alchemy urban

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October 2, 2008An invitation to leadTHE NANO HOUSE CAMPAIGN A National Campaign for Legal, Affordable Ownership Housing For All in Indian Cities Academy for Urban Research and Advocacy An Initiative of Alchemy Urban Systems Pvt. Ltd. AURA

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What this campaign is about Today in the larger cities in India, it is impossible for a low income family to buy a legal house that they can afford. The rules don’t allow small houses, developers don’t build small houses and small house loans are not available. The result is that low income families have NO OPTION but to live in slums and illegal houses. This campaign is about making small houses available legally. This campaign is about helping even the poorest family start the process of building real assets. This campaign is about storming one of the last bastions of the License Raj. While we at Alchemy take pride in launching this campaign and are committed to taking it to a meaningful conclusion, we also hope that YOU will find in this campaign something that you can give new meaning and direction to. B.R. Balachandran, Urban Planner, Alchemy Urban Systems, Bangalore bala@alchemyurbansystems.com +91-9343377911

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The Structure of this Presentation Why legal ownership is so important The status of housing affordability Why housing is unaffordable What if we let things be as they are Nano Housing! Enabling Nano Housing – the Campaign How can YOU lead this campaign? Arguments and counter-arguments Comments and suggestions Contact us

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Why legal ownership is so important The Asset Building Process The Vicious Cycle Legal ownership of real estate assets is the process by which a family moves up the economic ladder. When the first rungs of this ladder are missing, the family is trapped in a vicious cycle.

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The status of housing affordability The poverty premium The upper class discount Today, small houses are much costlier to own or rent and to live in than bigger houses when the costs are compared on unit rates, primarily because of their illegal status. Given below are figures from Bangalore Rent for a 100 sq.ft room (a shanty) with no toilet – Rs. 1000 per month - that is, Rs.10 per sq.ft with no services Price of “potable” water in a slum with no water supply – Rs. 1.50 per pot – that is, Rs. 300 per kilo litre Rent for a 1000 sq.ft, “2BHK” flat with two toilets – Rs. 10,000 per month – that is, Rs.10 per sq.ft with all services Price of potable water in a municipal or private water supply - Re. 1 to Rs. 6 per kilo litre

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Why housing is unaffordable Low density There are many reasons why housing has gone out of the reach of half the urban population. Given below are the three most important ones Most of our cities impose a flat, low density (the amount of floor area that can be built per unit of land area) across the city. This results in high land prices and rapid growth of the city outward, also increasing the cost of services like water, sanitation, power and communications No small houses Most cities specify a minimum size for a house – usually about 180 sq.ft. A large portion of the urban population can’t afford this minimum size. Neither can our governments afford to give everyone 180 sq.ft houses. Therefore all those who can’t afford the minimum become “illegal”. No small loans Most of the people who need small houses work in “informal” jobs. This, coupled with the fact that the small houses available to them are all “illegal”, ensures that the small loans they need to buy the small houses, are not available from mainstream financial institutions

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What if we let things be as they are More and more people in urban areas will be unable to start the asset building process. They will remain trapped in the vicious cycle of insecurity There will be more slums and illegal housing with consequences for health and hygiene as well as law and order An increasingly larger proportion of the housing will be unsafe and vulnerable to disasters of all kinds The real estate market will continue to be driven by speculation and a large portion of it will be “grey” if not “black”

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Nano Housing! Let new typologies emerge! If it is possible to have a brand new car for Rs. 1 lakh, a mobile phone for Rs.1000, if we can buy branded shirts for Rs. 100 and branded shampoo in One-Rupee sachets, then we can certainly re-package housing as a commodity in "legal“ and "affordable" sizes and formats. Small flats – 120 sq.ft – living room, built-in kitchenette, attached toilet Small flats – 90 sq.ft – living room, built-in kitchenette, and common toilets Small flats – 70 sq.ft – living room, common toilets, community kitchen Shared sleeping space – bunk beds, individual lockers, common toilets, community kitchens.

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Enabling Nano Housing – the Campaign Policy reform The transformation of the market for affordable housing will not happen on its own. We need to make it happen. Given below are three most important areas of intervention Change regulations and policies that prevent housing from being re-packaged in affordable formats Change urban planning practices that reduce density, and fuel speculation in land Drastically reduce the overheads of property ownership at the lowest levels of the market – minimize stamp duty, registration fees, etc Product Innovation Demonstrate developer-built housing packaged in affordable formats Design "instruments of ownership" that make the legitimate purchase, sale and transfer of these re-packaged housing products extremely easy Design housing finance products that are easy to manage at the lowest levels of the market Support Systems Develop donor-funded shelters where a family that would otherwise go to a slum can get: Dormitories, clean toilets and basic food Information kiosks for daily wage work Clinics and crèches Counseling on socio-economic issues Create platforms for all housing stakeholders to get information, interact and collaborate

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How can YOU lead this campaign? If you are a/an XYZ, you can… If you are a/an XYZ, you can… Lawyer –file a Public Interest Litigation Architect – design Nano Housing models Developer – create a Nano Housing project Administrator – commission programs for housing IT professional – create virtual platforms – e-groups, blogs, websites… Change maker – carry out advocacy Political activist – raise the issue on political platforms Donor – fund the campaign, fund demo projects Academician/ Researcher – take up research projects to explore the issue in depth Author – write! – in your genre, in your language, in your media Journalist/ Broadcaster – put the issue in the media Anyone – Respond! – participate, debate, argue for or against, find fault, support, instigate, castigate… This is an issue that is multifaceted. It is emotive and intellectual, action-oriented and strategic, political and technical. There is something for anyone and everyone to do. Here are a few ideas, just a few…

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Comments and suggestions This is YOUR page. Put in your suggestion and pass it on 

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Contact us AURA is an activity that we are launching with this campaign. It is not yet a separate entity, but will soon be. For the time being, for anything related to this campaign, our contact point will be: B.R. Balachandran bala@alchemyurban.com bala@alchemyurbansystems.com +91-9343377911 Alchemy Urban Systems Pvt Ltd 302, 4th B Cross, 3rd Block, HRBR Layout Kalyan Nagar, Bangalore – 560 043 www.alchemyurban.com