73801 CITIES WITHOUT CIVIS Sharing Knowledge and Learning from Cities SLUMS Reprint — November 2012 The Case for Incremental Housing Prepared for Cities Alliance by Patrick Wakely and Elizabeth Riley of the Development Planning Unit Associates Introduction providing appropriate legal and technical supports. This O took two forms: 1) the environmental upgrading of existing ver the last two decades the failure of standardised informal settlements with safe water, sanitation, drainage, contractor led housing delivery models to electricity and access ways; and 2) providing recognised respond to the sheer scale of need of the urban title to new plots of serviced land – sites and services (S&S) poor raises the question as to whether the time has not – on which households could build their own dwellings. arrived to revisit the “incremental housing� approaches of the 1970s and 1980s as a more realistic approach Many projects that were ‘evaluated’ only one or two years to meeting the housing needs of the urban poor. after their start were (erroneously) judged to have failed, whereas revisiting them a decade or two later attests to their The basis of “incremental housing� was that the cost of success [see photos]. Over time the social and economic housing could be reduced by recognising that poor urban benefits of engaging communities and the realistic time families already build and extend their own dwellings needed for poor householders to build better quality incrementally in response to their needs and the availability buildings has become clearer. These learning provide the of resources. The approach was to improve on this by basis for re-making the case for incremental housing. The CIVIS series shares knowledge and learning arising from Cities Alliance projects and other activities in slum upgrading and city development strategies. It also serves as a platform for policy dialogue among city development stakeholders, including national and local governments, donors and slum dwellers to impact change in the lives of the urban poor and advance the urban development agenda. www.citiesalliance.org The Case The case for governments to support participatory incremental housing strategies for low-income groups rests on a set of six interrelated arguments. 1) The numbers case 3) The urban management case G  overnments do not have the mix of resources to build Th  e basis of incremental housing is that government subsidised completed dwellings for all low-income does what households cannot effectively do – assemble households. Every day people demonstrate their own land and provide trunk infrastructure and services – and ability to house themselves even if they cannot afford to households do what governments cannot do efficiently do so legally in the formal housing market. By engaging – construct affordable dwellings that meet the priorities and improving the production and management of and resources of their occupants. By recognising the most peoples’ own strategies for the development of their effective levels of decision-making – national, municipal, dwellings and neighbourhoods, a far greater number community, household – and delegating authority to the of legal, safe and healthy dwellings, affordable to low most appropriate level and actor, partnerships can be built income groups can be procured than by conventional between government, the private sector, civil society and approaches. However, to be effective support to both the community groups that enhance the efficiency of urban upgrading of existing informal settlements and the supply management and the administration or urban services. In of S&S plots must be at a scale that matches demand. By the citywide Favela Bairro upgrading programme in Rio de switching from a ‘supply approach’ to a ‘support approach’ Janeiro, Brazil in the 1990s authority for the administration to housing policy in the 1980s the Government of Sri of urban services was devolved to local partnerships of Lanka’s ‘Million Houses Programme’ achieved a ten-fold residents associations and the field offices of state and increase in the number of low-income families reached. private utility companies. This improved the delivery, maintenance and management of water, sewerage and electricity at the same time as reducing the administrative overheads of meeting the changing needs and demands 2) The financial case of the incremental settlement upgrading process.  ven poor households are able to raise significant sums E through savings and borrowing to invest in housing and neighbourhood development provided that the security 4) The urban development case of their investment is guaranteed. Few households will I  ncremental housing strategies provide an opportunity invest their resources in building good quality housing to regulate ongoing informal (illegal) urban development or improving and maintaining their neighbourhood processes, and ensure adequate and relatively efficient infrastructure if they are under the threat of eviction due to provision for infrastructure and service delivery and the lack of legally recognised title. By providing security of rational land use. It has the ability to shape the development tenure to land and property and ensuring access to reliable of towns and cities in accordance with strategic priorities urban services, low-income households and governments developed for an entire urban area, rather than just are able share the cost of incremental urban development engaging in small-scale fire-fighting. Supported incremental with communities. It is estimated that for every dollar of housing can be a means to reduce uncontrolled low- government input to the Parcelles Assaines S&S project density urban sprawl in favour of high-density compact in Dakar, Senegal in the 1970s, $8.2 of private funds were development. By planning areas of legitimate low-income subsequently invested in housing and local facilities. housing development as part of an integrated urban development strategy governments are able to set strategic priorities for an entire urban area. In the context of a citywide development strategy (CDS), the Municipality of Aleppo in Syria has established an Informal Settlements Development Department to integrate the ‘formalisation’ of existing informal settlements, which account for some 45 percent of the population, and new illegal housing areas that are growing on the urban fringes. 2 | CIVIS: Sharing Knowledge and Learning from Cities 5) The governance case 6) The social and economic development case  e organisation and management of incremental building Th  ncremental housing processes can be an effective I processes and particularly engagement in the installation catalyst to the social and economic development of poor and extension of neighbourhood infrastructure provides households and communities. Organising to engage in a means to the development of decentralised participatory developing their housing and local environment inevitably decision-making and governance. Good governance not brings people together in a ‘common cause’. This presents only helps to ensure transparency and accountability in an opportunity to develop and consolidate social solidarity the management of the financial and physical aspects of and to introduce and support local enterprise initiatives housing and neighbourhood building, it is a vehicle for and employment, notably in the infrastructure and house community development that can stimulate a wide range construction activities of the projects themselves. It can of local development activities. Participation helps to create also build social capital around issues that are not related a sense of ownership and pride in the local environment to the immediate urban environment, developing wider that engenders a responsibility for the maintenance and networks and involving other groups, for example sporting management of community assets (streets, drains, street or cultural activities that engage the youth and/or women. lighting, public open space, even schools and clinics). The The importance of organised household savings activities Busti Baseer Odhikar Surakha Committee (BOSC) structure, both to support house building and enterprise development set up in Dhaka, Bangladesh in the late 1990s by a coalition of is becoming well understood as a significant factor in NGOs has established a citywide network of ‘accountability local economic and social development. In Cambodia, mechanisms’ to incorporate the urban poor in urban the Urban Poor Development Fund supports a growing governance working with the city’s Ward Commissioners, number of community-based savings groups, largely run the lowest level of public administration. This interface by women community leaders, and provides loans and between government and organised representative non- grants for land acquisition as well as for upgrading, house governmental bodies has become widely accepted and works building, income generation and food production. well in many of the city’s 90 wards, reducing corruption and giving voice (and confidence) to low-income communities. Ciudad Bachue, Bogota, Colombia 1985. @DPU Associates. Starting with pre- fabricated core houses in 1979, households began to replace doors, install security grills and eventually swapped out the pre-fabricated panels for conventional block and brick construction when they could afford the expense. www.citiesalliance.org | 3 The Components Many early projects confined their support to the provision of land and infrastructure. However, subsequent experience shows that in order to make incremental housing strategies sustainable and to take them ‘to scale’ a wider range of issues has to be addressed. a) Land subsidies. Long and renewable leasehold titles to land are L  and is the principal component of government support not out of the question for incremental housing, though to housing for urban low-income groups. In making land they are rarely socially acceptable. Various forms of available for incremental development consideration needs collective title such as housing associations, co-operatives to be given to three basic aspects: its location, price and title. and condominiums can provide acceptable mechanisms to provide low-income groups with security of tenure whilst Th  e selection of the right land for incremental housing protecting households from exploitative market forces. development is crucial to success. Land is often acquired because it is cheap. Ultimately it becomes expensive to both communities and government when the cost of b) Finance extending infrastructure and the loss of socio-spatial The  credit needs of incremental housing differ from support networks to families is factored into the equation. conventional mortgage finance, which is based on funding The identification of land on which to develop S&S for low- to purchase or build a complete house. Incremental income housing requires a much more rigorous analysis of housing requires flexible, relatively small short-term its costs and benefits than merely its initial price and the loans that are responsive to the intermittent demands cost of servicing it. It entails an assessment of the social of households’ changing fortunes and priorities. At a and economic costs in use by the intended beneficiaries different level, there are financing (security) advantages in a context of often wildly fluctuating family fortunes, in making even initial starter loans for construction insecure incomes and changing household priorities. available on an incremental basis, requiring borrowers W  ell-located privately owned land within an existing to ‘qualify’ for the next stage of credit only by built-up area tends to command high prices, normally completing the first – e.g. separate sequential loans for well beyond the capacity of local government funds. foundations and floor slab, structural walls, and roof. Compulsory acquisition for low-income housing requires  n order to ensure that monetary support is invested I considerable political will and risk. Governments need in house construction as intended, an alternative to to negotiate with private landowners using incentives to financial credit has been the provision of building encourage them to make land available or to develop it materials, bought in bulk and passed on to authorised themselves on terms that are affordable to low-income house builders at or below cost. However, such schemes householders - below the optimum market returns. A are open to exploitation, though where they do work range of strategies exist in which governments use their well, on-site organised depots of building materials, legislative advantages to do deals with landowners and bought and stored in bulk, are able to lower the cost of developers, including transferable development rights construction materials and serve as one-stop-shops for that allow landowners to ‘trade’ land for development materials, advice and housing loans, though they have advantages and land sharing schemes. In addition been known to drive out small-scale local suppliers cities have extensive ‘reserves’ of under-utilised urban who are a source of local employment and incomes. land in public ownership that could be transferred to low-income housing. However, transferring such land I  ndependent credit facilities and management have usually entails complex inter-agency negotiations. often been shown to be more efficient and effective than those administered by government. The In many societies individual freehold ownership of land  plethora of microfinance initiatives, both small and and property is the only form of title considered absolutely large in scale and either community-managed or secure. However, it is not the only option and it has been supported by NGOs (or banks), attests to the ability criticised for enabling households to sell their plots up- of poor people to mobilise resources and apply long- market and making profits and speculate with government term financial strategies at low risk to lenders. 4 | CIVIS: Sharing Knowledge and Learning from Cities c) Infrastructure and services  lanning bylaws and building controls should be confined P  e timing, standard and level of infrastructure and service Th to those necessary to ensure the health and safety of provision is a key component of support to incremental households and the wider community and facilitate housing initiatives. If infrastructure and services are incremental construction processes. They should be provided at too high a level, costs are unaffordable to proscriptive, setting the limits of good practice, rather than low-income households. Where they are too low, or their the more common prescriptive legislation that stipulates installation delayed, plots remain empty and are not in some detail what has to be done, leaving little room for developed. In theory, ensuring the right balance can only innovation. Thus there are strong arguments for a shift from equitably and effectively be made by the community of the concept of official development control to ‘development users, provided that they fully understand the implications promotion’ and the establishment of planning and building of the trade-offs between initial capital cost, cost in use, advisory services for incremental housing programmes and and the tenets of environmental health, safety and amenity. projects that provide technical guidance on good practice. However, this may not always be practicable in situations However, there is still a need for development control where new communities are being formed. Where decisions functions to police illegal development and unsafe building on the levels and type of infrastructure provision have to be by unscrupulous speculators. made without community consultation, it is a mistake to assume that service standards should always be low. There  hilst NGOs may be best placed to provide W are strong arguments in favour of providing high standards neighbourhood-level planning and building advisory right from the start of an S&S or upgrading project in order services and to build CBO capacity to administer first- to stimulate good quality construction by individual house stage development control functions, it is important that builders and a sense of pride in the neighbourhood in order government has the capacity to ensure their complicity. to motivate local care and maintenance of public facilities. Th  e cost of high standards of initial provision may be recovered in several ways such as long repayment periods Community organisation and asset e)  linked to tariffs on user charges or spreading the cost management beyond the confines of the project, through local taxation  e importance of a sense of ‘ownership’ of local Th schemes. Another approach to keeping the cost of community facilities engenders a degree of collective infrastructure low is by depending on community labour responsibility for their maintenance and management by for construction work. This may take several forms ranging the community. This ideally requires the participation of from the organisation of volunteer ‘sweat equity’ whereby households in all stages of the project planning process. project beneficiaries contribute their time and skills, to In new ‘open access’ S&S projects where the beneficiaries ‘community contracting’. are not identified until after the site planning stage such participation is obviously not possible, so support to  strategy for minimising the initial capital cost of A community building with an emphasis on the new and infrastructure and services is to apply the concept of developing environment should be a high priority right incremental improvement to them as well as to the from first days of occupation. construction of dwellings. The rationale of this approach is that whilst basic services have got to be provided right from the beginning of a S&S project they can then be upgraded f) Strategic planning over time in response to the development of householders’ increasing ability to pay for higher standards.  or state-supported incremental housing initiatives to F have a significant impact on the enormous low-income housing deficits of most cities and towns, they must be d) Site planning and building controls and supports located within a broader framework. At the national level there needs to be a clear poverty reduction strategy that S  ite planning is almost invariably undertaken as a centrally recognises the detrimental significance of urban poverty controlled technical service, though on a micro level it has on national and regional development and the role that occasionally been done with the participation of the project housing can play in reducing it. beneficiaries. The distribution of land uses, plot sizes and access layouts are normally determined by prevailing norms S  ituating incremental housing initiatives firmly within the and regulations. However, incremental housing projects may context of broader land market and management reforms be used to test and/or demonstrate the rationalisation of and programmes to facilitate housing supply for all income excessively generous planning standards, whilst maintaining groups is an essential component of their long-term success adequate conditions of health safety and amenity. and their potential to have an impact at a significant scale. www.citiesalliance.org | 5 GUACAMAYAS, BOGOTA, COLOMBIA A sites and services project started in 1976 by the Caja de Vivienda Popular on land on the city fringes but with good access to the city centre and industrial areas. 1976 Core service units with one room on each plot were provided by the project. Many households moved into the site with second-hand building materials and components to start extending their dwellings immediately. Patrick Wakely 1977 Within one year several families had extended their houses, including the addition of a second floor on the original core house. Patrick Wakely 2009 Barrio Guacamayas has become fully urbanised with traffic confined to perimeter roads and pedestrian precincts in the interiors of the blocks. Houses continue to be extended and improved. Guacamayas has its own community website http://www.barrioguacamayas.com. Maria Victoria Echeverri 6 | CIVIS: Sharing Knowledge and Learning from Cities NAVAGAMPURA, COLOMBO, SRI LANKA A sites and services project initiated by the National Housing Development Authority as part of the Sri Lanka Million Houses Programme in 1985 on an inner city site. 1985 The project was laid out as terraced housing with shared ‘party walls’ between each dwelling – an innovation in Sri Lanka, where detached houses on individual plots were the norm. Patrick Wakely 1986 The uniform roof level was spontaneously maintained in the initial construction stages. Patrick Wakely 2009 Navagampura has integrated as a regular part of the urban fabric of Colombo that is still being developed by its residents. Kumudu Jayaratne www.citiesalliance.org | 7 CHINAGUDALI, VISAKHAPATNAM, INDIA A sites and service project on the urban fringes to resettle squatters from the centre of Visakhapatnam. Only communal water points and individual pit latrines were provided for each plot. 1988 Private informal sector building material suppliers arrived at the site on the first day of occupation. Patrick Wakely 1989 Pour-flush pit latrines were supplied on each plot. House construction utilised ‘temporary’ materials. Patrick Wakely 2009 Chinagudali has developed into a thriving suburb of Visakhapatnam. P. Rambabu 1818 H Street, NW | Washington, DC 20433 USA | Tel (+1 202) 473.9233 | Fax (+1 202) 522.3224 info@citiesalliance.org | www.citiesalliance.org www.citiesalliance.org