Sociology, Economy & Politics

The Vienna model of social housing

Susane

The city of Vienna, Austria has been in the front line developing and implementing social housing policies since 1840. A series of tax reforms and specific city legal framework promoting rent over ownership have allowed for almost two hundred years of social housing tradition to thrive in benefit of its citizens.

Study trip to housing case studies in Madrid

Daniel

Research project: Proposal for Bellas Vistas, Madrid.

Juanita Gómez, Andrew Georges, Sebastian Worm, Nayanatara Tampi

Bellas Vistas is a wonderfully diverse gem in the middle of Madrid. Historically it has been able to provide refuge and shelter for a wide array of immigrants and locals who come from underprivileged backgrounds and need to be in the proximity of the economic center of Madrid. Better policies regarding rent control, zoning and equitable developments are crucial for the deterrence of an incoming wave of gentrification that is targeting this relatively cheap neighborhood. Alongside policy measures, we believe proper urban and architectural interventions that focus on the public and common goods and grounds ensures the wellbeing and longevity of communities in this area.

Essay: The paradox of vacant housing in a homeless India

Nayanatara Tampi

Estimated Housing requirement: 19 million units1

Estimated Vacant Houses: 11 million units2

On superficial screening it appears to be a simple problem of matching surplus supply with need/demand. However, the problem is much more varied and has deeper underlying causes. This essay seeks to explore the causes and conditions for houses to go uninhabited in the slum dwelling cities of India.

On initial inspection, one cause may appear to be obvious: the financialization of Housing.

“It is argued that the absorption of capital by the housing sector and real estate more generally was one of the defining characteristics of the current age of financialization, exceptionally inflating the balance sheet of households and banks in the process.”3

In India, parking of one’s capital into second homes as a way to avoid taxations and illegal income is common amongst the higher income groups. It becomes a safe investment and protection against inflation and market changes. The prices for Housing in Urban areas thus becomes inflated and more unaffordable.4

The rental yield on residential property in India is one of the lowest in the world; ranging from 1-3%. This is because of rent control policies in India. The rental yield would barely cover the cost of maintaining and redoing the flat between tenants and therefore is not a lucrative income source. The better source for financial gain is through capital appreciation of the property and so, owners often prefer to keep properties empty.5

Rent control in India since independence has always been through very pro-tenant policies. The policies allow very little to no appreciation on rent and allows passing on of the lease through generations. This creates ‘muddled property rights’ between the owner and renter. 6 This is also the reason for little future investment in rental housing in Urban India, despite the desperate need. Although the owner can always sell the property as a whole, there is a lack of buyers for such rent-controlled properties. The strong rent control also results in dilapidation of the buildings because maintenance does not fall under the renter’s responsibilities, however the rent is too low to cover the expenses for the owner.7 This is a cause for concern for the city as a whole, and few solutions have been able to eradicate it.

1 (MHUPA - Ministry of Housing and Urban Poverty Alleviation, 2012)

2 (Census of India, 2011)

3 (Aalbers, 2016)

4 (Monani, 2020)

5 (Monani, 2020)

6 (Bertaud, 2004)

7 (Monani, 2020)

In cities like Mumbai, the pro- tenant policies on rent also allow many months of non-payment of rent without legal eviction from properties. Legal issues when taken to court may be prolonged typically for years as the judicial system in India is tediously slow. 8 Such policies make owners wary of renting out their properties and the legal issues that may arise from it. As housing and rent policies come under the State Government in India, a clear difference can be seen between states that have chosen to reform their rental policy and allow for better legal policing of the rental contract. For example, in the city of Vishakhapatnam, a maximum of one month may be allowed to pass without rent payment before legal eviction. This resulted in a shrinkage of vacant houses in the city and a rise in renting.9 Therefore we can see a clear co-relation between the strict rent control policies and resulting vacant homes because of reluctance to rent by owners.

The second type of housing that can be discussed under this theme is public housing. In Maharashtra the municipal body in charge of developing and distributing low-cost housing is known as MHADA (Maharashtra Housing and Area Development Authority). The system of developing houses is that MHADA acquires land through the Government at a very low cost, which allows subsidizing of the sale of housing units after construction. The housing units can be applied for under various categories of income and are distributed through a lottery system at random. Also, there are many Government schemes for low-cost housing to encourage private developers to build affordable housing, through tax incentives and development rights. Through both these systems, slum rehabilitation and low-income housing stock is built.

Through statistics it can be observed that the large quantum of vacant housing lies in this section of public housing incentivised or provided by the Government.10 Housing is provided at a highly subsidised rate to an economic group that has no other form of formal housing (slum dwellers) and yet these houses remain vacant. This paradoxical situation arises due to various reasons that will be explored ahead.

In many situations the city centre is too congested to absorb new housing and these developments need to take place in peripheral areas of the city. These areas often are lacking in infrastructure, in terms of public transport or even basic road networks. The cost of long commutes is pushed on to an economic group that can least afford it and has no means of private commute. As quoted by a resident from ‘Moving to Opportunity or Isolation?’ report: