yap - housing the poor in asia's globalized cities [2010]

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Housing the poor in Asia’s globalized cities

by Yap Kioe Sheng1

Economic growth, higher incomes, improved access to housing finance and a rapidly expanding real estate sector have allowed millions of people in Asia to access adequate housing. Millions of other people still live in low-quality informal settlements. Market-driven urban development is now narrowing their options, as they are evicted from valuable land, while little or no land is left in a suitable location where they can live informally. Gov-ernments promote public-private partnerships for resettlement or re-development schemes, but such schemes turn many urban poor into victims rather than beneficiaries. Governments must recognize the right to adequate housing and adopt pro-active housing policies rather than leave low-income housing to market forces. Through effective urban planning, they must al-locate land for housing the poor. This requires accurate data about the ur-ban poor and their housing needs which are often lacking, as the focus is on market efficiency rather than long-term outcomes and inclusiveness.

Introduction

Urbanization has long been seen in Asia as a negative trend that created more problems in urban areas than it solved in the countryside. Urban-based economic growth has changed that perception. It is now generally agreed that urbanization and economic growth are closely linked and that preventing rural-urban migration is counter-productive. Recognition of the significance of urban centres as engines of economic growth has led to a search for more effective urban policies, but these require accurate and timely knowledge and understanding of urban trends and conditions.

1 City and Regional Planning Department, Cardiff University (UK).

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Today, more and more data become available and some argued that us-ing “big data” sets is the new challenge (MGI, 2011), but the question is not just how to use the “big data”, but what data to use. Data presented to monitor social, economic and environmental trends and conditions often do not distinguish urban and rural areas, different urban population groups or different parts of urban areas. Differentiating intra-urban trends and condi-tions is critical for policy-oriented monitoring needs to.

Informal settlements

For decades, the informal sector has supplied housing for the urban poor through the development of, what are often called, informal settlements. Informal settlements, in all their different forms, have become the most im-portant way in which the urban poor have housed themselves as they were faced with a shortage of affordable formal housing. In some cities, they are said to house more people than the public and private sector together: the settlements are the solution to the housing problem, not the problem per se(Turner, 1969, p. 522).

In 1976, the UN Conference on Human Settlements endorsed this view, and for about a decade the UN promoted policies aimed at regularizing and upgrading informal settlement. If this was impossible, it recommended re-settlement in a planned and participatory manner. Since such policies are re-active, it promoted opportunities for the urban poor to develop its hous-ing in a formal setting through sites-and-services schemes.

Many governments were unconvinced that regularization was a solution. They saw it as encouraging rural-urban migration and rewarding people who occupied other people’s land. They saw sites-and-services schemes as government-endorsed slums. They preferred direct construction of public housing, but that proved to be too expensive and did not meet the needs of the urban poor. Many governments therefore turned a blind eye to informal settlements, adopting a policy of benign (or less benign) neglect.

Benign neglect has been the de facto policy in many countries. Faced with this neglect, residents in many informal settlements took responsibility for the improvement of their settlement by forming community-based or-ganizations, building basic infrastructure and improving their houses, pro-vided the neglect offered sufficient land tenure security. The informality of the settlements had a positive side: it made the land and houses in the set-tlements unattractive to middle-income households and thus kept them af-fordable for the urban poor.



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Enabling housing policies

In the late 1980s and early 1990s, UNCHS2 and the World Bank shifted focus and introduced the enabling housing policy. UNCHS (1991) noted that the focus on squatter settlement upgrading and sites-and-services schemes as the cornerstone of housing strategies had been responsible for the lack of progress in solving the low-income housing problems. The pro-ject-by-project approach needed to be replaced by sustainable large-scale housing delivery.

Moreover, focusing on low-income housing only would never solve the problem (World Bank, 1993). The housing sector is a single market and trends in one part affect those in other parts. If affordable housing is in short supply, better-off households will inevitably capture most benefits aimed at improving housing for the urban poor. If housing markets can be made more efficient, more families will be able to afford private-sector housing, making programmes for the urban poor more effective.

The enabling approach implies a retreat by the public sector from plan-ning, production, marketing and maintenance of housing projects, and an introduction of incentives and measures to mobilize the resources of private actors for housing production and improvement. Measures include: a) im-provements in housing finance to strengthen effective demand; b) de-regulation of the housing sector to enable the private sector to supply hous-ing more efficiently; c) an institutional framework to manage the sector and ensure access to housing by the poor.

An enabling strategy does not reduce government responsibility for housing production and distribution, because the market cannot solve the fundamental problems of squatters and other informal housing occupants. Their problems can only be solved through innovative measures that offer viable alternatives to squatting, while squatters already in place must be brought into the mainstream of the housing process through interim land-tenure programmes that quickly regularize their position.

Many policy-makers welcomed the shift, as they felt more comfortable with market-driven housing development for the middle-class than with squatter settlement regularization for the urban poor. They keenly adopted an enabling housing policy, but ignored the need for innovative strategies to deal with squatters and inner-city slum dwellers.

2 United Nations Centre for Human Settlements (Habitat), now: UN-HABITAT.



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Urban policies

The enabling approach to housing did not come alone. It was part of a package of free-market policies aimed at a retrenchment of the government and its withdrawal from social sectors. It shifted attention from projects to institutional reform, from low-income housing to the housing sector as a whole, and from housing to urban management. If urban areas were better managed, urban land and housing markets would perform more efficiently, benefiting everyone, including the urban poor. Although it was perhaps not intended, housing the urban poor became a function of urban management rather than a specific policy area.

Urban management focused on the mobilization of public and private resources to ensure that rapid urbanization is matched by the development of infrastructure and services, including housing. However, housing moved down the list of priorities for governments, because the private sector was expected to take care of it. Urban management focused on issues such as a growing demand by an expanding middle class for urban services. Given the retrenchment of the government, decentralization and privatization were thought to be the answers.

Countries across Asia have devolved powers from national to local gov-ernment. Local governments have been assigned new responsibilities, but many lack the capacity and the authority to mobilize the human and finan-cial resources to assume the new tasks. Privatization has shifted this burden to the private sector. Decentralization and privatization were expected to improve accountability and transparency by brining decision-making closer to the population and the introduction of customer-oriented approaches by private companies. However, the local elite, the rich and powerful often captured the benefits, leaving the urban poor not better off.

Urban entrepreneurialism

In the globalized economy, cities must compete for investments that bring economic growth, finance infrastructure and generate employment. In the initial stages of development, cities in Asia attracted foreign investors through the low cost of labour and other factors of production. Today, many urban centres around the world can now offer labour at a low cost. Productivity of labour and quality of infrastructure have become critical in investment decisions, as cities seek to attract investments in higher value-added manufacturing and services.



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Increasingly, investors seek an environment that encourages innovation, creativity and information flows. This is found in places with universities and research centres of global reputation. If a city lacks highly skilled la-bour, it will try to enhance the “quality of place” to attract such workers, because many are footloose and can work anywhere in the world (OECD, 2005, p. 5). Cities say they need to be “world-class” to survive.

The need to compete has shifted the local government agenda from managerialism – concerned with service delivery to citizens – to entrepre-neurialism – characterized by a willingness to collaborate with the private sector, pro-economic-growth strategies and city-marketing to attract inves-tors (Harvey, 1989; OECD, 2007, pp. 19-20 and 30). The repercussions of an entrepreneurialist agenda are a growing influence of global capital over the physical and social form of the city and a focus on land values ratherthan social and environmental concerns in urban planning (Hasan, 2009, pp. 3-4).

A world-class city is a city that can attract tourists and other visitors through meetings, incentives, conferences and events. The apex of world-class city development is the organization of a “mega-event” (a large sport event, the world expo or an international conference). It is an opportunity to beautify the city, improve infrastructure and evict informal settlements. NGOs estimate that preparations for the Commonwealth Games in Delhi in 2010 resulted in the eviction of 200,000 urban poor (HLRN, 2011, p. 4)3.

Local government and the private sector often join forces to create a world-class city, but such public-private partnerships are often speculative: the public sector pays the costs, the private sector makes the profits. They also divert attention and resources from broader urban problems (Harvey,1989, pp. 7-8). Private developers, politicians and top bureaucrats often collude to develop such public-private partnerships (UNESCAP, 1996, p.56). There are long-standing links between developers and politicians, me-diated by the underworld, in Mumbai (Mahadevia and Narayanan, 2008, p.31).

If the benefits of economic growth as a result of the entrepreneurialist agenda are redistributed among the population, living standards can im-prove for all, but income inequality is, in fact, growing. Export-oriented manufacturers often outsource their work to the informal sector where

3 The entrepreneurial agenda also affects other sectors. Medical tourism is a growing sector in Asia, where health care tends to be cheaper and more readily available than in de-veloped countries. Expansion of the private health-care sector for medical tourism may oc-cur at the expense of local patients who seek treatment in the public sector, if skilled health workers move out of the public sector into the private one (Connell, 2006, p. 1099).



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working hours are long, working conditions are harsh and wages are low. Formal companies also hire labour on a fixed-term basis to avoid having to pay social benefits. The urban informal sector is allowed to provide food, housing and transport to keep the cost of urban living down.

When local and global capital handpick sites for development without any concern for its social and environmental impact, urban planning be-comes an exercise in futility. Private-sector housing development for the middle class and real estate development to attract investors, expatriates and tourists dominate urban land markets, leading to large-scale evictions of urban poor communities. As land values increase, land for informal housing becomes scarce. This trend is now reaching a point where informal settlements can no longer provide housing for the urban poor.

The enabling approach called for innovative approaches to housing the urban poor. In line with the prevailing paradigm, these approaches tend to be (more or less) market-based: public-private re-development schemes, land-sharing, etc. Point of departure is that land use has to be optimized and that informal housing does not represent an optimal land use. As the case studies from Cambodia and Thailand illustrate, the approaches do not have a positive impact on the living conditions of all urban poor.

Boeung Kak, Phnom Penh

Cambodia’s (re-)urbanization started in 1979 with the fall of the Khmer Rouge who had moved the entire urban population to the rural areas in 1975, leaving urban centres devoid of inhabitants. After 1979, people fled the countryside where the civil war continued, to seek safety in the urban areas. They moved into abandoned villas, apartments and office buildings, in temples and cemeteries. As government records had been lost, there was no proof of land or building ownership. Everyone was a squatter, until a 2001 Land Law stipulated that five years of continuous occupancy could give residents ownership rights.

Boeung Kak Lake in northern part of Phnom Penh served as a natural reservoir for excess rainwater during the rainy season. People began set-tling around the lake in the 1980s, and it became home for some 4,250 households. The lake was important for the livelihood of the population who used it to grow vegetables and to catch fish and snails. Foreign tourists frequented its lake-side restaurants and cheap guest houses. In 2006, the government started land registration in the area, but did not issue land titles to the families in the lake settlements, because the lake was considered state public property which cannot be owned or leased.



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In 2007, the Phnom Penh Municipality included the lake in a 99-year lease to a Cambodian-Chinese joint venture linked to senior government officials. The company began filling the lake in order to build a new city of villas, shops and office buildings. When questions were raised, the gov-ernment retroactively converted the area in 2008 to state private land (which can be leased) to regularize the contract with the company.

The filling of the lake led to the flooding of lake-side houses and resi-dents were forced to move. House-owners were offered three types of com-pensation: a) cash payment of US$8,500; b) a house and plot of land in a resettlement area 15-20 km from the city centre plus US$500; or c) reset-tlement on site at some undefined time in the future. A few chose to reset-tle, but most took the cash payment and left. Their whereabouts are not known; they may be renting accommodation in the city centre or squatting.

In 2009, Boeung Kak residents filed a complaint with the World Bankwhich was funding the land registration programme. They claimed that they should have been included in the land titling programme and had more rights to the land than the private company. If, on the other hand, they had to be resettled due to the registration of the land as state public land, they would be entitled to a resettlement package along World Bank guidelines: restoration of their socio-economic and physical conditions to at least pre-project levels.

An Inspection Panel for the World Bank agreed that the residents had been unfairly excluded. The World Bank asked the government to resettle the residents using the Bank’s guidelines. Instead, the government ended its agreement with the World Bank. Eventually, the prime-minister granted land titles to 800 remaining households on 12.4 ha within the project area. By late 2011, 500 households had received a title.

Evictions are an almost daily routine in urban and rural Cambodia. Some 30,000 families have been displaced in Phnom Penh alone since 1990 (STT, 2011) and there are over 40 resettlement sites around Phnom Penh. Most resettled households face serious hardship as their site lacks adequate housing, potable water and sanitation. Due to their remoteness, access to jobs is difficult and costly (Khemro and Payne, 2004, p. 193). Titles are rarely issued and further evictions are always possible. Many families are forced to return to the city to rent or squat.

The land registration programme was designed to exclude disputed land from titling until the dispute was resolved, but the authorities use the option to exclude land that is occupied by the urban poor, but wanted by powerful businessmen or politicians and foreign investors. They block attempts by the poor to register land and accuse them of illegally occupying state land. They can do so, because the land classification process is not transparent



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and a register of state land is not publicly accessible (Bugalski and Pred, 2010, pp. 4-5). Many urban poor never apply for a land title, because they do not know that they qualify or how to apply. Those who apply may have to pay US$200-700 in informal fees (Bristol, 2007, p. 4).

Suwan Prasid 2, Bangkok

Before the mid 1980s, Bangkok had many areas (“super-blocks”) with urban development only at its fringe due to a lack of internal infrastructure. As economic growth accelerated in the 1980s, the government opened some of these areas for development by building roads and bridges. One such road was Rama IX Road, where land belongs to the State Railways of Thailand (SRT), an inefficient state enterprise with vast tracts of unused land in Bangkok. The SRT likes to develop its unused land commercially and use the profits to compensate for its operational losses.

In 1988, the SRT leased 1,376 ha of land along Rama IX Road to a Thai-Singaporean company to build a shopping area (Royal City Avenue), a hotel and houses. Three informal settlements south of Rama IX Road with a population of 110 households came under the threat of eviction. The developer offered each household a compensation of Baht 8,500 (US$340). Some accepted it and left; they were said to have ended up living under a nearby bridge. Most households rejected the offer. As negotiations went on, the developer paid the leader of one of the communities an extra sum of money to abandon his community which fell apart and dispersed.

Through his connections with other urban poor communities, another community leader found land for sale in a fringe area of Bangkok. The land was relatively cheap, as it was part of another “superblock” and lacked pub-lic access. With subsidized loans from the National Housing Authority (NHA), the remaining households bought the land and moved there at the end of 1989. They called the settlement Suwan Prasid 2; Suwan Prasid 1 is an adjacent settlement of evicted urban poor who had moved a few years earlier from another part of Bangkok.

The NHA divided the land into 100 plots to house 100 households, but only 44 households from Rama IX Road had moved at the end of 1989. Evicted households from other settlements (Wattanawong and Sukchai) joined the settlers from Rama IX Road a few months later; they were fol-lowed by other urban poor (Yap and Ruangchap, 1992). However, some households from Rama IX Road simply could not live at the new site, as itwas too far from their place of work.



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In 2011, Suwan Prasid 2 was revisited and surveyed (Leerutanawisut, 2011). The survey found that only 37 households from the original 100 households still owned a house and a plot in Suwan Prasid 2; many others had sold their property and left. Most households owned a single plot, but some owned two or three plots. There were also six squatter houses.

Tab. 1 – Plot distribution in Suwan Prasid 2 (1992, 2011).Origin Plot

allocationPlot distribution

1992 2011Original owners

Rama IX. 44 35 27Wattanawong. 28 22 5Other slums. 24 6 1Not from slum. 4 4 4

Subtotal 100 67 37New plot buyers

New owner-occupant. 48New renter. 6Original owner, now renter. 3

Subtotal 57Squatters

New squatter. 4Original owner, now squatter. 1Locked squatter house. 1

Subtotal 6Empty plot, locked house, etc. - 33 6

Total 100 100 106

Some people had become legal owners of the land, but lost it in times of financial problems:

Respondent A: «I repaid my loan and the land belonged to me. When my son went to the jail because of drugs, I wanted to help him. I used my land to borrow money. I could not borrow from the bank, because I did not have stable income. I borrowed from a money lender at 10 per cent interest per month, very high com-pared to the bank. I had no choice but to borrow from her. When I could not pay back, I lost my property».

Plot-owners are assumed to use land title as collateral to borrow from a bank to improve their house or start a business, but that is not always the case.

Respondent B: «To improve our house, we wanted to borrow money from the bank, but the bank did not accept our land as collateral, because we did not have a stable job. The Government Housing Bank which is supposed to help people buy or improve their house had the same criteria as commercial banks. So, we could not improve our house».



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When the original settlers arrived in 1989, the area was in a remote cor-ner of Bangkok, in a “superblock” without public access. Employment op-portunities were limited and commutes to the centre were long and expen-sive. By 2011, the situation had changed: the area is now an integral part of the city. The government has built a six-lane road through the “superblock” which gives direct public access to Suwan Prasid. Land prices increased and an adjacent informal settlement was evicted to develop a middle-income housing scheme. Some residents of Suwan Prasid have already re-ceived attractive offers for their plot of land.

Faced with imminent eviction, urban poor communities in Bangkok now propose land sharing to avoid a long and costly battle with landowners. In land sharing, the landowner and the community reach a compromise: the community vacates the most profitable part of the land to allow the owner to develop it commercially; the owner sells or leases the remaining land to the poor, preferably at a below-market rate. The approach has been repli-cated in other cities, but landowners nowadays prefers to retain the entire plot of land and to offer a number of apartments to the residents.

Borei Keila, Phnom Penh

Borei Keila Sports Village in Phnom Penh was built in 1966. It included eight three-storey apartment blocks and other buildings. After the fall of the Khmer Rouge, many people moved into Borei Keila. With 1,800 families, it became one of the most conspicuous and populous slums in the city. The authorities claimed that the site was state land, but a majority of residents claimed possession rights. Efforts to evict the people failed. Borei Keila became the first land sharing project in Phnom Penh (Rabé, 2010, pp. 9-11).

The government accepted a proposal by a private company to subdivide the land in three parts: 2 ha for ten six-storey walk-up apartments for the original residents, 2.6 ha to develop commercially, and 10 ha to be returned to the government. From the start, the project had serious flaws: a lack of transparency in the award of the contract to the developer, inadequate con-sultation with the residents about the land sharing arrangement and the building design, and widespread irregularities in the procedures to identify eligible beneficiaries and allocate housing units (Rabé, 2010, pp. 11).

Sale of the units by the original residents was only possible after five years of continuous occupancy, but 40 per cent of the families had sold their unit by late 2011 (Cambodia Daily, December 23, 2011). While the company had agreed to construct ten buildings for the displaced families, it



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built only eight due to a lack of funds. The government accepted this change in the plan which left almost 400 families homeless, while 300 fam-ilies in Borei Keila had never been allocated any unit. In early 2012, riots broke out in the area, as officials and guards were trying to force the re-maining residents to move to resettlement sites in the province.

To further complicate the situation, stories are circulating about people who, supported by government officials, bought the identity of allottees to acquire their housing unit or assumed two or more identities to claim an additional unit. As poverty is still severe among the urban population, fami-lies may take whatever money is being offered and leave. All this makes it extremely difficult to identify and assist the true victims.

Dharavi, Mumbai

With 20 million inhabitants in 2010, Mumbai is the largest city of India and also its financial and commercial centre. Mumbai is expected to take the lead in integrating India into the global economy, and nearly all politi-cal parties agree that Mumbai should become a world-class city on par with Shanghai. To achieve this goal, Mumbai has to do something about its slums which are estimated to house around half of the city’s population. Attempts have been made to interest the private sector in the upgrading of urban poor housing in Mumbai in return for commercial development on the same site, a form of land (value) sharing.

An example is the plan for Dharavi, one of Asia’s largest slums, with a population that some estimate at 0.6 to 1.0 million. Besides people, it also houses recycling enterprises and industries that produce garments, leather goods, pottery, soap, cutlery and food. The government says that it wants to improve the living conditions of all residents at no cost to the governmentthrough a re-development of the area by the private sector and local and in-ternational companies have shown interest (Patel and Arputham, 2007).

A first plan was prepared for one sector of Dharavi that houses 57,000 families. Each house owner would receive a 30 m2 flat in a multi-storeyed building for free to be maintained by the developer for 15 years. Renters would not be compensated and there would be a cut-off date (first 1995, later 2000) for residents to be eligible for re-housing. Business owners would receive 25 m2 of space for free and pay for additional space. The de-veloper would have to provide 3 million m2 of housing, schools, parks and roads for the current population, and could build 40 million m2 of houses and offices for sale in return (Ramanathan, 2007).



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Not everyone supports the plan (Giridharadas, 2006). Critics expect that the developers will minimize the space and cost of accommodating current residents and enterprises and maximize the space they can sell. Critics also worry that high-rise buildings will disrupt the livelihoods of vendors, shop-keepers and fishermen, whose work requires them to live in ground-level homes where they can store their boat or supervise their store. In brief, the urban poor’s way of live does not easily match the plans of the government and private developers.

This became clear in subsequent surveys. A survey in one of Dharavi’s sectors found that 31 per cent of the families had moved to Dharavi in 2000 or later and thus were ineligible for free housing. It also found that the sale of housing is a regular feature: around one-third of the houses in the sector had changed hands since 2000. In anticipation of the redevelopment, house prices were rising rapidly (Hindustan Times, January 22, 2011). In view of these findings, it is unclear how the scheme can proceed.

Baan Mankong, Thailand

Thailand has long struggled to find a solution for its land-rental and squatter settlements. In 2003, the Community Organizations Development Institute (CODI) was given the task of assisting urban poor communities improve their housing conditions through the Baan Mankong programme. The programme helps the urban poor form savings-and-loans groups and establish networks with other community-based organizations. The network forges partnerships with local government, civil society and academics to develop a city-wide solution for the housing problems of the urban poor.

Supported by the network and CODI, a community negotiates with the landowner to try to buy the land it occupies or share it with the owner. If this is impossible, it will sign a long- or short-term lease, or buy or lease land nearby. The network can supply information about prevailing land prices and the availability of vacant land nearby. Once land tenure is se-cured, CODI provides loans and grants for land purchase, infrastructure de-velopment and house construction or improvement.

CODI’s goal is not just to improve housing, but also to empower people. Building a cohesive community is critical, because residents need to sup-port each other so that all community members, even the poorest, benefit from the project. CODI insists on collective ownership of land and houses for at least 15 years, until loans have been repaid, to give the community control over the sale of properties and the entry of new households that may not fit in the community.



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This is a more inclusive approach than the top-down projects described earlier, but it has limitations. If land is unavailable or too expensive, the plan cannot proceed. This applies particularly in areas with strong land pressure such as the city centre of Bangkok. Communities are also rarely homogeneous in terms of income. A project is difficult to realize if there are few not-so-poor and many very poor or if the not-so-poor conclude that the project is only feasible, if the very poor are excluded.

The very poor are more reluctant than the not-so-poor to borrow money to build a house, and renters may prefer to remain renters. Community members may be able to help each other on an ad hoc basis, but unable to give large-scale and continuous assistance to the needy. Solidarity may not outlast a period of economic hardship affecting the entire community. Leaders may set a price for property that discourages residents to invest in their housing, and powerful people within the community may buy the properties and become landlords.

Impacts

The enabling approach has made a significant contribution to the devel-opment of private-sector housing in Asia, but it did not do so on its own. An essential factor was the rapid economic growth of the past few decades which raised incomes and created a middle class with effective demand for home ownership and quality urban services. Public policies and pro-grammes to open land for development by providing infrastructure, to sup-port an effective housing finance sector and to de-regulate and simplify construction-related regulatory frameworks played an important role.

Low-income housing problems cannot be solved unless the housing problems of middle-income households are addressed. Today, formal and informal low-income housing has become an integral part of the global real estate sector. Joint ventures by foreign (often East-Asian) companies and local investors, with links to politicians and government officials, develop real estate across Asia and compete with the urban poor for land.

With a concern for the efficiency of urban land markets, governments seek to use land in the most profitable way, but this forces the urban poor out of their informal housing in suitable urban locations. Middle- and high-income housing construction, infrastructure development, the proliferation of shopping malls, hotels and casinos, city beautification have led to the eviction of thousands of urban poor households from informal settlements across Asia. Proponents of market-based urban policies argue that econom-ic growth also benefits the urban poor «On average, even the poorest mem-



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bers of society benefit from economic growth and well-functioning mar-kets» (UNCHS, 1991, p. 74), but the reality is different.

Urban poverty

In market-based housing development, access to housing depends on the capacity to negotiate a price and to pay rather than on an entitlement. The urban poor communities must negotiate a deal with the land owner, the de-veloper and the government: resettlement or cash payment, land sharing or integration into a redevelopment project. However, most urban poor lack a strong negotiating capacity and they “voluntarily” accept arrangements that result in a deterioration of their situation (Durand-Lasserve, 2005, p. 2).

Most poor lack information, experience in dealing with public-sector bureaucracies and private-sector administrations, time to wait in a queue and money to pay bribes. They are discriminated and excluded, because of their address, their ethnicity, their gender and their language. The number of families included in a project and the size and type of housing units built depend on the (cut in) profit the developer is prepared to accept. Some or many families are excluded from the start; others sell their housing later.

Often, only house owners are compensated, while the poorer renters are excluded. Developers will initially offer cash compensation to reduce the number of households they have to accommodate. The “cut-off” date stopsprofessional squatters from taking advantage of the project, but informal settlements tend to be dynamic places where people come and go, buy and sell. A redevelopment project takes several years to complete and allottees may doubt that they will ever be resettled. They will informally sell their right to a housing unit to others, thereby further complicating the process.

Clientelism is widespread in Asia and a family may have to pay a price for inclusion in a project or in the compensation payment. Relying on the community leader can make them less rather than more empowered. While negotiating with a community, a private company may seek to divide and rule, and bribe a community leader into accepting a lower compensation for the common community members. Thus, there is an often justified mistrust of community leaders among the residents.

Participation is not a feature of private-sector housing development. The developer is interested in the sale of the units, not in the socio-economic characteristcs or the needs of the buyer. A developer will design medium- and high-rise buildings and small apartments to make the most efficient use of the land rather than give attention to the specific needs of the urban poor. Apartments in multi-storeyed buildings suit some urban poor, but not all.



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Because the financial situation of the urban poor is always precarious, the attraction or the need to sell their (right to a) housing unit is never far. While selling to move to better housing should be encouraged, the urban poor often sell to pay a debt and subsequently become homeless. To protect the community against market forces, Baan Mankong in Thailand requires land and housing to be in cooperative ownership until all loans are repaid, but this may discourage investment in house improvement.

All these processes remain mostly invisible to the outside observer who sees a high-quality structure replace a low-quality settlement (“slum”). The exclusion of the very poor or their replacement by the better-off and better-connected takes place gradually. Politicians and administrators are happy tosee an improvement in the quality of the housing and do not want to be bothered by questions about the fate of the affected people. Monitoring or evaluating the long-term impact of a project is rarely done.

Economists will conclude that the market is performing efficiently, if house prices are held down to actual costs plus a reasonable profit for the developer due to an adequate supply of land, competition in the real estate sector, and an ample supply of capital. If the house price to income ration is within acceptable limits, housing is considered affordable, although other factors than the price may turn the urban poor away. A reduction in infor-mal housing could indicate better access to formal housing for the urban poor, but also a decline in opportunities for informal housing.

The question is who benefits in the short and long term. Project are only successful, if the original population benefits directly through improved on-site housing conditions, or indirectly through financial compensation and support which allow them to improve their conditions elsewhere. Some original residents of Boeung Kak, Rama IX Road and Borei Keila may not be worse off today than before; the conditions of others may have gravely deteriorated. There is no way of knowing.

Urban low-income housing policy

As opportunities for informal housing decline and the poor tend to lose out in projects aimed at land sharing or redevelopment, governments must rethink their approach. Low-income housing policies cannot be market-based, but must be rights-based. A rights-based approach gauges the extent to which the urban poor effectively benefit the urban poor. If the right to adequate housing is accepted as the principle, the questions to be asked are not «what has been built or physically improved?», but «who has benefit-ed?», «who has been excluded?» and «on what grounds?».



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A rights-based approach may seem to give an overly negative look on achievements, but it complements the often overly positive conclusion that a supply of a large number of adequate and financially affordable housing units and a large amount of housing finance is sufficient to address the ur-ban low-income housing problem.

Policies need to effectively assist the urban poor in finding adequate housing based on a thorough understanding of the conditions and the pro-cesses involved: What works and what does not, in the short and in the long term? That is not an easy task to achieve, but without knowing what makes a difference, there is no way to expand the impact.

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