POLICIES AND: PROGRAMS FOR HOUSING IN GREATER BOMBAY Thesis for the Degree of M. U. P_ MICHIGAN STATE UNIVERSITY RAJENDRA KESHAV‘LAL MEHTA 1969 IIIIIIIIIIIIIIIIIIIIIIIIIIIIIII» Egg: E] 1 3 1293 01577 400 n ‘ univemity ABSTRACT POLICIES AND PROGRAMS FOR HOUSING IN GR EATER BOMBAY BY R. K. MEHTA The purpose of this study is to review existing housing policies and programs in Greater Bombay and analyze the causes of the housing problems. The attempt of this study is to clear some of the concepts in the problem definition and make some specific recom- mendations for housing programs and policies in Bombay. The first two chapters give a fuller presentation of existing housing problems in Greater Bombay: the tremendous amount of housing shortage prevailing for all economic classes in Bombay; the high demand for housing; and the crucial housing need among low income families and slum dwellers. It will require a very ambitious housing program to meet the demand satisfactorily . It is felt that success or failure of housing programs depend to a great extent on housing policies. Therefore, existing housing policies regarding land, taxation, planning and or- ganization are analyzed comprehensively . The housing program for I981 is outlined stating the housing demand, provision of housing sites and machinery needed to implement the programs. The specific recommendations are made in order to meet the housing needs goal for 198] . The recommendations for housing ‘34“ AI- ;«r a” "- . .‘r- . programs include social need of low income families, the responsibility of providing housing on the parts of public and private enterprise, provision of cheap housing for low income families and the application of self help housing programs. The recommendations for housing policies include the policies regarding land, taxation and organization. The proposed housing policies emphasize the need for land regulations and enforcement, revision of the "Rent Act", and the need for regional planning . SCHO POLICIES AND PROGRAMS FOR HOUSING IN GREATER BOMBAY BY RAJ EN DRA K ESHAVLAL MEHTA A THESIS Submitted to Michigan State University In Partial Fulfillment of the Requirements For the Degree of MASTER IN URBAN PLANNING SCHOOL OF URBAN PLANNING AND LANDSCAPE ARCHITECTURE I969 TO MY PARENTS (In Fi. ACKNOWLEDGMENTS I wish to express my appreciation to the several people who have assisted me in this study. I am particularly indebted to Mr. Charles W. Barr, Professor of Urban Planning at Michigan State University. Without Professor Barr's valuable guidance, suggestions, encouragement and time, this thesis would not have been completed. I am also grateful to Mr. Sanford S. Forness, Professor of Urban Planning at Michigan State University, who reviewed the thesis draft carefully and provided many helpful suggestions. Finally, I am indebted to my wife, Aruna, who encouraged me throughout the period this thesis was in preparation. R .K . Mehta ACKNO‘I LIST OF I 'LISi OF I IISi OF I EXPLANI‘ CRCQIEr I. THE N. THE III. EXI: \J TABLE OF CONTENTS Page ACKNOWLEDGEMENTS .................................... iii LIST OF TABLES ........................................... - vi LIST OF MAPS ............................................. _VI LIST OF PHOTOGRAPHS .................................... VII EXPLANATORY NOTES ..................................... VIII Chapter I. THE HOUSING PROBLEM The Population Hessure and Housing Shortage ............. I The Immediate Need for Housing ........................ 2 Housing and Public Health ............................. 3 Density Standards ..................................... 4 Summary ............................................. 5 II. THE SLUMS lN BOMBAY Introduction .......................................... 6 Definition of Slum ..................................... 6 The Situation in I956 .................. I ................. 7 Types of Slum .......................................... 7 Causes of Slum ......................................... 8 Slum Life .............................................. 8 Legislative Bases for Slum Clearance ...................... 9 Summary .............................................. I4 Ill. EXISTING HOUSING POLICIES Land ................................................ I5 Taxation ............................................. I8 Planning ............................................. 22 Organization ......................................... 23 iv 1'- Co: LIOC bin» ‘5 Page IV. ANALYSIS OF THE HOUSING PROBLEM The Gap Between Family Income and Housing Cost ........ 25 Economic Factors ..................................... 26 Urban Land Factors ................................... 29 Social Factors ........................................ 36 Population Growth ............................. 36 Family System, Caste, and Religion .............. 37 Organization and Administration Factors ................. 38 Regional Planning Factors ............................. 39 Summary ............................................ 40 V. THE FUTURE HOUSING PROGRAMS Introduction ......................................... 4 I Population Projections ................................ 4] Housing Demand ..................................... 42 Population Increase and Housing Demand .......... 42 Existing Housing Deficit ........................ 43 The Total Housing Demand ...................... 44 Population Densities .................................. 45 Population Densities (I 96I) ...................... 45 Proposed Population Densities .................... 46 Selection of Housing Sites .............................. 49 Land Acquisition and Development ...................... 5I Building Supplies ..................................... 5I Housing Responsibility ................................ 52 VI. RECOMMENDATIONS FOR HOUSING PROGRAMS AND POLICIES The Housing Needs Goal ............................... 54 The Supply Side ................................ 54 The Demand Side ............................... 56 Development of Community ............................. 57 Slum Clearance and Public Housing ..................... 57 Self-help Housing for Low-Income Families ............... 58 Ptoposed Housing Policies .............................. 6] Land ......................................... 6I Taxation ..................................... 63 Organization ................................. 63 Conclusion ........ . ..................................... 65 BIBLIOGRAPHY .............................................. 67 IC R)“ Dr” T l-U ‘.~ Div I.Wv lizu It. .nr .na -- Table I Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 Table 8 Map-I Map-2 Map-3 LIST OF TABLES Page Population and Housing Needs of Greater Bombay ............ 3 Population in Ages 6-”, I2-I7, I5-59 and 60+ years - I96I - I98I ................................. 4I-42 Requirements of Dwelling Units, I98I ...................... 43 Requirements of Additional Dwelling Units, I96I ............ 44 Total Requirements of Dwelling Units, I98] .................. 44 Population Density, I96I, City of Bombay ................... 45 Proposed Population Densities I98I ......................... 46 Wardwise Reservations of Sites for Housing in the Development Plan ........................................ 49 LIST OF MAPS Page Gross Density of Population ............................... 47 Pr0posed Gross Density of Population I98I ................... 48 Greater Bombay Showing Ward Boundaries ................... 50 vi 3‘. III-I iII-Z ill-4 PIV-I PIV—2 PIV—3 PIV-4 Pll-I P ”-2 P ”-3 P ”-4 P IV—I P IV-2 P IV-3 P IV-4 LIST OF PHOTOGRAPHS The older Development at Lalbaug ................ The Kamathipurg Slums - The Largest Slums on lands privately owned ........................ Hutment Colony I ............................. Hutment Colony 2 ............................. Nonconforming Uses in a Typical Residential Area ......................................... Duncan Road - Existence of Godowns and Volume of Truck Traffic in the Residential Area ............ Foras Road - Residential Area Interspersed with Timber Storages ............................ Andheri - Incompatible Uses in a Vast Suburb ........................................ vii Page IO II I2 I3 BI 32 33 34 EXPLANATORY NOTES Ruppee (R5) and Naya Paisa (Np) are units of Indian currency. I Ruppee = I00 Naya Paisa I U.S. Dollar = Rs 7.50 I Lac = I,O0,000 or 0.I million I Crore = I,O0,00,000 or I0 million vlli CHAPTER ONE THE HOUSING PROBLEM THE POPULATION_PRESSURE AND HOUSING SHORTAGE Bombay is the second largest city in India. It continues to grow as large masses of people drift into urban centers from rural areas in search of better employment opportunities. The influx of population, natural increase in population and low income level of the people have created housing problems in almost every maior city. Perhaps Greater Bombay is experiencing the most acute shortage of housing accomodation in the nation. The population of Bombay is increasing at a higher rate than the city's ability to accomodate them with amenities and services. In the year I960 the population was approximately 5,000,000. It is estimated that in I970 the population will reach 6,000,000. In terms of area, Greater Bombay covers 26, I89 square miles while the city of Bombay covers l4,28] square I'fllles-I Most of the population is concentrated on the small island which creates congestion and a more acute housing problem. The island of Bombay is now so congested that as many as eight to ten persons live on a floor area of one hundred square feet. In many parts of the city, large masses of the population reside in slums where the 2 density varies from an average of 438 to I, I75 persons per acre . The housirg problem has become gradually worse. There are not only the problems of over-crowding, congestion and poor houses, but the problem of providing the houses for 1Govt. of Bombay. Reports ofjthe Panels appointed by the Study Group for Greater Bombay, (Bombay, The Government Central Press, 195% p. T. 2lbid., p.l. it: or In: Q an In I)!" 2 the thousands who do not have any roof at all over their head. The foot path dwellers are increasing day by day. Census figures for Bombay in I963 showed that one out of every 66 persons was homeless. Another 77,000 persons lived under stairways, in cattle sheds, on 3 landings or in similar spaces. THE IMMEDIATE NEED FOR HOUSING In I959 there were about 408,097 dwelling units on the island of Bombay and about I65,575 dwelling units in the whole of Greater Bombay excluding Bombay City, which may be said to accomodate a pOpulation of 2,800,000 persons. Considering the fact that population in I959 was about 4,500,000 there was an immediate shortage for I,500,000 persons. Applying an average density of five persons per dwelling unit the actual minimum need was about 300,000 dwelling units.4 The conditions have worsened during the last eight years. Thus, the immediate need is a crucial problem in itself. THE FUTURE NEED FOR HOUSING The population in I970 is estimated to be 6,000,000. The population in I959 was 4,500,000. The increase of 1,500,000 persons from I959 to I970 will need additional 300,000 dwellirg units. To meet the needs, the Maharashtra Housing Board5 formulated a program of constructing 25,000 dwelling units annually. Financial limitations restricted the board to this construction schedule. From the year I959 to I970, according to all 3Charles Abrams, Man's Struggle for Shelter in an Urbanizing World. (Cambridge, Mass., I964), p. I Government of Bombay, $.12!" p. 2 5Maharastra Housing Board is the agency for executing and administering the Housing Schemes in Bombay. - ' 3L. e'r J. K (13‘ 3 housing schemes, 275,000 dwelling units can be constructed at the rate of 25,000 dwelling units per year. The following list clearly expresses the resulting problem: Table - I POPULATION AND HOUSING NEED OF GREATER BOMBAY. Population Housing Actual Housing Housing (in millions) needs Supply Shortage (in millions of dwelling units) I95l 3.000 0.60 0.50 0.I0 I958 4.3I7 0.863 0.575 0.289 I96I 5.550 0.9I0 0.650 0.3I0 I970 6.000 I .20 0.875 0.325 Thus, in spite of all the efforts to meet the housing shortage, the housing deficit will be 325,000 in I970 which is greater than the need in I959. HOUSING AND PUBLIC HEALTH The housing problem of Bombay has two aspects; one is shortage of housing and the second is the unsatisfactory public health aspects. This has been clearly stated by Mr. Aggarwal 6 as follows: "Over and above the acute shortage of housing in the city and dangerous overcrowding in one room tenements, there is another drawback from which the city suffers viz. the very large extent of dark, ill ventilated, badly built housing with applaingly squalid surrounding in various parts of the city. There are rooms so dark that even during the day the inmates cannot see each other in passageways, or in single living rooms, without the help of artificial light. Fresh air is com- pletely lacking. Ventilation is of the poorest standard imaginable. The single room serves as a living room, bedroom, sick room, kitchen and dining room, etc. and to add to this the number of persons living in the single room varies from 4 to I0." 6Aggarwal, 5.5., Industrial Housing. (New Delhi, Roxy Press, 1952), p. 3 -L‘ 'é'i-n - - .1 . .. DENSITY STANDARDS A I952 survey inquiring into working class housing conditions in Bombay put the average floor space per person as low as 27 square feet.7 This condition is still common and reflects the gross overcrowding existing in Bombay. However, inadequacy of living space is more clearly presented when this figure of 27 sq . ft. per person is compared to standards of other countries. In I9I8 England adopted a minimum standard of I52 sq . ft. person which was raised to 160 sq. ft. after 1930.8 In U.S.A. had attained a standard of I49 square feet per person in I940.9 In the reconstruction plan for Moscow, the soviet city planners laid down a minimum standard I0 of I50 square feet per person in Moscow. 7lbid., p. 66 8Housing: Report of the Royal Institute of British Architects. (London, I937) , p. 3I 9Louis Winnic. The American Housing: It's Use. (New York, Wiley, I957), p. I 0 Simon, Sir E.D., Moscow in the Making . (London, New York, etc., Longmans, Green and Co., I937), p. T37 J’LL—n-‘I r. . Inn, : :s ' to 2» axe-en? it: build? 3':st s 'I' ‘: JO'I'IC '3' g'est SUMMARY Thus, the problem of housing is acute in Bombay. Financial limitations make it difficult to solve the problem. Considering the housing shortage, plus the need for replacement on the basis of one percent depreciation per annum, it will be necessary to plan a building program of 60,000 dwelling units per year. This means it will cost ap- proximately seventy-five million dollars. It is financially impossible for the state and city to provide such a large fund of money for housing . The rate of population increase is much greater than the rate of construction of building in Bombay. Thus, the housing deficit is large and the problem is becoming gradually worse. CHAPTER TWO THE SLUMS IN BOMBAY INTRODUCTION In the first chapter, while stating the present housing situation shortage and future need for housing, it was mentioned that one out of every 66 persons in greater Bombay is homeless. This is related to the problem of providing new housing . But, at the same time, the need to replace dilapidated houses is also great. The large maiority of the population live in very bad slums and slum life is miserable. The problems of slums and slum clearance is perculiar to most of the older and in- dustrial cities of the world. Bombay is a big industrial city and no exception to this common problem . DEFINITION OF SLUM A I960 study showed that 4I6,000 persons lived in the city's I44 slums.I There is no standard definition for a slum, but for the purpose of slum Improvement Schemes, the following definition is adopted in Maharashtra State:2 "A slum area means any area where dwellings, predominate which by reason of dilapidation, overcrowding, faulty arrangement or design of buildings, narrowness or faulty arrangement of streets, lack of ventilation, light or sanitation facilities, in- adequacy of open spaces and community facilities, or any combination of these factors are deterimental to safety, health or morals. Any slum area selected for improvement under the scheme should have at least 67% of the slum families in the poor and low income groups with an income of less than $250 per month . Also, there should be no likelihood of any slum clearance or redevelopment program being taken up in that are for a period of at least I5 years for pucca* built slums and I0 years for hutment type slums, so that the adequate benefit is secured from the money spent on improvement. " 'Government of Bombay, Reports of the Panels appointed by the Study Group for Greater Bombay. (Bombay, The Government CentrarPressTl 959? p. 3 2Government of Maharashtra, Urban Development and Public Health Department, Urban Housing in Maharashtra. (Bombay, The Government Central Press, I964), p.122 *"pucca" is a terminology used in India for dwellings which are constructed by building materials such as bricks, cement, concrete, etc. . "pucca" word is used to differentiate dwellings from hutment type dwellings which are small and temporary dwellings of simple construction . A. r . R V 7 A different definition has been adOpted by the government of India in the Improve- ment and Clearance Act of I956. This definition has been taken from the U.S.A. Housing Act of I949 and reads as follows:3 "Any predominantly residential area, where the dwellings which by reason of dilapidation, overcrowding, faulty arrangement of design, lack of ventilation, light, or sanitary facilities or any combination of these factors are detrimental to safety, heath or morals. " THE SITUATION IN I956 In greater Bombay area about 600,000 persons lived in slums. In other words, one- sixth of the population, or one person out of every six in Greater Bombay, was living in a slum in I956-4 According to a survey conducted by Bombay Municipal Corporation in I956-57, there were I44 slum localities having a total are of 877 acres in Bombay city. The number of residential buildings in these slum areas was 7,59I besides 4,328 huts. The number of non-residential structures was I,360. In all, 83,45I families were living in these areas. In the suburbs and extended suburbs of Bombay there were 65 slum areas for which a detailed 5 survey was not made. TYPES OF SLUMS Slums similar to those in Bombay are common to most Asian cities. Slum residents can be classified into three maior groups: 3Ibid, p. 34 4lndian Institute of Administration, Pt'oblems of Urban Housing, (Bombay, The Government Central Press, I964) , I. I2 5lbid, p. 12 :Iur. dwe 3E} Include . .._.\ 1 here I firing on III“ :56: in c 8 (I) The homeless people who are squatting in cities without any shelter. (2) Inhabitants of shacks or temporary houses. (3) Inhabitants of old and decaying houses. The slum dwellings may be either rented or owner occupied; either legally or illegally. They include small cabins, sheds, stalls and simple temporary bamboo structures on public land. There are many single family dwelling units which are converted in small rooms, creatirg overcrowding and thus forming slums. THE CAUSE OF SLUMS The causes creating slums are almost the same throughout the world. Generally the causes in creation of slums in Bombay are as follows: (I) The drift of people from many parts of India in search of employment; (2) The location of industries in an unplanned way and without having sound policies for future placement of industry; (3) The high price of urban land and construction in relationship to family income; (4) The failure of local authorities to provide minimum sanitary services in all areas; (5) The unfamiliarity of the ordinary resident with better living conditions; (6) The fatalistic acceptance of things as they are; (7) The low income level of slum families and individuals. SLUM LIFE Whatever may be the causes for slums, the existence of slums is undesirable from the country's social, economical, political and cultural points of view. Slum life is miserable. These slums present a scene of filth and squalor . They do not have water or sewer facilities. 9 The streets are unpaved, unlighted, narrow and dingy. The co-existence of animal and human life increase the sanitation problems. The mortality rate is high, hospitals are overcrowded and the productivity of workers is affected. Social problems arising from such conditions are acute and a real threat to the society. Crime thrives under such conditions and individuals become the victim of distraction such as, women, drinking and gambling . Millions are living under such conditions which are totally undesirable for human habitation. LEGISLATIVE BASES FOR SLUM CLEARANCE Due to the rising awareness of slum problems, the national government has for- mulated slum clearance schemes in maior cities of India. Legal procedure for slum clearance and redevelopment is established under the provisions of the City Improvement Act. Clearance of slums can be done by two methods, viz:- (I) By the Housing Corporation declaring a slum area a "clearance area" and there- after securing its clearance by either requiring the owners to demolish the buildings, or by the corporation itself acquiring and clearing the properties in the clearance area. When the owners themselves are required to demolish the buildings, it is done by serving them with a clearance order in accordance to the procedure stated in section 354 - RA in the Bombay Municipal Corporation Act (I 954). Clearance by acquisition is done by the corporation issuing a compulsory acquisition order in conformance with procedures stated in section 354 - RD. Generally the slum clearance procedure of compulsory acquisition is resorted to when ....... . ....... ........... .... ............ ........ ..... mOan m" .9 . . . . . ._ .. s . :...........x.3sw...n..; :00 261052 0030320: 0m 0803‘ woavovs. .0 , .1: Alt- achfiir - 1.0!. Znhfion .1 A OJ . RIF. 00-6.!!- §d.l--.hi V\ :r . otaodw mOCmnm" :6 anmompn: 00:33:03 0m @3034 woavavs. dd w.......,...» ....3.. as"?! .Iil.ul.-I .1 I... u5fisfinxn .32 mOCmn m" .0... .5, I. . 95mg 885 _ .05.»: . .25 anmnva_ 0030310: 0m 0803.. woawovfi .m H0. HH 0 » gag. 03.02% N mOCmnm" .200 3:10.me— noqooqozo: 0m 0.003.. @0263? .w I4 the corporation needs lands for rehousing displaced families from other areas. (2) Corporations may use section 354 RI of the Housing City Improvement Act and declare the slum area a "re-development area " . Applications of these slum clearance provisions is required in dealing with slums consisting of privately owned properties. The clearance of slums on corporation land is,of course,possible by a program of clearance and redevelopment. SUMMARY Bombay is facing the great problem of slums. The causes of a slum remain the same as in other older and industrial cities in the world. The social implications from these are undesirable, hence the national government has given attention to the problem and for— mulated policies and programs for slum clearance schemes. However, the problem has not been solved as the rate of slum formation is much greater than that for clearing the slums. CHAPTER THREE EXISTING HOUSING POLICIES It is impossible to evaluate each and every factor affecting housing in this thesis. However, some specific policies regarding housing, such as, land, taxation and planning are analyzed . LAND In order to stabilize the land prices and to provide land for housing purposes at a reasonable rate, the state government enacted the Land Acquisition Act of I948. This act provides for the acquisition of land at the price level prevailing on January I, I948 for housing schemes undertaken by state government or by local authority, company or society with the previous sanction of the state government. The state government has also decided to grant government lands for approved housing schemes at the market value, or the value prevailing on January I, I948, whichever is less.' The land values are very high in the center of Bombay. It was estimated that the rise in the values of land in the city from I940 to I959 was from I00 to I50 percent.2 The Rent Enquiry Committee, appointed by Government of Bombay in I938, wrote in its report as follows:3 "Land in Bombay has become costly. There is a constant pressure of population on land for occupation; on the other hand there is a constant demand for land for possession by the moneyed class. Bombay is an alluring place where fortunes are made and unmade. In boom periods, like that witnessed soon after the war, on increasing number of people begin to roll in wealth; keen competition follows 'Government of Mahavashtra, Urban Development and Public Heath Department, The Government Central Press, Urban Housing In Maharashtra. (Bombay, I964), p. I5 2Government of Bombay, Reports of the panels appointed by Study Group for Greater Bombay. (Bombay, The Government Central Press, I95W, p. II7: 3Ibid., p. 117 15 I6 and a race ensues for possessing immovable property. Fancy prices are quoted and accepted and in this way the cost of land goes up by leaps and bounds." These were the situations in I938. During the last 25 years prices have iumped enourmously high. Therefore, it became necessary to control the land values. The need for making separate provision in the development plan to facilitate ac- quisition of land was stressed in the Housing Minister's conferences and as a result the Government of India formulated the Land Acquisition and Development Scheme which was introduced in October, I959.4 Under this scheme state governments get a loan from the central government for the acquisition and development of large parcels of land. This permits the sale of developed plots at reasonable prices. These loans are repayable over a period not to exceed I0 years and carry the usual rate of interest. For this purpose, Government of India has devoted RS-260 million to land acquisition and development scheme.5 The loan assistance has to be utilized by the state governments for the exclusive purpose of acquisition and for development of land in big cities and in town and cities rapidly growing in size and population. When land already in possession of the state government or any other public authority is proposed to be developed for house-building purposes, the loan assistance under the scheme is restricted to the cost of development only. The size of an individual house plot developed under the scheme shall not exceed 500 sq . yards.6 4Government of Maharashtra, Urban Development and Public Health Department, _o__p_._c_i_t_., p. 85 5United Nations: ST/SOA Sales No. E/CN S/367/Rev. I. The report of Ad Hoc groups of experts on Housing and Urban Development, (New York, I962), p. 64 6Government of Maharashtra, Urban Development and Public Health Department, _r.)_p._c_i_t., p. 86 In 5* IRE .,. POI «r; l, ) w... 2" I’Ifleh Aw “I he $1" he '3, 'C'; 'I III I7 7 In the matter of plot sales the scheme lays down the following conditions. (I) Not more than one plot shall be sold to any individual or firm under the scheme. (2) If an individual eligible for the benefits of this scheme already owns a house or a devel0ped plot of land in any town of the state whether in his own or her own name or iointly with others, he shall not ordinarily be entitled to purchase any plot under this scheme for the construction of a house. The state govern- ment is however, allowed to relax this condition in very exceptional cases. (3) Plots intended for commercial, or commercial-residential purposes, as well as, plots to be given to those who are not covered by any of the housing schemes shall be sold at public auction or open tender. Plots remaining after the auction may be sold by the state government at a price it considers appropriate. (4) The state government shouldo'rdinarily give out the land on a lease-hold basis on suitable terms devised to prevent misuse, speculation, transfer, etc. The Land Acquisition and Development Scheme was introduced in Maharashtra in I960-bl . A program estimated to cost 29 million Rupees was drawn up by Maharashtra Housing Board for acquisition of land in Greater Bombay and approved by the state government . 8 As we have seen earlier, the need to regulate the use of land is very important. In Bombay the use of land is regulated through provisions made under the Town Planning Act, p954. The development plan must contain the following proposals under the Town Plannirg Act, I954.9 (i) Proposals for designatirg use of the land for purposes such as, residential, industrial, commercial and agricultural. 7lbid., p. 87. 8lbid., p. 87. 9Government of Bombay, Report of the Study Group for Greater Bombay. (Bombay, The Government Central Press, I959), p. 49 I8 (ii) Ptoposals for designation of land for public purposes such as, parks, plar grounds, recreation grounds, 0pen spaces, schools, markets or medical, public health or physical culture institutions, etc. . Section II of the Act empowers the local authority to acquire any land designated in the develop- ment plant for purposes specified as above. There are provisions in the Act to prevent property owners taking any action with reference to their pro- perties contrary to the requirements of the deveIOpment plan. Compensation for land to be acquired for housing proiects is paid at the rate pre— vailing on Ist January, I948. The reasons behind this policy are related to a basic phil050phy of the country. Housing and land for houses are necessary for people. When, the 'general welfare' of society is blocked, it is considered to be the State's duty to in- tervene in order to free the obstructions such as large land holdings by individuals. To sum up, there is a lack of sufficient space on the Island and land values are high. Owing to the lack of sufficient space on the Island the bulk of the housing program will have to be located in the suburbs on the mainland. It is necessary to regulate the use of land on the Island, the reclamation land that will become available in the future and the land in the suburbs. The regulation of land use in the suburbs is very important if conditions similar to those on the Island are to be avoided. TAXATION Desired housing progress has been hindered by the various factors which make the in- dividual lose his incentives for housing investment. The incidence of taxation is one of the leading factors causing the slow down. It is estimated that the burden of taxes has increased about 40 percent since I940. lolbid., p. 49. I‘ll! phi I9 Tax measures taken by the municipality which tend to inhibit the construction of new houses are illustrated in the following paragraphs. A dwelling unit suitable for a low income employee in Bombay costs at least Rs 8,000." The rental value of this dwelling unit is taken at about Rs 800/ - per year. The rateable value, (which is 5 percent of land value plus 8—2/3 percent of a structure value) is considered 84.5 percent of gross rent for tax purposes. In this case, rateable value would be Rs 676/ - per year. The employer has to pay the following taxes: General Tax at I9-3/4% of rateable value Water Tax at 4»- I/2% of rateable value Halkora Tax at 3-I/2% of rateable value Education Cess 3/4°/o of rateable value Total Municipal Taxes Urban lmmovable Property Tax (State Govt.) at 5% of rateable value Tota l The additional income tax payable would be as follows: Rental Value Less: I/2 General Tax RS 66.75 I/2 Water Tax RS I5.2I I/2 Halalkhor Tax RS II .83 II the construction cost have gone up rapidly since then. RS I33.5I RS 30.42 RS 23.66 RS 5.07 RS I92.66 RS 33.80 R5 226.46 RS 93.79 RS 706.2I These figures are based upon I960 figures. The recent figures are not available, but 20 Less: I/6 of RS 706.2I for repairs Collection charges (Estimated) Insurance (Estimated) Net taxable property income Income Tax at 45 percent of net taxable property income Thus, the total taxes and expenses would be, Local Taxes RS 226.46 Income Tax RS 24I .98 Repair Charges RS II7.70 Collection Charges RS 42.37 Insurance RS 8.40 Total RS 636.9I This leaves a net return of RS I63.09 giving a net return of 2.04 percent per annum, which compares very unfavorably with the rate of return available from other investments. For instance, the investment in bank savings, small savings bonds,etc. , give approximately a 4 percent return . We have mentioned only direct taxes, but there are also many indirect taxes which makes the problem more acute. The materials which go into the construction, such as cement and steel are taxed. The sales tax and town duties levied at the time of importing building materials also add to the higher construction costs. As indicated earlier, the housing shortage is being accentuated mainly because the cost of construction has gone up beyond the economic capacity of the common man who is not able to build for himself. Building materials are in short supply. RS II7.70 RS 42.37 RS 8.40 RS I68.47 RS 537.74 RS 24I .98 LI ' I'- y..- RD 0... u 'I. :u. a n (r) ‘6‘. 5.1 ‘1 1.9 21 Another factor which militates against the inflow of private investment into housing is the certain restrictive provisions in the Rent Control Act. The Rent Act has been enforced to protect the tenant. But the law has also affected the rights of the owner. In many cases the present rent could have been higher according to the prevailing market value, but the tenant pays the same low rent which he used to pay years before when he moved into the house. The owner can sell the property, but the new owner does not have the right to in- crease the rent. Also, certain conditions in the Rent Act make it impossible to evict. tenants. In this case, the owner suffers yet, legally, he can do nothing because the tenant is pro- tected by law. The Rent Act has not only put a ceiling on the rents in "old" buildings, but has also considerably reduced the house owner's right to allot dwelling units to any persons he desires . While the basic rights implied in ownership are denied to the house owner, there are quite a few tenants who have been abusing their tenancy rights. Some of them are actually trading in their tenancies. The right given to the tenant in a new building to go to a court of law for getting the 'standard rent' fixed at anytime during the tenancy has been creating a great deal of uncertainty and causing much inconveniences to the landlord. It is the adverse effect of all these factors on the economic as well as the psychic return to the house owner.' The heavy burden of the Municipal Corporation tax, State and Central Government taxes and other measures, such as the Rent Act, work as disincentives for housing . Not only that, but the cumulative result has caused the rise of many dishonest and illegal practice ”Government of Maharashtra, Urban Development and Public Health Department, $.£i_t_., p. 49 1“ ‘C L‘ o t. a": I v m" 22 and waste of national resources. The owners adopt other measures such as "pugree", "advance" and "goodwill" . These are common terms for the methods employed to obtain more money from other parties illegally in order to raise their economic return. Thus, such public policies work against the obiectives and force the public to adopt dishonest pro- cedures, which does not help the nation at all. There is an urgent need for reducing these situations which give rise to undesirable practices. To sum up, the heavy burden of taxes has resulted in the acute housing problem and the loss of private enterprise incentives in the building industry. The policies need to be revised. The Rent Act, especially should be modified, giving some protection to the owner . It is necessary to devise a formula which safeguards the revenues of the government and at the same time promotes the housing activities. PLANNING The concept of planning is defined in Article 38, of the National Constitution as follows: "The State shall ensure that "the ownership and control of the material re- sources of the community are so distributed as best to subserve the common good", (article 39-Bland that "the operation of the economic system does not result in the concentration of wealth and means of production to common detriment" (article 39-C) Thus, social iustice has been the guiding principle of India's development plans. Central government plays an important role in planning. The policies, programs and priorities are determined on the national level. The National Planning of Government of India is responsible for policy formation at the national level. Although production of 23 materials, except steel, has been left to the private sector, the Planning Commission, in consultation with the Ministeries concerned, tries to plan and get the production capacity expanded, in accordance with the estimated future requirements. In the content of the five year plans of India, housing policies are formulated in conformance with economic development and industrialization. Conditions are to be created in which the entire program of housing construction, both public and private is so oriented that it especially serves the requirements of the low income groups within the community. Efforts for the coordination of all agencies concerned, public, c00perative or private should be made .13 ORGANIZATION The Ministry of Works, Housing and Supply, which was created in I952, is en- trusted with the function of administering the housing policy of the National Government of India. The name of the Ministry was changed to Ministry of Works, Housing and Re- habiliatation in I962. As recommended in the First Five Year Plan, the Ministry established a National Building organization in July, I954 at the national level. The functions of this or- . ganization are to collect and disseminate information on building science, techniques and materials, formulation and coordination of research programs and the execution of physical, socio—economic, statistical surveys and studies. At the individual state level there is a department of Urban Development and Public Health which observes and administers all urban housing schemes in the Maharashtra State. ”United Nations, Report of the AD HOC Groups of Experts on Housing and Urban Development, (New York, 1962), p. 63 24 Under the general administrative control of the Urban Development and Public Health Department there are two Housing Boards in Maharashtra; one is Maharashtra Housing Board and the other is the Vidarbha Housing Board. In Bombay, the Maharashtra Housing Board is the main executive agency for im- plementing the various urban housing schemes . At present, there is a State Housing Advisory Council which advises State Government on the housing problem in the state. The State Minister for Housing is the chairman of this council. The Maharashtra Co- operative Housing Finance Society, which was set up in I952, advances loans to co-operative housing societies in Maharashtra under its own schemes. Thus, the Ministry of Work, Housing and Rehabilitation at the national level, and the state agencies of Urban Development and Public Health Department, Maharashtra Housing Board, Maharashtra Co-operative Housing Finance Society are the organizations dealing with the housing problem in Bombay. CHAPTER FOUR ANALYSIS OF THE HOUSING PROBLEM o'w-A‘ .r— inn- I“ In this chapter some contributing factors to the housing problem are analyzed under economical, physical, social and organization factors. It is very important to look at the housing problem from many angles. THE GAP BETWEEN FAMILY INCOME AND HOUSING COSTS The basic cause of the housing problem in any undeveloped country is the wide gap between shelter cost and that which families can afford. Most people are poor. They earn very little and can harly provide food for their families. Housing cost is very high due to high construction cost and the high price of urban land. Though the average family's earnings may go up when he migrates from the village to the city, the problem of finding a home he can afford becomes almost a nightmare. For most cities in India, the cost of a new dwelling is approximately $I000.' This amounts to 12 to 15 years of income of an average Indian. In addition to house construction costs, one has to pay taxes, maintenance, insurance, utilities, etc. . If 15 to 20 percent of a family's income should be spent on housing, an Indian urban family would need a minimum income of $600 to $800 per year.2 In India, the average per capita is less than $80 per year and only I2 percent of the urban population has earnings above $600 to $800 a year.3 Unless the wide gap between the income of families and rent can be minimized, the problem of housing will always remain crucial. 'United Nations, Financing ofjousing and Community Improvement Programs (United Nations Publication. Sales No.: I957 IV. If p. I3 2Abrams, Charles, Man's Struggle for Shelter in an Urbanizing World. (Cambridge, Mass., I964), p. 57 3United Nations: Financing of Housing and Community Improvement Programs Op. cit., p. I5 25 :L' nJ' 26 ECONOMIC FACTORS Generally, the poor economic case of the country is the main reason for the housing problem. Ten new dwellings per I000 people are needed annually in Asia. In a big city like Bombay this need of new dwellings seems to be higher. The magnitude of the con- struction problem is clearly apparent when it is compared with highly developed nations where even they cannot afford to build more than 6 or 7 dwellings per I000 people annually.4 The main cause for this grave problem is that the national and state governments can- not afford to invest needed money in housing . The economic planners of India believe that they should focus more on food production and assets that advance productivity, such as factories, power plants, livestock, highways, etc. . Use of the country's limited resources for housing would cosume the funds needed for productive development.5 Thus, for these reasons housing has low priority in India for both internal spending and international aid. Investment in housing furnishes low returns in short run financial terms. However, benefits are derived from the more balanced development of economic activities which it supports.6 The provision of housing is necessary to enable economic proiects to be under- taken or expanded. Housing provides the physical link to economic activities. For instance, factories, workshops, offices and other economic structures are related to housing and failure to establish well planned housing results in a high economic price in the inconviences of 4United Nations: Ad Hoc Group of Experts on Housing and Urban Development (United Nations publication: Sales No. 63 IV. I), p. 2 5Abrams, Charles, 3&,_C_i_t_., p .I06 6United Nations: Report on a Special United Nations Fund for Economic Development. (United Nations Publication: Sajes No. 53 INLI), p. 9 27 the city which are measured in terms of wasted time of man, high transport cost, etc. .7 House building stimulates the manufacturing of materials not only for housing but for all kinds of construction. Domestic production of building materials will help to improve the trade balance. Also experience shows that in rapidly developing and urbanizing countries employment in construction appears to be the first industrial employment undertaken by rural migrants. The provision of building materials can also be an important step towards the monetizction of rural economics.8 Thus, housing investment is important from an economic view point. Long term finance is very essential for housing activity. In Western countries a very large contribution towards provision of housing programs is made by house building societies for the supply of long term house financing .9 Accentuating the housing shortage is the rising cost of construction. It has risen beyond the economic capacity of the common man to satisfy his housing need and he, for the most part, is not able to build for himself. Both the cost of building materials and the transportation cost to move them are high . For instance, the transport rates for sand have been raised by the railways from Rs.20 prior to the second world war to Rs. I05 per wagon (600 cu. ft.) from the usual fields supply to Bombay.'0 In recent years the rates have been risen very high . 7United Nations: Report of the Ad Hoc Group of Experts on Housing and Urban Development, p. II 8|loid., p. 13 9Government of Bombay, Report of Study Groups for Greater Bombay (Bombay, I959) p. 60 'olbid., p. 73 .‘rvu . 0‘“ . I. :5 p. I)! 28 Not only the high development cost, but also the central, state, and local govern- mental policies regarding taxation and the Rent Control Act have made the investment unremunerative for those having the resources for house building . Governmental and semi-governmental bodies cannot cope with this large demand for housing . Pfivate investors must make a large contribution. But, private enterprise will not invest money in the building of houses unless it is assured that it will have a reasonable return. The public has other alternatives for investing money which give a greater return in comparison to that derived from housing . For instance, central government has offered very tempting induce— ments for investment in small savings by exempting the same from the income tax, super-tax and corporation tax . Also, the I2 year National plan Savings certificates offer a very attractive investment. Income from the same is not liable to any tax. These funds are used for investment in central and state government industrial project undertakings. As described earlier, the development costs are very high . In contrast, labor is very cheap. The failure to use these human resources effectively in housing is another cause for the housing problem. "The unutilized talents of the people constitute the chief present waste and the chief future h0pe of the developing countries. Only a small fraction of these populations participate actively in national life today."II Thus, the need of using human resources of the developing countries is becoming widely acknowledged. Self-help housing can be of importance in this direction . "United Nations: The United Nations Developmgnt Decade Proposals for Action (United Nations publication: Sales No. 62 “73.2), p. 7 29 URBAN LAND FACTORS As mentioned in the first chapter, the great demand for housing in Bombay has been created by the increase in population. As against an increase of 200 percent in the City's population between I90I and I95I , the increase in the stock of residential buildings during I2 the same period hardly amounted to sixteen percent. There is also an extreme paucity of open space in Bombay City. The quantity of public open space works out to be one acre per 6,8I9 persons. '3 In Greater London there was seven acres of open space per I,000 persons, and it was proposed to raise it to ten acres.'4 The most important factor responsible for the growth of population in Bombay is the immense concentration of economic activities. The two maior types of economic activities are industry and commerce, which together with government and semi-government offices constitute the principle agencies of employment. Bombay Island accounts for 76 percent of the registered factories and 85 percent of the labor employed in such factories in Greater Bombay-'5 Absence of such essential facilities like transport, electricity, water supply, etc. on the main land and their existence for a long time in Bombay have attracted industries towards the City of Bombay. Another attraction for new industries is the location of many existing financial, industrial and business houses in the Greater Bombay area . They provide the drive and financial wherewithal, which are necessary for further industrial development. '2Raiagopalan, C., Greater Bombay. (Bombay, I962), p. 44 '3Ibid., p. 43 '4lbid., p. 45 ”Government of Bombay, op. £i_t_., p. 22 \‘n - ‘I . a;- II *1. 30 Lack of facilities outside the Greater Bombay area acts as a deterrent against both the original location and subsequent movement of industries to the periphery of Greater Bombay. Land is the basic resource for purposes of planning . This resource has not been utilized to the best advantage and hence the result is shortage of space for various requirw ments of the community. In the year I95I , Bombay City had an average gross density of I43.8 persons per acre, but the distribution of population within the Bombay City was un- even. Some sections like Chakla, Umarkhadi, Khara Talao Market, Utobi Talao, had densities ranging from 500 to I,000 persons to the acre, two sections, viz, Bhuleshwar and Kumbharwada showed the highest densities of I,366 and I,063 persons respectively per acre. '6 (see MapZI-ETI) In the closely built-up sections the buildings are old, dilapidated and lacking essential amenities. The streets are narrow, unpaved andunlighted. It is in such environment that a vast maiority of the inhabitants of Bombay live. Thus, physical and environmental blight, lack of open space and mixed land uses have resulted in the formation of slums. It is necessary to prevent slums from developing rather than iust clearing them. To do this it is necessary to understand the causes of slum formation and take proper preventative measures by enforcing, effectively, public health regulations, building codes and other municipal regulations, building codes and other municipal regulations. I 6Raiogopalan, C., 391.91!" p. 4I area are a constant .ger) bay. source of dan 1.4.2615) . ..1 m. H