Author : Renita Dsouza

Expert Speak Urban Futures
Published on Oct 05, 2020
While there exists a weak and broken ecosystem of affordable rental housing, there is no ecosystem for seasonal urban migrants.
Affordable rental housing for the urban seasonal migrants in India Before the period of economic slowdown began in India, when the nation was referred to as one of the fastest growing economies of the world, it failed in the universal provision of basic services including housing. In fact, according to the 2012 report of the Technical Group on Urban Housing Shortage for the 12th Plan (TG-12), the total housing shortage in cities stands at 18.78 million, a number that is expected to reach 38 million in 2030 riding on rapid urbanisation. The Covid-19 pandemic has virtually crushed the migrants under the burden of poverty, hunger and even homelessness. The most vulnerable of the migrant population has always been the seasonal migrants. Housing for these seasonal migrants has been a perennial problem. The magnitude of this housing problem can be fathomed by the fact that Aajeevika Bureau places the number of seasonal migrants at 140 million. Construction, manufacturing and agriculture sectors constitute the significant proportion of seasonal migrants.

Seasonal migration facilitates poverty alleviation. It enables migrants to sustain consumption and income levels in the face of the transient nature of rural employment and seasonal nature of agriculture.

Although the migrant population as a whole has been compelled to return to the areas of their origin thanks to the pandemic, given that the rural economy does not have the capacity to absorb them, these migrants are expected to come back to the urban areas of which they form a significant pillar. Seasonal migration facilitates poverty alleviation. It enables migrants to sustain consumption and income levels in the face of the transient nature of rural employment and seasonal nature of agriculture. They may also be forced into migration intermediaries by those who they may be indebted to. Understanding the nature of cycles of seasonal migration becomes imperative to identify the character of the housing needs of the seasonal migrants. Such migration cycles which might be last a few days or a few months each time; or take the form of several short migration cycles or just once in a year. Furthermore, the kind of employment that seasonal migrants are engaged in, are seasonal and temporary in nature. They are typically employed in the informal sector. As such, their incomes are low, irregular and uncertain, they do not have any employment or social security.

Understanding the nature of cycles of seasonal migration becomes imperative to identify the character of the housing needs of the seasonal migrants.

Seasonal migrants are forced to reside in informal settlements such as slums, shanties etc; at times compelled to inhabit footpaths, open spaces, parks etc. They are reeling under the threat of forceful evictions and harassment by the police. They lack access to basic amenities such as water, electricity, sanitation and sewage management, which adversely affects their wellbeing and productivity. Given their seasonal nature of work and their ability to pay low rents, the appropriate housing model for seasonal migrants is of course affordable rental homes. What is worrisome is that while there exists a weak and broken ecosystem of affordable rental housing, there is no such ecosystem for the seasonal urban migrants. Seasonal migrants, because their special housing needs, cannot be catered to by conventional rental models prevailing in the existing ecosystem.

High cost of renting buildings, proportion of fixed costs being as high as 60 percent of total costs, the cost associated with non-occupancy risks during the transitory phase of the migrants negatively impact profits.

Despite the absence of consolidated efforts to provide affordable rental housing to seasonal migrants, there may some isolated efforts to do so. One such initiative that needs mention is Aarusha Homes Private Limited has been providing low-cost rental accommodation to low-income migrant workers, ensuring access to decent living standards to its occupants. This venture has adopted the pay-as-you-go payment mechanism and offers various rental plans associated with different forms of service packages that seek to be affordable across several socio-economic segments. Aarusha Homes faces several difficulties as reflected in its thin and sensitive profit margins. Notwithstanding the nature of service provided by it, the enterprise is treated as a commercial entity to end up paying higher tariffs for electricity and water. High cost of renting buildings, proportion of fixed costs being as high as 60 percent of total costs, the cost associated with non-occupancy risks during the transitory phase of the migrants negatively impact profits. Such an impact of profits, especially in the early stages of the business, can jeopardise the survival of the business. This impact is further aggravated by the absence of support from financial institutions. In order to rectify the failure of the government to consider the housing needs of the seasonal migrants, it must lend support such as Aarusha Homes in all respects possible.

The existing rent control regime has reduced the rents and made eviction of tenants a complex task causing acute shortage of affordable rental housing in many urban centres of India.

Government housing schemes and efforts at providing social housing since Independence have remained limited to the ownership model of housing. The government has completely ignored the rental model of housing. In fact, the government has also derailed the affordable rental housing markets by allowing draconian rental laws to prevail. The existing rent control regime has reduced the rents and made eviction of tenants a complex task causing acute shortage of affordable rental housing in many urban centres of India. Post the Covid-19 migrant crisis, the Government of India has realised its failure in providing social rental housing and taken steps for the same. The Ministry of Housing and Urban Affairs has launched the Affordable Rental Housing Complexes (ARHC) as a sub-scheme under the Pradhan Mantri Awas Yojana (Urban). This scheme is to be executed via two models: In model one, the existing government constructed homes; for example, the 1.8 lakh houses constructed under the JNNURM scheme, will be utilised either through the PPP mode or by public authorities. The second model would employ the construction, operation and maintenance mode either by private or public players on their own vacant land. The ownership of these complexes are to be surrendered to the Urban Local Bodies post 25 years.

While schemes such as the ARHC are steps in the right direction, they are not enough.

The rental housing complexes are expected to consist of both single and double bedroom accompanied by a living room, kitchen, bathroom and toilet; of 30 to 60 sq. m. carpet area. Dormitories are to have a common kitchen, bathroom and toilet. The success of the ARHC scheme depends upon whether it satisfies all of the following dimensions of rental affordability:

• The ability to pay the housing rent without impinging on the consumption of the minimum basic non-housing goods.

• Another dimension of affordability refers to access to formal credit.

• Affordability is also seen as a reconciliation between cost of land which is cheaper in the urban peripheries and transportation costs to the nearest employment hub.

• Access to adequate space, water supply, electricity, sanitation, sewerage management, open spaces, etc.

While schemes such as the ARHC are steps in the right direction, they are not enough. The government needs to play the role of an incubator and collaborate with other entities which can nurture an ecosystem for the affordable rental housing, especially for seasonal migrants. There is a need to understand the needs and problems of the potential stakeholders of this ecosystem. There is also a need to design scalable and sustainable housing solutions in this space. A complete blueprint of the ecosystem needs to be demarcated. The government needs to begin by initiating conversations revolving the affordable rental housing ecosystem for seasonal migrants which can motivate other stakeholders to initiate efforts in the direction of building this space.
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Author

Renita Dsouza

Renita Dsouza

Renita DSouza is a PhD in Economics and a Fellow at Observer Research Foundation Mumbai under the Inclusive Growth and SDGs programme. Her research focus ...

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