affordable land and housing in asia - International Union of Tenants

AFFORDABLE LANDAND HOUSING IN ASIAVolume 2

FOREWORDThe first four volumes in the Adequate Housingseries respond to the urgent need for a globalassessment of the state of land and housing.While countless studies, research projects, andreports have been undertaken on individualhousing needs, projects, and programmes,no contemporary studies have compared andcontrasted housing conditions, policies, andapproaches on a regional or global scale.This series fills this gap. The four volumes focuson the land and housing situation in four regionsfacing considerable challenges and affordabilityproblems: Latin America and the Caribbean,Asia, Africa, and Europe and North America.They present a comparative documentation ofthe historical trajectory, major contemporarytrends, and best practices in land and housingprovision in each region.affordable housing opportunities and to bringsolutions to scale. This will help in preventingcity expansion on the basis of informal landdevelopment and informal housing supply. Thefour volumes represent a significant body ofresearch, documentation, and critical review thatI believe will be of value to those involved in thehousing sector.Dr. Joan ClosUnder-Secretary-General of the United NationsandExecutive Director, UN-HABITATAlthough the size and overall characteristics ofthe housing sector does vary markedly acrossthese regions, and indeed their countries,common to all is the fact that obtaining andretaining housing that is adequate and affordableis a serious problem for a large proportion of thepopulation.Unfortunately housing affordability remainsa challenge and it is worsening due to, amongother factors, the economic effects of the globalfinancial crisis and the increasing severity ofdisasters and conflicts, which both place anadditional strain on already stretched land andhousing resources. This series and its messagesand recommendations are therefore timely.These regional studies represent a significantstep forward in investigating the state of theglobal housing challenge. A detailed examinationand comparison of, as well as critical reflectionon access to housing at the local, national andregional levels is the first and important steptowards designing policies to improve access toAFFORDABLE LAND and HOUSING IN Asiaiii

3.2.1 HOUSING POLICY AND LEGISLATIVE FRAMEWORKS 373.2.2 CURRENT AFFORDABLE HOUSING PROGRAMMESAND APPROACHES 373.2.3 EXTENDED CASE STUDIES OF CURRENT LARGE-SCALE HOUSINGPROGRAMMES AND POLICIES 403.2.4 HOUSING BENEFICIARIES 463.2.5 CO-OPERATIVE HOUSING, COMMUNITY SLUM UPGRADING ANDTHE ‘PEOPLE’S PROCESS’ 473.2.6 TRANSFORMATIONS OF GOVERNMENT-BUILT HOUSES 483.2.7 THE CONTRIBUTION OF NGOS 503.2.8 BUILDING MATERIALS, THE CONSTRUCTION INDUSTRY, ANDBUILDING REGULATIONS 503.2.9 PRIVATISATION OF PUBLIC HOUSING 523.2.10 PUBLIC PRIVATE PARTNERSHIPS (PPP) 533.2.11 FINANCING MECHANISMS 534 NOTABLE TRENDS, RECOMMENDATIONS AND CONCLUSIONS 634.1 NOTABLE TRENDS 644.2 RECOMMENDATIONS ON HOW TO FACILITATE MORE EFFECTIVEAFFORDABLE LAND AND HOUSING DELIVERY 684.3 CONCLUSION 725 REFERENCES 77AFFORDABLE LAND and HOUSING IN Asiav

EXECUTIVESUMMARYThe provision of affordable housing at scaleremains a challenge to most countries, particularlythose in the developing world and in transition.Currently, more than 1 billion people are livingin slums. Over the next 25 years, more than 2billion people will add to this growing demandfor housing and basic infrastructure services. Thesituation is particularly serious in developingcountries where governments at central, regionaland local levels often lack the resources toadequately address this challenge.The housing challenge is particularly evident inurban Asia. Although Asia is still predominantlyrural, it is urbanising at the fastest rate in theworld. Predictions suggest that between 2010and 2050 the urban population in Asia willnearly double to reach 3.4 billion. Every dayAsian cities will need to accommodate the120,000 new residents, which equates to a dailyhousing demand of at least 20,000 housing units.This report provides an overview of progressachieved in the provision of affordablehousing in Asia. The central message is thataffordable housing in Asia remains a serious andconsiderable challenge, especially for low-incomehouseholds. Due to a lack of affordable and welllocatedhousing alternatives, nearly a third ofhouseholds in Asia live in slums and informalsettlements. The presence and expansion of theseis a physical manifestation of poorly functioninghousing sectors, which do not provide a rangeof affordable housing alternatives, especially forlow- and middle-income households.Housing programmes, policies and institutionalarrangements over the last sixty years have variedconsiderably throughout Asian countries. Forexample, some countries have sought directgovernment provision of ‘social housing’,others have supported the provision of urbanland for private-sector-led development, whilstothers have sought to upgrade existing informalsettlements. In terms of scale, though, in themajority of Asian countries not enough has beenaccomplished through housing programmesrelative to the large and ever-growing housingdemand.This report highlights that access to affordableland is a principal barrier to increasing supply ofaffordable housing in Asia. Economic growth ispushing land prices up, especially well-locatedland in urban and inner-city areas. Low- andmiddle-income households are priced out of landmarkets in the vast majority of Asian cities. Thelack of flexible housing finance for householdsalso severely constrains affordable housingsupply and effective demand. Formal housingfinance mechanisms are, in general, inaccessibleand unaffordable to low-, and many middleincomehouseholds. In countries where financeis available, down payment requirements andinterest rates are high and loan periods are short,all of which limit the ability to secure formalhousing finance.While there are considerable challenges, thisreport also examines how countries in Asia haveimproved affordable land and housing supply.Several Asian countries have mearly achieveduniversal access to adequate housing througha range of policy interventions (for exampleSingapore). Likewise, although absolute numbersof slum dwellers have risen, the percentage ofthe urban population living in inadequate slumhousing conditions in Asia has decreased overthe last two decades. Furthermore, several Asiancountries have been at the forefront of innovativeslum upgrading projects and community savingsand finance mechanisms that have increasedaccess to, and the quality of housing for lowincomehouseholds. Many Asian countries aredemonstrating that with strong political willand improved institutional capacity affordablehousing can be provided, for example India andChina which have robust national programmesthat are showing evidence of affordable housingprovision at a large scale.viExecutive Summary

LIST OF FIGURESFigure 1: A woman prepares a meal at her home in Haveli, Pakistan 1Figure 2:Asia comprises countries from Turkey across to Japan, fromMongolia down to Indonesia 2Figure 3: Growth in total urban population by region between 1950-2010,Figure 4:Figure 5:Figure 6:Figure 7:and projections for 2010-2050. The growth in Asia’s total urbanpopulation is considerable especially relative to other regions 3Singapore: a global leader in successfully addressing affordable housingat a large scale 4Urbanisation trends in Asian regions 1950-2010, and projections for2010-2050 5Total population growth in Asian regions 1950-2010, andprojections for 2010-2050 7High-rise multi-household housing sits in stark contrast to low-risewooden dwellings in Penang, Malaysia 8Figure 8: Basic components of housing affordability 11Figure 9: Slum housing in South Asia 14Figure 10: Incremental house construction, Afghanistan 17Figure 11: Housing reconstruction in Banda Ache, Indonesia 18Figure 12: Urban population and slum proportion in Asian countries in 2001 20Figure 13: Dense, low-rise informal slum housing in Nepal 23Figure 14: House price/rent-to-income ratios for selected Asian capital cities 24Figure 15:House-price-to-income ratio compared with house rent-to-incomeratio in selected Asian cities 25Figure 16: The contrasting order of development in the formal and informal sectors 26Figure 17:Eighty per cent of the population in Afghanistan cannot afford topurchase even the cheapest new low-cost house 26Figure 18: Dwelling types in selected cities 27Figure 19:Figure 20:Housing and urban development in Bogra, BangladeshTraditional, labour intensive building material production techniquesare still widely used throughout Asia, such as this example from a village inNorthern NepalFigure 21: Housing construction in Sapa, Vietnam 31Figure 22: The continuum of land rights 32Figure 23: Housing in Afghanistan in varying states of construction 35Figure 24: The high-rise housing landscape of Hong Kong 44Figure 25: Incremental house construction and improvement in Colombo, Sri Lanka 46Figure 26:Infrastructure improvement as part of a wider slum upgradingprogramme in India 47Figure 27: Women at Land Share Site 3, Borei Keila, Cambodia 48AFFORDABLE LAND and HOUSING IN Asiaxi

Figure 28:The ‘control paradigm’ that dominates much housing developmentcontrasts the support paradigm, the ‘People’s Process’, which is widelyused in Asia and places people at the centre of development 49Figure 29: Laying down of water pipes in Nepal 49Figure 30: A family enjoying their newly constructed kitset house, Indonesia 51Figure 31:Figure 32:Figure 33:Throughout Asia, informal building material suppliers provide manyof the necessary construction inputs for incremental self-build houses 51Load-bearing masonry construction is common in most of Central andWestern Asian countries, and is typically well suited to the climate andlocal resource availability 53Inward and outward remittance flows in developing countriesaccording to region, 2007 (inward) and 2006 (outward) 59Figure 34: A traditional ‘shophouse’ in central Georgetown, Penang, Malaysia 63Figure 35:Women in Solo, Indonesia, preparing roofing materials for upgradingtheir housing 68Figure 36: New housing in Nepal 70Figure 37:Figure 38:Like many cities in India, inner-city housing in Delhi is dense, oftenovercrowded, and is mixed with small-scale commercial enterprises. 73Washing hanging outside the windows of multistorey housing in Nanning,China 75Figure 39: Multi-storied riverside housing in central Tokyo, Japan 77Figure 40:The narrow, vertical form and the rooftop additions of housing in Ho ChiMinh city, Vietnam 84xiiFIGURES

LIST OF TABLESTable 1: Regional urban population and slum population estimates in 2010 4Table 2: Measuring housing affordability 13Table 3: Five key shelter deprivations as measures of slums 19Table 4: Housing conditions among urban populations in Asia, 2003 21Table 5:Proportion of slum households in developing regions by number of shelterdeprivations, 2001 22Table 6: Five major microfinance institutions in Asia 55Table 7: Community savings groups in 13 Asian countries 56Table 8: New land and housing delivery initiatives outlined in PRSPS 67LIST OF BOXESBox 1: Philippines: The Urban Development and Housing Act of 1992 33Box 2: Improving land access and land administration efficiency for the benefitof poor and vulnerable households in Asia 36Box 3: Affordable housing provision in Sri Lanka 39Box 4: The National Housing Development Administration of Turkey (TOK) 40Box 5: Thailand: Community involvement in affordable housing initiatives 50Box 6: The importance of housing design and planning to match planningregulations and reduce costs: experiences from Pakistan 52Box 7: SPARC, SSNS and CLIFF: financing and community-led housingdevelopment in India 57Box 8: Philippines: Community Mortgage Programme (CMP) 57Box 9: The Grameen Bank in Bangladesh 58Box 10: Human Settlements Finance Systems series 59AFFORDABLE LAND and HOUSING IN Asiaxiii

Rapid andsustainedurban andpopulationgrowth inAsia arefuelling thedemand for welllocated,adequateand affordablehousing. The scaleof the challenge isimmense: Asian citiesreceive 120,000 newdwellers every daywhich requires theconstruction of over20,000 new houses. 3xivPART ONE

1PART oneIntroduction– affordablehousing in theregional contextFigure 1: A woman prepares a meal at her home in Haveli, Pakistan.Photo © UN-HABITATAFFORDABLE LAND and HOUSING HOUSING ASIA IN Asia 1

1. INTRODUCTION –AFFORDABLE HOUSINGIN THE REGIONALCONTEXTAccess to adequate and affordable housing is acurrent and growing problem in a majority ofcountries in Asia. In some cases it is not thathousing is too expensive but rather that incomesare too low. In other cases incomes are relativelyhigh but housing supply and finance is limitedand hence expensive. All over Asia householdsare forced to live in inadequate housing, mostlyin slums and informal settlements, because thereis an insufficient supply of better quality housingat a cost they can afford. Indeed, all too often,poor households spend an inordinate share oftheir incomes on housing. Consequently, manyhave to reduce expenditure on other basic needs,such as food, education and health, in order tomeet housing needs.Rapid and sustained urban and populationgrowth in Asia are fuelling the demand for welllocated,adequate and affordable housing. Whilethe population in some Western and EasternEuropean cities is actually decreasing, not oneAsian city is shrinking. ‘Urbanization in Asiainvolves around 44 million people being added tothe population in cities every year’ which equatesto a further 120,000 people per day added to theurban population. 1This growth requires the construction of morethan 20,000 new dwellings per day. 2Asia is also different to Africa and LatinAmerica in that it has unmistakable precedentsof countries that have solved their housingproblems. Singapore and Hong Kong, forexample, have successfully achieved more or lessuniversal access to adequate housing through arange of policy interventions. Historically theytoo had slums and significant affordability issues,just as neighbouring countries such as Malaysia,Indonesia and the Philippines face today.In light of the growing affordability problemthis publication examines the status of affordableland and housing in Asian countries. It beginsby introducing Asia and then briefly reviewshistorical housing trends and patterns that haveshaped current housing policy and discourse.Following this the paper explores the status quoof affordable land and housing by outliningaspects such as housing needs, quality, tenuremodalities, and affordability. Then, prominentaspects of housing affordability are explored,for example land supply, housing finance,government housing-delivery programmes, andslum upgrading initiatives. The publication endsby reviewing the lessons learnt and providingsome recommendations for how to increaseaffordable land and housing at the large-scalethat is required in Asia.1.1 ASIA: URBAN CHALLENGESAND URBAN OPPORTUNITIESUrbanisation has placed significant pressure ofhousing affordability in Asian cities. The urbanpopulation of Asia comprises 50.3 per cent ofthe world’s total urban population, equatingFigure 2: Asia comprises countries from Turkey across to Japan, from Mongolia down to Indonesia.2PART ONE

Figure 3: Regional urbanisation trends4,000,000Urban population (1,000s)3,500,0003,000,0002,500,0002,000,0001,500,0001,000,000500,0001950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050AsiaAfrica Europe Oceania Latin America and the CaribbeanNorth AmericaFigure 3: Growth in total urban population by region between 1950-2010, and projections for 2010-2050. Thegrowth in Asia’s total urban population is considerable especially relative to other regions.(Source: UNDESA, 2009)to over 1.7 billion people. 4 In 1950 the urbanpopulation in Asian cities was 229 million,roughly comparable to all other regions (Figure3). In the space of only 60 years, the urbanpopulation grew by over 1.5 billion. Betweenthe years 1950 and 2000 eight out of ten of theworld’s fastest growing cities were in Asia (Tokyo,Mumbai, Delhi, Dhaka, Jakarta, Karachi,Seoul, Kolkata). 5 Compared with urbanisationin Western European countries, Asianurbanisation is much faster. It took London 130years to expand from one million to eight millionwhereas Bangkok took 45, Dhaka 37 and Seoulonly 25 years. 6While there have been differences betweencountries, Asia is united by the overall trend ofmoving toward an urban future. In China alonethe urban population grew by over 246 millionbetween 1990 and 2007. This growth equates to anextra 39,000 new urban dwellers every day duringthese seventeen years. 7 India also faces similarurbanisation patterns. During the same period,121 million new urban dwellers arrived in Indiancities. 8 However, it is not only the populated andeconomically developing countries; Indonesiaincreased its urban population by 60 million andthe Philippines by 26 million during the sameperiod. Such is the immense urban growth facingthe vast majority of Asian cities.The urban growth and expansion of Asiancities has placed major pressure on land andhousing. With the exception of Singapore andHong Kong, in all countries the constructionof affordable housing has not matched urbangrowth. Urban residents face a lack of housingoptions that are affordable and well located.The result has been the widespread proliferationof slums and informal settlements throughoutAsian cities.Asia has over half of all slum dwellers in thedeveloping world. 9 Compared with Africa,Oceania, Latin America and the Caribbean, Asiaalso has the highest percentage of slum dwellers.In Asia 61.0 per cent of the population lives inslums whereas in Northern Africa the figure is13.3 per cent, In Oceania 24.1 per cent, and inLatin America and the Caribbean 23.5 per cent. 10In the vast majority of Asian countries theconstruction of affordable housing has notmatched urban growth. Due to a lack of housingoptions that are well located and affordable,slums and informal settlements have proliferatedthroughout Asian cities.Nearly three quarters (71 per cent) of thepopulation in Bangladesh live in slums. Similarly,in Pakistan nearly half of the population live inslums which equates to over 27 million people. 11China and India, however, dwarf all other Asiancountries with over 170 million and 109 millionslum dwellers respectively. With few affordablehousing alternatives a significant proportion ofAFFORDABLE LAND and HOUSING IN Asia3

Figure 4: Singapore: a global leader in successfully addressing affordable housing at a large scale.Photo © UN-HABITAT/Madanmohan Raourban residents have no other option but to turnto precarious informal housing as a means tohouse themselves.Although the general trend of rapid urbanisationand population growth is common to all Asiancountries, there are notable regional differences.The vast majority of the population live inEastern and Southern Asia. Eastern Asia hasover 40 per cent of the population and SouthernAsia 33 per cent (Table 1). Southern Asia hasthe largest percentage of urban population livingin slums (35.0 per cent) and Western Asia thesmallest (24.6 per cent), however the absoluteslum population in Eastern and Southern Asia issimilar, around 190 million in 2010.Southern Asia will have the fastest and mostsustained urban growth in the coming decades(Figure 5). It will more than double its urbanpopulation in the space of only forty years,from just under 600 million in 2010 to over 1.4billion in 2050. Similarly, it will have the fastestpopulation growth compared with other Asianregions (Figure 6). The rate of urban populationincrease in East Asia will slow and South-Eastand West Asia will have sustained urban growthbut far less rapid compared with East and SouthAsia.High urbanisation and population growth rateswill continue to define the vast majority of Asiancountries in the coming decades. China, forexample, is to reach 65 per cent urban by 2030. 12Such considerable and rapid change will continueto place enormous strain on Asian cities withan associated challenge of ensuring affordablehousing is provided on a large scale. While theTable 1: Regional urban population and slum population estimates in 2010Urban population(thousands)Urban slumpopulation(thousands)Percentage of urbanpopulation living in slumEastern Asia 671,795 189,621 28.2Southern Asia 545,765 190,748 35.0South-Eastern Asia 286,578 88,912 31.0Western Asia 145,164 35,713 24.6Source: United Nations Population Division, World Urbanization Prospects: The 2007 Revision.4PART ONE

Figure 7: High-rise multi-household housing sits in stark contrast to low-rise wooden dwellings in Penang,Malaysia. Photo © UN-HABITAT/Matthew Frencha market-based housing sector: from a producerand provider of typically subsidised rentalhousing, to moving in a direction where housingproduction and consumption was undertakenthrough the market, with a strong focus on homeownership.23 24 ‘By 2002, 80 per cent of publichousing had been sold to its occupiers’. 25 Such atransition was supported through several financemechanisms, for instance the Housing ProvidentFund which was modelled on Singapore’snational housing savings fund (see Section 3.2.3for an overview of current low-income housingprogrammes in China).Recognising the limitations and challengesof self-help housing schemes, slumupgrading became a prevailing practice inmany Asian cities. In many ways, South-East Asian countries were global pioneers inslum upgrading programmes. For instance, theKampung Improvement Programme (KIP) inIndonesia, introduced in 1969, installed muchneededinfrastructure and improved the urbanenvironment in rapidly deteriorating slums. 26Within the first ten years it benefited over 3.3million residents, equating to over 70 per centof the slum population in Jakarta at a cost ofonly 118 USD per capita. 27 Likewise, the BaanMankong programme and in Thailand is anothernotable example of the upgrading of informalareas. 28 While such upgrading programmes didnot focus on housing construction, their actionsin effect gave de-facto tenure to residents whichin turn promoted housing consolidation andimprovement.In South and South-East Asia in particular,industrialisation and export orientated growthfuelled strong economic development duringthe 1990s, which had significant structuraleffects, particularly for housing affordability.While the financial crisis of South-East Asiain 1997 slowed economic growth and cooledhousing markets, the effects proved not to bestructural and ‘in the last decade, there has beenan unprecedented rise in South Asian propertyprices’. 29 Rapid economic growth from exportorientedindustrialization reinforced the role angrowth of primate cities, in turn exacerbatinghousing demand in such cities, for exampleBangkok, Manila, and Kuala Lumpur. 30 Aconsiderable increase in foreign investmentcoupled with sustained high urbanisation ratesincreased urban land and housing demandand prices, as cities became hubs of economicdevelopment they attracted rural migrants and31 32international capital.Structural socio-economic changes in Asiancities from the 1990s onwards resulted in thecontinued exclusion of lower-income groupsfrom housing markets. The private sector hasnot been sufficiently stimulated to producelow-income housing because housing that is8PART ONE

affordable to lower-income sectors has not beenprofitable and therefore attractive for privatesector housing developers. 33 Consequently, witha lack of government policies and programmes,informal housing approaches continued to beemployed even though they became increasinglyconstrained by lack of available land. While selfbuilthousing in slums and informal settlementshas traditionally been seen to be a temporaryphenomenon, Asian cities demonstrate thateconomic growth alone does not guarantee thatthose living in slums can or will move to betterhousing.Private housing supply caters mostly to upperincomehouseholds where it is profitable forprivate developers to produce housing, whichoften results in a detrimental mismatch of supplyand demand. For example, in Bangladesh thereis actually a considerable surplus of housing atthe upper-income level, yet an ‘acute shortageof affordable housing for the great majority ofmiddle- and lower-income groups’. 34 Addingto the discord, the development and purchaseof such upper-income housing is ‘undertakenmostly for investment and rental purposes, notfor use as primary residences’. Indeed, as a result,one third of housing in Bangladesh is producedinformally, mostly in slums, on land whichoccupiers have no legal ownership.While the enabling approach underpins muchAsian housing policy, in practice access toaffordable urban land for housing developmentremains a continual problem in Asian cities. 35While masterplans and urban development planshave been produced, these more often than not sitin government offices and are not implementedor enforced. Some cities, for example Bangkokand Manila, have little influence or control overland development as such cites have high rates ofprivate land ownership. 36 Land prices in Bangkokrose 1,500 per cent between 1985-1990. 37Bangladesh is another example where, while theprice of building materials has risen considerably,they have risen concurrent with incomes, whereasland prices have skyrocketed, which is a centralreason why housing affordability in Bangladeshis so low. 38At the turn of the millennium new approachesof engagement are gaining prominence.There are many low-income, community-based,WHILE THECHALLENGEOF HOUSINGAFFORDABILITY INASIA IS NOT NEW,IT IS AN INCREASINGPROBLEM IN MOSTASIAN CITIES. THE KEYCHALLENGE REMAINS THENEED FOR GOVERNMENTSTO INSTIL A SUPPORTIVEINSTITUTIONAL ANDREGULATORY FRAMEWORKAND INCREASE THE SUPPLYOF SERVICED LANDTOADDRESS CONTINUEDRAPID URBANISATION ANDPOPULATION GROWTH.civil society groups in Asia that are organisingthemselves in an effort to not only secureaffordable land and housing but to address widerstructural issues that perpetuate inequalitiesregarding urban housing and service provision.A notable example is Shack/Slum DwellersInternational (SDI) which works throughoutAsia, as well as Africa and Latin America. SDI isa network of national slum dweller organisationsthat aims to build capacity and share knowledgeand experience on key dimensions of the strugglefor affordable land and housing, for examplemicro-savings, empowerment of women, slumenumerations, land tenure reform, and housingsupply and settlement upgrading.The slums and informal settlements thatcurrently proliferate on the periphery of Asiancities are physical manifestations of increasingsocio-economic division and gentrificationpressures. Middle- and upper-incomehouseholds are increasingly seeking housing inexclusive ‘gated communities’, a typology thatAFFORDABLE LAND and HOUSING IN Asia9

can be found throughout Asian cities and arelargely financed and led by private developers.Imposing advertisements abound for residentialproperty that is portrayed as comfortable andsecure, and often provided with associatedmortgage finance for middle- and high-incomehousehold purchasers. Such housing, however,is simply out of financial reach for the vastmajority of households and as a result, informalhousing, slums, squatter settlements, low-qualityrental housing, house sharing and street sleepingcontinue to proliferate in most Asian cities.In Asian countries that have relatively strongeconomies and well functioning housingmarkets the present issue is not the cost ofhousing per se but rather securing housingfinance. Compared with Africa and LatinAmerica, the rapid economic development inAsia over the last several decades has led to largeeffective demand, but the lack of housing financeis the major obstacle. Many households are ableto service a mortgage but they cannot get finance,often due to high down-payment requirements.In India, for example, there is considerablepotential at the lower-income end of the housingmarket. Private developers can produce low-costhousing units, but they cannot sell them becauseof the lack of lower-income finance options.There are 23 to 28 million middle- and lowerincomehouseholds in urban India with incomesbetween 5,000 and 11,000 INR (112 to 248USD) that could meet housing repayments. 39Yet they are constrained as they cannot get creditto buy housing. While the poorest still can notafford such housing, expanding housing financeto the group where there is effective demandcould potentially transform housing sector andeconomy. Likewise, in Bangladesh there isinterest from private developers in producinghousing for low-income households but ‘inthe absence of fundamental improvements ininfrastructure, land, and housing development,this nascent trend will not go far’. 40 Smalladjustments to the housing unit price andmortgage terms would increase the market to 40per cent of the urban population. This, again,highlights the importance of developing housingfinance mechanisms to support low-incomehouseholds to secure housing.In light of this brief historical snapshot itis clear that while the challenge of housingaffordability is not new, it is an increasingproblem in most Asian cities. Even with thesignificant theoretical, policy and practice shiftsover the last sixty years, informal housing hascontinued to play a leading role in deliveringurban housing at a economic cost that thepoor can afford. While it may be economicallybeneficial, such informal development is nota suitable method for delivering affordable,comfortable, and healthy housing consistentwith the sustainable and planned growth of citiesand urban regions.Over the last sixty years the key challenges havenot notably changed. For households, the keymicro challenge for obtaining and retainingaffordable housing is access to affordable land andhousing finance. For governments, the key macrochallenge remains the need for governments toinstil a supportive institutional and regulatoryframework that can improve the affordabilityof housing and increase its supply in face ofcontinued rapid urbanisation and populationgrowth.1.3 HOUSING AFFORDABILITY:ITS COMPONENTS ANDMEASURESAffordable housing is broadly defined as thatwhich is adequate in quality and location and doesnot cost so much that it prohibits its occupantsmeeting other basic living costs or threatens theirenjoyment of basic human rights. 41Housing affordability is affected by many factors.Figure 8 outlines the components of housingaffordability for households. Affordability isprincipally set by two main variables: capitalvariables (house purchase costs) and occupationvariables (costs associated with keeping thehouse).The ability of a household to purchase a house isaffected by the purchase cost (which is the sumcost of land, infrastructure, building materialsand labour and profit) and the ability to financethe purchase (principally set by the financedown payment requirement and the balance ofhousehold savings).10PART ONE

CAPITAL VARIABLESOCCUPATIONAL VARIABLESMaterial/ House InputsMaterial/ House InputsLandInfrastructureHousePurchaseCostHouseOccupationCostLand lease/ratesService costsBuilding MaterialsBuilding maintenanceLabour & ProfitFinanceDown paymentrequirementHousingaffordabilityfor householdsFinanceInterest rates andloan periodSavings and debtsAbility tofinancepurchaseAbility tofinanciallyserviceIncome and expenditureSavings and other assetsIncome(minus)(minus)Outstanding debtsNon-housingexpenditureFigure 8: Basic components of housing affordability.Once a house is purchased, the ability of ahousehold to occupy and pay for the house isinfluenced by material inputs (land lease andrates, services costs, and building maintenance)and finance inputs (loan repayment period andinterest rates, and household income minus nonhousingexpenditure).Housing affordability, therefore, involves morethan the often-used simplified conception ofhouse purchase price to household income. Thecomponents outlined in Figure 8 are the manydimensions of housing affordability, and thosethat this regional paper focuses on. For example,in many Asian countries the high purchase costof housing is often due to high land prices, whichare a result of inadequate land policies that resultin insufficient available land for development.Likewise, the lack of housing finance orunsupportive finance terms (for instance, highdown payment requirement, high interest rates,short loan periods) also directly limit housingaffordability especially for lower- and middleincome42 43groups.Measures of affordabilityWhile there is no universally agreed measure ofwhat constitutes ‘affordable housing’, there arethree common measures, which are associatedwith two components: housing costs andhousehold income (Table 2). 44 The first is houseprice-to-incomeratio. The ratio is calculated bydividing the median house price by the medianhousehold income. It shows the number ofannual median salaries it takes to buy a medianpricedhouse. Countries that have particularlyhigh house-price-to-income ratios are typicallythose with high land prices and constructioncosts. 45 The second measure is house rent-toincomeratio. This ratio is calculated by dividingthe median annual rent by the median annualrenter household income.While there is no universally agreed ratio orpercentage at which owner-occupied or rentalhousing is deemed unaffordable, these twomeasures enable cross-country comparisons aswell as the ability to track housing affordabilityAFFORDABLE LAND and HOUSING IN Asia11

AFFORDABLEHOUSING ISBROADLY DEFINEDAS THAT WHICHIS ADEQUATEIN QUALITY ANDLOCATION ANDDOES NOT COST SOMUCH THAT IT PROHIBITSITS OCCUPANTS MEETINGOTHER BASIC LIVING COSTSOR THREATENS THEIRENJOYMENT OF BASICHUMAN RIGHTS. HOUSINGAFFORDABILITY, HOWEVER,IS MULTI-DIMENSIONAL ANDINVOLVES MORE THAN THEOFTEN-USED SIMPLIFIEDCONCEPTION OF THE RATIO OFHOUSE PURCHASE PRICE TOHOUSEHOLD INCOME.within a country over time, as incomes and houseprices rise and/or fall.1.4The third measure of affordability is theresidual income assessment. It is representedas a percentage of household income spent onhousing-related expenses and demonstrates ahousehold’s ability to financially service housingwithout compromising on necessary non-housingexpenditure. 46 Although there is no universallyagreed percentage, housing is generally deemedaffordable when a household spends less than30 per cent of their income on housing relatedexpenses, such as mortgage repayments (forowner-occupiers), rent payments (for tenants),and direct operational expenses such as taxes,47 48insurance and service payments, etc.STRUCTURE AND CONTENT OFTHE VOLUMEDefinitions: regional and country groupingsThe following United Nations definition of Asiancountries and regions are used throughout thispaper:Western Asia:Armenia, Azerbaijan, Bahrain, Cyprus, Georgia,Iraq, Israel, Jordan, Kuwait, Lebanon, OccupiedPalestinian Territory, Oman, Qatar, SaudiArabia, Syrian Arab Republic, Turkey, UnitedArab Emirates, Yemen.South-Central Asia:Afghanistan, Bangladesh, Bhutan, India, IslamicRepublic of Iran, Kazakhstan, Kyrgyzstan,Maldives, Nepal, Pakistan, Sri Lanka, Tajikistan,Turkmenistan, Uzbekistan.South-Eastern Asia:Brunei Darussalam, Cambodia, Indonesia,Lao People’s Democratic Republic, Malaysia,Myanmar, Philippines, Singapore, Thailand,Timor-Leste, Viet Nam.Eastern Asia:China, Hong Kong, SAR of China, Macao SARof China, Japan, Democratic People’s Republic ofKorea, Republic of Korea, MongoliaData sources and analysisEfforts have been made to reflect the enormousheterogeneity in the Asia region as this hasimplications for the significant differences in theprovision of housing and the types of housingpolicy responses. The analytical assessment is basedon existing information from government reports,such as recent UN-HABITAT Global Reportson Human Settlements, The State of Asian Cities2010/11. The analysis draws on comparativeevaluations on the topic carried out by majorinternational organisations and research institutesas well as country specific assessments of affordablehousing alternatives. It incorporates statisticsand housing indicators from officially publishedsources of information and international databases.Volume structurePart One provides an overview of the challengeof affordable housing in the regional context.It has provided the introductory, historical andconceptual setting for the study of affordable12PART ONE

Table 2: Measuring housing affordabilityHouse-Price-to-IncomeRatioHouse-Rent-to-IncomeRatioHousing-relatedexpenditure as apercentage of incomeMeasureMedian house pricedivided by medianhousehold income. Theratio of the median freemarketprice of a dwellingunit and the medianannual household income.Median annual rent dividedby median annual renterhousehold income. Incomesare median gross incomesof private and public renterhouseholds.Annual median householdincome divided byannual median housingexpenditure (mortgagepayments, rent, services,taxes, insurance, etc).WarningTrendVery high or rising ratiosimply that either thereis no effective housingmarket or that landis extremely scarce,generally owing toregulatory inefficiencies orrestrictions.High values imply thatsupply is not keeping up withdemand and affordability islow. Low values usually implycontrolled tenancies or a highproportion of public housing.A high percentage indicateshousing is negativelyimpacting on meeting nonhousingbasic needs andthe housing market is notfunctioning properly.SignificanceA key measure of housingaffordability. Also generallyregarded as the singleindicator that givesthe greatest amount ofinformation about housingmarkets.A key measure of housingaffordability, especially forlow-income households whomay be unable to purchasehousing.It can account for essentialnon-housing expendituresuch as food, water,clothing, schooling,transport, etc and thedecisions households makeregarding housing andnon-housing expenditures.housing in Asia. It has highlighted the majorurban, economic, social, and historic factors inthe region underlying differences in housingprovision and specific housing challenges.Part Two canvases the state of affordable land andhousing in Asia. It systematically reviews trends inhousing conditions with respect to housing needsat the national scale and analyses the qualityof the existing housing stock using the UN-HABITAT’s ‘shelter deprivations’ framework. Itshows how the housing stock in Asia is grosslyinadequate, both quantitatively and qualitatively.The proportion of households living in slums,which are characterised by inadequate but moreaffordable housing, is growing at an alarming ratein many cities.Part Three explores the critical linkages betweenhousing challenges and policy responses. Itexamines trends in affordable land and housingdelivery systems. Existing land policy andlegislative frameworks are reviewed, along withavailability, accessibility and affordability ofserviced land for housing. Several approacheshave been tried in seeking to provide an adequatesupply of well-located serviced land at affordablecost; and some of the key ones are presented.The section also reviews housing policy andlegislative frameworks. Housing tenure patternsin different countries and the dominant buildingtypes are identified, followed by an examinationof the current affordable housing stock, thetypes and numbers of housing units currentlyunder construction, and housing beneficiaries.Privatization of public housing and publicprivate partnership—two notable ways inwhich affordable housing has been provided—are described; as well as some of the innovativefinancing mechanisms that have been usedsuccessfully.Part Four firstly summarises the key notabletrends over the last decade, in particular regardingsubsidized public housing programmes, assistedself-help housing, housing finance and theAFFORDABLE LAND and HOUSING IN Asia13

Figure 9: Slum housing in South Asia. Photo © UN-HABITATredevelopment of slum land by private developers.Secondly, it provides recommendations on howto facilitate more effective affordable land andhousing delivery. These include adopting theenabling approach, reviewing legal and regulatoryframeworks, making land-use planning anddevelopment control more realistic and flexible,enhancing security of tenure, and promotingslum upgrading and co-operative housing. Finally,a brief conclusion is provided to recap the majorthemes and draw attention to ways forward forlocal, national and global action.14PART ONE

PART ONE ENDNOTES1 Asian Development Bank (ADB) (2006). Urbanization and Sustainability in Asia: Good approaches in Urban and Region Development.Mandaluyong City, Philippines: ADB and Cities Alliance. p.12 Asian Development Bank (ADB) (2006) p.13 Asian Development Bank (ADB) (2006) p.14 UN-DESA (2009). World Urbanization Prospects: the 2009 Revision. United Nations Population Division.5 Jack, M. (2006). “Urbanisation, sustainable growth and poverty reduction in Asia”. IDS Bulletin, 37(3): 101-114, May 2006.6 Asian Development Bank (ADB) (2006)7 UN-DESA (2009)8 UN-DESA (2009)9 UN-HABITAT (2010a). The State of Asian Cities 2010/11. Fukuoka, Japan: UN-HABITAT.10 UN-HABITAT (2009). The State of the World’s Cities. Nairobi: UN-HABITAT.11 UN-DESA (2009)12 China Science Center of International Eurasian Academy of Sciences (IEAS), China Association of Mayors, and UN-HABITAT (2010) The Stateof China’s Cities 2010/2011: Better City, Better Life. China: Foreign Language Press. p.513 China alone is to reach 65 per cent urban by 2030: UN-DESA (2009)UN-HABITAT (2010a) p.1314 UN-HABITAT (2010a) p.1415 Gilbet, A and J. Gugler. (1992). Cities, Poverty and Development: Urbanisation in the Third World. Oxford: Oxford University Press.16 Hardoy, J. and D. Satterthwaite. (1984). Third world cities and the environment of poverty. Geoforum, 15(3): 307-333; and Hardoy, J. and D.Satterthwaite. (1989) Squatter citizen: life in the urban Third World. London: Earthscan.17 Turner, J. F. C. (1976). Housing by People. London: Marion Boyers.18 Takahashi, K. (2009). “Evolution of housing development paradigms for the urban poor: the post-war Southeast Asian Context”. Journal of Asia-Pacific Studies, 13, October, p.7319 Takahashi (2009) p.7320 Yeh, S. and A. Laquian. (1979). Housing Asia’s millions: problems, policies and prospects for low-cost housing in Southeast Asia. Ottawa:International Development Research Centre.21 Yeung, Y. M. (1983). A Place to Live: More Effective Low-cost Housing in Asia, Ottawa: International Development Research Center.22 UN-HABITAT (2006). Enabling shelter strategies: Review of experience from two decades of implementation. Nairobi: UN-HABITAT.23 Yeung, S. and R. Howes. (2006). “The role of the housing provident fund in financing affordable housing development in China”. HabitatInternational, 30: 343-356.24 Yanyun Man, J. (Ed) (2011). China’s housing reform and outcomes. New Hampshire: Lincoln Institute of Land Policy.25 Lee, M. (1995). “The community mortgage program: an almost-successful alternative for some urban poor”. Habitat International, 19(4): 529-546.26 Asian Development Bank and Economic Development Institute (1991). The urban poor and basic infrastructure services in Asia and the Pacific.Manila, Philippines: Asian Development Bank. Vol III, p. 635-668.27 Werlin, H. (1999). “The slum upgrading myth”. Urban Studies, 36(9): 1523-2534, p. 1524.28 Boonyabancha, S. (2005). “Baan Mankong: going to scale with ‘slum’ and squatter upgrading in Thailand.” Environment and Urbanization,17(21).29 Nenova, T. (2010). Expanding housing finance to the underserved in South Asia: Market review and forward agenda. Washington: The WorldBank. p.1630 Takahashi, K. (2009) p.6731 Takahashi, K. (2009) p.6732 Ooi, G. (2005). Housing in Southeast Asian capital cities. Southeast Asia Background Series, No. 4. Singapore: Institute of Southeast AsianStudies Publications, p.1033 Yeh and Laquian (1979)34 Nenova, T. (2010) p.8535 Acioly, C. Jr. (2008) Housing Strategies in the Asia-Pacific Region: Learning from the Past and Addressing Present and Future Challenges. SecondAsia-Pacific Ministerial Conference in Housing and Urban Development (APAMCHUD) 12-14 May 2008, Tehran, Iran.36 Ooi, G. (2005) p.337 Douglass and Zohlin, in Takahashi (2009)38 Nenova, T. (2010) p.9039 Nenova, T. (2010) p.16240 Nenova, T. (2010) p.9241 The term ‘affordable housing’ is often used to describe a type of housing for low-income people, which has a variety of other names for instance‘social housing’, ‘public housing’, and ‘low-cost housing’. In this publication, however, it does not refer to a type of housing (i.e. low-cost, socialor public housing) but rather relates to the financial affordability of housing with respect to occupants’ income.42 World Bank (1993). Housing: Enabling Markets to Work. Washington, D.C.: World Bank.43 Nenova, T. (2010) p.1644 You, N. (2007). Making the market work for pro-poor urban housing. 1st Asia-Pacific Housing Forum. Singapore.45 UNCHS (2001b). The State of the World Cities 2001. Nairobi: UNCHS (Habitat).46 Yang, Z. and Y. Shen. (2008). “The Affordability of Owner Occupied Housing in Beijing”. Journal of Housing and the Built Environment. 23:317-335.47 UN-HABITAT (2006a). Enabling Shelter Strategies: Review of Experience from Two Decades of Implementation. Nairobi: UN-HABITAT.48 Freeman, A., R. Chaplin, & C. Whitehead. (1997). Rental affordability: A review of international literature. Discussion Paper No. 88, Cambridge,UK: Department of Land Economy, University of Cambridge.AFFORDABLE LAND and HOUSING IN Asia15

The housingstock in manycountries inAsia is grosslydeficient bothin terms ofquantity andquality.16PART two

2PART TWOThe state ofaffordable landand housingFigure 10: Incremental house construction, Afghanistan.Photo © UN-HABITAT.AFFORDABLE LAND and AND HOUSING IN Asia17

2. THE STATE OFAFFORDABLE LANDAND HOUSINGThe housing stock in many countries in Asia isgrossly deficient both in quantity and quality.Housing shortages and poor housing conditionsare largely the result of the rapid urbanisationthat has occurred in the region. Inadequateand overcrowded housing, unsafe water, andpoor sanitation in densely populated citiesare threatening the health and well-being ofhundreds of millions of men, women andespecially children, and the consequences for notdealing with these conditions for governmentsare far-reaching.2.1 HOUSING NEEDS AT THENATIONAL SCALEGetting recent and reliable quantitative data onthe housing stock, needs, deficits or surpluses isdifficult. Data is often not collected, or, if it is, itis unreliable and unsystematic. Nevertheless, acursory analysis of the housing situation in Asiareveals that there is a pressing housing shortagein most countries in the various sub-regions. Forexample, in South Asia alone there is a shortageof 38 million units, not counting those needingrepair. 49Countries in South-Central Asia have some of thelargest housing deficits, both in terms of absolutedeficit (households without houses) and deficitsrelated to extremely deteriorated or temporaryhousing that requires full replacement. Thehousing shortage in Sri Lanka was projectedto rise from 400,000 to 650,000 units between2002 and 2010. 50 The Central Bank of Sri Lankaestimates that the current annual unit demandstands between 50,000 and 100,000 units. 51 Thecurrent urban housing shortage in Bangladesh issimilar with 659,000 units.Pakistan’s housing deficit has been steadilyincreasing by 270,000 units per year. 52 Thecountry has an estimated backlog of 7.5million units, which is considerable given thetotal national housing stock is 20.5 million. 53Affordability is a problem, as two thirds of thepopulation cannot afford any housing withoutsome type of financial subsidy or support: thebacklog for these households stands at 4.5million units.Estimates of housing need in India vary widelyalthough a conservative estimate suggest that in1991 the shortage of urban housing units was 5.1million; by 2001 this had grown to 7.1 millionunits. 54 This shortage was comprised of actualdeficit (23.5 per cent), overcrowding (33.1 percent), housing needing complete replacement(29.0 per cent) and kutcha (temporary) housing(14.4 per cent). 55 As these housing deficit figuresare only for urban areas the national (urban andrural) housing shortage is likely to be muchhigher. Some estimates currently put the nationalhousing deficit as high as 40 million units.Figure 11: Housing reconstruction in Banda Ache, Indonesia. Photo © UN-HABITAT18PART two

Table 3: Five key shelter deprivations as measures of slumsKey indicatorsStructural quality/durability of dwellingsSufficient living areaAccess to improvedwaterAccess to improvedsanitationSecurity of tenureDefinitionA house is considered ‘durable’ if it is built on a non-hazardous location and hasa structure that is permanent and adequate enough to protect its inhabitantsfrom the extremes of climatic conditions such as rain, heat, cold and humidity.A house is considered to provide a sufficient living area for the householdmembers if not more than three people share the same room.A household is considered to have access to improved water supply if it hasa sufficient amount of water for family use, at an affordable price, availableto household members without being subject to extreme effort, especially towomen and children.A household is considered to have access to ‘improved’ sanitation if it has ahuman excreta disposal system, either in the form of a private toilet or a publictoilet shared by a maximum of two households. In urban areas, access toimproved sanitation is defined by direct connection to a public, piped sewer;direct connection to a septic system; or access to pour-flush latrines or ventilatedimproved pit latrines, allowing for acceptable local technologies.Secure tenure is the right of all individuals and groups to effective protection bythe state against forced evictions. International law defines forced eviction as “thepermanent or temporary removal against their will of individuals, families and/orcommunities from the homes and/or land which they occupy, without the provisionof, and access to appropriate forms of legal or other protection.” 65Source: UN-HABITAT, 2004b; UN-HABITAT, 2006b.In South-East Asia formal housing deliveryprocesses in most countries kept pace with theincreased demand arising from urban growthup until the financial crisis of 1997, when theeconomies of many countries in the regiondeclined or stagnated. Consequently, theirhousing deficits are less pronounced than otherAsian sub-regions, although there are still deficitsto address. Indonesia now needs to houseapproximately 735,000 new urban householdsper year. 56 Malaysia is expected to require about709,400 new housing units between 2006 and2010. 57Like most other South-East Asian countries, thePhilippines has considerable housing deficits.Between 2001 and 2004 the estimated need was3.4 million units. 58 The Housing and UrbanDevelopment Council (HUDC) estimated thatbetween 2005-2010 the national housing deficitwas 3.75 million units. The largest demand wasfrom new household formation (2.5 millionunits), followed by the backlog (984,000),overcrowded houses (387,000), informal settlers(588,000), substandard housing needing fullreplacement (186,000) and homeless (8,300). 59Supply has not been able to meet demand, forexample in 2006 the HUDC was only able tobuild some 57,684 new housing units. 60The tsunami that struck the Indian Ocean regionin December 2004 severely affected the coastalareas of the Indonesian province of Aceh,Malaysia, Myanmar, Southern India, SriLanka, Thailand and the Maldives. It causedenormous destruction and suffering, claimingover 250,000 lives and leaving millions morehomeless or displaced. In the aftermath of thedisaster, a majority of the survivors were forcedto seek temporary shelter in tents and sharedbarracks. One of the most pressing needs remainsthe provision of adequate permanent housingat affordable cost. For example, it has beenestimated that in Aceh alone, 92,000 new housesneed to be built and 151,000 damaged housesrehabilitated. 61Against international trends, China has actuallyincreased its reported urban housing spaceper person from 6.7 square metres in 1990 toAFFORDABLE LAND and HOUSING IN Asia19

9.3 square metres in 1998. 62 A study of ninecities in China shows an even more notableachievement—an almost doubling of living spaceper household member from 8.0 square metres in1988 to 15.8 square metres in 1999. 632.2 QUALITY ANALYSIS OFEXISTING HOUSING STOCKAND SHELTER DEPRIVATIONSUN-HABITAT uses an operational definitionof slums that has five measurable indicatorsat household level, known also as ‘shelterdeprivations’ (see Table 3). Four of the fiveindicators measure physical expressions of slumconditions: non-durable housing structures; lackof water; lack of sanitation; and overcrowding.The fifth indicator, security of tenure, has to dowith legality. This, however, is less easily measured,as it is often dependent on de facto or de jurerights, or lack of them. Information on numbersof slum dwellers and the shelter deprivationsthey suffer from most enables the design ofinterventions targeted at the most vulnerable anddisadvantaged urban populations. 64With urban growth in Asia continuing apace,by 2030 the region will have the largest urbanpopulation of all the continents, however manycities will be characterised by urban povertyand inequality, and urban growth will becomevirtually synonymous with slum formation. 66The proportion of households living in slums,which are characterised by inadequate but moreaffordable housing, is growing at an alarming ratein many cities. 67It should be noted that concepts such as thoseof overcrowding and ventilation and lightingstandards have, however, been criticised for beingbased on foreign notions that are inconsistentwith the cultural and climatic contexts inmuch of Asia, and where interiors of dwellingsserve a different purpose to those in developedcountries. 68 Nevertheless, while the limitations ofsuch normative standards are recognised, they arebeneficial in enabling cross-country comparisonsat the macro-level.Although the data suggests a completely negativepicture, it should be noted that in many parts ofAsia housing quality is improving. Comparedwith other developing regions, Asia is leadingthe world in improving the quality of its housingstock in absolute terms. While in some Asiancountries and cities housing quality is notdrastically improving, there are many in whichhousing quality is improving and the proportionof households with multiple deprivations isdecreasing. One example is the Indonesian citiesof Bitung and Jaya Pura that have demonstratedtheir ability to increase housing supply andimprove the quality of slums and informalsettlements. 692.2.1 Housing durabilityHousing durability—the permanence ofresidential structures—is directly associatedFigure 12: Urban population and slum proportion in Asian countries in 2007Percentage of slum population9080706050403020100200000180000160000140000120000100000800006000040000200000Lao PDR*CambodiaBangladeshYemenTotal slum population (Thousands)MongoliaNepalLebanonIraqPakistanMyanmarPhilippinesViet NamIndiaChinaThailanIndonesiaSaudi ArabiaJordanTurkeySyriaCountryPercentage of slum populationTotal slum populationPercentage of urban population living in slums and total slum population for selected Asian cities, 2007.Source: UN-HABITAT, 2006b:23.20PART two

Table 4: Housing conditions among urban populations in Asia, 2003Percentage of population having:Urbanpopulation(000s)Finished floormaterialsSufficientliving spaceAccess toimproveddrinkingwaterAccess toimprovedsanitationEastern Asia 564,871 98.4 91.5 92.5 69.4Southern Asia 448,738 84.8 65.0 94.3 67.0South-Eastern Asia 228,636 98.6 73.1 91.0 80.0Western Asia 124,370 96.4 91.1 95.1 94.9Source: UN-HABITAT (2006b).with accessibility and affordability. According toUN-HABITAT estimates, in 2003 Asia had thelargest proportion (73 per cent) of urban dwellersin the developing world living in non-permanenthousing. Over 50 per cent of this populationlived in Southern Asia and 11 per cent in South-East Asia. In Bangladesh, Nepal and Pakistan,one in three urban dwellers lack durable housing,while in India this figure is one in ten (equatingto around 28 million people). In Asia, in general,there does not appear to have been as muchprogress in improving housing durability as inother developing regions. However, as notedthere have been significant improvements inseveral secondary cities in Indonesia. 70Global figures on housing durability are basedprimarily on permanence of individual structures,rather than compliance with building codes orlocation. Most only take into account the natureof the floor material as few countries collectinformation on wall and roof materials. They are,therefore, grossly underestimated. Indeed, if themeasures of durability were to include quality ofroof and wall materials, the figures for durablehousing in the stock for many countries woulddecrease significantly. For example, when only thefloor criterion was used in Indonesia, 84 per centof dwellings were considered durable as opposedto 70 per cent when the three components weretaken into account. 712.2.2 Sufficient living areaOvercrowding (lack of sufficient living area)is a manifestation of housing inequality thatresults from a combination of factors, the mostprominent of which are perhaps insufficienthousing stock and lack of affordable housing. It isalso argued to be a hidden form of homelessnessas many people with nowhere to live areaccommodated by relatives or friends, whichresults in overcrowding.In 2003, approximately 20 per cent of urbandwellers in developing countries lived in housesthat lacked sufficient living area (with three ormore people sharing a room). Two-thirds of thosein developing countries living in overcrowdedconditions reside in Asia, with half of thisnumber to be found in Southern Asia. 72 Onein three urban dwellers in Southern Asia lackssufficient living area: the highest prevalence ofovercrowding in the developing world.ALTHOUGH THEDATA SUGGESTS ACOMPLETELY NEGATIVEPICTURE, IN MANYPARTS OF ASIA HOUSINGQUALITY IS IMPROVING.COMPARED WITH OTHERDEVELOPING REGIONS, ASIA ISLEADING THE WORLD IN IMPROVINGTHE QUALITY OF ITS HOUSING STOCKIN ABSOLUTE TERMS.AFFORDABLE LAND and HOUSING IN Asia21

An analysis of sufficient living area in Asiain general shows a growing trends towardovercrowding in most cities and countries.Overcrowding and poor ventilation are relatedto morbidity and child mortality rates. The riskof disease transmission and infection can risein relation to increasing numbers of occupantscrowded into small, poorly ventilated spacesincreases.2.2.3 Access to improved water supplyTwo-thirds of the world’s population lackingaccess to an improved water supply live in Asia.This equates to over 670 million people in bothrural and urban areas. However, according toofficial reports, the proportion of the populationwith access to an improved water source in urbanareas in Asia is very high. The vast majority, 93per cent, have access to safe drinking water. 73 Inmany countries, official statistics reflect betterwater coverage in urban areas than in rural areas.However, in many cities, the quantity, qualityand affordability of water in slums falls belowacceptable standards.2.2.4 Access to improved sanitationMore than one in four people in the developingworld do not have access to adequate sanitation.Asia alone accounts for over 70 per cent of thisnumber, mainly because of the large populationsof China and India. In 2000, approximately 33per cent of the urban population in China lackedaccess to improved sanitation.Recent years have seen a significant increase inthe numbers of urban dwellers with access toimproved sanitation in Southern and South-Eastern Asia, however, access lags far behindin Eastern Asia where 31 per cent of the urbanpopulation still lacks access to improvedsanitation, as Table 4 shows. Lack of access to anadequate toilet impacts adversely on householdoccupants’ health, increases morbidity andmortality rates and more often than not doeslittle to improve their dignity.2.2.5 Security of tenureMass evictions of slum and squatter settlementsin various cities in recent years suggest thatsecurity of tenure for the urban poor in Asia isbecoming increasingly precarious. The scale ofinsecurity of tenure and forced evictions is largelya result of public and private sector policies andpractices.The three most common causes of mass evictionsin cities in Asia are large-scale infrastructureprojects, urban beautification initiatives andinternational mega events. For example, anestimated 1.5 million people were displacedfrom their homes due to construction and urbanredevelopment in the eight-year run-up to the2008 Olympic Games in Beijing, China. 74 Inmany cases evictions are carried out without legalnotice or without following due process. 752.2.6 Multiple shelter deprivationsHousing that is characterised by one or moreof the above shelter deprivations is defined asinadequate. However, the degree of inadequacydepends on both the number and the degreeof the deprivations. Thus, a slightly crowdedhousing unit that satisfies all the other adequacyTable 5: Proportion of slum households in developing regions by number of shelter deprivations, 2001DeprivationsOne Two Three FourAsia Southern 66 29 5 0South-Eastern 74 20 5 1Western 77 16 6 1Eastern - - - -Africa Northern 89 11 0 0Sub-Saharan 49 33 15 3Latin America and the Caribbean 66 25 8 1Source: UN-HABITAT (2005) Urban Indicators Programme, Phase III (data for Eastern Asia not available).22PART two

criteria is closer to adequacy than a unit that isnon-durable, crowded and has access neither toimproved water nor to sanitation. The use of thisdefinition sets a high benchmark for adequacy,making it more difficult to achieve housing thatis both adequate and affordable.Table 5 suggests that the majority of slumhouseholds in the different regions of Asia sufferfrom one or two shelter deprivations. Only asmall minority suffer from three or four shelterdeprivations. Western Asia has the highestpercentage with only one deprivation (77 percent) and the lowest for two deprivations (16per cent). In contrast, Southern Asia has thelowest percentage of households with onedeprivation (66 per cent) but the highest withtwo deprivations (29 per cent).2.3 AFFORDABILITYMedian house prices in developed countries canoften be 2.5 to 6 times the average median annualsalary. 76 In Asia, house-price-to-income ratiosare higher in many countries, as the selectedcapital cities in Figure 14 show. Vientiane, thecapital of Lao PDR, has a house price to annualincome ratio of 23.2. Dhaka has a ratio of 16.7and Jakarta a ratio of 14.6. Home ownershipin many emerging Asian countries is thereforea significantly more expensive and difficultproposition than in other countries.High house - price - to - income - ratiosnotwithstanding, housing in Asia is comparativelycheaper than equivalents in developed countries.For example, new fully serviced, very highspecification140 square metre apartments in alakeside setting in Wuhan, China, cost only USD76,000. 77 Indeed, anecdotal evidence suggestswidespread purchase of apartments in China byoverseas investors aware of the good value theyrepresent. 78 As formal housing is constructed ofinternationally tradable materials, the price tendsto be elastic only in relation to labour costs andopen or hidden subsidies on the real costs of landand materials.Rent-to-income ratios vary significantly fromone country to another, as Figure 14 and Figure15 illustrate. 79 They are lowest in countries wherepublic housing is still dominant and highest incountries with high demand pressure, owing toinsufficient supply of rental accommodation andhigh new household formation rates. In general,however, rent-to-income ratios in Asian citiesare almost twice as high as in cities in developedcountries. 80Pokhara, in Nepal, has one of the highest houserent-to-income ratios in Asia (a ratio of 34:1).Chang Mai in Thailand and Lahore in Pakistanhave similar, also high ratios (25.0:1 and 23.3:1respectively). Rent-to-income ratios are oftenmuch higher than house-price-to-income ratios.Figure 13: Dense, low-rise informal slum housing in Nepal Photo © UN-HABITAT/Rasmus PrechtAFFORDABLE LAND and HOUSING IN Asia23

POORER URBANHOUSEHOLDSIN ASIA SIMPLYCANNOT AFFORDTO SPEND SUCHPROPORTIONS OFTHEIR INCOME ONHOUSING. MILLIONS OFHOUSEHOLDS, THEREFORE, HAVENO OTHER OPTION THAN TORENT ROOMS IN HOUSING BUILTBY THE INFORMAL SECTOR,OFTEN IN SLUMS AND INFORMALSETTLEMENTS.For example, in Chang Mai, it takes 6.8 annualmedian salaries to purchase a median pricedhouse, but 25.0 median salaries to rent a medianpriced rental house. A similar trend is observedin Surabaya, where it is over 200 per cent moreexpensive to rent a house than to purchase one(Figure 15).Poorer urban households in Asia simply cannotafford to spend such proportions of their incomeon housing. Millions of households, therefore,have no other option than to rent rooms inhousing built by the informal sector, often inslums and informal settlements. This offers themfar more affordable options, with shared roomsor services being among the alternatives availableto them. Millions of other households buildrudimentary dwellings on illegally occupied land,while still hundreds of thousands of others becomepavement dwellers, as in the major cities in India.The cost of housing relative to income in Asia issecond only to Africa. The relative cost of housingis particularly high for the lowest income groups.Rent-control measures may contribute to lowerrent-to-income ratios, but they can also reduce81 82rental housing supply.A key determinant of housing supply andaffordability is the role played by the formaland informal sectors in housing production.In Asia, a substantial proportion of the housingstock is produced by the informal sector. Oneof the characteristics of the informal sector thatdistinguishes it from the formal sector is the orderin which development takes place. 83 Formal sectorhousing is planned beforehand, after which it is atleast partially serviced before construction. Onlythen do the occupants move in. In contrast, inthe informal sector, occupation takes place first,often on vacant, un-serviced land. Housing issubsequently constructed, and then services andplanning follow—typically after an extendedperiod of time, trying to improve the situationretrospectvely.Figure 14: House price/rent-to-income ratios for selected Asian capital cities302520151050AmmanAnkaraBangkokDamascusDhakaHouse price/rent to income ratioGazaJakartaKuwaitPhnom PenhSeoulSingaporeTokyoUlaanbaatarVientianeHouse price to income ratioCityHouse rent to income ratioHouse price/rent-to-income ratios for selected Asian capital cities (Note: house rent-to-income data not availablefor all cities; no value does not mean a ratio of zero). Source: UN-HABITAT, 200324PART two

Figure 15: House-price-to-income ratio compared with house rent-to-income ratio in selected Asian cities4035House/rent price to income ratio302520151050Chang Mai Chennai Chittagong Hanam Lahore Penang Pokhara Surabaya YangoonHouse price to income ratioHouse rent to income ratioHouse-price-to-income ratio compared with house rent-to-income ratio in selected Asian cities.Source: UN-HABITAT, 2003Low housing affordability in Asia is pervasive forseveral primary reasons. 84 Firstly, the majorityhousing finance mechanisms have high interestrates and are inflexible, which makes obtaininghousing finance and servicing monthly loanrepayments difficult. Secondly, real estate pricesare high primarily due to high land costs andthe high cost of building materials. Thirdly,there are few alternative low-technology housingconstruction methods available, or used, whichcould reduce housing costs. Fourthly, thecompliance costs and regulations surroundingformal housing development are expensive andtime consuming. Lastly, there are significantincome disparities between households, andthe financial assets and incomes of low-incomehouseholds are not high enough to affordmainstream, formal, market-procured housing.Affordability issues are particularly widespreadin South Asia. Estimates suggest that lowhousehold affordability in India affects 30million households. 85 In Sri Lanka 40 per centof households cannot even afford a basic lowcostdwelling. In Pakistan, two thirds of thepopulation cannot access formal housing dueto affordability constraints. Consequently, thesehouseholds seek housing in informal, slum areasand in Karachi alone informal areas house 7.6million people out to a total city population of15.1 million. 86Estimates suggest that in Afghanistan, 80 percent of the population cannot afford to purchaseeven the cheapest new low-cost house. 87 Usingfigures from 2009, the typical monthly earningsfor low-income households is 30 USD but themortgage repayment on a new low-cost house is49 USD (assuming a loan term of 20 years andinterest rate of 10 per cent, on a home costing5,000 USD of which 4,000 USD is borrowed).This case indicates that the percentage of themonthly mortgage repayment of a basic low-costhouse to the median income is 163 per cent,making such housing prohibitively expensiveand near impossible to obtain and retain. 88Affordability, then, is an issue regarding boththe initial down-payment (in this example 1,000USD which would take nearly six years assuminga regular income of which 50 per cent is saved)as well as servicing the mortgage repayments(which are 63 per cent more than the income).Of course, this also assumes finance is availableand the household has an acceptable credit ratingand can therefore obtain housing finance, neitherof which are always the case.2.4 DOMINANT BUILDING TYPESAffordable housing takes a variety of forms andmany different building types can be found inAsia. They range from traditional rural housetypes that have been adopted for use in an urbancontext to modern, multi-storey apartmentcomplexes. Figure 18 shows the range of differentdwelling types that can be found in selectedcities in Asia. Some cities have a large share ofdetached housing, for example Naga, Cebu,AFFORDABLE LAND and HOUSING IN Asia25

THE FORMAL SECTORPlan Service Build OccupyTHE INFORMAL SECTORFigure 16: The contrasting order of development in the formal and informal sectors(Source: Based on Baross, 1987).and Hanoi, whereas others have a large share ofmulti-household apartment blocks, for exampleHong Kong and Bangalore and Kathmandu.These patterns reflect both historical urbandevelopments and the availability of land forresidential development.Three main housing types can be found in Kabul,Afghanistan, five-storey walk-up flats; detachedhouses built on the middle of the plot; andhouses built around a walled compound leavingthe centre of the plot as an open courtyard. Eachtype corresponds to demand from differentsocioeconomic groups. 89 In Singapore, the publichousing stock, in which over 80 per cent of thepopulation lives, comprises mostly of apartmentblocks, which are on average 12 stories highalthough some of the more recent developmentshave been 30 to 40 stories. Indeed, the trend istowards taller buildings and the private sectorhas recently announced plans to construct 50-70storey high apartment blocks. 90The new government in Iraq, faced with hugehousing deficits following years of hiatus insupply and massive population movements,has recently developed a new housing policystrategy in which a range of housing typologiesare supported, 91 including provision of publichousing in the form of high-rise apartmentblocks. 92 With available urban land continuing tobecome more and more scarce, and also more andmore expensive, the trend towards high density,high-rise residential developments in inner-cityareas is likely to continue throughout Asia in thecoming decades.2.5 TENURE MODALITIESOver the last two decades most governmentsacross the developing world, including thosein Asia, have encouraged home-ownership. 93,94While the majority of households in rural areasown the home in which they live, in urban areasthroughout Asia this is not the case. In urban areasFigure 17: Eighty per cent of the population in Afghanistan cannot afford to purchase even the cheapest newlow-cost house. Photo © UN-HABITAT26PART two

Figure 18: Dwelling types in selected cities1009080706050403020100DhakaMedanColomboBangaloreLahoreUlaanbaatarKathmanduHanoiPercentageCebuHohhotNagaBishkekMandaluyongSeoulHong KongMelbourneHouses Apartments and Medium Density Temporary Other (Institutions, hostels etc.)home ownership is very expensive and ownershipof housing that is developed by the formal sectoris not affordable for a significant proportion ofurban households, leaving rental housing astheir only option. Nonetheless, rental housinghas been widely ignored in national housingpolicies and programmes in favour of outrighthousehold ownership of housing. Despite ageneral trend against direct provision of housingin the developing world as recommended in theHabitat Agenda, there is still continuing supportfor public rental housing in some countries. 95The success of Singapore in providing affordablehousing to the majority of its population has beenbased on home-ownership through subsidisedloan payments. The Housing and DevelopmentBoard has housed 80 per cent of the populationof whom 95 per cent are owners. 96 In China,about 80 per cent of urban households own theirhomes, half of whom have taken out a mortgage.This is because an estimated 50 to 60 per cent ofChinese homeowners bought their homes duringthe privatisation period at below market valueand few required mortgage finance. 97Homeownership was recognized as not being aviable option for all households in the Republicof Korea, which consequently started providingrental housing for low-income households in1989. By 1999, however, public rental unitsaccounted for only 2 per cent of the totalhousing stock. In Hong Kong, the HousingAuthority increased its rental housing stockby 18,000 units between 1991 and 2001—despite simultaneously selling of public rentalhousing during this period. This was a result ofthe Housing Authority continuing to build andalso increasing the entitlement threshold in realterms, thereby raising the number of potentialbeneficiaries. The housing is highly subsidized,with tenants paying about 9 per cent of theirincome in rent compared to 29 per cent in theprivate sector. 98An important source of rental housing in Asiais subsistence landlords (who rent out rooms intheir house to sustain or augment the household’sincome) and petty-bourgeois landlords (whouse the income from renting one or two unitsto invest in improvements to their quality oflife). 99 Hence, an increasing proportion ofrental accommodation is to be found in slumsand informal settlements and does not conformto regulatory or legal requirements. There arealso few legal and binding contracts betweenlandlords and tenants. 100AFFORDABLE LAND and HOUSING IN Asia27

PART TWO ENDNOTES49 Nenova, T. (2010). Expanding housing finance to the underserved in South Asia: Market review and forward agenda. Washington: The WorldBank.50 UN-HABITAT (2006a). Enabling Shelter Strategies: Review of Experience from Two Decades of Implementation. Nairobi: UN-HABITAT.51 Nenova, T. (2010)52 Nenova, T. (2010)53 Nenova, T. (2010)54 Tiwari, G., U. Raghupathi, and J. Husain Ansari. (2007). Improving housing and basic services for the urban poor in India. In, Laquain, A., V.Tewari, and L. Hanley. (Eds) (2007) The inclusive city: infrastructure and public services for the urban poor in Asia. Baltimore: John HopkinsUniversity Press: Baltimore, pp. 41-75.55 Tiwari, G., U. Raghupathi, and J. Husain Ansari. (2007)56 UN-HABITAT (2006a)57 Government of Malaysia (2006). “Ninth Malaysia Plan 2006-2010”. Kuala Lumpur: Government of Malaysia.58 UN-HABITAT (2009a). Community-based housing finance initiatives: the case of community mortgage programmes in Philippines. Nairobi:UN-HABITAT. p.359 UN-HABITAT (2009a) p.460 Villero, J. M. (2010). “The Right to Housing situation: still searching for a roof.” Available online: http://philrights.org/wp-content/uploaDS/2010/10/The-Right-To-Housing-Situation.pdf from the Phillipines Human Rights Information Center.61 UNEP and SKAT (2007). After the Tsunami: Sustainable Building Guidelines for South-East Asia. Nairobi: United Nations EnvironmentProgramme (UNEP).62 Wu, W. (2002). “Migrant Housing in Urban China: Choices and Constraints”, Urban Affairs Review 38(1): 90.63 Sato, H. (2006). “Housing inequality and housing poverty in urban China in the late 1990s”, China Economic Review 17(1): 37-50.64 UN-HABITAT (2006b). State of the World’s Cities 2006/7. London: Earthscan.65 UN-HABITAT (2006b). State of the World’s Cities 2006/7. London: Earthscan. p.9466 UN-HABITAT (2010a). The State of Asian Cities 2010/11. Regional Office for Asia and the Pacific (ROAP), Fukuoka, Japan: UN-HABITAT.67 UN-HABITAT (2007c). The State of Iraq Cities Report 2006/2007: Cities in transition. Nairobi, UN-HABITAT in association with GlobalUrban Research Unit (GURU), Newcastle University.68 Kironde, J. M. L. (1992). “Received concepts and theories in African urbanisation and management strategies: the struggle continues”, UrbanStudies 29(8): 1277-1292.69 UN-HABITAT (2007b). Secretary General’s visit to Kibera, Nairobi 30-31 January, 2007.70 UN-HABITAT (2006b)71 UN-HABITAT (2006b)72 UN-HABITAT (2006b)73 UN-HABITAT (2006b)Figure 19: Housing and urban development in Bogra, Bangladesh. Photo © UN-HABITAT/Matthew French28PART two

74 COHRE (2008). One World, Whose Dream? Housing Rights Violations and the Beijing Olympic Games. Geneva: Centre on Housing Rightsand Evictions (COHRE).75 UN-HABITAT (2006b); UN-HABITAT (2007a)76 UN-HABITAT (2005b). Facts and Figures about Financing Urban Shelter. Nairobi: UN-HABITAT.77 Dahua Group. (2007). “Record of apartment price of Gemdale Green Town (Wuhan).” Retrieved 16th October, 2007, from http://newhouse.wuhan.soufun.com/newhousenet/newhouse/newhouse_detail_more.aspx?newcode=2610067994&ptype=price.78 Yanyun Man, J. (Ed) (2011) China’s housing reform and outcomes. New Hampshire: Lincoln Institute of Land Policy.79 Source: http://www.adb.org/Documents/Events/2001/Cities_Data_Book/housing_graphs.pdf80 UNCHS (2001b). The State of the World Cities 2001. Nairobi: UNCHS (Habitat).81 UNCHS (2001b)82 UN-HABITAT (2003b). Rental Housing: An Essential Option for the Urban Poor in Developing Countries. Nairobi: UN-HABITAT.83 Baross, P. (1987). “Land supply for low-income housing: issues and approaches.” Regional Development Dialogue. 8(4): 29-45.84 Nenvoa, T. (2010)85 Nenova, T. (2010) p.3486 Nenova, T. (2010)87 Nenova, T. (2010) p.3488 Nenova, T. (2010) p.7189 Bertaud, A. (2005). Kabul Urban Development: current city structure, spatial issues, recommendations on urban planning.90 Yuen, B. (2005). Squatters no more: Singapore social housing. Third Urban Research Symposium: Land Development, Urban Policy and PovertyReduction. Brazilia, Brazil.91 Republic of Iraq (2010). Iraq national housing policy. Ministry of Construction and Housing. Baghdad: Republic of Iraq (supported by UN-HABITAT).92 Republic of Iraq and UN-HABITAT (2007). The State of Iraq Cities Report 2006/2007: Cities in Transition. Nairobi: UN-HABITAT.93 UN-HABITAT (2003b)94 UN-HABITAT (2011b) A policy guide to rental housing in developing countries. Quick Policy Guide Series. Vol. 1. Nairobi: UN-HABITAT.95 UNCHS (2001a)96 Tay, K. P. (2007). Creating a home-owning society. 1st Asia-Pacific Housing Forum, Singapore.97 RICS (2008). Asian Housing Review 2008. Hong Kong: RICS (Royal Institution of Chartered Surveyors) Asia.98 UN-HABITAT (2005d). Financing Urban Shelter: Global Report on Human Settlements 2005. London: Earthscan.99 Kumar, S. (1996). “Landlordism in third world urban low-income settlements: a case for further research”, Urban Studies 33(4/5): 753-782.100 UN-HABITAT (2003b)Figure 20: Traditional, labour intensive building material production techniques are still widely used throughoutAsia, such as this example from a village in Northern Nepal Photo © UN-HABITAT/Matthew FrenchAFFORDABLE LAND and HOUSING IN Asia29

Over the lasttwo decadesmicrofinanceandcommunitysavingsgroups haveemerged asimportant mechanismsfor facilitating access tohousing finance for theurban poor in Asia.30PART THREE

3PART THREEAddressingthe challenge:affordable landand housingDELIVERY trendsand patternsFigure 21: Housing construction in Sapa, Vietnam.Photo © UN-HABITAT/Rasmus PrechtAFFORDABLE LAND and AND HOUSING IN Asia ASIA31

3. ADDRESSINGTHE CHALLENGE:AFFORDABLE LANDAND HOUSINGDELIVERY TRENDS ANDPATTERNS3.1 LANDLegal access to land is a strategic prerequisite forthe provision of adequate and affordable housingfor all. It is also a strategic prerequisite forpoverty reduction. Indeed, as paragraph 75 in theIstanbul Declaration notes: ‘the failure to adopt,at all levels, appropriate rural and urban landpolicies and land management practices remainsa primary cause of inequity and poverty’. 101Lack of access to land is also the cause ofincreased living costs; the proliferation ofslums and informal settlements; environmentaldegradation; and the increased vulnerability ofurban poor and women-headed households, andother marginalized and disadvantaged groups.Development of urban land inherently involvessignificant risks, which the public sector isusually not well placed to assume responsibilityfor. These risks are consequently borne in such away that public land is supplied where there is lessdemand for it; the housing that is built does notrespond to land use demands; and middle- andupper-income, rather than poor, households areinadvertently subsidised. All of these problemslead to higher land prices and correspondinglyhigher house prices—and reduced affordability. 1023.1.1 Land policy and legislativeframeworksIn many countries in Asia, national governmentdecides land policy and legislative frameworksgoverning planning and tenure, while localgovernment is concerned with the details of landmanagement and development. However, theprivate sector, which often has the most advancedtechnical knowledge of how to effectivelydeliver and develop land, can be instrumentalin implementation once frameworks are agreedto. The example of the Philippines UrbanDevelopment and Housing Act of 1992 in Box 1provides a good example of how this can workin practice.In addition to access to land, tenure securityand property rights are key factors influencinghousing adequacy and affordability. As theGlobal Land Tool Network (GLTN) advocates,land rights are best envisaged on a continuum,from de facto tenure located at the informal endof the continuum to registered freehold at themore formal end of the land rights continuum(Figure 20). 103 104 This continuum highlights thatland tenure involves an intricate set of formal andinformal rights that range from various rights ofuse to conditional or full rights of use and disposeof the land. 105Land tenure security is important because it hasbeen shown to facilitate the consolidation andimprovement of housing as the threat of eviction,and therefore lost investment, is lower whenpeople feel secure in their location. However,it is important to note that ‘registered freehold’should not be seen as the ideal or ‘preferred’Perceived tenureapproachesOccupancyAdversepossessionLeasesInformallandrightsFormallandrightsCustomaryAnti evictions Group tenure RegisteredfreeholdFigure 22: The continuum of land rights.32PART THREE

tenure modality, or as an ultimate right, and defacto tenure alone has been shown to be sufficientfor households, especially those in slums andinformal settlements, to consolidate and makeimprovements to their houses and settlements.Participatory enumerations-a surveying methodthat involves the urban poor in the counting andmapping of their communities-has proven to bean important first step in the process of enhancingtenure security and improving urban landmanagement; the book Count Me In: Surveyingfor Tenure Security and Urban Land Management(2010) provides a clear and accessible overviewof how to conduct participatory enumerations. 106Some Asian countries still have operationalsystems of traditional land allocation, forexample, adat land in Indonesia, alongside andeven overlapping the systems based on individualtitling derived from European law. Most are basedon community rights and decision-making and itoften costs little for locals to gain use-rights toland. In earlier times, these systems ensured thatmost households could afford to own modest,durable accommodation. The change to titlingsystems is likely to involve significant transactioncosts and would take land-holding outside theaffordability of many households.Land titling and registration practices in manyAsian cities are time consuming and costly, whichincreases the overall cost of housing development.For example, in Pakistan there are 17 agenciesinvolved and six procedures to register land fordevelopment. It takes 50 days and costs 5.3 percent of the value of the property. 107 These highcosts and long time periods are comparable withother countries in the region. In contrast, SaudiArabia requires only two procedures, which onlytake up to three days and are cost-free. 1083.1.2 Provision of land for housingand availability of affordablelandAvailability of land in urban areas in Asia isgenerally independent of the type of ownership. Itis a problem in cities where most land is publiclyowned, for example in Delhi and Karachi; but itis equally a problem in cities where the majorityof the land is under private ownership, such asBangkok and Seoul. Indeed, in many cities, theland problem is not because of scarcity, but ratherrefusal to sell and much of the land is held byowners who have no intention of developing it. 109Public provision of serviced land and housing,especially to low-income households, is on> Box 1: Philippines: The Urban Development and Housing Act of 1992Section 2: Declaration of State Policyand Program Objectives:It shall be the policy of the State to undertake,in cooperation with the private sector,a comprehensive and continuing UrbanDevelopment and Housing Program, hereinafterreferred to as the Program, which shall:(a) Uplift the conditions of the underprivilegedand homeless citizens, in urban areas and inresettlements areas by making available tothem decent housing at affordable cost, basicservices, and employment opportunities;(b) Provide for the rational use anddevelopment of urban land in order to bringabout the following:(1) Equitable utilization of residential lands inurban and urbanizable areas with particularattention to the needs and requirement ofthe underprivileged and homeless citizensand not merely on the basis market forces;(2) Optimization of the use and productivityof land and urban resources;(3) Development of urban areas conducive tocommercial and industrial activities which cangenerate more economic opportunities forthe people;(4) Reduction in urban dysfunctions,particularly those that adversely affect publichealth, safety and ecology; and(5) Access to land and housing by theunderprivileged and homeless citizens;(c) Adopt workable policies to regulate anddirect urban growth and expansion towards adispersed urban net and more balanced urbanruralinterdependence;(d) Provide for an equitable land tenure systemthat shall guarantee security of tenure toProgram beneficiaries but shall respect therights of small property owners and ensure thepayment of just compensation…AFFORDABLE LAND and HOUSING IN Asia33

HOUSING IS ACATALYST FORSOCIO-ECONOMICDEVELOPMENT ANDPOVERTY REDUCTIONTHAT CUTS ACROSSALMOST EVERY OTHERINDICATOR FOR HUMANDEVELOPMENT. ACCESS TOADEQUATE AND AFFORDABLEHOUSING PREVENTS INJURY,DISEASE AND PREMATUREDEATH; INCREASES HOUSEHOLDAND NATIONAL INCOME; ANDPROVIDES SOCIO-POLITICALSTABILITY.the decline in many Asian countries for severalreasons. These include a lack of resources,inadequate administrative and technicalcapacities, and lack of political will. 110Some countries in Asia have, however, createdparastatal bodies with responsibility for landdevelopment, the largest being Perumnas inIndonesia. Such bodies are established to:• Channel land and housing at affordableprices to low- and middle-incomehouseholds;• Ensure that the land value increasesassociated with infrastructure provision arenot appropriated by private developers; and• Undertake important but risky projectsavoided by the private sector. 111Subsidies are sometimes used to release land forlow- and middle-income groups, but it is verydifficult to ensure accurate targeting. In Iran, landsubsidies amount to three per cent of GDP butmost of the land distributed to both householdsand cooperatives remains undeveloped owing tothe lack of sufficient resources to provide basicservices. 112 The government of Iraq allocatedhuge numbers of subsidised plots to middleincomehouseholds, armed forces personnel andgovernment workers during the 1980s. Many arestill not developed. 1133.1.3 Access to, and servicing of, landfor housingAccess to serviced land for housing is one of themajor problems faced by practically all Asiancities. Several approaches have been tried inseeking to provide an adequate supply of welllocatedserviced land at affordable cost. Theyinclude the following:Land bankingLand banking is used to acquire land for urbandevelopment ahead of need at relatively low cost.It can also be used to guide urban development,contain land speculation, redistribute land tothe poor, and finance infrastructure investments.However, it requires strong administrative andfinancial capacities, which many developingcountry local authorities lack. Experience hasalso shown that most land banks have failed tokeep land prices low and prevent speculation andextensive delays in acquiring and developing theland have tended to exclude poorer households.Although used successfully in Asian countriessuch as Malaysia and Singapore, land bankingis no longer seen as the way forward.Land sharingLand sharing has been used by landownerswanting to move squatter households off theirland and put it to alternative use. Rather thantaking legal action in court, the landowneragrees that the occupants (tenants or squatters)can remain on part of the land, often withimproved and secure accommodation at higherdensities. The owner then develops the mosteconomically attractive part of the land. Thefour basic features of land-sharing projects are:increased density, reconstruction, participation,and cross-subsidies. Land sharing has been usedwith variable success in India, Thailand and thePhilippines. It is not widely used, largely becauseof the many preconditions that must be met.34PART THREE

Land readjustmentLand readjustment is a more widely used varianton land sharing. It involves combining smallplots of land, servicing the larger area, and thenreturning it to the owners. In Bangladesh andIndia, readjusted land is returned to the owneron condition that a proportion of the increasein land values is handed back to government tomake more land available to low-income groups.In the Republic of Korea, the governmentreturns part of the property to the original ownersand then sells the remainder at market prices torecover development costs. Approximately 30 percent of the urban land supply in Japan has beendeveloped through land readjustment.Power of eminent domainMost countries have legislation that enablesgovernments to expropriate private land forpublic purposes, and determine the amount ofcompensation, if any, which should be paid.This is known as the ‘power of eminent domain’which, in many developing countries, is a colonialinheritance. It can be used for land-bankingahead of need. In India, the Delhi DevelopmentAuthority (DDA) owns a substantial portion ofthe land that it has acquired this way since 1957.Land swapping, joint venture agreements,negotiated purchaseIn the Philippines, Local Government Units(LGUs) are able to access privately-owned landfor social housing through several approaches,including land swapping, joint ventureagreements, and negotiated purchase. Theacquisition process is, however, complicated andprolonged by the lack of a standard land valuationmethodology, particularly in cases where the siteto be acquired is already occupied by informalsettlers. 114 Innovative land-use mechanisms havealso been adopted in Thailand, where local,context-specific solutions are designed with closeguidance from government, community groupsand NGOs. 1153.1.4 Serviced/unserviced housingdevelopment sitesAccording to the Global Shelter Strategy for theyear 2000:‘the greatest failure of Governments in thehousing sector has been the incapacity tostimulate a supply of sufficient affordable andofficially recognized serviced land to meet lowincomehousing needs.’ 119A number of countries in Asia are trying toovercome this failure by providing either servicedor unserviced sites at an affordable price forurban poor and low income households.Both the central government and city corporationsin Bangladesh, are developing residentialsubdivisions for lease to upper- and uppermiddleincome households and resettlementprogrammes, and site-and-services schemes forFigure 23: Informal housing extensions to public housing in Hanoi, Vietnam. Photo © UN-HABITAT/Claudio AciolyAFFORDABLE LAND and HOUSING IN Asia35

lower- to middle-income groups. However, ithas always been difficult to reach lower-incomehouseholds with the latter. Also, the size of thecombined public housing programmes has beenminimal in relation to housing demand. 120In Malaysia, the Government is implementingsites-and-services schemes to provide housing forlow-income households that cannot own a houseunder the Public Low Cost Housing (PLCH)programme. Housing options under this schemeare (i) a vacant plot inclusive of basic servicesand (ii) a serviced plot plus a core house whichthe owner can extend in future. 121 However,in the Plan for the period 2001 to 2005, theGovernment achieved less than half the target(48 per cent) of the target of 1,000 units. 122In Thailand, the National Housing Authority(NHA) in Bangkok assists evicted slum dwellersto resettle in sites-and-services schemes whichthe latter themselves identify and buy into. Manyof the schemes, which the NHA manages alongwith its rental housing stock, are in the peripheryof the Bangkok Metropolitan Area, far fromemployment opportunities. 1233.2 HOUSINGHousing is a catalyst for socio-economicdevelopment and poverty reduction that cutsacross almost every other indicator for humandevelopment. Access to adequate and affordablehousing prevents injury, disease and prematuredeath; increases household and nationalincome; and provides socio-political stability.However, despite fundamental transformationsin the economies and living standards of manycountries in Asia in recent decades, there remainsan urgent need to improve housing conditionsfor substantial numbers of people.>Box 2: Improving land access and land administration efficiency for the benefit ofpoor and vulnerable households in AsiaEfficient land administration in Karnataka,India 116Central to land access is efficient administrationprocedures for obtaining and retaining land.Asia has a number of good examples ofimproved land administration systems designedwith the poor in mind. To mention but one ofthese is the Bhoomi land conveyance system ofthe government of Karnataka, India. Bhoomihas computerised 20 million records of landownership of 6.7 farmers in the state. Itfocuses on on-line delivery and managementof land records, which provides transparencyin land records management and reduces theneed for lengthy bureaucratic procedures insuch tasks as changes to land ownership orverification of land ownership by other parties.It is a very successful example of the benefits ofelectronic records management, public-privatepartnership, coordination between governmentdepartments, and transparent information accessfor all-including often excluded low-incomehouseholds-through locally accessible computer‘kiosks’.UN-HABITAT efforts to enable access to landfollowing the Indian ocean Tsunami 117Following the Tsunami in December 2004,UN-HABITAT, together with other UnitedNations agencies, participated in the relief andreconstruction activities. In the Aceh region inIndonesia, efforts focused on land issues in thefollowing three ways:(a) relocation of entire settlements where thedestruction was considerable;(b) readjustment within existing settlementswhere there was partial only destruction; and(c) in situ upgrading of settlements where suchan approach was feasible.These initiatives directly impacted on the lives ofmany indigenous peoples, for whom land issuesare fundamentally important.Land to the landless in Pakistan followingthe 2005 earthquake 118Following the 8th October 2005 earthquakein Pakistan, UN-HABITAT supported asuccessful land distribution programme thatwas established by the Pakistan EarthquakeRehabilitation and Reconstruction Authority(EERA), whereby land from willing sellers waslegally transferred to willing buyers with aminimum of administration and legal costs ina ‘one window’ process. This meant that thetypically lengthy land administrative procedureswere modified to speed up recovery efforts andfacilitative the wide distribution of land, whilstmaintaining a focus on quality and equity. Asof the end of 2009, 8,156 households wholost their land or who were living on precariousmountain slopes obtained new land for housingthrough this programme, demonstratingthe importance and value of efficient landadministration procedures, especially in postdisastercontexts.36PART THREE

3.2.1 Housing policy and legislativeframeworksNational housing policies, strategies andlegislative frameworks in the Asia region haveshifted significantly over the past few decades.Many of the changes have been aimed atpromoting national housing strategies thatseek to enable the poor to access adequate andaffordable housing. 124 However, when it comesto highlighting the most significant innovationsin housing policy in developing countries overthe last two decades, the following can be singledout:• The development of national shelterstrategies by many governments in line withthe Global Strategy for Shelter to the Year2000 (GSS) and Habitat Agenda guidelines;• Higher priority given to, and development ofinnovative approaches for, slum upgrading;• Increased efforts to address discriminationagainst women and ‘gender-blindness’ inhousing and service provision;• Enhanced attention to human rights;• Recognition by governments of the potentialpositive role of rental-housing, withinitiatives to support its development. 125Housing delivery processes in Iraq, Lebanon,Syria and Yemen have been strengthened byinvolving and increasing the role of the privatesector and various civil society actors. Othercountries such as Bangladesh, the Philippinesand the Republic of Korea have emphasisedhousing programmes that are demand driven,decentralised market oriented, deregulated andinitiated by the private sector. 126In Jordan, the Housing and Urban DevelopmentCorporation (HUDC) was mandated toimplement the National Housing Strategythroughout the Kingdom, and has introducedsubstantial reforms to the housing sector. Inimplementing the Housing Strategy, measureshave been taken to eliminate the emergence ofnew slums and to increase the supply of affordablehousing for lower-income groups. They includeimproving the legislative environment, reformingland policies, updating planning and buildingregulations, introducing a secondary mortgagemarket, revising the rental law, and streamliningadministrative procedures. 127Building and land-use regulations are often notconducive to creating affordable housing for themajority. They are often very restrictive and lawson land use and building characteristics increasethe unit cost to households. A clear example isrestrictions on building heights: low heights onbuildings and number of stories permitted. Lowrisedevelopment increases infrastructure costs,spreads the city outwards, and limits the size ofhousing development projects. Such restrictionsare evident in Karachi which has a relatively lowheight limit on apartment buildings. 128 Wheredevelopers have gone above these regulations thelegal status of their housing projects is pendingand they cannot get future finance which restrictstheir ability to develop more houses.3.2.2 Current affordable housingprogrammes and approachesMany governments have withdrawn from directdelivery of housing, as recommended in theGSS and Habitat Agenda. However, publicorganisations are actively involved, in one wayor another, in shelter production in a numberof countries. They include government agencies,specialized institutions and financial bodies,many of whom are trying to ensure access toadequate and affordable housing for poor andlow-income households, and other vulnerable,disadvantaged and marginalised groups.In Bangladesh, the Government has launchedAsrayon (shelter), Gharey Phera (return home)and Ekti Bari Ekti Khamar (one homestead onefarm) programmes for the rural landless andhomeless people to limit the number of peoplefrom rural Bengal migrating to urban areas, andalso to encourage urban slum dwellers to return totheir own villages and take up income generatingactivities. In the Asrayon programme theGovernment has been providing group housingand small agricultural plots on Governmentownedland for landless households. In theGahrey Phera programme rural migrants to urbancentres are given credits to enable them to returnto their villages and earn their livelihood there.These programmes aim to reduce the problemof squatting and stem the growth of urbanslums. The Government has also established theAFFORDABLE LAND and HOUSING IN Asia37

Grihayan Tahabil (Housing Fund) through theBangladesh Bank to provide housing loans toNGOs to build shelter for the urban poor. 129The Housing and Urban DevelopmentCorporation (HUDCO) in India has a specificmandate to improve the housing conditionsof lower-income groups and the homeless.As the primary government agency throughwhich public capital spending on housing ischannelled, it provides financial support tothose state governments, housing boards andlocal authorities implementing housing andurban development projects. HUDCO delivershousing through a variety of schemes, many ofwhich are recommended in the Habitat Agenda(see the following section, 3.2.3 for an extendedreview of current programmes). Although, forall its efforts, the contribution of all the publichousing programmes together is no more than16 per cent of the total housing stock in India, 130they include:• Co-operative housing;• Construction loans;• Rental housing for employees;• Rehabilitation and upgrading;• Night shelters for pavement dwellers andother homeless people;• Condominium ownership for workingwomen;• Housing delivery through NGOs andCBOs;• Housing delivery through the privatesector; and• Individual housing loans.Several housing programmes are beingimplemented by both the public and privatesectors in Sri Lanka to provide adequate andaffordable housing for all. The governmentprovides direct assistance to low-incomehouseholds to build or upgrade their housingand encourages private sector investment inhousing through a range of fiscal incentives.The National Housing Development Authority,the State Mortgage and Investment Bank, theHousing Development Finance Corporation, thePlantation Housing and Social Welfare Trust, andthe Ministry of Fisheries and Aquatic Resourcesare the main public sector institutions involvedin the provision of low-income housing. Thebasic strategy of public housing programmes is tosupport a self-help system in which the NationalHousing Development Authority (NHDA) orother organisations provide a maximum loan ofLKR 50,000 (USD 452) per beneficiary to buildor upgrade their own house. 131Over the years China has provided large amountsof affordable housing for its citizens. Beforemarket reforms in the 1990s, the majority of urbanhouseholds lived in housing provided for workersby their work units (danwei) or by municipalcouncils. 132 More recently, the “ComfortableHousing Project” (anju gongcheng) was launched(in 1995) to build and sell flats at affordable costto low-income households, especially those whohad inadequate or no housing (see the extendedcase study in the following section, 3.2.3). In1998, it was modified and renamed “Economicand Comfortable Housing” (jingji shiyongfang) which sought to reduce costs still furtherby reducing land prices, contractor profits,government charges and dwelling size. 133 TheHousing Provident Fund was instituted in 2001to aid households in saving for housing ownershipand had assisted 2.4 million households by2003. 134 However, the poorest households, thosewho have been laid off in the reforms of the 1990sor temporary migrants, tend to be excluded fromthe systems that provide affordable housing andendure very poor conditions compared with thegeneral population. 135The first public housing programme in HongKong was implemented in 1954, and thegovernment has continued to participateaggressively in the housing market ever since. In2005, the public housing stock comprised of atotal of over 1.1 million units, including rentalflats and subsidised flats for sale, which housedabout half the city’s population (3.4 millionpeople). These housing units include livingquarters built under the Housing Authority’sHome Ownership Scheme, the Middle IncomeHousing Scheme, the Housing Society’s Flatfor Sale Scheme, the Sandwich Class HousingScheme and the Private Sector ParticipationScheme. The government has also in the pastprovided direct financial assistance in differentforms to public and non-public housing tenantsto purchase their own flats. 13638PART THREE

The government approach in the Philippinesover the past 25 years has been to boosthomeownership for the poorest 50 per centof the country’s population through a rangeof approaches including direct productionof housing, provision of public funds fordevelopment, or end-user financing, to enticethe private sector to produce ‘socialised’ housingunder the decentralized and participativeapproach, which led to the rise of joint ventureprojects between government (at all levels) and theprivate sector for low-income housing. The jointventure programmes have, however, remainedcontingent upon public sector funds and implicitsubsidies, which are not always forthcoming. 137A private sector company, Phinma PropertyHoldings Corporation (PPHC), is the country’sleading developer of affordable medium risehousing in Metro Manila. 138Singapore is an example of one of the mostextensive systems of state intervention throughdirect construction. In 2002, an estimated 85per cent of the population of 3.3 million wereliving in public housing units, which weresubsidized to remain affordable to the majorityof households. Of this number, 96 per centwere owned by their occupants and 4 per centrented. The public housing programme is basedon subsidized mortgage finance, primarilythrough the setting of interest rates. The successof the programme is due, in part, to Singapore’srapidly growing economy, which is one of thefastest growing in the world; and also to the factthat the government owned 85 per cent of theland. Acquiring land was thus not problematic,although compulsory acquisition was used. 139,140In Bhutan housing programmes in urbanareas are still dominated by public sector socialrental housing and there is an acute housingshortage. Rapid urban population growth, lackof access to land, and a shortage of funds forpublic housing programmes are the primaryreasons for the growth of the housing problem.In addition to new housing demand that stemsfrom population growth, much of the existinghousing stock requires renovation owing to itsold age and low quality. To date, there has beenlittle effort in providing affordable housing forlow- and middle-income households; and thelack of sufficient housing is leading to severeovercrowding. 141In Malaysia, various housing developmentprogrammes have contributed to the increasein housing construction. Overall targets weresurpassed for the Plan period 2001 to 2005. Atotal of 844,043 units were completed, 77.6 percent of which were constructed by the privatesector and the remaining by the public sector. Inthe ‘low-medium-cost’ housing category, a totalof 83,910 units (63.9 per cent of the Plan targets)were completed. The private sector constructed72.8 per cent of this number, demonstrating apositive response on its part to the increasingdemand for houses in this category, and helpingto reduce the demand for affordable housing. Onthe other hand, the total number of mediumandhigh-cost houses constructed by the privatesector during the same period far exceeded thetarget reflecting a continuous demand for thiscategory of housing. 142Western Asian countries have tended to retainstrong government involvement in housing> Box 3: Affordable housing provision in Sri LankaProvision of affordable housing has beena priority of successive governments in SriLanka since independence in 1948. In 1977,the National Housing Development Authoritywas established to implement and promotemass housing programmes such as the OneHundred Thousand Housing Programme andthe One Million Housing Programme to increasethe housing stock and home ownership, byproviding long-term subsidized loans for newdevelopments and upgrading activities.programme to relocate slum dwellers in highdensity apartments built by the government.The Indian ocean tsunami in December 2004completely destroyed around 99,480 homesand partially damaged about 44,290, togethercomprising 13 per cent of the housing stockin the administrative divisions along the coast.The Government is however committed torebuilding houses and communities.Source: Sri Lanka, 2005; Ergüden and Precht, 2006.In 1994, because of increasing land scarcity, thefocus shifted away from slum upgrading to aAFFORDABLE LAND and HOUSING IN Asia39

provision, especially in countries that have strongeconomies underpinned by oil exportation. InSaudi Arabia and the United Arab Emirates(UAE), for example, governments feelresponsible to provide housing under a socialcontract between the rulers and citizens. This hasbeen done through direct building programmes,mainly through approved contractors, withhugely discounted or entirely free allocation, andthrough interest free loans. 143 Huge amounts ofmoney have been expended on these endeavoursand many thousands of dwellings have beencompleted. 144The efficiency of these systems in supplyinghousing has, however, been questioned. Not onlydo the loans tend to encourage households tobuild more housing than they need, 145 but alsothey lead to deterioration in the existing housingstock as prospective recipients of loans maximisetheir gain by living in poor housing conditions, 146whilst owners see their housing lose value incompetition with heavily discounted units. 147 Inaddition, the amount privately-funded housingwas reduced in Saudi Arabia from 74 per cent in1975 to 32 per cent in 1990. 148 Since then, thenumber of loans available has been badly affectedby the value of oil exports and other events suchas the First Gulf War. Poor construction withina hot and highly saline environment has alsoled to poor durability and many householdshave abandoned government-built dwellingsin UAE. 149 In Tunisia, Jordan, Lebanon andYemen, however, the private sector carries outaround 95 per cent of all housing construction.In Turkey, the private sector is dominant butthe government produces around ten per cent ofnational housing supply (Box 4).The above examples, drawn from all over Asia,underscore the important role that governmentscontinue to play in the provision of adequateand affordable housing in a number of countriesin Asia. Indeed, public housing remains theonly way through which poor and low incomehouseholds can access adequate and affordablehousing in cities across Asia.3.2.3 Extended case studies ofcurrent large-scale housingprogrammes and policies3.2.3.1 National Indian programmes toincrease affordable housing supplyIndia is experiencing some of the highest ratesof urbanisation and population growth in Asiaand consequently every day thousands of peoplemove to cities and in doing so seek housing inwhich to live. In response to these physicaland demographic changes the Indian Ministryof Housing and Urban Poverty Alleviation(MoHUPA) has developed several programmes> Box 4: The National Housing Development Administration of Turkey (TOKI)The National Housing DevelopmentAdministration of Turkey (TOKI) is the singlepublic entity within the housing sector in Turkeythat is responsible for increasing housing supplyfor the low-to-middle income population.Underpinning TOKI’s strategy is the recognitionthat without increasing the provision of affordablehousing at scale existing slums will expand andnew slums will form. As urbanisation increases,many households have few options but to settlein slums, ‘gecekondu’, that contribute to manyproblems such as urban exclusion, poverty,degradation of the urban environment and theloss of natural resources. TOKI’s stated aims are:• Create a model framework for quality lowcosthousing,• Prevent real estate speculation that mightuse low-quality materials in the constructionof low-margin housing,• Produce housing for regions in Turkey wherethe private sector is not active,• Offer low- and middle-income groups theopportunity to finance their own homes,• Offer rural housing opportunities thatdecrease the pressure on the migration tourban areas,• Collaborate with local municipalities tocreate urban renewal projects and• Create financial opportunities to financesocial housing projects such as innovativeincome-sharing projects with the privatesector.TOKI aims to produce between 5 and 10 percent of housing need in Turkey through thedevelopment of low- and middle-income housingon TOKI-owned land. Beneficiaries of this ‘socialhousing’ pay a down-payment and enter into aloan agreement with bank on low interest ratesand long repayment periods. These governmentledhousing projects are on a large scale, mainly 4to 7 storey multi-household housing blocks.>>40PART THREE

Since 2003 TOKI has also undertaken agecekondu upgrading programme. It has twostrategies: temporary resettlement of occupantsthen resettlement in newly built houses, orresettlement elsewhere and land returned toTOKI for development. TOKI also has a ‘Revenue-Sharing model’ where they give their land toprivate developers who subsequently develophousing and give TOKI an agreed share of theprofits, which they re-invest in low-incomeprojects.By 2009 TOKI had built 400,000 houses,exceeding their seven-year goal of 350,000houses. Their new goal for 2011 is to build500,000 houses in the coming years with afocus on low-income households. The privatesector remains dominant in housing supply andconstruction; in 2008 the private sector produced81.9 per cent of houses, cooperatives 6.4 per centand TOKIİ 11.7 per cent.Affordability and finance limitationsTOKI housing is not widely affordable for lowandeven many middle-income households. Theunit cost is too expensive and there is lack offinance opportunities that households can access.Indeed, Habitat International (2010:43) note that‘in Turkey, the problem is not that homes aretoo expensive; rather, it is that home loans aretoo expensive. Thus, the biggest gaps in Turkey‘shousing system are on the demand side andhelping people pay for housing, rather than thesupply side and making home prices cheaper’.There are also concerns regarding who benefitsfrom the implicit subsidies. It appears that itis mostly middle-income workers and publicservants, not the really poor who secure housing.Likewise, there appear to be problems with theeviction and resettlement of gecekondu residentson development sites. During a mission toIstanbul in 2009, the Advisory Group on ForcedEvictions (AGFE) noted forced evictions weretaking place in Istanbul due to high populationgrowth with social inequalities and a desire toturn Istanbul into a 'Global First Class City'.Furthermore, in early 2011, TOKI admitted thatthe social dimensions of housing had not beenwell addressed, for instance traditional lifestyles,culture and demographic needs in locations thatare redeveloped. 150From mid-2010 onwards TOKI modified itsapproach to specifically accommodate lowincomehousing in some of its developmentplans. It is doing this through strict eligibilitycriteria: households must earn less that 2,600TL per month (1,690 USD), not own propertyelsewhere, and have not received a TOKI housebefore. These recent housing projects were heavilyoversubscribed with over 30,000 applicationsreceived (so far) for only 5,641 units. 151The experience of TOKI in Turkey demonstratesthe importance of affordable and availablehousing finance. It is not enough to just buildfinished housing units on a large scale; they needto be affordable and part of affordability is havingappropriate finance mechanisms in place to allowhouseholds to access housing units. Like manyother Asian countries, Turkey urgently needsimproved housing finance markets to stimulatehousing production at middle- and low-incomelevels. Private developers simply will not buildhouses if they cannot sell them. Predictablesources of finance that potential homebuyerscan access are needed to stimulate housingproduction for all income sectors but particularlyimportant is flexible finance opportunities for thelow-income population.Turkey also demonstrates the challenges of directhousing provision by governments. Targeted anddeliberate mechanisms must be implementedto reach low-income households otherwisedirect housing provision does not reach lowincomehouseholds and the government endsup constructing and subsidising houses for themiddle- and upper-income groups.Source: Özsan and Karakas, 2005; Uzum et al, 2009; Habitatfor Humanity International, 2010; Uzum, Çete, and Palancıoglu,2009; AGFE, 2009.that aim to increase affordable housing supplyand improve existing slum conditions. Theirambitious target is to achieve the ‘provision ofaffordable housing for all and livelihood, shelterand basic services to all slum-dwellers and theurban poor’.This extended case study outlines five keyMoHUPA programmes. Information and datafrom this section is drawn from the followingsources: MoHUPA (2010); Ministry of UrbanDevelopment of India (2009); Baindur andKamath (2009); Murali (2006); and Tiwari, G.,Raghupathi, U. and Husain Ansari, J. (2007).Jawaharlal Nehru National Urban RenewalMission (JNNURM)The national flagship programme is theJawaharlal Nehru National Urban RenewalMission (JNNURM), a six-year programmethat commenced in 2006. It responds to theneed for investment and policy reform at bothnational and city level to address physical aspectsof urban areas, in particular housing, builtAFFORDABLE LAND and HOUSING IN Asia41

heritage, infrastructure and services. It paysparticular attention to the needs of EconomicallyWeaker Sections (EWS) and Lower IncomeGroup (LIG). The stated aims are to ‘augmentsocial and economic infrastructure in cities’,ensure basic services to the urban poor includingsecurity of tenure at affordable prices, initiatewide-ranging sector reforms and strengthenmunicipal governments to decentralise. The twocomponents that address affordable land andhousing provision are Basic Services to the UrbanPoor (BSUP) and Integrated Housing and SlumDevelopment Programme (IHSDP).BSUP focuses on the integrated upgrading ofslums in 65 major cities. It includes the provisionof basic urban services, urban improvementand rehabilitation projects, community servicesprojects (such as water supply, toilets, baths, etc),affordable housing projects, and street lighting.The IHSDP focuses mainly on the provision ofnew affordable housing and upgrading of existinghouses in cities and towns that are not eligiblefor BSUP. New housing provision is typicallycondominium housing on brown-field sites.The ceiling cost of a housing unit is set at INR100,000 (2,253 USD), the minimum floor areais set at 25 meters squared, and each unit musthave a kitchen and toilet.Both programmes are largely directed andimplemented at state level. They involvethe preparation of a city development plan,preparation of budgets and project identification,release and leveraging of funds, and a focus onenabling the private sector through private-publicpartnership. Projects are financially assisted bythe national government but states are requiredto contribute land and funds as well as leveragefunds from public-private partnerships.Central to both BSUP and IHSDP are citypolicy reforms that aim to improve the deliveryof affordable housing ‘at scale’. For example,decentralisation, reform of property taxregulations, rent control laws, enactment ofCommunity Participation Law (at Municipaland State level) and financing services for theurban poor. In line with the National IndianUrban Housing and Habitat Policy (2007) akey regulation stipulates that 10 to 15 per centof land in every new public and private housingdevelopment and 20-25 per cent of Floor AreaRatio must be reserved for the EconomicallyWeaker Section (EWS)/Lower Income Group(LIG).As of 31 December 2010, the nationalgovernment had approved 1,028,503 housesunder BSUP and 515,244 under IHSDP. On thesame date 585,255 BSUP houses were completed(or nearing completed) and 253,212 IHSDPhouses had been completed. These are impressiveachievements.As states lead the development andimplementation of projects, there have beendifferent experiences and levels of success indifferent states depending on their capacityand willingness to reform. The state of AndhraPradesh is an example of a state that has embracedthe programme and is seeing results in 32 of itstowns and cities. The state is prioritising in-situupgrading of slums with a focus on ensuringsecurity of tenure for all residents. When slumsare in precarious or at risk areas, land is providedfor relocation projects. The state has createda land pool for housing the urban poor as partof reforms required under JNNURM as well astaken an active role in facilitating the provisionof affordable and high quality building materialsat scale by working directly with manufacturersto secure cement and steel at fixed, below-marketrates to guarantee quantity to meet the largehousing demand. The State Bank of Hyderabadis issuing loans to beneficiaries of all JNNURMprojects with special attention on the poorest ofthe poor by providing flexible terms. The statehas a commitment to providing infrastructureservices at affordable rates for both slumupgrading and new housing projects.JNNURM, however, faces several issues andchallenges. There is criticism that the programme,especially BSUP, caters more to the constructionindustry at the expense of the poor. Some reportssuggest that the provisions of Urban Land Ceilingand Regulation Act are not adhered to whichaffects the ability of the programme to provideshelter for the poor. Often expenditure has beendirected into ‘big ticket’ infrastructure itemsrather than affordable housing as the former aremore visible. There is the challenge of engaging42PART THREE

state governments to implement and direct theprogramme at state level due to their retreat fromenabling affordable housing markets and thelack of political commitment to addressing theneeds of the poor. There remains the challengeof implementing the programme in peri-urbanareas and small towns, which are currentlyexperiencing very rapid urbanisation, due to thelack the institutional capacity to implement theprogramme. While these issues need addressing,the JNNURM programme remains a positivestep forward to address affordable housing inIndia at a large scale that such a rapidly urbanisingcountry demands.An important part of the Ministry’s strategy is thatfour other land and housing related programmescompliment the JNNURM programme, andtogether they improve the opportunities ofdelivering affordable land and housing ‘at-scale’:Pajiv Awas Yojana (RAY)Following on from the JNNURM, in late-2009the National government launched the PajivAwas Yojana (RAY) programme to regularise andupgrade slums to meet the Government’s visionof a ‘slum free-India’. The central elements ofthe programme are regularisation of slums andtackling the shortages of urban land, which keepshelter out of financial reach of the poor withflow on effects of indirectly leading to informalslum developments.Affordable Housing in PartnershipIn 2009 the Affordable Housing in Partnershipscheme was launched which seeks to create onemillion houses for the low-income sector throughencouraging partnerships between variousagencies. The programme includes the provisionof a subsidy for infrastructure for housing units(less than 80 square meters) by the centralgovernment.Interest Subsidy Scheme for Housing the UrbanPoor (IHSUP)The Interest Subsidy Scheme for Housing theUrban Poor (IHSUP), launched in early 2009,aims to improve the ability of housing financefor the urban poor. A five per cent subsidy forloans under INR 100,000 (2,253 USD) up to amaximum of 15 years is permitted for EWS anLIG.Urban Statistics for HR and Assessments(USHA)Importantly, India has recognised the needfor improved housing market monitoringmechanisms and established the Urban Statisticsfor HR and Assessments (USHA) implementedby the National Buildings Organisation thatworks towards producing a national statisticaldatabase concerning housing and urban areas.Also, the Housing Start-up Index (HSUI) toolaims to monitor the role of the housing sector onnational and city-wide economies.As all these programmes are relatively new, theirdegree of success in delivering affordable landand housing at scale remains to be seen. Fornow though, what is clear is that their existencedemonstrates the political commitment on anational level to address the challenge of slumsand improve access to affordable shelter for all,which is certainly a positive step forward.3.2.3.2 National housing programmes inChina, the rapidly growing Asian tigerChina, cognisant of the challenges it faces withincreasing urbanisation and deepening urbaneconomic inequality, has three major housingprogrammes that aim to ensure adequate andaffordable housing for all. The programmesindicate the radical transformation of China’shousing sector over the last 30 years from acentrally planned system to a market-orientatedhousing system. They are underpinned by theprinciples of private home-ownership, marketefficiencies, and the state as an enabler of marketsrather than direct provider of housing. Thisextended case study outlines the three mainprogrammes, drawing data and information fromthe following sources: Wang and Murie (2000);Huang (2004); Ma (2002); Smit and Purchase(2006); Deng, Shen and Wang (2010); Yang andShen (2008); Stephens (2010).Economical and Comfortable Housing (ECH)The Economic and Comfortable HousingProgramme (ECH) (jingji shiyong fang), whichbegan as the ‘Comfortable Housing Project”(anju gongcheng) when it was launched in1995, aims to help lower- and middle-incomehouseholds secure housing when they cannotafford private housing. Housing is mostly builtby private developers for profit and sold throughAFFORDABLE LAND and HOUSING IN Asia43

market transactions. All units are developed forsale, not rent. House prices are lower becauselocal governments provide land for free or atlow-cost and reduce or waive developmentfees. Furthermore, they regulate the sale priceand keep profits at 3 per cent. House prices arearound 50 to 60 per cent of market prices (persquare meter).A large proportion of the population is eligible.Since 1998 onwards ECH housing has beenpositioned to be accessible to 70 to 80 per centof the urban population. It was envisaged thathigher-income households (10 to 15 per centof the national population) would seek higherqualityhousing and the lowest-income sector (10to 15 per cent) would be given subsidized rentalhousing by employers or local governments.This broad eligibility reflects a goal of the ECHto stimulate the economy, especially after theAsian Financial crisis of the late-1990s. Providinghousing to the majority of the population wasone way to achieve this.While the programme certainly produceshousing ‘at scale’, affordability is an increasingconcern. Middle- and low-income groups areincreasingly forced out of being able to buy anECH unit. High-income households are seekingECH units and this is pushing costs up andlimiting ownership opportunities for lower- andmiddle-income households. With high-incomehouseholds demanding higher housing standards,primarily larger unit sizes, housing norms arechanging and house unit costs are increasing,even if the price per square meter (the commonmeasure in China) remains the same. Therefore,lower-income households cannot afford thehigher overall house unit costs. In Beijing, forexample, the median price of an ECH unit wasabove the medium price of all the housing stock.To address the prevalence of high-incomepurchasers of ECH housing the governmenthas made reforms. In 2007 the governmentimplemented regulations that the floor areaof ECH housing be no more than 60 meterssquared and only sold to moderate- and lowincomefamilies. These eligibility criteria anddevelopment standards were implemented toreduce house unit costs, although this has hadlimited success because of powerful lobbying bydevelopers at local government level. Likewise,there is much resistance from local governmentswho view the programme negatively as they haveto bear most of the costs, especially land costs.Limits are often not enforced and householdincomes not tested or tracked properly. Whilethe overall success of these recent reforms arestill not known, they are a positive sign of thegovernment’s desire to reach lower-incomehouseholds.Housing Provident Fund (HPF)The Housing Provident Fund was trialled in 1991and established as a national housing programmein 1994. Modelled on Singapore’s CentralProvident Fund, it is essentially a housing savingsFigure 24: The high-rise housing landscape of Hong Kong Photo © UN-HABITAT/Matthew French44PART THREE

scheme to promote home-ownership. Employersand employees contribute a certain percentageto an HPF account. Employees can get theirfunds for home purchase, or improvement, orself-construction at low interest rates (often onepercent lower than market rates). Therefore,rather than workers or employers building theirhousing they save for it and buy it on the openmarket and in theory it is compulsory for bothpublic and private employees (before 2002 itwas only public sector employees). The Fundis centrally controlled in terms of decisions,the setting of rates, etc, and money is held inthe China Central Bank. Local governments,however, do the day to day running of loans.There remain affordability and accessibility issueswith the HPF. As it is salary based, workers whoget paid more, get larger employer contributions.Only 25 per cent of workers enrolled have takenloans. This low rate is because of the strict loanterms, the challenge of actually processing theloan, and stricter criteria (credit checks andincome sources and levels). Also, loans are tied toincome so those on low incomes cannot get a largeloan, a challenge for low-income households.Furthermore, consistent increases in house pricesare putting home ownership out of reach of thelower-income bracket. HPF loans are typicallyaround half of the value of the property, sopurchasers have to fund nearly half the purchasethemselves, which is a challenge for manyhouseholds. Due to national salary differences,there are also large differences between regionsand cities in employer contribution percentages,and membership rates.Nevertheless, the HPF is a considerableachievement in terms of the management of theprogramme and degree of government support.The default rate in 2006 and 2007 was only 0.07per cent. Likewise, there has been huge demandof which the government is proud. In 2008: 77.4million workers nationwide were participatingin the programme and between 2005 and 2008alone the savings fund doubled in nominal value.Cheap Rental Housing (CRH)Even within the reforms of the last 30 years,China has generally ignored the rental housingmarket, especially that of low-income people. Itspolicies and approaches focussed mainly on homeownership and the housing sector as a means ofeconomic development. However, the CheapRental Housing programme is a governmentsubsidisedrental housing programme for thosewith disabilities, low-incomes, disadvantagedgroups, and seniors.The programme was initially proposed assupporting both new-build rental housingand rent subsidies of existing rental properties,although new-build has come to dominate.Funding comes from local governments throughseveral mechanisms such as capital gains from theHPF, annual budgetary allocations, and otherlocal housing funds. The CRH has grown slowlydue to the reluctance of local governments toimplement at municipal level. In 2006 a new lawspecified that local governments must spend fiveper cent of the net gain from land conveyancefees on CRH, although this had limited practicalsuccess due to lack of enforcement. Between 1998and 2006, the programme has only contributedone per cent of total housing production duringthis period. Nevertheless, this still represents aconsiderable size: to date 550,000 low-incomehouseholds have benefited from CRH.Recognising the challenges of the CRHprogramme and the need to scale up, theChinese government launched an ambitiousplan: Cheap Rental Housing Guarantee Planfrom 2009-2011. This partly responded tothe need to combat the detrimental economiceffects resulting from the global recession. Theplan aims to provide 7.5 million homes for lowincomehouseholds. Three-quarters will be innew-build and one quarter in existing housingthrough rental subsidies. Plans have been madefor each year with targets for house constructionand beneficiaries, which are in turn aggregatedfor each province. The central government hasincreased its funding for the plan to subsidizeCRH construction and also stipulated that 10percent of conveyance fees and all capital gainsin HPF investments should be allocated to CRH.Challenges and future directionsThese three Chinese housing programmesdemonstrate that with political will, institutionalreforms, and capacity building at all levels ofgovernment housing that is affordable to themajority can be provided at scale. In 2003, theseECH units constituted 23 per cent of all newunits sold in the city of Beijing. In the cities ofAFFORDABLE LAND and HOUSING IN Asia45

Boatu and Chengdu alone, 600,000 people havebenefited from affordable ownership housinginitiatives. 152Nevertheless, affordability for low-incomehousehold in the housing sector in Chinaremains a concern. From 1998-2004 houseprices in Beijing rose 25 per cent annually, whiledisposable income rose only 12 per cent. 153 Themedian income to median house price ratio is 7.8nationwide. In big cities like Beijing or Shanghaithe ratio is even higher (above 10). Yang andShen (2008) suggest that effective demand is notpushing up prices but rather this is partly due toforeign investment (estimated at 13 per cent ofhigh-end residential property), which ‘opens upspace for price inflation’. Saving for the downpaymentfor a unit takes 15 years for a low- tomedium-income household, ‘therefore the downpaymentrequirement represents a significantadditional barrier to home ownership for thesehouseholds’.What is clear across all three programmes is thatChina needs better integration between centraland local government to scale up housing supplyfor low- and moderate-income households.Principally, more commitment is required fromlocal governments. China’s housing programmesalso reinforce the benefit of understandinghousing as an integral part of national andlocal economic systems. It has great potentialto contribute to economic growth and improvethe living conditions of the population. Inthis sense the policies have been successful inbuilding houses and stimulating the economybut there remain necessary improvements interms of providing housing for those on low- andmoderate-incomes.3.2.4 Housing beneficiariesAffordability is a key component of adequatehousing. It is especially important in terms thesuccess of policies, programmes, and projectsin reaching and benefiting their intendedbeneficiaries,almost always low-incomehouseholds.As explained in Part One, from the 1970s onwardsthe World Bank and other development agenciespromoted site, services and slum upgradingprogrammes in many Asian countries aimedat low-income groups. Indeed, the KampungImprovement Programme in Indonesia showedthat providing services that could benefit lowincomehouseholds was feasible. When theWorld Bank was supporting the programme, ‘ofthe USD 4.6 billion total project costs, about40 per cent of the benefits in 75 per cent of theprojects directly reached people whose incomeswere below one-third of the national average percapita income.’ 154 However, other projects didnot reach the target groups, largely owing to theissue of affordability. The intended beneficiariescould not afford the repayments, representing 25to 30 per cent of their, often irregular, householdincomes, which in many cases were used for whatFigure 25: Incremental house construction and improvement in Colombo, Sri Lanka. Photo © Suzi Mutter46PART THREE

were deemed to be priority and urgent needs, 155such as health and education.The many government programmes have hadvaried success in reaching target beneficiaries:low-income and urban poor households. Onenotable country is the Philippines, whichdemonstrates the opportunities for positive propooraction. In 2007 it announced the followingachievements related to beneficiaries from variousinterventions in the housing sector since 2001:• 100 Proclamations and Executive Ordersproviding security of tenure to 195,475households;• 77,964 households empowered to ownproperty through the Community MortgageProgramme;• 30,940 households relocated from Northrailand 8,003 households from Southrail (inMetro Manila);• 125,603 households given assistancethrough various other direct housingprovision programmes;• 323,303 housing units funded byDevelopment Bank of the. Philippines(DBP), Home Development Mutual Fund(HDMF), Land Bank of the Philippines(LBP), Government Service InsuranceSystem (GSIS) and Social Security System(SSS);• Access to affordable housing expandedwith the reduction of interest rates, loweramortization and longer repayment period;• Retail and development guaranty providedfor loans of 170,757 housing units; and• 869,132 licenses to sell issued to real estatedevelopers. 1563.2.5 Co-operative housing,community slum upgrading andthe ‘people’s process’The approach of co-operative housing has beengaining momentum in a number of countriesin Asia in recent years. Co-operative housingprovision is available either through governmentchannels or independently. Housing cooperativesserve three basic functions towards thegoal of adequate and affordable housing for theirmembers:1. they enable households to pool resources toacquire and develop land and housing;2. they facilitate access to finance; and3. they enable groups to join forces and reduceconstruction costs.In India, the co-operative housing movementhas spread all over the country and is makingan important contribution to housing supply.The number of housing co-operatives increasedfrom 5,564 in 1960 to 72,040 in 1994, analmost fifteen-fold increase. The co-operativesFigure 26: Infrastructure improvement as part of a wider slum upgrading programme in India Photo © Maartje van EerdAFFORDABLE LAND and HOUSING IN Asia47

have built an estimated 700,000 dwelling units,with another 800,000 units at various stages ofconstruction. As they are considered so useful forurban poor households, housing co-operativesare given preferential treatment in terms ofallocation of land, credit and other subsidies.Asia is leading the world in community-ledslum upgrading. Upgrading programmes suchas the Kampung Improvement Programme inIndonesia and the Baan Mankong in Thailanddemonstrate the opportunities to improve theenvironmental, social and economic dimensionsof slums through engaging with a wide range ofactors. 157 158 A central actor in such programmesis the community, the residents themselves, whohave demonstrated a capacity to articulate theirdwelling needs and priorities, develop upgradingproposals and plans, and carry out the upgradingwork.This community-centred approach to housingdevelopment and settlement upgrading has beentermed the ‘People’s Process’, and has gainedwide recognition and respect throughout Asiaas a viable housing development mechanism. 159The key principles are the beneficiaries activelyparticipating in the decision making over housingprocesses and products, and authorities taking asupporting role through such aspects as technicaladvice, training, legal support, recognition andfinance. 160 161 In Ulaanbaatar, Mongolia, theCommunity-Led Ger Area Upgrading project isunderpinned by the approach and methodologiesof the people’s process, in particular the formationof Community Development Councils (CDCs)that will work with other stakeholders to prepareCommunity Action Plans. 162The people’s process has proven extremelybeneficial in post-disaster situations in aidingrecovery, cultivating a spirit of peace-buildingand community cohesiveness, and ‘generatinga process that would allow every family in needto build a basic secure home, which can beimproved incrementally over time’. 163 Problemidentification exercises, community actionplanning, and community contracts are some ofthe many tools used by communities to identifytheir needs and priorities and respond to them ina collective and forward-looking manner.3.2.6 Transformations ofgovernment-built housesTransformation of government-built housing canbe likened to attaching informal development tothe most formally developed areas found in manycities. It involves households in constructionactivity to alter and/or extend the dwelling,turning consumers of housing into producers ofhousing. It also involves the household sector ininvestment in the housing stock in an unexpectedbut often welcome way. 165The standard of the extensions being built inthe transformation process tends to be at least asgood as the original buildings. However, becauseof their unplanned and disorderly look, they cancause displeasure to those more interested in theFigure 27: Women at Land Share Site 3, Borei Keila, Cambodia. Photo © Suzi Mutter48PART THREE

Control Paradigm and Support ParadigmPEOPLEMONEYRECOGNITIONPEOPLEREGULATIONSTECHNOLOGYCONTROLSDESIGNINGTECHNOLOGYRULESSURVEYSPROFESSIONALSAUTHORITIESBUREACRATSSTANDARDSPLANNINGPLANNINGTECHNOLOGYPEOPLETECHNICAL ADVICETRAININGRULESTRUSTORGANIZATIONBONDINGPEOPLEORGANIZATIONPLANNING SET STANDARDSNEEDSMUTUAL RESPECTRULESLEGAL SUPPORTPLANNINGMONEYMONEYPEOPLEFigure 28: The ‘control paradigm’ that dominates much housing development contrasts the support paradigm,the ‘People’s Process’, which is widely used in Asia and places people at the centre of development.(Source: Lankatilleke, L. and Y. Todoroki, 2009).appearance of the city than in meeting the needsof low-income people. While they inevitablygenerate higher than planned densities in theirneighbourhoods as more people move into thenew space created, they can reduce overcrowdingat the household level. 166Transformation is a universal phenomenonwherever it is allowed either actively or passively.It is evidently very widespread throughout thedeveloping world, including in Bangladesh,Hong Kong, India, Indonesia, Malaysia andthe Philippines. 167Transformations tend to increase the amountof accommodation by significant amount—forinstance by 48 per cent in Bangladesh 168 andby 33 to 63 per cent in Malaysia. 169 Whilethey increase the economic value of the housesextended; the new space is rented at lower ratesper room than the original dwellings. Thus,transformations can be very efficient generatorsof affordable housing. Local authorities needto support the process by ensuring that serviceprovision is kept in working order and developcapacity where major increases in space areachieved.Figure 29: Laying down of water pipes in Nepal. Photo © UN-HABITATAFFORDABLE LAND and HOUSING IN Asia49

3.2.7 The contribution of NGOsThe marginalisation and increasing poverty of agrowing majority in the developing world hasradically changed the role of Non-GovernmentalOrganisations (NGOs) in the developmentprocess. The emergence of NGOs as significantactors in the provision of adequate andaffordable housing in recent years is especiallynotable. Although no comprehensive figurestrack the number of NGOs active in housingdelivery world-wide, a conservative estimate isseveral thousand. Some, such as Slum DwellersInternational (SDI), operate as internationalumbrella NGOs which co-ordinate activitiesat regional, national and local levels. Almost40 per cent are members of wider global orregional networks that foster collaboration in theimplementation of the Habitat Agenda, adequateand affordable housing, gender, governance andother urban issues. 170In some countries NGOs are major actors in theaffordable housing sector. In India, for example,NGOs are key actors in enabling access toadequate housing and infrastructure, especiallyfor women. They gather potential beneficiariestogether, inform them of their rights, assist in theformation of community organisations, lobby forbenefits, catalyse the formation of communitylinks within the group and sometimes even act asthe developer of the infrastructure and dwellings.Several international NGOs are involved inaffordable housing provision, chief amongthese is Habitat for Humanity (HfH). In Asia,HfH is providing about 14,000 dwellings peryear. 171 The international NGO Practical Action(formerly Intermediate Technology DevelopmentGroup – ITDG) has been promoting access toadequate and affordable housing through anintegrated approach to housing development. 172173However, the number of affordable dwellingsthat have been provided through this approachthus far is insignificant relative to needs in theAsian countries (Bangladesh, India, Nepal andSri Lanka) in which it has been working.3.2.8 Building materials, theconstruction industry, andbuilding regulationsBuilding materials typically constitute the singlelargest tangible input into the construction ofhousing, and can account for up to 80 per centof the total value of a simple domestic house. 174> Box 5: Thailand: Community involvement in affordable housing initiativesIn 1992 the Thai government set up UrbanCommunity Development Office (UCDO) inBangkok. It exists to give loans and technicalsupport for community groups to upgrade theirexisting settlements and dwellings, or to constructnew settlements. The aim is to include a widerange of actors (community groups, authorities,private actors, etc) to make positive change forthe lowest-income groups through creatingstronger networks and partnerships.In 2000 the Community OrganisationsDevelopment Institute (CODI) was established,which was largely based on the UCDO modelbut scaled up to address national demand. Acentral programme of CODI is the Baan Mankong’Programme, translated as ‘secure housing’. Theprogramme aims to work with a wide rangeof actors, including residents, to upgrade theirinformal settlements and address tenure insecurity.Land regularisation is typically achieved throughlong term lease or cooperative land ownership.The results are impressive and the Baan Mankongprogramme has become an example of thenumerous opportunities for community supportedslum upgrading. As of January 2011, 1,546communities had been involved, comprising over90,000 households, within a budget of over 160million USD.The originality of such upgrading programmeslies in their approach to affordable housingdevelopment. They are not direct governmenthousing provision (‘turn-key’, ready to occupyunits), nor are they complete, independent selfbuildby residents themselves. Residents retaincontrol of dwelling construction decisions andgovernment, CODI, provides a subsidy directlyto residents: the ‘people decide for themselveswho to hire and work with’ 164 . This results in alower unit cost than turn-key housing but arefinished faster than incremental self-build. It alsooffer the opportunity to up-skill the communityas in the case of Baan Mankong they form intosmall building groups, cooperatives, “ChangChumchon” (Guilds of the Commune). The roleof these building groups varies: sometimes it istotal house construction, sometimes just labour,sometimes just technical expertise on one aspect ofthe development.Source: Boonyabancha, 2005; www.achr.net/baan_mankong.htm.50PART THREE

Figure 30: A family enjoying their newly constructed kitset house, Indonesia. Photo © UN-HABITATIn simple terms, if the cost of building materialsdoubles in relation to average prices for othercommodities, then the number of years that ahousehold will have to work to afford the cost ofmaterials will likewise nearly double. 175A major reason why housing is unaffordablefor the urban poor majority in Asia is the highcosts of two key inputs—land and buildingmaterials. The problem with the former is thatparticular land regulations increase developmentcosts (for example in Pakistan: see Box 6). Theproblem with the latter arises because manygovernments, at central and local levels, insiston the use of conventional building materialsand technologies. These are stipulated inbuilding codes and regulations, many of whichare a colonial heritage or adopted from foreigncountries. These standards and regulationsprevent the use of more appropriate, readilyavailable local building materials, and also the useof cost-effective and environmentally-friendlyconstruction technologies. 176The efficiency of the construction industry, interms of its ability to supply housing in sufficientFigure 31: Throughout Asia, informal building material suppliers provide many of the necessary constructioninputs for incremental self-build houses. Photo © UN-HABITATAFFORDABLE LAND and HOUSING IN Asia51

quantity and at an affordable cost, is a keydeterminant of housing sector performance.In many countries in Asia, for example Nepal,the local building materials industry has manyshortcomings, including poor productivity—leading to shortages and price fluctuation—andinability to diversify into new product lines. 177One of the main reasons for this, especially inthe small-scale sector, is poor technologicalcapacity. Many cities with high house price-toincomeratios also have high construction costsper square metre. 178The Habitat Agenda calls on governments toencourage the production and distribution ofbuilding materials, including strengthening thelocal building materials industry, based as far aspossible on locally available resources. It also callsfor the development of environmentally soundand affordable construction methods. It furthercalls for the review and revision of ‘buildingcodes and regulations based on current standards ofengineering, building and planning practices, localconditions and ease of administration, and [theadoption of] performance standards, as appropriate’.3.2.9 Privatisation of public housingPrivatisation of public (government) ownedhousing is common in the national housingpolicies of many Asian countries. Privatisation hasbeen achieved mostly through transfer to sittingtenants (free of charge, through vouchers, or sale atnominal fee) and reflects ‘enabling strategies’ andprocesses of market liberalisation, as discussed inSection 1.2. These policies have been implementedat a different pace in countries in Asia and havereduced the size of the public housing stocksignificantly.Through privatisation of public sector housing,China now has one of the highest homeownershiprates in the world and Chinese cities are pursuinga homeownership-oriented public policy aimedat the development of affordable housing. 179 InJinan, a city of 1.5 million in Eastern China, the>Box 6: The importance of housing design and planning to match planning regulations andreduce costs: experiences from PakistanA common approach to housing the poor inAsian cities is to relocate slum households tonew multi-storied apartment blocks, often onthe periphery of cities. This is often justified onthe basis that the only way to achieve suitabledensities in urban areas, to match local planningregulations, is to have multi-storied apartmentblocks. Houses on individual plots of land are seenas low-density and inappropriate or not possiblegiven local planning regulations.A recently completed conceptual study fromKarachi, Pakistan challenges this prevailingview by highlighting that similar or even higherdensities than specified in local planningregulations can be achieved by using anindividual terrace house typology. In terms ofsettlement and building design, this highlights theimportance of exploring design options to suitthe local conditions and constraints, rather thansettling for one building design and repeating itthroughout a city or country.The experience also demonstrates the opportunityfor building and settlement regulations toimprove housing affordability. For example,through reducing the size of the plots in KhudaKi Basti 3 to the lower-end of the regulatoryminimum (but still to a size that is comfortableand can accommodate household activities) thecost of a plot reduces from 525 USD to 308 USD,a 41 per cent cost reduction. This also reducesthe cost of infrastructure development (water,sewerage, and roads) for each plot by 44 per centwhich can reduce the overall cost of each housingunit.While maximising plot area is desired by mosturban households, both rich and poor, the factis that to improve affordability, especially at thelower end of the market, development costs haveto be reduced. Modifying planning regulationsto facilitate the large-scale provision of land thatis affordable for individual households is oneimportant part of improving affordable housingprovision. Building and planning regulations playa crucial role in determining the affordabilityof housing. Often cities have antiquated orinappropriate design standards and regulationsthat increase the cost of land and housingprovision. Common regulations are inappropriatelylarge minimum plot dimensions that result inexpensive plots of land to purchase as well as toservice with infrastructure.As the experience from Pakistan shows, modifyingbuilding standards and regulations, for instancethe minimum plot size or building height limit, cannot only contribute to lowering the cost of newhousing development but also allow for the in-situupgrading of already informal areas through beingable to formalise them within newly adopted moreflexible regulations.Source: Hasan, Sadiq and Ahmed, 2010.52PART THREE

sale of public housing began in 1994. Followingan initial slow uptake, terms were made morefavourable and by the end of 1990 80 per centof public housing units had been privatised. 180Overall, privatisation of public housing in Asia,together with various legal reforms abolishingrental control, has decreased affordable rentaloptions in many Asian countries. 1813.2.10 Public Private Partnerships(PPP)In many developing countries, the paradigm shifttowards market-orientation has seen a marriageof public and private players and policies givingrise to a new type of institutional arrangements. InIndia, in particular, new partnership arrangementsbetween the public and private sectors haveeffectively replaced traditional public housingproduction.Within India, Kolkata has been at the forefrontof a housing market revival, having pioneered theimplementation of the public private partnership(PPP) model, which is regarded as highly successfulnationally. 182 183 The partnership is based on a jointventure model with the equity shares of publicpartners ranging between 11.0 per cent and 49.5per cent depending upon the social content of theproject. By 2004, 3,554 units were transferredto the public since the policy’s implementationin 1993, and 3,000 additional units were underconstruction, 184 which equates to an averageannual production of roughly 500 housing units.The overall output, however, constitutes just overhalf a percentage point of the annual averagehousing need in the city. 185Other States in India have also attained varyinglevels of success as a result of their own operatingprinciples and models. The government ofHaryana, for instance, requires that privatedevelopers allocate 20 per cent of the total plotsto the Economically Weaker Section (EWS) inorder to obtain a licence for development ofany residential area. In the case of apartmenthousing, 15 per cent of the total number of flatssanctioned in the scheme have to be allocated,by drawing of lots, to EWS households at a fixedGovernment rate. 186 The Maharashtra Housingand Area Development Authority permits a 20per cent increase of the normally permissiblefloor space index (FSI) for schemes having atleast 60 per cent of the tenements under EWScategory.3.2.11 Financing mechanismsAffordability is not just about the price of housing;it is also critically about the access to and the costof housing finance, as the example form Turkeyin Box 4 demonstrated. Only a small proportionof the population in Asia can afford formalhousing with the associated financing costs. Ina context in which incomes are very low, thehigh costs associated with the large loan financesuggest that the potential is limited for reachingthe lowest income groups, ‘down-marketing’,Figure 32: Load-bearing masonry construction is common in most Central and Western Asian countries, and istypically well suited to the climate and local resource availability. Photo © UN-HABITATAFFORDABLE LAND and HOUSING IN Asia53

OVER THE LASTTWO DECADESMICROFINANCEAND COMMUNITYSAVINGS GROUPSHAVE EMERGEDAS IMPORTANTMECHANISMS FORFACILITATING ACCESS TOHOUSING FINANCE FOR THEURBAN POOR IN ASIA.through traditional housing finance. 187 Thereare a range of innovative approaches to housingfinance throughout Asia: from new governmentfinance subsidies in China, to longstandingcommunity-led housing finance such as theCommunity Mortgage Programme (CMP) inthe Philippines (Box 8) and the Grameen Bankmicrofinance in Bangladesh (Box 9).Singapore’s Central Provident Fund (CPF) hasbeen instrumental in enabling households tosave for housing through providing incentives forsaving alongside directing housing production.Workers contribute a certain percentage(depending on age) of their monthly income tothe fund and the government helps by exemptingCPF earnings from tax, and guaranteeingpayment of CPF savings. Housing can bepurchased through two schemes: The PublicHousing Scheme and the Residential PropertiesScheme. 188 The CPF is an extremely successfulhousing finance approach with 95 per cent ofemployees aged 21 and above owning publichousing brought with CPF savings.The economic boom in China has encouragedinvestment in the high- and middle-incomesegments of the urban housing market but ithas also created affordability problems for lowincomehouseholds. To enable the latter groupto access the housing market, equity grants havebeen introduced. In this process, land remainsthe property of the state and leases are auctionedto developers to construct affordable housingfor ownership. Low-income households living54in slums or sub-standard housing are providedwith one-off equity grants, and developers areoffered fiscal incentives to build housing withina negotiated price range. More than 20 millionhousing units have been constructed through thisapproach in the last five years. 189 China also usesfinancial subsidies to make housing affordable forthe lowest income groups, for example the interestsubsides on the HPF as explained previously,and the government policy: The AdministrativeRegulation on Low Rent Houses for LowestIncome Household in Cities and Towns. 190The Government Housing Bank of Thailand(GHB) was established in 1953 to providefinance to housing developers and prospectivehomeowners, in particular those at the lowerend of the market. Although a public sectorinstitution, the GHB is fully commercial inits operations. Having greatly improved itsoperational efficiency, and with adequate fundingand reduced overheads, the GHB has been ableto offer lower interest rates and improved loanconditions.Between 2000 and 2008, the economy ofThailand has grown at a rate of more than eightper cent per annum. Since public sector housinghas become more common, this has led theprivate sector to lower the costs of housing, whichis making housing affordable to the majority.This has encouraged housing developers totarget lower-middle income groups and broughtabout a down-market trend in private-sectorhousing production in the country. The privatehousing market has also developed its operationseffectively and offers the lowest lending ratesin the market, challenging other financialinstitutions to lower their interest rates in orderto compete for business. As home ownershipremains unaffordable to the lowest-incomegroups, the GHB also grants loans to developersto construct low-cost rental apartments. 191In 1997 the government of Bangladeshintroduced a nationwide loan scheme, theHousing Fund, with the aim of improvingthe quality of life of the poor by providingloans to construct safe and durable houses.Although a relatively small programme, theHousing Fund provides housing loans to lowincomehouseholds to construct houses throughpartnership agreements with NGOs, as well asmicro-credit through implementing agenciesPART THREE

and NGOs for income-generating purposes. Thetarget groups of the Housing Fund are the ruralpoor, the landless, small and marginal farmers,and households rendered homeless by disasters. 192Microfinance and community savings groupsOver the last two decades microfinance andcommunity savings groups have emerged asimportant mechanisms for facilitating accessto housing finance for the urban poor in Asia.Microfinance Institutions (MFIs) are developinga variety of ways to overcome one of the majorconstraints to scaling up—a shortage of funds.Most use several funding strategies and practices,as Table 6 shows. They include savings deposits,commercial finance institutions, state funds,foundation funds, donor funds, internationalfunds and internal cross-subsidies (for examplehigher interest on microenterprise loans).The Community-led Infrastructure FinanceFacility (CLIFF) provides loan finance for slumdevelopment projects implemented by theurban poor, with an aim to influence policy andpractice and replicating and upscaling projects.CLIFF is currently supporting 15 projects inIndia, ten of which are housing projects andfive sanitation projects. 193 One such project is inconjunction with SPARC and SSNS (Box 7). Theprojects include the construction of over 5,300new homes and 429 sanitation blocks, and spansix cities across three states.Table 6: Five major microfinance institutions in AsiaMicrofinanceinstitutionSEWA (SelfemployedWomen’sAssociation) Bank,IndiaProduct descriptionand loan termsUSD 3005 yearsFunding strategiesOther practicesMandatory savingsDonor fundsFoundation fundsPublic fundsCross-subsidy frommicroenterprise lendingprogram (interest on housingloans is lower)Co-signersWomen borrowersCounselling and borrowereducationGroup loansWomen borrowersCounselling and borrowereducationSPARC (Societyfor the Promotionof Area ResourceCentres), IndiaNot distinguished frommicroenterprise loans(exact numbers notavailable)Mandatory savingsDonor fundsFoundation fundsBank funding/partnershipsPublic fundingMandatory savingsDonor fundsFoundation fundsDepositsBank funding/partnershipsCredit enhancementDepositsCARD (Centre forAgriculture andRural Development),PhilippinesUSD 35012–20 monthsGroup loansWomen borrowersCounselling and borrowereducationLoan history (previousmicroenterprise loan)BRI (State-ownedBank RakyatIndonesia), IndonesiaUp to USD 5,5003–36 monthsCross-subsidy from microenterpriselending programLoan history (previousmicroenterprise loanCross-subsidy from microenterpriselending programCo-signersWomen borrowersCounselling and borrowereducationLoan history (previousmicroenterprise loan)Grameen Bank,BangladeshUSD 60010 yearsMandatory savingsDonor fundsFoundation fundsDepositsInternational investors/International FinanceCorporationSource: (Duncan, n.d.: 52)AFFORDABLE LAND and HOUSING IN Asia55

Table 7: Community savings groups in 13 Asian countriesCountry SAVINGS FUNDSNo. Cities andtownsNo. members No.GroupsTotal Savings(USD)How manycitiesNationalfund?Cambodia 24 24,733 524 638,165 14 Yes(UPDF)Nepal 11 11,264 471 2,285,714 3 NoKorea 2 138 5 35,100 None yet NoBurma 8 townships 4,359 54 48,646 1 NoIndonesia 5 1,607 128 9,666 1 NoPhilippines 33 25,991 1,837 2,162,239 8 YesVietnam 12 33,657 1,561 1,788,345 9 NoSri Lanka 250 towns/cities(Women’s Coop)65,000 6,500 13,513,500 6 Yes(Clapnet)130 towns/cities 52,633 8,016 20,000,000 1 NoMongolia 13 1,980 180 45,793 10 Yes(UDRC)Thailand 274 91,758 1,500 1,674,056 31 Yes (CODI)Fiji 5 25,000 2,500 97,000 0 NoIndia 2 (Bhuj and Leh) 323 20 7,825 0 No56 (MahilaMilan/SPARC)*75,000* 1,170 850,000 0 Yes (SPARCNirman)Lao PDR 523 villages 104,803 532 12,584,000 22 Districts Yes (LWUfund)CommunityFinance in13 Asiancountries1,379 cities/districts/towns518,246savingsmembers*24,998savingsgroupsUSD 56million incommunitysavingsCity fundsin 107cities/districtsNationalfunds in 7countriesSource: Asian Coalition of Housing Rights (ACHR) (2011) e-news, January March 2011. www.achr.net, p.3. (*Note: SPARC keeps loan data ononly 10 per cent of its 750,000 members. This figure is therefore only documented savers hence the actual figure is likely to be much higher).An estimated 415,000 households—between2 and 3 million people slum dwellers—areexpected to benefit from these CLIFF projects,which show how community-led solutionscan work for the urban poor as well as the cityas a whole. The aspects being demonstratedinclude design, construction process and quality,maintenance and cost recovery from a wide rangeof sources such as Transferable DevelopmentRights (TDR), residential and unit sales,central and local government subsides, and thecommunity. Most of the ten housing projects arenearing completion, meaning that hundreds ofhouseholds will soon have access to adequate andaffordable housing. 194Grass-roots, community savings groups haveemerged as a driving force in Asia. They typicallyoperate in informal settlements or low-incomeareas where the residents see the benefits ofworking together to develop their savingscapacity and capital base. While there are manyvariations, the central premise of communitysavings groups is that the poor should control thefinancial resources to enable them to be in chargeof making decisions and acting on their dwellingneeds and aspirations. 195Group members contribute a certain amount toa collective account, from which they can drawwhen needed. The group can also use this assetbase to secure larger sums for more significantactivities, such as building houses. Developinga savings and credit capacity is the first step.From there groups work to secure more funds(development funds), which is important tospeed up action compared with that which ispossible with their slow personal savings capacity.In Asia, the geographic scope and the scale ofthese savings groups is impressive (Table 7).In terms of total savings, they are the largest56PART THREE

Box 7: SPARC, SSNS and CLIFF: financing and community-led housing development in IndiaSPARC have a division called Samudaya NirmanSahayak (SSNS), a sister NGO that assistscommunities with financial and technical aspectsof housing development and construction.Housing projects are financed through theCommunity-Led Infrastructure Finance Facility(CLIFF). CLIFF was started in 2000 and issupported by Homeless International. It operatesas a revolving fund and provides loans fortechnical assistance, financing of projects, andcan provide guarantees to underwrite loans fromcommercial banks.SSNS aims to improve the institutionalarrangements for the poor to access resourcesto negotiate with authorities and eventuallyconstruct their houses. While to date projects arenot at a large scale, SSNS is showing signs of‘going to scale’ with housing projects such as thesecond phase of Oshiwara relocation which has amulti-storey building for many households.Through partnering with CLIFF, SSNS has beenprovided with capital and financial fundsdirectly, rather than relying on governmentfunds. These funds are used for settlementupgrading and housing improvement. Suchmechanisms are characteristic of emerging trendsin Asia where urban poor organisations workwith municipalities/authorities to develop andimplement plans, with external finance, but withthe urban poor retaining control of the process.Source: Cities Alliance (no date); SPARC (2009).>Box 8: Philippines: Community Mortgage Programme (CMP)The Community Mortgage Programme (CMP)is an innovative goverment financed, pro-poorhousing finance programme. The key featureis that the urban poor initiative and developprojects themselves and therefore there isgreater collective ownership and developmentthan with traditional government housingprogrammes. The CMP was launched by theNational Home Mortgage Finance Corporation inAugust 1988, primarily as a scheme for housingdelivery and addressing settlement upgradingneeds (negotiating between landowners andsquatters).The CMP can be considered a form ofmicrofinance but also a housing upgradingand procurement method. It places a focus onhousing ownership and tenure security for thelow-income sector. Community associations arethe main implementers of the programme. Theycollect remittances, loan payments, and enforcesanctions and punishments. Loans are providedfor plot acquisition as well as house construction.Between 1993 and 1998, the ‘CMP accountedfor an estimated 60 per cent of completedunits of assistance targeted by the nationalshelter program.’ (Mitlin, 2010:1). It is widelyconsidered to successfully reach low-incomehouseholds. However, the main challenge is thatloan collection rates are only around 75 per cent,which is still higher than other schemes in Asiabut leaves room for improvement. Furthermore,implementing the CMP is time consuming and inpractice it is being challenged by the increasingprice of land and reluctance of landowners to selltheir land.Source: Lee, 1995; Cacnia, 2001; UN-HABITAT, 2009; Mitlin, 2010.in Sri Lanka (33.5 million USD), Lao PDR(12.5 million) Nepal (2.2 million). In termsof members, they countries with the largestnumbers of members are India (750,000), SriLanka (117,633), and Lao PDR (104,803).Community savings groups in six countries havesecured national development funds: Cambodia,Sri Lanka, Mongolia, Thailand, India and LaoPDR.Islamic housing finance is under-developed buthas significant potential to improve housingaffordability in the region. In Pakistan,musharakah is a popular Islamic housing financeapproach which works on a declining-balance/shared-equity partnership. After selecting aproperty the prospective owner (consumer)enters into an agreement with the bank wherebythe bank buys the house, and leases it back to theconsumer. The consumer then buys units of theproperty and eventually buys out the financiersequity and has sole title to the property. This is lessrisky for the bank and reduces the down paymentrequirement for households, which is often themain barrier to securing housing finance. Islamicmortgage finance in Pakistan grew 43 per centbetween December 2007 and March 2009 alone,and it shows similar promise in Bangladesh withthe presence of key banks such as the IslamicBank of Bangladesh (IBBL). 196AFFORDABLE LAND and HOUSING IN Asia57

RemittancesRemittances-money transfers a foreign workermakes to his or her home country or countryof origin-can have a considerable impact onland and housing markets through the abilityof households to buy or improve housing. Thescale of remittances has been gradually increasingover the last decades and they now constituteone of the largest financial inflows to developingcountries. The World Bank notes:“Worldwide remittance flows are estimatedto have exceeded 318 billion USD in2007, of which developing countriesreceived 240 billion USD. The true size,including unrecorded flows through formaland informal channels, is believed to besignificantly larger. Recorded remittances aremore than twice as large as official aid andnearly two-thirds of FDI [Foreign DirectInvestment] flows to developing countries.” 197Figure 31 demonstrates that in all developingcountries, inward remittance flows are muchlarger than outward flows. This is particularly thecase with Latin America and the Caribbean andSouth Asia where inflows are more than 20 timesgreater than outflows. Developing countries inEast Asia and the Pacific, and Latin Americaand the Caribbean constitute the largest inwardremittance flow: 58.0 and 59.9 billion USD in2007. Sub-Saharan Africa has the lowest inwardand outward flow of remittances, with 10.8 and2.9 billion respectively.Three of the top five highest remittance-receivingcountries 2007 were in Asia (in billions of USD):India, first (27.0); China, second (25.7); and thePhilippines, fourth (17.0). Within Asia, afterthese three countries, Bangladesh, Pakistanand Vietnam have the next largest remittances(6.4, 6.1 and 6.0 billion respectively), followedby Vietnam with 5 billion, and then Thailandthe next largest with 1.7 billion. 198 In terms ofremittances as a percentage of a country’s GDP,the top five countries in Asia are: Nepal, withremittances constituting the equivalent of 18.0per cent of its GDP; the Philippines with 13.0 percent; and Bangladesh, Sri Lanka, and Vietnamwith 8.8, 8.7 and 7.9 per cent respectively. 199 Thetop five global remittance-sending countries werethe United States (42.2), Saudi Arabia (15.0),Switzerland (13.8), Germany (12.3) and theRussian Federation (11.4).India and China’s inward remittances are notonly the largest of all countries but are havegrown steadily over the last seven years. Between2000 and 2007, China’s inward remittancesgrew from 6 to 25 billion USD and India’s from12 to 27 billion USD during the same period.India’s inward remittances represent a notablepercentage of GDP, 2.8 per cent, whereas China’srepresent only 0.9 per cent. 200Overall, remittances are a crucial part of regionaland national housing sectors in terms of housingfinance. While limited data is available regardingthe degree to which remittances are applied toland and housing, experience and anecdotalevidence suggests that remittances are indeedused to improve housing, build new housing,pay off existing housing finance (mortgages), andinvest in new residential property.> Box 9: The Grameen Bank in BangladeshThe Grameen Bank is a pioneering the possiblymost well-known micro-finance institution inAsia, if not the world. It was started in 1976and aims to provide small loans to householdson favourable terms, notably a low interestrate. In 2009 its total revenue was 209 millionUSD. It is considered a success due to its lowdefault rate, ability to keep interest rates lowand borrowing terms flexible, and it does notrely on international donor funding or nationalgovernment contributions and is therefore totallyself-sufficient.In 1984 the Bank introduced housing loans. Theseare perceived as very attractive by low-incomehouseholds and consequently there has beenconsistently high demand. The loan period is fiveyears, repayments are weekly and the interest rateis fixed at eight per cent. Between February 2010and January 2011, 7,215 houses have been builtusing the loans, which amount to 1.16 millionUSD. The houses are modest yet flood resistant,important in Bangladesh’s river delta geography.With the loan, a household buys a kitset house:four pre-cast concrete columns, a sanitary slaband 26 corrugated iron roof and wall sheets andthey construct it themselves. So far 130 millionUSD has been dispersed in housing loans. Title isinvested with the borrower and in 96 per cent ofcases this is a woman.Source: Norton, 1990; http://www.grameen-info.org/index.58PART THREE

100Latin America & the Caribbean Sub Saharan Africa Middle East & North Africa100100Billion USD5059.9Billion USD50Billion USD5028.50Inward2.6Outward010.8Inward2.9Outward0Inward8.8Outward100South Asia East Asia & Pacific Europe & Central Asia100100Billion USD5043.8Billion USD5058.0Billion USD5038.60Inward2.0Outward0Inward10.4Outward0Inward17.4OutwardNotes: Inward figures for 2006, outward figures for 2007. Based on the World Banks analytical regions.Figure 33: Inward and outward remittance flows in developing countries according to region, 2007(Inward) and 2006 (Outward).Source: The World Bank (2008)> Box 10: Human Settlements Finance Systems seriesAn in-depth examination of the specificities ofhousing finance systems in each country in theAsian region is not possible in this volume givenspace limitations and its regional focus. However,UN-HABITAT publishes an ongoing series, HumanSettlements Finance Systems, which provides ananalysis and review of country-specific housingfinance systems.Each volume explores such dimensions of housingfinance as legal and regulatory frameworks,property and land rights and registration, andthe relationship of housing finance systems tothe wider national economy and financial sector.Furthermore, each covers specifics of governmentinterventions, subsidies and incentives,instruments for resource mobilisation, communitybasedfinance institutions and instruments, andinformal housing finance.Some of the seminal volumes that have beenpublished within this series so far are: Zimbabweand Chile (2009), and Thailand, South Africa,Peru, Indonesia, Bolivia, and India (2008). Thesepublications and others are available online viathe UN-HABITAT website and are essential readingfor a more in-depth analysis of the importance ofhousing finance systems in increasing access toaffordable housing.AFFORDABLE LAND and HOUSING IN Asia59

PART THREE ENDNOTES101 UNCHS (1997a) The Istanbul Declaration and The Habitat Agenda. Nairobi: United Nations Centre for Human Settlements (Habitat).Paragraph 75.102 World Bank (2005). The Macroeconomic and Sectoral Performance of Housing Supply Policies in Selected MENA Countries: AComparative analysis. Washington, DC: World Bank.103 UN-HABITAT (2004c). Pro poor land management: Integrating slums into city planning approaches. Nairobi: UN-HABITAT. p.14104 UN-HABITAT and GLTN (2008). Secure land rights for all. Nairobi: UN-HABITAT.105 UN-HABITAT and GLTN (2004). Urban Land for All. Nairobi: UN-HABITAT and Global Land Tool Network. (see page 8 for an overviewof tenure systems, with an outline of their characteristics, advantages and disadvantages).106 UN-HABITAT and GLTN (2010). Count Me In: Surveying for Tenure Security and Urban Land Management. Nairobi: UN-HABITAT andGLTN.107 Nenova, T. (2010). Expanding housing finance to the underserved in South Asia: Market review and forward agenda. Washington: The WorldBank. p.257108 Nenova, T. (2010) p.257109 Sivam, A. (2002). “Constraints affecting the efficiency of the urban residential land market in developing countries: a case study of India”,Habitat International 26(4): 523-537.110 UN-HABITAT (2006a). Enabling Shelter Strategies: Review of Experience from Two Decades of Implementation. Nairobi: UN-HABITAT.111 UN-HABITAT (2006a) p.108112 World Bank (2005)113 Republic of Iraq and UN-HABITAT (2007). The State of Iraq Cities Report 2006/2007: Cities in Transition. Nairobi: UN-HABITAT.114 Steinberg, F. (2007). Public sector-private sector and NGO collaboration in provision of access to tenure, housing and livelihood support:challenges from the Philippines. 1st Asia-Pacific Housing Forum. Singapore.115 Ergüden, S. and R. Precht (2006). Slum upgrading and prevention in Asia-Pacific: progress and challenges. Asia-Pacific Ministerial Conferenceon Housing and Human Settlements (APMCHHS). New Delhi, India.116 http://www.bhoomi.karnataka.gov.in/about.htm117 http://www.un.org/esa/socdev/unpfii/documents/fifthsession_unhabitat_en.pdf118 http://www.fukuoka.unhabitat.org/projects/pakistan/detail10_en.htm119 UNCHS (1990). The Global Strategy for Shelter to the Year 2000. Nairobi: UNCHS (Habitat), Paragraph 93.120 Hoek-Smit, M. C. (1998). Housing Finance in Bangladesh: Improving Access to Housing Finance by Middle and Lower Income Groups.121 Economic Planning Unit, Prime Minister’s Department, Malaysia website: http://www.epu.jpm.my/new%20folder/FAQsocial.htm122 Government of Malaysia (2006). “Ninth Malaysia Plan 2006-2010”. Kuala Lumpur: Government of Malaysia.123 Sheng, Y. K. (2002). “Housing, the state and the market in Thailand: enabling and enriching the private sector”, Journal of Housing and theBuilt Environment 17(1): 33-47.124 UNCHS (2001c). Synthesis of national reports on the implementation of the Habitat Agenda in Asia and the Pacific Region. Special Session ofthe General Assembly for an Overall Review and Appraisal of the Implementation of the Habitat Agenda. New York.125 UN-HABITAT (2006a)126 UNCHS (2001c)127 UNCHS (2000). Review of the implementation of the Habitat Agenda in Africa. Istanbul + 5 Africa Regional Meeting of 6-8 November 2000.Addis Ababa, Ethiopia.128 Nenova, T. (2010) p.219129 Government of Bangladesh (2001). Bangladesh National Report: Progress of implementation of the Habitat Agenda (1996-2001). .Governmentof Bangladesh.130 UN-HABITAT (2006a)131 Government of Sri Lanka (2002). Regaining Sri Lanka: Vision and Strategy for Accelerated Development. Government of Sri Lanka.132 Yanyun Man, J. (Ed) (2011). China’s housing reform and outcomes. New Hampshire: Lincoln Institute of Land Policy.133 Wu, W. (2002). “Migrant Housing in Urban China: Choices and Constraints”, Urban Affairs Review 38(1): 90.134 Wang, Y. P. (2004). Urban poverty, housing and social change in China. London: Routledge.135 Wu, W. (2002)136 Lui, H.-K. (2007). “The redistributive effect of public housing in Hong Kong”, Urban Studies 44(10): 1937-1952.137 Ballesteros, M. M. (2002). A second look at institutional reforms in the housing sector, Philippine Institute for Development Studies PolicyNotes. No. 2002-11.138 Uy, W. J. (2006). Medium-Rise housing: the Philippine experience. 5th Asian Forum: Tokyo, Japan.139 UN-HABITAT (2005d). Financing Urban Shelter: Global Report on Human Settlements 2005. London: Earthscan;140 Yuen, B. (2005). Squatters no more: Singapore social housing. Third Urban Research Symposium: Land Development, Urban Policy and PovertyReduction. Brazilia, Brazil.141 Asian Development Bank (ADB) (2002). Technical Assistance to the Kingdom of Bhutan for Housing Sector Reform. Manila, Philippines: AsianDevelopment Bank.142 Government of Malaysia (2006)143 Al-Shafiei, S. (2007). Contemporary middle-class dwellings in Dubai: an assessment of housing space over-consumption and its policyimplications. School of Architecture, Planning and Landscape. Newcastle upon Tyne, University of Newcastle. PhD Dissertation.144 Al-Hathloul, S. A. and N. Edadan (1992). “Housing stock management issues in the kingdom of Saudi Arabia”, Housing Studies 7(4): 268-279.145 Al-Shafiei, S. (2007)146 Al-Mansoori, M. A. J. (1997). Government low-cost housing in the United Arab Emirates: the example of the Federal Government Low-Cost Housing Programme. Newcastle upon Tyne, University of Newcastle upon Tyne. PhD Dissertation.147 Al-Otaibi, A. M. (2006). Housing supply and demand in Northern Jeddah: preferences and aspirations. School of Architecture, Planning andLandscape. Newcastle upon Tyne, University of Newcastle. PhD Dissertation.148 Al-Hathloul, S. A. and N. Edadan (1992)149 Al-Mansoori, M. A. J. (1997)150 (Hurriyet, 2011) http://www.hurriyetdailynews.com/n.php?n=toki-chair-self-criticizes-for-not-addressing-social-dimension-in-gentrificationprojects-2011-02-2360

151 http://www.sabahenglish.com/Economy/2011/02/26/toki_to_break_records152 Smit, D. and J. Purchase (2006). “A Review of the International Experience with Inclusionary Housing Programmes: Implications for SouthAfrica”.153 Yang, Z. and Y. Shen. (2008). “The Affordability of Owner Occupied Housing in Beijing”. Journal of Housing and the Built Environment. 23:317-335.154 Cohen, M. (2001). “Urban assistance and the material world: learning by doing at the World Bank”, Environment and Urbanization 13(1):37-60.155 UN-HABITAT (2005a)156 Steinberg, F. (2007)157 For Indonesia see: Asian Development Bank and Economic Development Institute (1991) The urban poor and basic infrastructure services inAsia and the Pacific. Manila, Philippines: Asian Development Bank, Vol III, p. 635-668.158 For Thailand see: Boonyabancha, S. (2005). “Baan Mankong: going to scale with “slum” and squatter upgrading in Thailand.” Environment andUrbanization, 17(21): 21-46.159 Lankatilleke, L. and Y. Todoroki. (2009). Supporting the People’s Process in Human Settlements Development – Re-asserting Responsibilitythrough Support. Journal of Habitat Engineering, 1(1):111-123.160 UN-HABITAT (2008) People’s Process in post disaster and post-conflict recovery and reconstruction. Fukuoka, Japan: UN-HABITAT RegionalOffice for Asia and the Pacific.161 Manie, S. (2004) The Peoples Housing Process: current practice and future trends. Available online: http://70.86.182/-dag710e/docs/research/5.pdf162 UN-HABITAT (2010d) Community-led ger area upgrading in Ulaanbaatar city project. Ulaanbaatar, Mongolia: UN-HABITAT.163 UN-HABITAT (2008) People’s Process in post disaster and post-conflict recovery and reconstruction. UN-HABITAT Regional Office for Asiaand the Pacific: Fukuoka, Japan. p. 2.164 http://www.codi.or.th/housing/selfbuild.html165 Most of the households involved are probably below the threshold at which ownership is possible through the new-build market, and most wherefound to be subsidised renters who only recently gained ownership of their government-built dwellings.166 Tipple, G. (2000). Extending Themselves User-initiated Transformations of Government-built Housing in Developing Countries. Liverpool:Liverpool University Press.167 Tipple, G. (2000)168 Tipple, G. (2000)169 Tipple, A. G. and A. Salim (1999). “User-initiated extensions as housing supply: A study of government-built low-cost housing estates inMalaysia”, Third World Planning Review, 21(2): 119-154.170 UN-HABITAT (2006a)171 Personal communication with HfH.172 Majale, M. (2005). “Urban housing and livelihoods: comparative case examples from Kenya and India”, in N. Hamdi (Eds) Urban Futures:Economic Growth and Poverty Reduction. London: ITDG Publishing: 125-141.173 Stevens, L., S. Coupe, et al., Eds (2006). Confronting the Crisis in Urban Poverty: Making Integrated Approaches Work. Rugby: ITDGPublishing.174 Majale, M. and M. Albu (2001). Livelihoods among the Roofing Construction Subsector In Nakuru, Kenya: Tools for Understanding SustainableLivelihoods Involving Micro and Small-scale Enterprise.175 UNCHS (1993). “Building materials for housing: Report of the Executive Director, United Nations Commission on Human Settlements”,Habitat International 17(2): 1-20.176 UN-HABITAT (2006a)177 UN-HABITAT (2011a). Nepal: Urban Housing Sector Profile. Nairobi: UN-HABITAT.178 UNCHS (1996a). Global Report on Human Settlements 1996: An Urbanising World. Oxford: Oxford University Press for UNCHS (Habitat).179 Yanyun Man, J. (Ed) (2011)180 UN-HABITAT (2005d); UN-HABITAT (2005c). Financing housing and urban development: with special reference to Africa African MinisterialConference on Housing and Urban Development (AMCHUD). Incorporating the 5th assembly of the African Population Commission servingas the Expert Group Meeting for the Ministerial Segment. Durban, South Africa.181 UN-HABITAT (2005f). Shared Tenure Options for Women: A Global Overview. Nairobi: UN-HABITAT.182 Jain, A. K. (1996). The Indian Megacity and Economic Reforms. New Delhi: Management Publishing Company.183 Rao, P. S. N. (2000). “Housing and land development, Case study: India.” World Bank’s South Asia Urban and City Management Course, 1-20.184 Sengupta, U. (2006). “Government intervention in public private partnership in housing in Kolkata”, Habitat International 30(3): 448-461.185 Sengupta, U. and A. G. Tipple (2007). “The performance of public-sector housing in Kolkata, India, in the post-reform milieu”, Urban Studies40(9): 2009-2028.186 Ansal, S. (2002). Housing for Economically Weaker Section by private participation. Conference on Housing in Nation Building, 3rd NationalConvention and Exposition, NAREDCO in association with H.T. Estates. New Delhi.187 UN-HABITAT (2005d)188 Acioly, C. Jr. (2008). Housing Strategies in the Asia-Pacific Region: Learning from the Past and Addressing Present and Future Challenges.Second Asia-Pacific Ministerial Conference in Housing and Urban Development (APAMCHUD) 12-14 May 2008, Tehran, Iran.189 UN-HABITAT (2004a). Dialogue on urban realities: innovative urban policies and legislation in implementing the Habitat Agenda andattaining the Millennium Development Goals. World Urban Forum. Barcelona.190 Meisheng, N. (2006). The status of real estate finance development and the housing finance policy for the middle and low-income groups inChina.191 Ergüden and Precht (2006); UN-HABITAT (2006a)192 Government of Bangladesh (2005). Bangladesh: Poverty Reduction Strategy Paper. Washington D.C.: International Monetary Fund.193 CLIFF is also supporting infrastructure and housing initiatives of organizations of the urban poor in India and the Philippines.194 Homeless International (2007). Community-Led Infrastructure Finance Facility: Annual Review 07.195 Asian Coalition of Housing Rights (ACHR) (2011) e-news, January March 2011. www.achr.net/.../Architects%20page%20in%20E-News%20Mar%202011.pdf, p.3.196 Nenova, T. (2010) p.25-26197 World Bank (2008). Migration and Remittances Factbook 2008. Washington: The World Bank. p.x198 World Bank (2008) p.22 and 30199 World Bank (2008) p.22 and 30.200 World Bank (2008) p.125 (India) and p.82 (China).AFFORDABLE LAND and HOUSING IN Asia61

Access toadequate andaffordablehousing isdependentupon anadequateand affordablesupply of land,basic infrastructure,construction materials,labour, and finance:hence the imperative toimprove access to theseinputs.62PART FOUR

4PART FOURNotable trends,RECOMMENDATIONSand conclusionsFigure 34: A traditional ‘shophouse’ in central Georgetown, Penang,Malaysia. Photo © UN-HABITAT/Matthew FrenchAFFORDABLE LAND and AND HOUSING IN Asia ASIA63

4. NOTABLE TRENDS,RECOMMENDATIONSAND CONCLUSIONSAccess to adequate and affordable housing isdependent upon an adequate and affordablesupply of land, basic infrastructure, constructionmaterials, labour, and finance: hence theimperative to improve access to these inputs.However, numerous studies and reports onhousing have underscored the failure of deliverysystems of all kinds to satisfy these basicconditions, particularly at affordable levels forlow-income households. Low-income groupsare commonly excluded by formal markets and,consequently, are often forced to pay more in realterms for poorer-quality inputs through informalsuppliers. It is in these areas that decisive actionby governments is urgently needed. 2014.1 NOTABLE TRENDSA number of important lessons can be drawnfrom the foregoing review and analysis of thestate of adequate and affordable housing, and themeasures being taken to towards its provision.These are summarised below.The right to adequate housingThe core elements of the right to adequatehousing as defined by General Comment No. 4of the United Nations Committee on Economic,Social and Cultural Rights include the following:(a) Legal security of tenure; (b) Availability ofservices, materials, facilities and infrastructure; (c)Affordability; (d) Habitability; (e) Accessibility;(f) Location; and (g) Cultural adequacy.A majority of governments in the region haverecognised housing development as an importantcontributor to economic growth and socialdevelopment, as well as a tool for the realisationof human rights in general, and housing rightsin particular. In trying to meet the requirementsfor provision of adequate and affordable housingto their populations, governments in Asia havepursued various housing policies and strategies.Security of tenureEviction is the greatest threat to most existingslum dwellers since it means loss of well-locatedaffordable housing. Many governments in Asiasee security of tenure as a cornerstone of housingand urban development policies, and have passedvarious legislation ensuring rights to land andsecurity of tenure. For example, many efforts weredeployed to upgrade slums in Jordan and Yemenwhich aimed at granting security of tenure to theinhabitants. 202 Security of tenure is an importantbut not sufficient condition for people to invest inhousing development and improvement. Otherincentives such as loans, technical assistance, andcommunity organization for mutual and selfhelpconstruction are also required. 203Subsidised public housing programmesLarge-scale government programmes of directhousing provision been successful in only a fewAsian countries. Hong Kong is able to operate amassive subsidised public housing programme tomeet the housing needs of half the population ataffordable rent and price levels, without havingto resort to planning tools. This, it is argued,is not only because the Government has landownership and development rights, but also as ithas prioritised and is committed to, addressingthe housing issue. 204 The Government’s policy onland supply aims to ensure availability in adequatequantities to meet the projected needs. 205 Similarissues pertain in Singapore.Assisted self-help housingAdequate and affordable owner-occupied orrental housing with secure tenure is a key asset onwhich individuals and households can build theirfuture. Assisted self-help housing, in the forms ofupgraded and new housing, is a proven way inwhich the paradigms of adequacy, affordability,and security have been brought together andenabled poor households to gain access to adecent home. The UN Millennium Projectdemonstrates that upgrading and providingnew housing through self-help is an attainabletarget. 206 Millions of poor households around theworld are already implementing assisted self-helpsolutions successfully and meeting their need foraffordable housing. Whether or not these millionscan become tens of millions depends to alarge extent on the political will of governments.Housing financeHousing finance is a considerable constrainton affordable housing in Asia. Housing financeis either not available or the terms are notfavourable to the majority of households due to64PART FOUR

short repayment periods, high interest rates anddown-payment requirements. The GovernmentHousing Bank of Thailand (GHB) in Thailandprovides a good example of a governmentmanagedinstitution successfully providingaffordable housing finance for lower incomegroups. With a market share of over 38 per cent,GHB is the leading housing-finance lender in thecountry, a position it has achieved by mobilisingdomestic savings and stimulating greater privatesector participation in housing finance. Thecombination of increased supply of competitivehousing loans and a responsive housing supplysystem have made housing more easily affordableto 70 to 80 per cent of the population. 207Microfinance and community based savingsgroups have emerged as positive financialmechanisms that can reach the urban poor. Themechanisms have demonstrated that throughcollective action significant sums of moneycan be saved and used to leverage national andinternational development funds to scale uphousing projects for group members. Suchmechanisms, however, remain relatively smallcompared with housing demand and, in manycountries, are constrained by unsupportiveinstitutional and regulatory frameworks thatkeep low-income households excluded fromurban and housing development plans.Redevelopment of public/slum land by privatedevelopersDisused public land and slum land in the centreof many Asian cities has increasingly beenrecognised as an opportunity for affordablehousing. Different cities and countries arenow taking up the opportunity by inviting theprivate sector to draw up redevelopment plans.In many cities in India, there is a large stock ofdisused industrial land under public ownershipwith considerable redevelopment potential. InKolkata, an appropriate strategy to unlock thepotential of the hundreds of acres of land inprime locations occupied by slums and bustees isbeing devised. Both state and local governmentsare examining how to free 10,000 acres of slumland in the prime pockets of the city.Such schemes can, however, potentially sufferfrom two seemingly unrelated issues. First theytend to become highly political, as observed inKolkata, where such attempts have met fierceobjection from the opposition parties. Secondly,such projects encounter financial problems. Forexample, the city of Mumbai has started a massiveredevelopment plan of slum areas based on theDharavi slum upgrading experience. However,the city cannot action its redevelopment projectsdue to a lack of construction finance as formalinstitution and private sector financing is difficultto arrange because such upgrading projects areperceived to be too risky. 208In China, the problem of finance, particularlywhen affordable housing is provided, is beingovercome through land auctions in major citieswhich require the highest bidders to constructdwellings for the low-and middle-incomehouseholds. 209 Transparency in the biddingprocess and respect to social content is vitalfor the viability of this approach. This is oftenmissing in public private partnership projects inKolkata. In China, pricing authorities in citiessuch as Shenzhen, Shanghai, and HangzhouShenzhen, set the prices and developers arediscouraged to push the post ante prices or imposeany additional cost burdens on the households. 210Experience in Delhi suggests that differentstakeholders should be involved at different stagesof the land acquisition and development processin the pluralistic and liberalised context. 211What is slowly becoming apparent in large citiesin China and India has already been experiencedin Bangkok in the 1990s. The Bangkok caseproves that private sector engagement in lowincomeaffordable housing is feasible, andcould be a good prototype for other countries.However, it has had its share of problems as aresult of investment overheating and unrealisticspeculation. The massive development ofhousing in Bangkok Metropolitan region can beattributed mainly due to the steady growth ineconomy, which was growing by an average 8 percent annually. It was thus possible to supply morethan 100,000 units per year and as a result, thehousing stock increased from 1,036,411 units in1982 to 3,477,640 units in 2002, an increase of2.4 times in only 20 years. 212GenderGender-blindness in policy and practice hascommonly led to adverse outcomes for womenwith respect to their access to and controlover resources—especially land and housing.AFFORDABLE LAND and HOUSING IN Asia65

Overcoming discrimination against womenremains a major challenge in many countries inAsia.Microfinance initiatives are showing the positiverole women play in housing development. Forexample, nearly all Grameen Bank housing loansare taken by women (96 per cent). Likewise, mostcommunity based savings groups are developed,managed and directed by women with hugesuccess. There remains, however, significant scopeto provide women with the same opportunities asmen at the all levels of government, professionalvocations, and trade and enterprises that concernland and housing development to ensure thevoices of all are heard.Available, affordable and efficientlyadministered land: a central issue in AsiaThe availability of land, at prices that areaffordable, administered in an efficient andtransparent manner is fundamental to expandingthe supply of affordable housing and limiting thegrowth of new slums. The location of the land iskey for access to infrastructure, services, amenitiesand employment opportunities Ensuring thatland used for housing is in environmentallysound locations is also vital to the environmentalsustainability of housing. 213 Land, however,remains a central constraint of increasing thesupply of affordable housing. Various approacheshave been developed that aimed to improveaccess to affordable land with secure tenure.Land sharing and readjustment initiatives areperhaps the most widely known initiatives whichinvolve the surrender of a parcel of occupied landby a (usually) private owner in exchange for theopportunity to realize some of the commercialvalue of the site. The remainder of the site is thensystematically planned, allocated to the slumdwellers already occupying the site, and servicesinstalled. With some variation in the details oftransactions, this form of land release has beenused widely in India, Thailand and the Republicof Korea, however it has not always been used tobenefit the poor. Land banking is another widelyused approach, whereby governments expropriateor purchase land and subsequently release theland at affordable prices specifically for poorergroups. However this approach is increasinglyused less, as government resources are reducedand land prices rise. Joint ventures are public/private partnerships which have been used insome countries, such as the Philippines andTurkey to facilitate access to land for the urbanpoor. Attempts have also been made throughplanning powers to ensure that land is set asidefor low-cost housing, for example Malaysia,often as a condition of planning permission.Other land development initiatives have beendeveloped which, whilst they have not directlycontributed to the supply of land for the urbanpoor, have been designed to facilitate the supplyof residential land in general, or reduce the extentof speculation in the land market. Examples ofsuch approaches include the establishmentof the Urban Land Ceiling Act in India; andthe introduction of fiscal measures such as‘betterment’ charges accruing from capital gains,or the introduction of hefty taxes on unused landto prevent hoarding, as in the Republic of KoreaPromising land and housing delivery initiativesand commitmentsIn the Habitat Agenda (Para. 40), governmentscommit to:“Increasing the supply of affordable housing,including through encouraging andpromoting affordable home ownership andincreasing the supply of affordable rental,communal, cooperative and other housingthrough partnerships among public, privateand community initiatives, creating andpromoting market-based incentives whilegiving due respect to the rights and obligationsof both tenants and owners.”Many governments are endeavouring to honourtheir commitment through new land and housingdelivery initiatives, many of which are outlinedin various policy, strategy and implementationdocuments.Poverty Reduction Strategy Papers (PRSPs) areprepared by governments in many Asian countriesthrough a participatory process involvingdomestic stakeholders and external developmentpartners, including the International MonetaryFund (IMF) and the World Bank. PRSPs describethe macroeconomic, structural and social policiesand programmes that countries will pursue over66PART FOUR

Table 8: New land and housing delivery initiatives outlined in PRSPSBangladesh 217Cambodia 218New land and housing delivery initiatives/measuresProtecting and recovering public land from illegal occupation.Distributing available khas (State) land to the poor for housing.Modernizing land records, updating and implementation of land use policies.Ensuring access of the poor owners to their new accretion in char land (low lying landreclaimed from the sea and rivers).Facilitating credit supports to landless and tenant farmers.Providing house building loans at lower interest rates along with an increased loan ceilingfor both urban and rural areas.Reinforcing the idea of vertical housing instead of horizontal expansion in the housingpolicy.Create a supply of affordable land for low-income families in suitable locations.Stimulate the formation of affordable housing on such locations.Provide access to water, electricity and solid waste services in situ and on relocation sites.Provide adequate drainage systems in situ and on relocation sites.Provide adequate sanitation in upgradeable settlements and relocation sites.Improve transportation networks and services for low-income populations in existingupgradable settlements and on relocation sites.Develop disaster prevention and mitigation programme for existing settlements (whetherupgradable or not) and on relocation sites.a three year or longer horizon to promote broadbasedgrowth and reduce poverty. A number ofPRSPs outline new land and housing deliveryinitiatives that countries plan to implement toaddress the need for adequate and affordablehousing. For example, the new land and housingdelivery initiatives outlined in PRSPS forBangladesh and Cambodia are summarised inTable 8. Three other examples now mentionedare from Bhutan, Pakistan and Sri Lanka.The Government’s goals for the housing sectorin Bhutan are set out in the 2002 NationalHousing Policy. They are to: (i) provide safe,basic, and affordable housing; (ii) promotehome ownership; and (iii) create a transparentand well-functioning housing market. It isrecognised that achieving the objectives willrequire a multi-faceted approach, including:(i) developing a national urban land policy andlimiting land speculation; (ii) promoting policyand regulatory reforms to attract the privatesector; (iii) redefining the Government’s role inthe housing sector from housing provider anddeveloper to regulator and advisor; (iv) enablinglow- and middle-income (LMI) groups to accessadequate housing finance; (v) stimulating theinvolvement of the private sector in planning,constructing, and maintaining LMI housing andrelated infrastructure. 214The Pakistan Interim Poverty Reduction StrategyPaper (I-PRSP) outlines plans to distributeshamlat land (common land) around villagesfree to the homeless, and to develop a packagefor improving living conditions in kachi abadis(slum areas) under the government’s housingpolicy. A new regulatory framework for housingfinance companies is to be developed by the StateBank and Securities and Exchange Commission(SECP) to encourage further investment in thisindustry. 215In Sri Lanka a number of programmes will beimplemented to broaden access and upgradethe quality of affordable housing available tothe poor, including three main mechanisms.First, The sustainable townships programme is aself-financing voluntary re-housing programmein the city of Colombo in which slum dwellersvoluntarily leave their dwellings and land and arere-housed in high-rise apartment blocks. Second,Special housing programmes for the ultra-poor inwhich concessionary financing will be providedto assist ultra-poor groups upgrade their housingconditions. This may take the form of housinggrants and concessionary financing throughpopular financial institutions. This support will beprovided to the disabled and handicapped, thosedisplaced by natural and man-made disasters,fishing communities and migrant workers. Third,AFFORDABLE LAND and HOUSING IN Asia67

Affordable housing for plantation workers involvesthe provision of some 200,000 housing unitsin cluster townships for the 300,000 workersengaged in the plantation sector. 2164.2 RECOMMENDATIONS ONHOW TO FACILITATE MOREEFFECTIVE AFFORDABLE LANDAND HOUSING DELIVERYThe foregoing discussion and analysis inthis report has shown that governments inAsia are endeavouring to improve access toadequate and affordable housing by adoptingpolicies and strategies that are in line with therecommendations of the Habitat Agenda. Theyinclude the following:• Housing market interventions to makehousing more affordable for poorerhouseholds.• Increasing the supply of buildable land(through tenure regularisation andinfrastructure provision).• Increasing secure access to affordableserviced land.• Reviewing regulatory frameworks for landdevelopment and housing construction.• Increasing affordability through theprovision of subsidies and rental and otherforms of housing assistance to people livingin poverty.• Supporting community-based, cooperativeand non-profit rental and owner-occupiedhousing programmes.• Building partnerships with groups in theprivate, NGO and community sectors.• Promoting support services for the homelessand other vulnerable groups.• Mobilising innovative financial and otherresources, both public and private, forhousing and community development.• Creating and promoting market-basedincentives to encourage the private sectorto meet the need for affordable rental andowner-occupied housing.The discussion and analysis also point to anurgent need for policy improvements in a numberof areas, including the following:• Existing regulatory frameworks, whichin many cases fails to take into accountaffordability trade-offs.• The rental sector, both formal andinformal, which has largely been ignored bypolicymakers.• Eviction and relocation strategies whichcontinue to be implemented in violation ofFigure 35: Women in Solo, Indonesia, preparing roofing materials for upgrading their housing.Photo © UN-HABITAT/Ruth McLeod68PART FOUR

asic human rights by some governments inAsia.Drawing on the discussion and analysis above,recommendations on how to facilitate moreeffective affordable land and delivery systemsare presented below, with a particular focuson key actors in the housing sector: nationalgovernments, local authorities, private developers(commercial; self-help), housing co-operatives,NGOs and other social developers and landlords.Adopt the enabling approachThe enabling approach is widely seen as themost promising way of addressing the housingchallenge posed by urbanisation in developingcountries. Foremost among these are rapidlygrowing urban populations, the urbanisation andfeminisation of poverty, and the proliferation andexpansion of slums and informal settlements.Within the enabling approach there are four waysin which adequate and affordable housing can beprovided as newly-built dwellings:• Through direct provision for groupsmost in need by NGOs and other welfareorganisations;• Through public-private partnerships;• Through private sector provision, usuallythrough a deal to allow more profitablehousing in return for a proportion of‘affordable’ dwellings;• Through changes to regulatory frameworksto accept dwellings provided through thehousehold sector in conjunction withinformal sector builders.In addition, the existing stock can be convertedfrom informal housing to affordable housingthrough upgrading. Recent empirical research onthe effects of housing policy on housing supplysupports the argument that having governmentsenable rather than control or displace the privatesector improves the affordability of housing ingeneral—and for the urban poor in particular. 219Regulatory frameworksReviewing legal and regulatory frameworks is animportant way for governments, at both centraland local levels, to play the facilitating rolerecommended in the GSS and Habitat Agendain order to enable the poor and other vulnerableand disadvantaged groups, including women, toaccess adequate, secure and affordable housing.The overall legal and regulatory framework forthe housing sector has a significant impact onhousing adequacy and affordability. Therefore,this framework must imperatively be reviewedon a regular basis if the goal of adequate shelterfor all is to be achieved. The review of legal andregulatory frameworks is also fundamental tothe achievement of MDG 7, Target 11: to haveachieved a significant improvement in the livesof at least 100 million slum dwellers by the year2020.Regulatory frameworks also need to explicitlyprovide for the housing needs of women, aswell as vulnerable and disadvantaged groups.Women’s requirements with respect to dwellingsize, layout, location and construction oftendiffer from those of men, and they can oftenbe inadvertently discriminated against byinsensitive and inflexible planning norms. Inview of the growing numbers of women-headedhouseholds, and the triple role of women (asmothers, as income earners, and as communitymanagers) the consequences can be particularlyfar-reaching. Developing competence in gendersensitiveplanning (both women and men) is thusof vital importance.The economic benefits of increasing housingprovisionBeyond housing as a form of welfare andconsumption the housing sector also plays animportant part in national and regional economicdevelopment:‘After several decades of debate on whathousing might contribute to economicgrowth, it is now a widely held view thathousing is not just a peripheral activity but acentral force in sound economic development,much in the same way as investment intransportation, power and communication’.220Housing is therefore much more than providingpeople a place to live, ‘housing investmentcontributes, directly and indirectly, throughbackward and forward linkages in the economy,to national economic growth and, to a largeextend, to national capital stock.’ 221 222 Housingis a tool for employment creation, providingAFFORDABLE LAND and HOUSING IN Asia69

opportunities to solve the underemploymentproblem and improve human capital, as wellas for improving business capacity and privateenterprise to deliver land and housing efficientlyand economically. 223 Therefore, expanding accessto affordable housing does not only have social orequity benefits but also clear economic benefitswhere the housing market can contribute to theoverall economic development of nations, cities,and households. The challenge is to harnessthe economic power of the housing sector tocontribute to national economic developmentand filter these benefits down to households, bothoutcomes of which are evidenced in the Indianand Chinese housing programmes previouslydiscussed.Affordable serviced land for housingReasonably-priced, well-located serviced landat reasonable prices has been cited as arguablythe major constraint to ‘going to scale’ in theproduction of affordable shelter. 224 The HabitatAgenda (Para. 77) calls on governments to review‘restrictive, exclusionary and costly legal andregulatory processes, planning systems, standardsand development regulations.’Land-use planning and development controlcan be made more realistic and flexible, and lesscomplex, by revising standards and proceduresand eliminating unnecessary regulations.Allowing for more flexible standards wouldreduce the production costs of buildable servicedland for housing. It will also avoid renderinginformal land and housing production processesillegal, and reduce procedures that discriminateor segregate particular groups. 225Security of tenureWhile access to serviced land is essential for thedevelopment of adequate and affordable housing,de jure security of tenure in the form of individualtitle is not a prerequisite. People will build theirown homes as long as they feel secure that theywill not be forcibly evicted.Innovative tenure policies should be combinedwith responsive urban planning and infrastructureprovision programmes, and innovative tenurearrangements should be considered and adopted.In addition, anti-eviction legislation should beimplemented as a matter of priority, as securityof tenure is a fundamental prerequisite for tenureregularization and upgrading.Slum upgradingGiven the cost of construction and the constraintsto making suitable urban land available for newhousing development, slum upgrading ratherthan demolition is a significantly less costlysolution to the problem of providing adequateand affordable shelter for urban households.Indeed, slum upgrading clearly represents themost cost effective means of improving theshelter conditions of the poor in Asia.Figure 36: New housing in Nepal. Photo © UN-HABITAT/Rasmus Precht70PART FOUR

The UN Millennium Project estimates that toupgrade slums and meet MDG 7, Target 11 onimproving the lives of 100 million slum dwellers,while also preventing the formation of newslums, will require investing USD 4.2 billion peryear, a total of USD 294 billion over the period2005 to 2020. Further detailed estimates showthat an investment of just USD 440 per personcould markedly improve the lives of 670 millioncurrent and potential future slum dwellers. 226Housing programmes in Asia should thereforerefocus to provide a much higher priority to slumupgrading.Building materials and the constructionindustryPolicies are needed to increase access toappropriate and affordable building materials.Likewise, research and development intoinnovative construction technologies should besupported. Equally urgent is the need to improvethe quantity and quality of skilled workers in theinformal housing sector. Environmentally-soundconstruction design and techniques, and energyefficient,low-polluting technologies should bepromoted and made more widely available. Inthis respect, user-friendly technical literatureon various innovations, such as compressedearth blocks, dome construction, ferro-cementchannels, rammed earth and vault constructionis already available. 227 UN-HABITATand appropriate technology developmentorganisations have actively promoted wide-scaleproduction and use of these appropriate buildingmaterials and construction technologies.Small-scale contractors are central to theimplementation of policies to increase access toadequate and affordable housing. If they are to beassisted by the government and local authoritiesto take a more central role, they must be morecooperative with regulating bodies in order tobenefit from the change of attitude which publicauthorities are urged in the enabling approachand by UN-HABITAT and the InternationalLabour Organisation (ILO). 228 Large-scalecontractors are encouraged to make better use oflabour-based technologies.Housing construction is a particularly soundinvestment in countries in Asia because low-costhomes are the most economically stimulating tothese economies. Low-cost housing generates30 per cent more worker income than highcost housing. Because the informal sector ismore labour intensive than the formal sector,construction in the informal sector creates 20 percent more jobs and builds six times more perdollar spent than formal sector construction.Informal sector construction is, however, proneto labour and occupational health and safetyabuses. Still, countries that can take advantage ofthe growing urban populations by creating jobsand stimulating their economies will not onlysurvive unprecedented urbanisation processesbut prosper from them. 229Privatisation of public housingPrivatisation of public housing has been shownto be a good way of providing adequate andaffordable housing in some countries. Indeed, ithas been very successful in a number of cities inChina. Lessons learned point to the followingkey interventions that, if implemented, cansignificantly increase the chances of success ofsale and transfer endeavours:• Monitoring and evaluation mechanismsmust be set up (by the local authorities orother appropriate body) to ensure greatertransparency of, and quality control over,sale and transfer programmes.• The relevant public housing agencies mustprovide adequate information to ensurethat beneficiaries fully understand allaspects of home ownership, including thechoices being offered to them, their rightsand responsibilities, and the financialimplications.• The capital needs of buildings must becomprehensively addressed by a publichousing agency before transfer and fundsmust be made available for that purpose.• Appropriate resident participation needsto be facilitated in the process. This shouldpartially be brought about by the promotionof democratic, representative and wellfunctioning residents’ organisations. 230Co-operative housing and Community BasedOrganisations (CBOs)The co-operative housing movement has beengaining momentum in developing countries inrecent years. This is, in part, due to the failureAFFORDABLE LAND and HOUSING IN Asia71

of other housing delivery systems to provideadequate and affordable urban housing. Inaddition, the tradition of collective support inrural areas, though not nearly as strong in citiesand towns, retains some influence in many Asiancountries. In the Habitat Agenda ‘the co-operativeapproach is given a pre-dominant role withregard to the principles of strengthening enablingstrategies, participation and partnerships.’Cooperative groups and Community BasedOrganisations (CBOs) involved in housingprovision should be promoted and encouragedthrough the provision of supportive local andnational frameworks. Because in their presentform they are relatively new, new forms areengagement need to be formulated for effectivepartnering of government and the privatesector with CBOs. The efforts of CBOs shouldbe supported at a large scale that the housingchallenge demands.Financing mechanismsLack of access to housing finance is a majorconstraint to access to adequate and affordablehousing in Asia. Formal housing financemechanisms are, in general, inaccessible andunaffordable to the poor. Innovations inhousing microfinance and community funds are,however, improving access for many, in particularwomen. The growing use of community fundsrepresents the following trends in the Asia regionwhich should inform housing policy and strategyformulation:• A shift from forced eviction or relocationand toward slum upgrading.• Supporting the growth of communityorganisations and NGOs.• A shift from a strict ‘market enabling’paradigm in shelter delivery to therecognition that some degree of subsidy willbe necessary to reach into the lower incomebrackets.Governments should encourage and supportthe development of alternative housing financesystems. In particular, greater recognition andsupport must be given to community-basedinitiatives such as daily-savings schemes andthe federations of the urban poor that haveevolved from these. Housing finance systemsthat support the progressive building approach72of poor households can make housing financemore affordable. Furthermore, the private sectormust be stimulated to develop new models ofhousing finance, particularly for the poor whoare trustworthy in repayment (through grouplending) but cannot afford the mortgage modelsused for middle- and high-income groups.Governments should, however, be judicious whenseeking intervention opportunities, and ensurethat their actions have no adverse consequences.Strategies must be developed to increase accessto housing finance products in tandem withimproving the availability and accessibility ofother critical housing inputs (such as land,infrastructure and building materials). If housingis in short supply, a radical increase in access tohousing finance without a concomitant increasein other fundamental housing inputs may leadto an increase in the price of housing, creatingor continuing affordability constraints for lowincomehouseholds. Similarly, if vast numbersof houses are built but not enough householdsare able to obtain finance to purchase them, thehousing market will collapse. 2314.3 CONCLUSIONIn many countries throughout Asia low-incomehouseholds are forced to live in inadequatehousing in slums and informal settlementsbecause there is an insufficient supply of betterquality housing at a cost they can afford.Indeed, all too often, poor households spend aninordinate share of their incomes on housing andmany have to reduce expenditure on other basicneeds, such as food, education and healthcare inorder to meet basic housing needs.The pressure on affordable land and housing inAsia is fuelled by rapid and sustained urban andpopulation growth. Every day for the comingdecade cities in Asia will need to accommodatean extra 120,000 people, which necessitatesthe construction of at least 20,000 newhouses per day. 232 Clearly, in the face of suchurbanisation pressures, households in Asia faceconsiderable challenges in obtaining, retainingand maintaining a house that is adequate andaffordable.Countries in Asia are particularly disparateculturally,socially, geographically, economicallyaswell as in terms of their housing and urbanPART FOUR

planning histories and current forms. Asiahas unmistakable precedents of countries thathave largely solved their housing problems bysuccessfully achieving universal access to adequatehousing through a range of policy interventions,for example Singapore. However, unfortunately,Asia also has precedents of countries whosehousing sectors are characterised by high rates ofinadequate and insalubrious slum and informalsettlements, and where a vast majority of thepopulation lives deprived of their human right toadequate housing.While Asian countries face considerable land andhousing affordability challenges, this publicationhas shown that there is some evidence of affordableland and housing provision. In particular,the emerging economic powers of China andIndia have been most successful in reaching alarge number of low-income households withaffordable housing. The report also shows that,in line with the recommendations of the HabitatAgenda, many governments, in Asia, are adoptingand implementing policies and strategies aimedat making housing habitable, affordable andaccessible. Access to adequate and affordablehousing for all can conceivably be achieved ifgovernments proactively implement such policiesand strategies. However, doing so will, above all,require strong and consistent political will.Figure 37: Like many cities in India, inner-city housing in Delhi is dense, often overcrowded, and is mixed withsmall-scale commercial enterprises. Photo © UN-HABITAT/Matthew FrenchAFFORDABLE LAND and HOUSING IN Asia73

PART FOUR ENDNOTES201 UNCHS (1997b) Shelter for All: The Potential of Housing Policy in the Implementation of the Habitat Agenda. Nairobi: UNCHS(Habitat).202 UNCHS (2001e). Synthesis of national reports on the implementation of the Habitat Agenda in the West Asia Region. Special Session of theGeneral Assembly for an Overall Review and Appraisal of the Implementation of the Habitat Agenda. New York.203 UNCHS (2001d). Synthesis of national reports on the implementation of the Habitat Agenda in the Africa Region. Special Session of theGeneral Assembly for an Overall Review and Appraisal of the Implementation of the Habitat Agenda. New York.204 Chiu, R. L. H. (2007). “Planning, land and affordable housing in Hong Kong “, Housing Studies 22(1): 63 - 81.205 Chiu, R. L. H. (2004). Planning and affordable housing in Hong Kong. Planning and Housing: Policy and Practice. Housing Studies AssociationConference 2004.206 UN Millennium Project (2005). A Home in the City. Task Force on Improving the Lives of Slum Dwellers. London: Earthscan.207 UN-HABITAT (2006a). Enabling Shelter Strategies: Review of Experience from Two Decades of Implementation. Nairobi: UN-HABITAT.208 Mukhija, V. (2001). “Enabling slum redevelopment in Mumbai: policy paradox in practice”, Housing Studies 16(6): 791-806.209 Yanyun Man, J. (Ed) (2011). China’s housing reform and outcomes. New Hampshire: Lincoln Institute of Land Policy.210 Mak, S. W. K., L. H. T. Choy, et al. (2007). “Privatization, housing conditions and affordability in the People’s Republic of China”, HabitatInternational 31(2): 177-192.211 Sivam, A., D. Evans, et al. (2001). “An approach to improved housing delivery in large cities of less developed countries”, Habitat International25(1): 99-113.212 Pornchokchai, S. and R. Perera (2005). “Housing speculation in Bangkok: lessons for emerging economies”, Habitat International 29(3): 439-452.213 Marcuse, P. (2006). “The role of the public sector in promoting affordable housing”, Global Urban Development 2(1).214 Asian Development Bank (ADB) (2002). Technical Assistance to the Kingdom of Bhutan for Housing Sector Reform. Manila, Philippines:Asian Development Bank.215 Government of Pakistan (2001). Pakistan: Interim Poverty Reduction Strategy Paper (I-PRSP). Washington D.C.: International Monetary Fund.216 Government of Sri Lanka (2002). Regaining Sri Lanka: Vision and Strategy for Accelerated Development. Government of Sri Lanka.217 Government of Bangladesh (2005). Bangladesh: Poverty Reduction Strategy Paper. Washington D.C.: International Monetary Fund.218 RGC (2002). National Poverty Reduction Strategy 2003 - 2005, Royal Government of Cambodia (RGC).219 Buckley, R. M. and J. Kalarickal (2005). “Housing policy in developing countries: Conjectures and refutations”, World Bank Research Observer20(2): 233-257.220 Tibaijuka, A. (2009). Building prosperity: housing and economic development. London: Earthscan. p.1221 Tibaijuka, A. (2009) p. 1222 UNCHS/ILO (1995). Shelter provision and employment generation. Nairobi: UNCHS and Geneva: ILO.223 Green, R. (1997). Follow the leader: how changes in residential and non-residential investments predict changes in GDP, Journal of Finance,51(5):1188-1214.224 UN-HABITAT (2005e). Land Tenure, Housing Rights and Gender in Namibia. Nairobi: United Nations Human Settlements Programme(UN-HABITAT).225 UN-HABITAT (2006a)226 UN-HABITAT (2005e)227 UNCHS and AVBC (2001a). “Compressed earth blocks”, poster 1 of 5 on low-cost building techniques; and UNCHS and AVBC (2001c);UNCHS and AVBC (2001b); UNCHS and AVBC (2001e); UNCHS and AVBC (2001d)228 UNCHS/ILO (1995)229 UNCHS (1997a) The Istanbul Declaration and The Habitat Agenda. Nairobi: United Nations Centre for Human Settlements (Habitat).230 Social Housing Foundation (2006). Ensuring Readiness for Transfer of Municipal Housing Stock: Lessons Learned from Experiences of theMetropolitan Municipalities of Cape Town, eThekwini, Nelson Mandela and Johannesburg. Houghton,, Social Housing Foundation.231 FinMark Trust (2006). How Low Can You Go? Charting the Housing Finance Access Frontier: A Review of Recent Demand and Supply Data.FinMark Trust.232 Asian Development Bank (ADB) (2006). Urbanization and Sustainability in Asia: Good approaches in Urban and Region Development.Mandaluyong City, Philippines: ADB and Cities Alliance. p.174PART FOUR

Figure 38: Washing hanging outside the windows of multistorey housing in Nanning, ChinaPhoto © UN-HABITAT/Matthew FrenchAFFORDABLE LAND and HOUSING IN Asia75

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HS/1221/09EISBN 978-92-1-132187-6United Nations Human Settlements Programme (UN-HABITAT)P.O. Box 30030, Nairobi 00100, KENYATel: +254 20 7621 234Website: www.unhabitat.orgUnited Nations Human Settlements Programme (UN-HABITAT)P.O. Box 30030, Nairobi 00100, KenyaTel: +254 20 762 3120Website: www.unhabitat.orgSUMMARYSince 2005 Ethiopia has been implementing an ambitious government-led low- and middleincomehousing programme: The Integrated Housing Development Programme (IHDP) whichaims to construct 400,000 housing units, create 200,000 jobs, promote the development of10,000 micro- and small- enterprises, and enhance the capacity of the construction sector.This authoritative book documents the genesis of the programme and the country’s experiencesince its inception. As it is intended for policy makers, public sector officials, and urban andhousing practitioners, it logically outlines the design of this programme and its effect onthe multiple dimensions of housing. Through documenting the Ethiopian experience otherdeveloping countries with housing shortages and who face rapid urbanization and populationgrowth can adapt and apply this logic to their own housing systems.In light of Ethiopia’s previously uncoordinated and inefficient housing sector, the IntegratedHousing Development Programme has proved to be a highly successful tool for affordablehousing delivery at a large scale. Importantly, the programme is not only a housingprogramme but a wealth generation programme for low-income households. Its success liesin its integrated nature - understanding housing as part of an integrated social, economic,and political system - which has the opportunity to greatly improve the living conditions andeconomic capacity of all sectors of society.United Nations Human Settlements Programme (UN-HABITAT)P.O. Box 30030, Nairobi 00100, KENYATel: +254 20 762 3120Website: www.unhabitat.orgUnited Nations Human Settlements Programme (UN-HABITAT)P.O. Box 30030, Nairobi 00100, KENYATel: +254 20 762 3120Website: www.unhabitat.orgUnited Nations Human Settlements Programme (UN-HABITAT)P.O. Box 30030, Nairobi 00100, KENYATel: +254 20 762 3120Website: www.unhabitat.orgEuropean CommissionINDIGENOUS PEOPLESPOLICY GUIDE TO HOUSING FORINDIGENOUS PEOPLES IN CITIESQuick Policy Guide Series - Volume 1About this publicationThis Policy Guide provides policy-makers with the necessary knowledge about thechallenges and rights of Indigenous peoples in relation to land and property in theurban context. The Guide sets out how to secure land rights of Indigenous peoplesin cities through a human rights framework in the context of urbanization, includingmigration and urban expansion.This Policy Guide to Secure Land Rights for Indigenous Peoples in Cities builds onearlier guides and is part of a series of UN-HABITAT handbooks focused on therights of Indigenous peoples. The first policy guide entitled, “Housing IndigenousPeoples in Cities: Urban Policy Guides for Indigenous Peoples” was published in2009, followed by a report entitled, Urban Indigenous Peoples and Migration:A review of Policies, Programmes and Practices, published in 2010 and launched atthe Fifth Session of the World Urban Forum in Rio de Janeiro.HS/066/11EISBN (Volume 2) 978-92-1-132360-3United Nations Human Settlements Programme (UN-HABITAT)P.O. Box 30030, Nairobi 00100, KENYATel: +254 20 7621 234Website: www.unhabitat.orgUnited Nations Human Settlements Programme (UN-HABITAT)P.O. Box 30030, Nairobi 00100, KENYATel: +254 20 762 3120Website: www.unhabitat.orgS E C U R I N GF OR I NDI GENOUS PEOPL E SPOLICY GUIDE TO SECURE LAND RIGHTSFOR INDIGENOUS PEOPLES IN CITIESQuick Policy Guide Series - Volume 2Other recent land and hOusing publicatiOns by un-habitat:Housing Indigenous Peoples in Cities: Policy Guide toHousing for Indigenous Peoples in Cities (2009)ISBN: 978-92-1-132187-6HOUSINGIN CITIESPolicy Guide to Secure Land Rights for IndigenousPeoples in Cities (2011) UN-HABITAT and GLTNISBN Number (Volume 2): 978-92-1-132360-3LAND RIGHTSIN CITIESA PRACTICAL GUIDE FOR CONDUCTING: HOUSING PROFILESA PRACTICAL GUIDE FOR CONDUCTING:HOUSING PROFILESA Practical Guide for ConductingHousing Profiles (2010)ISBN: 978-92-1-132028-2Quick Policy Guide SeriesA POLICY GUIDE TORENTAL HOUSINGIN DEVELOPING COUNTRIESA Policy Guide to Rental Housing in DevelopingCountries (2010) (Volume 1)ISBN: 978-92-1-132327-6ENABLING SHELTER STRATEGIES:DESIGN AND IMPLEMENTATIONGUIDE FOR POLICYMAKERSEnabling Shelter Strategies: Design and ImplementationGuide for Policymakers (2010) (Volume 2)ISBN: 978-92-1-132334-4Housing Practices SeriesCondominium Housing in Ethiopia: The IntegratedHousing Development Programme (2010) (Volume 1)ISBN: 978-92-1-132326-9CONDOMINIUM HOUSINGIN ETHIOPIA:The Integrated HousingDevelopment ProgrammeHousing ProfilesMALAWI: URBAN HOUSING SECTOR PROFILEMALAWIURBAN HOUSING SECTOR PROFILEMalawi Housing SectorProfile (2010)ISBN Number (Volume): 978-92-1-132188-3NEPALURBAN HOUSING SECTOR PROFILENepal Housing SectorProfile (2011)ISBN Number (Volume): 978-92-1-132373-3UGANDA: URBAN HOUSING SECTOR PROFILEUGANDAURBAN HOUSING SECTOR PROFILEForthcoming: Uganda (2011), Ghana (2011),Tunisia (2011), Vietnam (2012),El Salvador (2012), Ecuador (2012).

AFFORDABLE LANDAND HOUSING INASIAAffordable Land and Housing in AsiaThis volume investigates the state of affordable land and housing in Asia. It explores the major trends inhousing provision, conditions, availability, and quality; analyses housing policy responses and practices;and provides key recommendations for local, national and international policy initiatives that can increaseaffordable housing supply.As this volume demonstrates, many households throughout Asia struggle to obtain, retain, andmaintain housing that is adequate and affordable. While there have been significant shifts in theoryand policy over the last three decades, in the vast majority of Asian countries, low- and middle-incomehouseholds face significant housing affordability problems, largely due to limited access to affordableland and inflexible housing finance mechanisms. Yet, as explored in this volume, Asia also shows positivesigns for expanding access to habitable, affordable housing, in particular through the strengtheningof community-led slum upgrading and housing programmes, and the improved availability of flexiblehousing micro-finance.Logically structured, clearly written, and richly-illustrated, the volume provides an accessible yetauthoritative reference for housing experts, policy makers, researchers, NGOs, and communityorganisations regarding the challenge of housing affordability in Asian countries, the bottle-necks toexpanding access, and the ways contemporary housing sector actors are supporting affordable land andhousing provision.United Nations Human Settlements Programme (UN-HABITAT)P.O. Box 30030, Nairobi 00100, KENYATel: +254 20 762 3120Website: www.unhabitat.org