ASSESSMENT OF HOUSING AFFORDABILITY FOR URBAN POOR IN MILLION PLUS CITIES IN INDIA

Abstract

Housing is identified as a basic human need, along with food and clothing. Housing is not merely a shelter, but it comes with various amenities. These amenities are required to fulfill all kinds of human needs at various levels, like safety and security, social, self-esteem, and self-actualization. However, in the present scenario, the housing supply has failed to fulfill the growing demand due to rapid urbanization. This demand-supply mismatch has affected all sections of society, but the lowest section of the income pyramid bears the highest impact. As per the Technical Group 2012 report, 88% of the shortage lies in the economically weaker section (EWS), and 11% of the shortage lies in the low-income group (LIG) (MoHUPA, 2012). The homeless, those living in overcrowded conditions, and those who live in dilapidated or unusable homes all contribute to this shortage. In addition, there has been a dramatic increase in the cost of housing. Housing shortage and affordability have thus become the key factors to address the Indian urban housing situation. Most of the housing policies and programs are based on the thumb rule of the ratio of housing cost to income to measure housing affordability. The thumb rule does not address various other factors that are associated with housing. Various physical and social infrastructures are essential to make the housing adequate along with the quality of housing. The literature suggests that a broader view should be considered apart from income and house prices while measuring housing affordability. The present study centers its attention on the assessment of housing affordability using various housing and household-related variables. The target group for this research is the urban poor, as this section has the maximum housing shortage. According to the Technical Group 2012 report housing shortage in Indian urban areas is 18.78 million. Public housing programs have been continuously proven insufficient to fulfil this gigantic demand. The demand-supply mismatch can only be addressed through the open market supply. Thus, it is important to understand how the housing market functions. This study centers on comprehending the demand-side dynamics inside the industry. An understanding of housing demand can be achieved through an examination of its characteristics and components. The home owner or tenant considers the implicit values attached to these components. The components and characteristics have been derived from housing and household-related variables. Some of these variables are continuous, whereas some are categorical variables. These variables have been discussed in detail in the further sections.Purpose. This study aims to estimate housing affordability and demand for urban poor in India. It assesses housing affordability using various housing and household-related variables. The target group for this research is the urban poor, as this section has the maximum housing shortage. The paper is focused on understanding the demand side of the market. The demand for housing can be understood by considering characteristics and components. A home buyer or renter considers the implicit values attached to these components. The components and characteristics have been derived from housing and household-related variables. Design/methodology The overall approach for this study is whole to part. The research study has four objectives which has been achieved by data collection from secondary and primary sources and analysis. For objective one the studies on global scale obtained from secondary sources are used. Objective two is based on application of established methods for the study area. His stage also uses secondary data. Objective three is based on data collection and data analysis form primary survey. Two mid mid-size cities from state of Uttar Pradesh, Kanpur and Lucknow has been studied in detail for third objective. Inferences from objective one, two and three has been used to achieve the objective four. A socio-economic survey was conducted for 450 households from slums in Lucknow and Kanpur city. Two regression models were developed for this research. A hedonic price index was prepared for the first model to understand the relationship between housing expenditure and various housing characteristics. The housing characteristics considered for the hedonic model are dwelling unit size, typology, condition, amenities, and infrastructure. In the second stage, a regression model is created between household characteristics. The household characteristics considered for the demand estimation model are household size, age, education, social category, income, non-housing expenditure, migration, and overcrowding. Findings Based on the findings of regression model results, it is evident that the hedonic model is an effective tool for the estimation of housing affordability and housing demand for urban poor. Various housing and household-related variables affect housing expenditure positively or negatively. The two-stage hedonic regression model can define willingness to pay for a particular set of housing with various attributes of a particular household. The results show the significance of willingness to pay for dwelling unit size, quality, and amenities (R2>0.9, p<0.05). The demand function shows that income has a direct effect, whereas other variables have mixed effects. Research limitation/implication This study is case-specific and uses a dataset generated from a primary survey. Household surveys for a large sample size are resource-intensive exercises. Practical implication The results can be used by all the stakeholders to make an effective housing policy. The variables which are statistically significant and have a positive relationship with the housing cost should be deliberated upon to provide the basic standard of living for the urban poor. The formulation of policies should duly include the housing preferences of the economically disadvantaged population residing in slum areas. Additionally, these policies should prioritize the provision of housing in close proximity to the places of employment. This will also help private developer to develop housing schemes as per the demand. Social implications The absence of adequate engagement with the impacted people in slum initiatives, as well as the lack of a participatory approach, contributes to the emergence of resistance against such interventions. Additionally, it involves a lack of understanding regarding the needs and objectives of the residents, resulting in insufficient rehabilitation activities (Dupont & Gowda, 2020).City specific housing demand assessment can be used of slum redevelopment schemes. Although household surveys for a large sample size is resource intensive exercise but provide opportunity to exploit microdata for better understanding of complex housing situation in slums. Novelty Previous studies have acknowledged the housing issue in India, but, limited study has been undertaken specifically on the Urban Poor(M. Gupta & Gupta, 2017; N. Gupta & Kavita, 2020; Nayak & Jatav, 2023; Ram & Needham, 2017).This research focuses on the demand side analysis for the urban poor within the context of a mid-size city in India. This study uses primary survey data (collected by the author) to assess housing affordability for the urban poor of Lucknow and Kanpur city. Use of primary data for all housing and household related variables and creating a holistic model for housing affordability and housing demand assessment brings novelty to this research.