Affordable housing: India edition

The New York Times details the disastrous impact of socialist-inspired government central planning on India's housing market:

A recent report by the McKinsey Global Institute estimated that by 2030, 70 percent of India’s jobs would be created in cities, and about 590 million Indians would live in them. To provide enough housing and commercial space, it said, India must build the equivalent of the city of Chicago every year.

But it has no such plans, and the cities already here are buckling under the strain of their new arrivals. From Mumbai to Bangalore, Delhi to Chennai, roads are perpetually choked. Sewers, water lines and electricity are lacking. Perhaps most important, housing is desperately short, especially for impoverished new arrivals, leaving India with more slum dwellers than anywhere on earth.

“We require a radical rethinking about urban development,” said K. T. Ravindran, a professor of urban design who frequently works with the government on urban issues. “It is not that there are no ideas. It is that there is no implementation of those ideas.”

Like those of many Indian cities, Delhi’s building codes and zoning laws were written for a much smaller city in a different time, with policies that actively discourage growth.

The number of floors in most neighborhoods is capped at five stories, and in many areas fewer. The government largely controls land, and government approval for new development is difficult to obtain, even to house the wealthy and middle class, never mind the poor.

The dilapidated state of Indian cities is in some ways by design. For decades, Indian governments tried to discourage migration to cities by making city life unaffordable and unbearable for new arrivals.

These policies were driven at least in part by a Gandhian belief that India should be a rural nation, and more broadly by a centrally planned, socialist approach to development. But rural Indians have voted against these notions with their feet.

A recent report on urban slums published by the Center for Policy Research and the Centre des Sciences Humaines concluded that these measures “have made formal housing expensive and unattainable to a large share of the population, reinforced both chronic urban infrastructure shortages citywide and squalid, precarious living conditions in urban slums.”

Indeed, cheap rental housing outside of slums, like the tiny room Mr. Sarkar and his family shared, is almost impossible to find because it is very difficult to create such housing legally.

“If I want to build for the poor, the current building codes wouldn’t allow me to do it profitably,” said Sanjeev Sanyal, and economist and expert on urbanization. “There is a demand that is not being met, and the only way to meet it is by breaking the law.”

But at least Indians are being spared the horrors of the free market, right? I previously noted the McKinsey report cited by the article here.