As of early 2012, depending on your source of data, India had between 90 million and 200 million slumdwellers. 50% of New Delhi's population and about 60% of Mumbai's lived in slums. Although the Indian economy grew in size over the previous decade, the total number of slumdwellers did not decrease. On the contrary, more were packed into the same space. In other words, life for a majority of urban Indians steadily worsened over the last decade.
None of this was news to any slum-dweller. Even the most gainfully employed amongst them just accepted it as fate. No one ever asked him –or people like him – if he wanted a simple apartment of his own someday. No matter how hard he worked, he knew that owning his own place was an unattainable dream in this lifetime. Over time, he had come to believe the same fallacies that were being repeated by everyone else; “it’s the high population,” “is all those poor villagers coming to the cities,” and “India doesn’t have enough land.”
As for the rest, Property in India has been turned into a zero-sum game. As demand continues to increase while supply is choked off, property prices keep rising. The rich buy prime property as first and second homes (as profitable investments), pushing out the lower classes. These second homes are not rented out due to a fear of tenant-squatters (covered here), and since prices keep rising, the illusion of capital gains negates any economic need to rent them out. The middle classes cannot rent these second homes from the upper classes and thus cannot move out of their starter homes. Meanwhile, those used starter homes that could have provided housing to the lower middle classes remain unavailable. And this chain of denial continues downward along India's socio-economic ladder. Multiply this by 300 million urban Indians and one begins to get an idea of the enormity of the problem.
But why arent elected leaders taking steps to alleviate the property shortage? Why dont they simply repeal these policies that restrict supply (outlined here)?
The property business is highly unique; the value of its product is derived from its relative scarcity; and it is the best place to park ill-gotten gains. As India opened up its economy in 1992, property developers began to increasingly rely on politicians - to ensure that supply was artificially choked, and as a source of funds.Within a decade the distinction between a politician and a property developer was already blurred, with most of India's ill-gotten gains invested into property.
Any increases in property supply now (by repealing the policies I outlined here) would lower property prices and result in immediate personal losses for these regional and middle-level politicians. And in India's Political Patronage Pyramid (outlined here), the middle level politicians almost always get what they want from their national leaders.
In 2010, it was revealed that Mumbai's leading politicians were usurping prime property allocated to war widows.
In other words, in order to keep their middle-level politicians happy, India's national leaders are willing to look the other way while about 200 million Indians live in slums, and another 100 million are homeless.
No comments:
Post a Comment