Dilip D’Souza has a very thought-provoking article in the Washington Post about Mumbai’s slum dwellers.
He has also posted the article on his blog. I found myself taking over his comments section, and even after writing a whole essay there, I still had not voiced all that I wanted to say. Obviously, the only thing to do at that point was to blog about it.
I’d love to hear all your comments on my opinions, so please fire away and let me know even if you think I’m barking down entirely the wrong tree. Dilip, if you are reading this, that goes for you too.
Dilip’s main point, as far as I can tell, in simple terms is :
(i) Cross–subsidizing housing for slum dwellers does not work because it involves building free/ subsidized homes for slum dwellers and building a lot of for-profit homes (to offset the loss on free homes). Developers do not want to build too many for-profit homes lest the glut forces a drop in home prices. So therefore, they will always build very few free/subsidized homes.
(ii) On the other hand, if developers build slowly, then housing prices remain high and slum dwellers will sell off their newly built homes and move back into (other) slums.
So either way, cross-subsidization is doomed to fail.
I really liked the article, and I agree with Dilip on cross-subsidization being doomed to fail. What I would like to point out is the bigger picture. This is not an issue with cross-subsidization or Mumbai’s soaring real estate market. It also does not matter whether the resettlement is done by selling free/ subsidized homes built by private developers or by the government. It is an issue with the very idea of slum resettlement.
My point is, resettlement of slum dwellers has never been successful in any Indian city. It does not matter what method you adopt, whether it is cross-subsidization or forcible clearance. Slum resettlement will never make slums vanish from cities.
To understand why I am saying this, let’s look at cross-subsidization first. What are some of the dynamics that happen when a slum dweller gets an offer for free or subsidized housing ?
1. From the slum dweller’s point of view, any profit he makes from selling his new free/ subsidized apartment is a free lunch. He is used to the slum lifestyle, and can easily join another slum as long as there is one within a reasonable distance. He would rather make a profit by selling the apartment and using it for other priorities like education/ healthcare/ durable goods.
2. There is also the social aspect. People in slums interact much more closely with each other than people in apartments. Slum dwellers tend to miss their old, “communal” lifestyle and move back into slums after selling/ renting their apartments. This NY Times article by Anand Giridharadas talks about how some slum dwellers feel “caged” like poultry in apartments.
3. Also, people in slums usually think shorter term. Their need for money is more immediate. So even if their apartment will appreciate over the longer term, they would rather make a profit now by selling it since the money would be much more useful.
The issue is, slum dwellers themselves usually never feel an urgency to move up into apartments. There is no overriding cost involved (social or economic) that makes them want to stay in the apartment at the cost of giving up the immediate profit they can make by selling it.
The other issue is the presence of a nearby slum. As long as we are not eradicating all slums simultaneously, it is very easy for a former slum dweller-turned-apartment owner to move into another slum.
Then there is the option of forcible clearance. Apart from being autocratic, discriminatory and plain callous, it never works. There is no point in forcing slum dwellers to move to the edge of the city when their jobs are in the city. Unless the exurbs offer attractive employment opportunities (which they almost never do) these former slum dwellers will still pour into the city every day, spending much more than they can afford on transportation alone. This article in Frontline sums up why this approach can never succeed.
In both cases, what we really end up doing is moving slums around the city. The conditions that the people live in don’t change much. It’s just that instead of occupying prime land, slums occupy less desirable areas. For now. In a few years, those areas will also become much more desirable, and then the whole process will start again.
What, then, is the solution?
If the government really cares about slums (let’s assume it does care about the people and not just the prime land), there are only two things it needs to do:
(i) Improve infrastructure in existing slums: The issue with having slums is not that they are an eyesore and are occupying prime land. The bigger issue is the appalling lack of basic amenities and the spread of diseases. The government should provide basic infrastructure to slums – water, electricity, toilets. Most slum dwellers already use electricity – except that they use it illegally and don’t pay for it. Providing electricity and charging them (even nominally) is actually a step forward.
(ii) Develop the exurbs by offering incentives to factories to move out of the city: For instance, if leather-related companies were offered incentives to move out of Dharavi to Navi Mumbai, soon, some of the slum dwellers in Dharavi will follow them. If the new leather companies are set up in planned areas with infrastructure, then we can avoid a new slum coming up in Navi Mumbai.
The government can also identify which parts of the city are likely to grow and proactively ensure that the basic infrastructure is in place in these new areas. If necessary, the government can also partner with local employers to part-finance the costs of developing the infrastructure.
In essence, there is no quick fix to the problem of slums occupying prime land. Slum resettlement is an organic process, which will evolve as opportunities shift outside the city.
But I am not crossing my fingers and waiting for the day that any government will adopt such a far-sighted approach to the problem of slums in our cities. Especially when it means doing nothing about prime land.
For of course, slum resettlement is not about improving the welfare of the slum dwellers. It is really about improving the welfare of a variety of other vested interests.