Housing the Urban Poor in

INPUT 2012Cagliari, 10 May 2012

Housing the Urban Poor in Asia’s Globalized Cities:

Evaluating Outcomes, not Outputs

Yap Kioe Sheng

1. Introduction1. Introduction

For decades, the poor have informally housed themselves. Unable to offer an alternative, the themselves. Unable to offer an alternative, the authorities mostly tolerated informal housing

The United Nations estimates that over 500 million people live in inadequate housing in urban areas of Asia

As cities develop, the poor are evicted As cities develop, the poor are evicted

Evicted families often face serious hardship

Evictions follow a pattern:

1. reduce the population

a. soft or hard pressure to leave

b. bribing of community leaderscommunity leaders

2. offer of compensation

a. in cash

b. in land

c. in housing unit

When the population resist eviction, land-owner and residents may compromise

The landowner and population decide to divide the land: land sharing

Today, governments want world-class cities without slums

Land owners want to optimize land valuesoptimize land values

Investors seek land to invest in real estate

Land is too valuable for housing the poor

Because of todays’ high land values, developers prefer to give housing units in the project rather than landrather than land

This looks like an attractive solution, but is it?

2. Eviction from Boeung KakPhnom Penh, CambodiaPhnom Penh, Cambodia

Boeung Kak Lake

15,000 to 20,000 people lived in and around the lake

US$1.5 billion

The Municipality of Phnom Penh leases the area to a private company for redevelopment

The residents protest and claim that they had more rights to the land than the company

The company fills the lake, flooding the houses; The company fills the lake, flooding the houses; the population, with NGO support, starts negotiations

The company offers house-owners (but not the renters) three options:

1. cash payment of US$8,500 per family

2. a plot of land with basic shelter, 15kms from the city centre + US$850

3. some form of housing inside the project, once it is finished

• Most left without or with a cash payment• Most left without or with a cash payment

• Some moved to the resettlement area

• Some waited for inclusion in the project

Why did they leave and where did they go? Does their departure solve the problem?

3. Sharing land in Borei KeilaPhnom Penh, CambodiaPhnom Penh, Cambodia

Borei Keila was part of the Olympic Village for the ‘63 SEA Games

People occupied it after the overthrow of the Khmer Rouge

Public-private partnership arrangementPublic-private partnership arrangement

2.0 ha 1740 apartments of 4x12 m in 10 buildings for the original population

2.6 ha commercial development by a private company

10.0 ha to be returned to the government

The project was not completely successful:The project was not completely successful:

• Some 300 families were never included

• The company built only 8 blocks leaving 350 families homeless

• An estimated 400 families had (illegally) sold their right to a unit to others

The excluded families battled with the police, but their houses were eventually destroyed

It is unknown where those who left went;

“their departure solved the problem”

4. Re-development in DharaviMumbai, IndiaMumbai, India

Source: Google Dharavi in Mumbai:

• 216 ha of prime land

• 0.6-1.0 million people

• 100,000 housing units

• 5,000 industrial units

The government is inviting private bids to re-develop Dharavi:

• build housing for the residents on-sitesite

• build real estate for sale on the rest of the land

Expected cost: US$ 3 billion

Phase 1 [sector 5]

• 57,000 apartments of 30 m2 in 20-storey buildings

• 25 m2 of space per business ownersbusiness owners

• conditions: house owner in Dharavi before 2000

Is this a good idea?

Not to be included in the project:

• Renters (30-40% of the population)

• Arrivals after 2000 (30% of the population)

Their departure would solve some difficult problems, but where will they go?

5. Evaluating Suwan PrasitBangkok, ThailandBangkok, Thailand

Three squatter communities of 180 families lived along Rama IX Road in the 1980s

When the owner wanted to develop the land in 1989, the people had to leave

They found land for sale in the urban fringe and bought it using money from the developer and loans and subsidy from NHA

20 years later

The question is: who benefited, who lost?

Housing conditions of many (not all) families improved in Suwan Prasit, but Oimproved in Suwan Prasit, but O

• many families from Rama IX never came

• some families from Rama IX came and left

Some left for positive reasons, but some were forced to leave; it is unknown where they went

Number of families on Rama IX Road

180

?

Number of plots demarcated in Suwan Prasit

100

Number of plots allocated to Rama IX families

44

Number of Rama IX families living in Suwan Prasit in 1992

35

Type of ownerPlot

allocation

Plot ownership

1992 2011

Rama IX allottees 44 35 27Rama IX allottees 44 35 27

Other allottees 56 28 11

New-comers - - 54

Empty or locked - 37 8

Squatter houses - - 6

Total 100 100 106

Plots originally belonging to Rama IX allottees

Original owner 22 +

Inherited after death of original owner 5 +Inherited after death of original owner 5 +

Sold after death of original owner 1 +/-

Sold right-to-a-plot to someone else 5 -

Returned to NHA due to distance to job 1 -

Sold and left 5 +/-

Sold when unable to repay loan 5 -

Total 44

6. What are the long-term outcomes?6. What are the long-term outcomes?

The World Bank and the Asian Development Bank have a resettlement policy:

“the resettlement programme will improve, or “the resettlement programme will improve, or at least maintain, pre-project living standards”

• Did living standards improve for people from Boeung Kak, Borei Keila, Suwan Prasit?

• Who benefited and who did not?

• What about people in Dharavi?

Economists like de Soto argue that the poor need titled property (a plot, an apartment)

They can mortgage the titled property to obtain business loans and become capitalists

Thus, titled property brings not only shelter, but also capital, income, employment also capital, income, employment

The poor understand the benefits of titled property, but some poor have other priorities:

1. cash money

2. income and employment

3. shelter

4. titled property

Some families cannot live under the threat of eviction; they leave without any compensation

Some families leave with a cash compensation so they can repay a debt or make purchases

Some families have the resources to wait for the opportunity of a plot or an apartment

A plot of land can be available quickly, but it may be far away. Too far away?

Some families will not take a risk, but sell their right and leave with some money in hand

An apartment on-site will take time to develop; is it worth waiting for?

Evaluations measuring living standards some years after project completion are rare

Most evaluations count outputs, not outcomes

It is easier to count “number of units built” than to measure improvements in living standards

Thank YouThank You