Low Income Housing, Slum Upgrading and Incremental Urbanization

Roberto Chávez et Al

Incremental Housing Network, MIT

IBRD – KRIHS - COEX

EAST ASIA LAUNCH OF THE

REGIONAL URBANIZATION KNOWLEDGE PLATFORM

SEOUL, SOUTH KOREAJUNE 30, 2011

 What did we know about slums in the 1970’s?

• Growing migration from rural to urban increased post WWII, first in Latin America, the South and East Asia and most recently, in Africa

• John F.C. Turner’s post earthquake work in Peru,1960s: Explained how self help, incremental housing becomes the city

• John F.C. Turner's Matrix. In the early 1970s J.F.C. Turner advises World Bank's housing strategy. His concept is in this matrix:

LAND FINANCE MATERIALS LABOR

squat savings temporary self-help

rent pay as go combined barter

buy loan solid contract

other other other other

World Bank Sites and Services programs in Africa and Latin America in 1970’s and 1980’s

• Moved away from subsidized public housing, provided a serviced plot (water and electricity) + basic unit

• Basic units ranged from a pit latrine only to a one or two room core unit

• Full cost recovery proposed for serviced plots and core units ranging from US$500 to $US3,000+

• First WB sites and services project in Senegal, 1972. Tondo Foreshore, Manila, Philippines, 1974

Sites and Services projects were partially successful, but many issues remained:

• Cost and affordability of serviced plots + basic unit: only middle class or Haiti syndrome (absurdly small)

• Technical: lengthy preparation, implementation

• Macroeconomic: large loans, fiscal space issues

• Bottom line: did not reach poorest households, limited overall impact

• Lima, Peru, 1970’s

• Ouagadougou, Burkina Faso, 1980’s

• Nouakchott, Mauritania, 1990’s

• Low initial investments, leveraged assets of poor

• Greater affordability for poorest households

• Larger programs, smaller loans required

• Shorter design to delivery period

• Bottom line: leverage household inputs, can “go to scale”, have greater impact

So, what worked? Surveyed Plots projects plus Slum Upgrading:

Villa El Salvador, Lima, Perú

Burkina Faso Second Urban Project in 1980’s

• Stopped sites and services in favor of lower cost, larger scale surveyed plots program

• Provided surveyed plots and addresses; issued resident “citizen” ID, collected minimum tax

• Relocated immigrants to residential areas as per land use master plan

• Water and fuel supplied by informal sector

• Layout allowed for cost-efficient upgrading

Slum Upgrading and Prevention in the 1990’s: Nouakchott, Mauritania, 1998 to 2003

• Combined upgrading of squatter settlements and new low-income incremental housing

• Based on a home-grown City Development Strategy and city-wide Street Addressing system

• Overlaid 400x400 meter grid on upgraded areas; organic, tribal distribution retained inside grid

• Grid integrated community to road system, future Bus Rapid Transit

• Water and electrical infrastructure systems provided along grid only

A few lessons learned:

Incremental Housing: • Together with Street Addressing are the least cost incremental housing solution, most suitable for poorest• Provide large scale, short term response to exploding low income housing demand• Require low levels of capital, technology, planning and design expertise• Are a basis for cost efficient medium term urban upgrading

City Strategies: • Should combine slum prevention (surveyed plots) and slum upgrading, to address both stock and flow• Should use 400x400m. grid to integrate slum upgrading and prevention with the city and allow for future BRT• Should respect the principle of Subsidiarity

Incremental Housing vs. Incremental Urbanization?

• Think not incremental housing but rather incremental urbanization

• Low income housing and slum upgrading should be part of an urbanization strategy

• Incremental housing and slum upgrading should be tied to local economic development

• Incremental urbanization is the spatial representation of actors participating in local economic development.

Case Profiles

Kampung Improvement Programme (KIP)

Upgrading in Indonesia

• 1969-1974: Jakarta (DKI) – Improved Living Standards for 1.2 million people at average expense of $13 per person

•1979 – Government Adopted National Policy for KIP

•1974-1982 World Bank Support to KIP

•By 1982 – Close to 5 million people benefitted from upgrading

Photo: Aga Khan Development Network

Upgrading in the Philippines

1970s in Tondo Foreshore – Before Upgrading

Upgrading in the Philippines

1970s in Tondo Foreshore – During Upgrading

Upgrading in the Philippines

1970s in Tondo Foreshore – After Upgrading

HABITAT FOR HUMANITY: PHILIPPINESTaguig City, Metro Manila, the Philippines

Upgrading in the Philippines

Upgrading in the Philippines

HABITAT FOR HUMANITY: PHILIPPINESTaguig City, Metro Manila, the Philippines

LAND

MATERIALS

LABOUR

FINANCE

COST INPUTS TO LOW COST HOUSING Land is the major ‘cost’ input to low-cost housing

production in cities

In many developing country cities – Government mandated ‘minimum lot size’ can be very high (75m2 – 110m2)

The poor have no viable option but to illegally access and subdivide land into very small land parcels - creating slums

If land comprises 70% of the housing production cost – then reducing the ‘required minimum lot size’ from 75m2 to 25m2 (a 66% reduction), brings down the overall cost of housing by 50% - low income groups can access lower prices

In Vietnam: permissive attitude to allow low minimum lot sizes (sometimes as small as 25m2) has enabled a market of low-cost housing to develop and supply low income groups

Why Vietnam Does not Have Widespread Slums? – A Hypothesis

1) Efficient Use of Land - Minimum Lot Sizes

Why Vietnam Does not Have Widespread Slums? – A Hypothesis

2) Efficient Use of Land - FAR and Building Heights

Government: A permissive attitude toward FAR increases and building height

Same unit of land used for more production of floor space

Incremental development keeps pace with demand

Increase the supply and reduce the cost of floor space for low income groups

While increasing the efficiency of land use for city

Photo by Alain Bertaud

Rapid urbanization is regulated, consolidating upwards and outward growth Investment in primary & trunk infrastructure near urbanizing villages Communities investing in incremental improvements and new housing construction Low-cost housing development on the city fringe

Why Vietnam Does not Have Widespread Slums? – A Hypothesis 3) Efficient Use of Land - Incorporation and Densification of Villages (Hanoi)

Analysis by Alain Bertaud

Why Vietnam Does not Have Widespread Slums? – A Hypothesis 4) Incremental Urban Upgrading – Upgrading Infrastructure in HCMC

Vietnam Urban Upgrading: Trunk Infrastructure, Storm Drainage, Water Supply, Paving and Improvements of Alleys, Fire Hydrants, Micro-Finance for Housing Improvement Loans, Issuance of Land Use Certificates

Why Vietnam Does not Have Widespread Slums? – A Hypothesis 4) Incremental Urban Upgrading – Upgrading Infrastructure in HCMC

After

Before

Why Vietnam Does not Have Widespread Slums? – A Hypothesis 4) Incremental Urban Upgrading – Upgrading Infrastructure in HCMC

Before

Before

Why Vietnam Does not Have Widespread Slums? – A Hypothesis 4) Incremental Urban Upgrading – Upgrading Infrastructure in HCMC

During and After

During and After

Majority of housing supply provided by efficient and entrepreneurial low-cost and self-help construction sector

Small contractors manage to keep up housing supply with demand – should be supported

Social acceptance of co-habitation in crowded dwellings (low consumption of floor space per capita)

Multi-generational co-habitation also provide an alternative to slums

A strong legacy of socialism and wealth distribution: state support to low income people more acceptable

Why Vietnam Does not Have Widespread Slums? – A Hypothesis

5) Self Help (Informal) Construction Sector and Cultural Reasons

Land Use Pattern Emerges from PolicyAn Illustration in Da Nang

Good Location: These informal homes 4km from beach and 7km from CBD

Government Policy: Incorporate existing villages by widened road from 5 meters to 14 meters – enabling private actors to respond and invest accordingly

Government Policy: Allow average unit floor area at 50m2 – and allow vertical construction for 2 - 4 stories

Result: From a low density semi-rural 2002 – to a emerging urban node by 2010

Homes not too structurally different from formal homes

About 70% lower unit prices than formal homes – affordable to low income groups Analysis by Alain

Bertaud

Why Vietnam Does not Have Widespread Slums? – A Hypothesis

Permissive policies have enabled a strong response to low-income, and medium income demand segments (orange and yellow) in cities, Vietnam has avoided widespread slums (red)

This policy should be consolidated, further formalized and strengthened

A shift to focusing on high end segments (green) like new towns and showcase projects will distract from this success and eventually result in more of the orange slipping into red….

Graph by Alain Bertaud