IBRD KRIHS - COEX

EAST ASIA LAUNCH OF THE REGIONAL URBANIZATION KNOWLEDGE PLATFORM

SEOUL, SOUTH KOREA JUNE 30, 2011

Low Income Housing, Slum Upgrading and Incremental Urbanization

Roberto Chvez et Al Incremental Housing Network, MIT

What did we know about slums in the 1970s? Growing migration from rural to urban increased post WWII, first in Latin America, the South and East Asia and most recently, in Africa John F.C. Turners post earthquake work in Peru,1960s: Explained how self help, incremental housing becomes the city John F.C. Turner's Matrix. In the early 1970s J.F.C. Turner advises World Bank's housing strategy. His concept is in this matrix: LAND squat rent buy other FINANCE savings pay as go loan other MATERIALS temporary combined solid other LABOR self-help barter contract other

World Bank Sites and Services programs in Africa and Latin America in 1970s and 1980s Moved away from subsidized public housing, provided a serviced plot (water and electricity) + basic unit Basic units ranged from a pit latrine only to a one or two room core unit Full cost recovery proposed for serviced plots and core units ranging from US$500 to $US3,000+ First WB sites and services project in Senegal, 1972. Tondo Foreshore, Manila, Philippines, 1974

Sites and Services projects were partially successful, but many issues remained: Cost and affordability of serviced plots + basic unit: only middle class or Haiti syndrome (absurdly small) Technical: lengthy preparation, implementation Macroeconomic: large loans, fiscal space issues Bottom line: did not reach poorest households, limited overall impact

So, what worked? Surveyed Plots projects plus Slum Upgrading:

Lima, Peru, 1970s Ouagadougou, Burkina Faso, 1980s Nouakchott, Mauritania, 1990s Low initial investments, leveraged assets of poor Greater affordability for poorest households Larger programs, smaller loans required Shorter design to delivery period

Bottom line: leverage household inputs, can go to scale, have greater impact

Villa El Salvador, Lima, Per

Burkina Faso Second Urban Project in 1980s Stopped sites and services in favor of lower cost, larger scale surveyed plots program Provided surveyed plots and addresses; issued resident citizen ID, collected minimum tax Relocated immigrants to residential areas as per land use master plan Water and fuel supplied by informal sector

Layout allowed for cost-efficient upgrading

Slum Upgrading and Prevention in the 1990s: Nouakchott, Mauritania, 1998 to 2003 Combined upgrading of squatter settlements and new low-income incremental housing Based on a home-grown City Development Strategy and city-wide Street Addressing system Overlaid 400x400 meter grid on upgraded areas; organic, tribal distribution retained inside grid Grid integrated community to road system, future Bus Rapid Transit Water and electrical infrastructure systems provided along grid only

A few lessons learned: Incremental Housing: Together with Street Addressing are the least cost incremental housing solution, most suitable for poorest Provide large scale, short term response to exploding low income housing demand Require low levels of capital, technology, planning and design expertise Are a basis for cost efficient medium term urban upgrading City Strategies: Should combine slum prevention (surveyed plots) and slum upgrading, to address both stock and flow Should use 400x400m. grid to integrate slum upgrading and prevention with the city and allow for future BRT Should respect the principle of Subsidiarity

Incremental Housing vs. Incremental Urbanization?

Think not incremental housing but rather incremental urbanization Low income housing and slum upgrading should be part of an urbanization strategy Incremental housing and slum upgrading should be tied to local economic development Incremental urbanization is the spatial representation of actors participating in local economic development.

Case Profiles

Upgrading in Indonesia
Kampung Improvement Programme (KIP)

1969-1974: Jakarta (DKI) Improved Living Standards for 1.2 million people at average expense of $13 per person 1979 Government Adopted National Policy for KIP 1974-1982 World Bank Support to KIP By 1982 Close to 5 million people benefitted from upgrading
Photo: Aga Khan Development Network

Upgrading in the Philippines

1970s in Tondo Foreshore Before Upgrading

Upgrading in the Philippines

1970s in Tondo Foreshore During Upgrading

Upgrading in the Philippines

1970s in Tondo Foreshore After Upgrading

Upgrading in the Philippines

HABITAT FOR HUMANITY: PHILIPPINES Taguig City, Metro Manila, the Philippines

Upgrading in the Philippines

HABITAT FOR HUMANITY: PHILIPPINES Taguig City, Metro Manila, the Philippines

Why Vietnam Does not Have Widespread Slums? A Hypothesis 1) Efficient Use of Land - Minimum Lot Sizes
COST INPUTS TO LOW COST HOUSING

FINANCE MATERIALS

Land is the major cost input to low-cost housing production in cities In many developing country cities Government mandated minimum lot size can be very high (75m2 110m2) The poor have no viable option but to illegally access and subdivide land into very small land parcels - creating slums If land comprises 70% of the housing production cost then reducing the required minimum lot size from 75m2 to 25m2 (a 66% reduction), brings down the overall cost of housing by 50% - low income groups can access lower prices In Vietnam: permissive attitude to allow low minimum lot sizes (sometimes as small as 25m2) has enabled a market of low-cost housing to develop and supply low income groups

LABOUR

LAND

Why Vietnam Does not Have Widespread Slums? A Hypothesis 2) Efficient Use of Land - FAR and Building Heights
Government: A permissive attitude toward FAR increases and building height Same unit of land used for more production of floor space Incremental development keeps pace with demand Increase the supply and reduce the cost of floor space for low income groups While increasing the efficiency of land use for city
Photo by Alain Bertaud

Why Vietnam Does not Have Widespread Slums? A Hypothesis 3) Efficient Use of Land - Incorporation and Densification of Villages (Hanoi)

 Rapid urbanization is regulated, consolidating upwards and outward growth

 Investment in primary & trunk infrastructure near urbanizing villages  Communities investing in incremental improvements and new housing construction  Low-cost housing development on the city fringe
Analysis by Alain Bertaud

Why Vietnam Does not Have Widespread Slums? A Hypothesis 4) Incremental Urban Upgrading Upgrading Infrastructure in HCMC

Vietnam Urban Upgrading: Trunk Infrastructure, Storm Drainage, Water Supply, Paving and Improvements of Alleys, Fire Hydrants, Micro-Finance for Housing Improvement Loans, Issuance of Land Use Certificates

Why Vietnam Does not Have Widespread Slums? A Hypothesis 4) Incremental Urban Upgrading Upgrading Infrastructure in HCMC

Before

After

Why Vietnam Does not Have Widespread Slums? A Hypothesis 4) Incremental Urban Upgrading Upgrading Infrastructure in HCMC

Before

Before

Why Vietnam Does not Have Widespread Slums? A Hypothesis 4) Incremental Urban Upgrading Upgrading Infrastructure in HCMC

During and After

During and After

Why Vietnam Does not Have Widespread Slums? A Hypothesis 5) Self Help (Informal) Construction Sector and Cultural Reasons
 Majority of housing supply provided by efficient and entrepreneurial lowcost and self-help construction sector  Small contractors manage to keep up housing supply with demand should be supported  Social acceptance of co-habitation in crowded dwellings (low consumption of floor space per capita)  Multi-generational co-habitation also provide an alternative to slums  A strong legacy of socialism and wealth distribution: state support to low income people more acceptable

Land Use Pattern Emerges from Policy An Illustration in Da Nang

 Good Location: These informal homes 4km from beach and 7km from CBD  Government Policy: Incorporate existing villages by widened road from 5 meters to 14 meters enabling private actors to respond and invest accordingly  Government Policy: Allow average unit floor area at 50m2 and allow vertical construction for 2 - 4 stories  Result: From a low density semi-rural 2002 to a emerging urban node by 2010  Homes not too structurally different from formal homes  About 70% lower unit prices than formal homes affordable to low income groups Analysis by Alain Bertaud

Why Vietnam Does not Have Widespread Slums? A Hypothesis

Graph by Alain Bertaud

 Permissive policies have enabled a strong response to low-income, and medium income demand segments (orange and yellow) in cities, Vietnam has avoided widespread slums (red)  This policy should be consolidated, further formalized and strengthened  A shift to focusing on high end segments (green) like new towns and showcase projects will distract from this success and eventually result in more of the orange slipping into red.