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Urban Development

Wanted: New Frameworks for Urban Housing

As global base of the pyramid urban evictions intensify, we need good quality, affordable housing that creates attractive profit opportunities.

Though “cities” was one of the seven priority areas addressed at last month’s Rio+20, the general post-summit consensus was that very little actionable progress was achieved related to confronting the massively mismatched impending population explosion in the urban developing world.

Indeed, the ill-conceived “environmental sustainability” initiatives discussed and launched at the event are likely to mean very little to the 40,000-plus Dhaka slum residents who still do not know if they will have a roof over their heads tomorrow. So far in 2012, there have been major informal community evictions in Kathmandu, Delhi, Kolkata, Colombo, Phnom Penh, Manila, São Paulo, Rio de Janeiro, Nairobi, Rundu, Harare, and Belgrade. These evictions are invariably characterized by heavy-handed tactics and violence that—despite exposure by human rights and other organizations—go largely unrecognized and very rarely result in resident protections in the form of notice, recourse, or compensation.

The populations of urban Africa and Asia look firmly set to witness the most acute situations, as several already overcrowded cities will likely double in size over the next two decades and have no anticipatory preparation in place. The problem is magnified in war-torn and disaster-prone areas where even the most basic shelter conditions are continually under threat. Throw in the hazy and unregulated relationships between the public and private sector, and archaic land-related laws and regulations that blatantly disregard the poor, and it becomes difficult to counter-argue that this is one of the largest global security questions of our time.

Yet despite these shocking facts, it is the broad, inadequate response to the situation that begs belief. NGO-supported initiatives have limited funding and are small players in relation to the ever-expanding problem. More worryingly, on the policy front, slums are seen as a nuisance that interfere with—rather than inspire—city plans for reform. This means the threat of displacement is even greater.

Perhaps the most contentious contributory factor is the lack of cohesive policy where—in the tradeoff between the speculatively based value of land and what actually should be undertaken to achieve housing equality—attention never ceases to focus on what can ultimately bring the most lucrative financial benefit.

Nonetheless, there is some progress worthy of mention. For example, the World Bank’s decided in 2011 to halt lending to Cambodia for proposed luxury real estate development projects that ostracized the poor—this set a powerful example of a high level institution making a stand against what is essentially exploitation. There are also pilot programs such as the Construction Sector Transparency Initiative (CoST), which is making important strides in encouraging holistic frameworks, and increasing transparency and accountability within the construction sector.

In some regions with notably high shortages—areas of Brazil, Mexico, and Africa, for example—new organizations are attempting to create social housing ecosystems that genuinely encourage developers and land owners to develop strategies that take into account base of the pyramid tax breaks, savings plans, bonds, and subsidies. One increasingly popular mechanism in Latin America is the “land value capture” model, which allows governments to “participate” in the financial gains generated via zoning or other public infrastructure improvements. One of the main ideas is that such benefits are subsequently reinvested into social housing and other related infrastructure. Despite the teething problems, such concepts can and do overcome some of the regressive initiatives currently deemed suitable for evictees (such as poorly facilitated peri-urban land provisions that are only occasionally accompanied by grants or very basic housing structures).

While seeking solutions beyond protecting land rights, we must also create clear frameworks whereby government housing policy makers, developers, and landowners view those at the base of the pyramid as outsiders when it comes to housing provision. We need models that can build good quality, affordable housing on well-serviced land that—perhaps above all else—creates attractive profit opportunities so that we can avoid fueling segregated housing business environments.

With the laissez-faire nature of real estate sectors presiding over what a truly sustainable trajectory means, it is little wonder that the speculative boom-bust cycles that have long characterized the developing world remain at the forefront.  Creating a different political and economic framework for housing development will require that we push practically applicable reform measures like the ones I’ve mentioned here. It will also, more fundamentally, require a serious transformation in stakeholder attitudes—commitment beyond weakly led token gestures and endorsement of immensely inefficient housing development models, all created to give the appearance that something is being done. Given that some 97,000 new low-income housing units will be needed by this time tomorrow, we need more than appearances. We need real change.

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COMMENTS

  • BY Wilson Passeto

    ON July 27, 2012 07:18 AM

    Estimado Rudan, o que deveria ser mais importante de observar na cidade do Rio de Janeiro não foi mencionado em seu artigo. Você não observou que o atual Governo Brasileiro tornou-se empresário e está explorando petróleo no fundo do Oceano Atlântico, utilizando recursos públicos. Está fazendo isto bem na frente do Rio de Janeiro e você não viu! Nos últimos 30 anos exploraram o território sub aquático e descobriram petróleo, utlizando recursos públicos. Agora estão utilizando recursos públicos para explorar petróleo. O Governo simplesmente não investe em cidades. Não investe em esgoto sanitário. O Brasil tornou-se urbano nos últimos 40 a 50 anos sem que se tenham construido cidades! Assim as favelas proliferaram. Não serão estes programas ingênuos de construir casas que vai solucionar o problema. As favelas do Rio, Recife, São Paulo, Salvador e outras mais são essencialmente urbanas. São partes das cidades abandonadas pelo Estado Brasileiro mais interessado em negócios do que com o social. Cidades, e não as moradias, são um assunto do Estado, do Governo. Assim você não observou o que está realmente acontecendo. Temos que conscientizar a população!

  • BY Ruban Selvanayagam

    ON August 1, 2012 09:06 AM

    Wilson,

    The post was more focused on what is happening from a global perspective rather than specifically on Brazil, but you do make some very important contextual points.  You are very right in your comment about the abandonment of investing in Brazilian cities - however the problem is more related to the lack of business opportunity in the country´s construction sector.  Essentially, petroleum is a profitable business - housing and urban development (using conventional models) are not.  It therefore a case of reversing this paradigm and encouraging viable models to operate in the sector. 

    There is also a lot to say about how finance is being allocated.  Macaé (Rio de Janeiro), for example, is one of the major Brazilian hubs for petroleum and billions are generated annually but, unfortunately, much of this (public) finance gets into the wrong hands; the majority of the population live in sub-standard housing and the city certainly does not reflect the amount of wealth flow.  The benefits of more attention being paid to routing revenues into real estate and urban development for the majority would be massive.  However, the core operation of Brazilian politics would have to be bought into serious question and there would have to be a major clean up (much more than what Rousseff has achieved to date) - which is where the major challenge is.

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