is 30% to 40% of their income. This is absurd and hence unworkable.

Besides, the AHP is being development in Affordable Housing belt, which, in case of Ahmedabad is outside the city’s third ring road, about 15 to 20 kms from the city centre. The housing constructed under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), BSUP (Basic Services for the Urban Poor) component, which had large subsidy, was constructed way outside the city and did not have takers. Only 78% of BSUP housing units are occupied as of mid-2016. Peripheral inaccessible location away from livelihood opportunities is the major reason for such high vacancy rate in the BSUP housing.

Has PMAY learnt anything from the past? Have we as a nation learnt anything from the past? Have we learnt anything from the housing protests and discussions in other countries or not? Nothing. It is the same rhetoric of ‘Affordable Housing’ seen in Britain, the cause of great disaffection leading to Brexit. The ISSR is euphemism for handing over prime lands of the city to the real estate sector, what can be called speculative capitalism. AHP is a way of diverting the subsidies to the builders in the name of the poor, again fuelling speculative capitalism. It is, probably conveniently, forgotten that the cities will not be looking smart without adequate housing for the poor? The subject of ‘Smart Cities’ will be handled in another article but currently both the slogans, Smart Cities and Affordable Housing sound like a Theater of absurd.