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Topic for Debate
 
Can you afford the "Affordable Housing"?
You want to buy a house; so you go to the bank to finance your home. The mortgage banker says,"Joe, although you agree to make a 15% downpayment using all the savings (of youself, your wife, your dad...); you will still have to keep paying us ALL your salary for next at least 60 years only to pay the principal amount..." What does Joe do? Where does Joe go, then?
Mr. Joe Smith faces similar scenario in Mumbai, in Delhi, in Beijing, in Shanghai... and several other big cities where the 'system' have been heavily pushing "affordable" houses.

Friends from India, China, developing world;
Are the so called "affordable" houses really affordable to you? What are the issues? How can they be solved in your local context?

Friends from the rest of the world,
Share your own insights, experiences and case studies.
P Das
Responses
 
Can you afford the "Affordable Housing"?
Hi Prashant,
May be Joe could afford a 2BHK if not a 4BHK. I mean "affordable" is very relative. E.g. one can afford a 2BHK on 7th floor in an apartment in Gurgaon(Prime metro suburb) for 60 Lakhs, where as he can afford a big bungalow for the same in a small city. The affordability is influenced by State policy in controlling the prices of the property and building materials, the capability of the local architects to give them best within their budget, instead of pushing their limits.

I think case specific and subjective discussion would be more appropriate here.
Sriraj Gokarakonda
Can you afford the "Affordable Housing"?
Sriraj,
The point you raised is pertinent.
Let me detail it out, to continue the discussion:

"The generally accepted definition of affordability is for a household to pay no more than 30 percent of its annual income on housing. Families who pay more than 30 percent of their income for housing are considered cost burdened and may have difficulty affording necessities such as food, clothing, transportation and medical care." (-HUD)
-----------------

"A college graduate has to spend almost 9 months of his salary and an average Shanghai family needs a whole year�s disposable income to purchase only a square meter of an apartment..."
-Chindia Biz

-------------------------------

"... DLF will enter the Rs 20 lakh to Rs 40 lakh market for affordable housing..."
-Financial express
--------------------
Let us assume the average price of such affordable house to be Rs 3,000,000 ($60,000); annual home loan interest rate 10%, 30 years term.

Thus, for the house to be "affordable", the annual income of the owner must be around Rs 1,000,000 ($22,000 approx).

Median salary of Regional Sales Managers in Delhi: less than Rs 900000 ($18,000)! Payscale.com

So, an average Regional Sales Manager in Delhi can apparently not afford the Affordable Housing. The scenario in Shanghai seems to be more serious.

Do we have an architectural/planning/engineering solution to this issue? Any other perspectives?
P Das
Can you afford the "Affordable Housing"?
Thanks for the details...
I think its state policy in China that free hold property is not permitted. I am not sure though.

Are you talking about a scenario where one has to own a house near to the place of work, as in in the same town?

I am not very familiar with market and industry standard terminology. But what I get from the scenario is, in general there is a great disparity between the cost of the land and cost of the construction. In areas like Delhi and surrounding satellite towns, construction costs are peanuts compared to the cost of the site itself. There should be a tab on that first of all.

I think decentralization of cities and having a sensible land use policy can change the situation. Planners and Urban designers in countries like India should spend more energies towards solving this housing problem. A house is as important to a Daily wage labor as it is to a Manager in Delhi. It is irony that in spite of having well established bodies like the DDA, HUDCO and several other Urban Development authorities for individual municipalities, we still cannot provide shelter to many people. Its only then our Country's complete Human Potential can be put to use when opportunities to work, food and shelter are guaranteed as fundamental rights and recognized as state policy.
Sriraj Gokarakonda
Can you afford the "Affordable Housing"?
Oh got that you are talking about big cities...
Sriraj Gokarakonda
Can you afford the "Affordable Housing"?
I agree. Major problem is the land. Suburbanization is a solution; But are not the suburban centers becoming as expensive as the main city?
P Das
Can you afford the "Affordable Housing"?
I think urbanisation is the problem.. When you can built a good Pucca ( I don't like this distinction between pucca and kutcha but it makes it easier to understand) of one room, veranda and kitchen for less than 2000 $ it would be well affordable , if one brings people out of poverty by creating jobs. If earring around 1000 $ a year instead of 400 it would already come in the range of being affordable. Poverty reduction is the key and keeping people in the rural areas. An approach, in which building designers could much contribute is the Reachable Technology, as I described in Zunia..org / society/ poverty on 17.December.
Norbert E. Wilhelm
Can you afford the "Affordable Housing"?
it's probably a ruse, and designed for selectively targeting those that are willing to take on mortgages. these will toil for the most of their productive years paying back the loans that made it possible to have a roof over their heads.
Jofer Magsi
Can you afford the "Affordable Housing"?
The euphemistic term "Affordable Housing" smacks of the `cheap and nasty` or `cheap and cheerful`.

I would say that most housing is built for the mass market within the limits of culture and legal requirements. For example here in the UK the hot issues are (a) Health & Safety and (b)Global Warming, so that the cost of new mass market housing is heavily burdened by mountains of bureaucratic and legal requirements which are not even considered in other countries.

Today, such things as low-energy lighting, double and even triple-glazed windows and extremely thick insulation in walls and roof spaces are mandatory for all housing; whereas even 30 to 40 years ago it was common for houses in Britain to have outside toilets, no bathroom, no central heating and in general were very basic when compared to modern day housing.
Frank John Snelling
Can you afford the "Affordable Housing"?
Several interest arguments have been made. I am adding the points against them to dig deeper.

"decentralization of cities and having a sensible land use policy can change the situation." (Sriraj)

-decentralization will pose a complex issue of dividing (newer)work-places and workers in matching categories. Moreover, the access of the main cities needs to be ensured through revamping the macro-level infrastructure such as Rapid Transit.
-What could be the examples of sensible land use policy?

"Poverty reduction and keeping people in the rural areas is the key " (Norbert)
-Can we conclude that affording houses to people can not be achieved in near future; given, poverty is a huge problem and will take at least decades to be eradicated?
BTW, thank you for your post on Zunia, Norbert! I enjoyed reading it.

"mortgages... will keep people (the selected few who can afford it) toiling for the most of their productive years paying back the loans" (Jofer)
-Are we hinting at exploring other mechanisms than mortgage? What could they be?

"...most housing is built for the mass market within the limits of culture and legal requirements...'Affordable housing' is a euphemism for 'cheap & nasty/cheerful'" (Frank).
-Frank, Thank you for describing the UK scenario. However, in the context of Indian/ Chinese cities, this scenario seems more normative than real.
P Das
Can you afford the "Affordable Housing"?
i believe the term "affordable housing" was exploited to benefit a higher and parallel program intended to print more money for stimulating economic activity... it was not really "affordable" in a sense that the individual can afford to pay them (ie, capacity, lifestyle checks, etc.), but it was "affordable" only for as long as the monetary system worked and the various economic elements moved according to plan...

but then, it was a known risk that it will never move according to plan... and yet it went ahead... now why is that?
Jofer Magsi
Can you afford the "Affordable Housing"?
Affordable implies have the financial means to do something or buy something. The protagonists of the idea base it on assumptions that the target population will afford.The concept fails because extraneous issues are never considered and I have seen in Kenya, low cost houses moving to the middle income bracket because of social issues etc.
Bernard Mugwima
Can you afford the "Affordable Housing"?
Hello Bernard,
that's an interesting observation. Could you elaborate more on the extraneous issues?
Also, any relevant websites that one could visit to study the affordable housing in Kenya?

Regards,
P Das
Can you afford the "Affordable Housing"?
Decentralization doesn't really mean segregation. Rather it should aim at better integration of work and work places. In this context I used decentralization also as decentralization of power, a transfer of functions and responsibilities from from the highest to the lowest level, from state level to municipal level(Lubomir Ficinski Dunin,Decentralizing City Management: A Successful Experiment ). Instead of focusing all the energies in the making of big cities even bigger eventually rendering them miserable to live, equal importance should be given to overall regional development in order to avoid regional imbalances and solve the problem of Urban migration.

I suppose land use policies are developed as a result of extensive data survey and are finalized after a thorough refinement by involving people at various levels. By using the word 'sensible land use policy', I meant to revise the existing policies whenever need arises and keep a check on them constantly. Instead of going by the book and closing your eyes to the real situations(as happened in New Delhi during the sealing drive around three years ago along with the Karol Bagh merchants crisis), keep acting at appropriate time.

E.g. Delhi Metro, no doubt is an excellent project and the need of the hour, but the prospects of revitalizing the existing Ring Railway to boost the existing transport network has been majorly overlooked.
Sriraj Gokarakonda
Can you afford the "Affordable Housing"?
Thank you for this viewpoint, Sriraj.
Decentralization of power may require a strong political will and may, perhaps, fall under the domain of urban policy than planning. Thus, its scope may go well beyond the scope of urban planners/architects/designers. Yet, strong public transit networks are within the boundaries.
P Das
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