Interesting points, Naren. I think property rights play a strong role in efficient use of already built housing and incentive to build more housing thus increasing the supply. The point I am making is that rich people buying real estate as a way to invest their money is not necessarily bad, what is terrible is when they lock it up rather than renting.
Jiten On Sun, Apr 28, 2019, 12:59 AM Shenoy N <[email protected]> wrote: > This hungriness for real estate seems to be a fairly recent phenomenon, > going by anecdotal evidence, namely my grandfather and his brothers. > > They were poor, when they came to Bombay, but grew decently rich from > running small businesses. My grandfather had a restaurant. One of his > brothers had a transport business. Another had a couple of pharmacy shops. > All of them were quite well off in the early sixties. But not one of them > thought of getting a larger house or an extra house. > > My father's generation made some small steps towards acquiring more real > estate but its only now that I'm seeing serious real estate obsession. > > The richer people in my family have been buying real estate maniacally, > and, to my eyes, foolishly. One of my cousins has two houses in Mumbai, one > in Pune, one in Goa, a monstrously ugly bungalow in Lonavala, one home in > Silvassa and recently was gushing about how beautiful Mysore was (my wife > is from there) and could I put him on to a good real estate broker in > Mysore. > > This leads me to one slightly tangential point. Recently, we had a > discussion on whether inequality is bad and whether it is desirable to > reduce it even at the expense of slowing down growth. Amit Varma pointed > out that India's greater problem is poverty and increase in prosperity, > while reducing poverty, would necessarily increase inequality. His argument > was that reducing inequality was a problem poor countries should not really > bother about. Poverty is the more serious one. > > I was broadly convinced but housing is one area where inequality seems to > skew things the most. Houses are the Indian rich person's favorite way to > store excess money, for some unfathomable reason, and this ends up pushing > up prices. Add to this the vested interest that these people now have in > the continuing appreciation of real estate and you have an active lobby > that doesn't want any change in policy that might reduce the prices of > housing. Every analyst worth her salt has been predicting a real estate > crash for the last decade or more but it hasn't happened yet. > > Thanks and regards > > Narendra Shenoy > > > > On Sun, 28 Apr 2019 at 13:01, Pooja Sastry <[email protected]> wrote: > > > > > > > I really don't think it's all THAT difficult to find land. Let us say > we > > > wanted to house 1 crore people - 10 million - or about 50% of the metro > > > population in the Mumbai area. If you assume 200 sq ft per person, > we'll > > > need about 200 sq km. The current density in slums, by the way, is > about > > 20 > > > sq ft per person. How much of a strain is 200 km on the city? Well, the > > > metro area is about 4500 sq km. > > > > > > > I completely agree. I don't buy the idea of scarce land + high density = > > high land prices. I've lived in (Navi) Mumbai for less than two years, > but > > it's clear that there's enough serviced land available in the Mumbai > region > > for any incoming population for the next 50 years, at comfortable > non-slum > > densities - the kind that Navi Mumbai hasn't even reached yet. And rail, > > road and basic services to these as-yet-undeveloped areas is already > being > > rapidly built. By contrast, Bangalore isn't creating serviced land with > > transport and infrastructure accessibility the way that Mumbai is, but it > > certainly has pretty much unlimited land. > > > > Theoretically, it may be possible to buy a house or even rent one within > > > one's budget but it might be entirely useless because it is so far away > > > from one's workplace, the other costs would make it unaffordable > > > > > > > This is the part I struggle with. We are forced to take these > > distance/budget payoffs as given, but to me, affordability means that > > workplaces are equitably distributed across the city, that (public) > > transport to them is easily available, AND that housing at a reasonable > > commuting time from any given workplace is easily found. For everyone. I > > admit that this does expand the problem beyond housing availability > alone. > > > > But should we define affordable housing necessarily as "home ownership"? > If > > > we are, then we are talking about something far more complex than > simply > > > shelter/housing because then we'll have to talk about property rights, > > > legacy ownership of urban land, et al > > > > > > > I do think we have a collective imagination of housing and land as an > > asset, as owned, as acquired - and hence the opacity and intrigue of land > > transactions. Is part of it a colonial hangover, or does it go back much > > farther, to the shaping of terrain for agriculture? I've been trying to > > trace this, although not very successfully, I'd be so grateful if anyone > > could point me to some related reading. It shapes so much of what we > > consider valuable, even in a time when more of us than before, perhaps, > > move cities and countries for work and family. > > > > Me, too, I would love to hear about a framework to think more about this > > issue. > > > > On Sun, Apr 28, 2019 at 11:35 AM Alok Prasanna Kumar < > > [email protected]> > > wrote: > > > > > To be quite honest, I'm not even sure how to think about affordable > > > housing. Theoretically, it may be possible to buy a house or even rent > > one > > > within one's budget but it might be entirely useless because it is so > far > > > away from one's workplace, the other costs would make it unaffordable. > > > > > > But should we define affordable housing necessarily as "home > ownership"? > > If > > > we are, then we are talking about something far more complex than > simply > > > shelter/housing because then we'll have to talk about property rights, > > > legacy ownership of urban land, et al. > > > > > > But if we define too broadly, there's no affordable housing problem at > > all > > > except for those who are homeless and living on the streets. > > > > > > I'd love to know if there is a good framework someone has come up with > to > > > think of this issue. > > > > > > > > > > > > > > > On Sun, Apr 28, 2019 at 9:18 AM Shenoy N <[email protected]> wrote: > > > > > > > One question I've always had is, Why is it so hard to have decent > > > > affordable housing? > > > > > > > > To amplify. Technological progress has made virtually all essentials > > more > > > > abundant, cheaper and better,such as food, clothes, vehicles, > > appliances, > > > > air travel, everything. Curiously, housing in urban areas has simply > > > grown > > > > more expensive. This is clearly an anomaly and I have no idea why it > is > > > so. > > > > The biggest culprit, everyone says, is land cost, because land is > > > scarce. I > > > > really don't think it's all THAT difficult to find land. Let us say > we > > > > wanted to house 1 crore people - 10 million - or about 50% of the > metro > > > > population in the Mumbai area. If you assume 200 sq ft per person, > > we'll > > > > need about 200 sq km. The current density in slums, by the way, is > > about > > > 20 > > > > sq ft per person. > > > > > > > > How much of a strain is 200 km on the city? Well, the metro area is > > about > > > > 4500 sq km. I don't think it would be very difficult to squeeze out > 200 > > > km > > > > out of that . It's less than 5%. And it would house everybody. With > > > labour > > > > and material efficient building technology, even the cost should be > > less > > > > than what developers incur, if you standardized things. And if you > > assume > > > > the cost of construction to be Rs. 1000 per sq foot, the entire > project > > > > would be 200,000 crore rupees. That's not a large number at Indian > > > Economy > > > > scale. Plus, its an investment, not a hand out. > > > > > > > > Also, the fact that such housing developments will have to be far > away > > > from > > > > the city center shouldn't be a deal breaker. There is enough mass > > transit > > > > technology available. > > > > > > > > What might be the reasons why this isn't happening? > > > > > > > > > > > > Thanks and regards > > > > > > > > Narendra Shenoy > > > > > > > > > > > > > > > > On Sat, 27 Apr 2019 at 10:38, Pooja Sastry <[email protected]> > > > wrote: > > > > > > > > > Hello all! > > > > > > > > > > I would love to hear what the members of this list think of > > affordable > > > > > housing - certainly from architects (hi Naresh!) and urban > > > policymakers, > > > > > but also everyone here. > > > > > > > > > > In my work as an urban planner, we throw around ideas like > > > affordability > > > > as > > > > > a function of land prices, minuscule floor areas, five times annual > > > > income, > > > > > construction quality and technique - but these, for me, completely > > miss > > > > the > > > > > mark. I'm a "millennial", renter, and likely never-homebuyer > myself, > > > and > > > > I > > > > > don't think it should be a stretch to see housing as an essential, > > > > > accessible (not to mention flexible and time-based) infrastructure > > > > instead > > > > > of a luxury. > > > > > > > > > > Thoughts? > > > > > > > > > > Pooja > > > > > > > > > > > > > > > > > > -- > > > Alok Prasanna Kumar > > > Advocate > > > Ph: +919560065577 > > > > > > On Sun, Apr 28, 2019, 12:59 AM Shenoy N <[email protected]> wrote: > This hungriness for real estate seems to be a fairly recent phenomenon, > going by anecdotal evidence, namely my grandfather and his brothers. > > They were poor, when they came to Bombay, but grew decently rich from > running small businesses. My grandfather had a restaurant. One of his > brothers had a transport business. Another had a couple of pharmacy shops. > All of them were quite well off in the early sixties. But not one of them > thought of getting a larger house or an extra house. > > My father's generation made some small steps towards acquiring more real > estate but its only now that I'm seeing serious real estate obsession. > > The richer people in my family have been buying real estate maniacally, > and, to my eyes, foolishly. One of my cousins has two houses in Mumbai, one > in Pune, one in Goa, a monstrously ugly bungalow in Lonavala, one home in > Silvassa and recently was gushing about how beautiful Mysore was (my wife > is from there) and could I put him on to a good real estate broker in > Mysore. > > This leads me to one slightly tangential point. Recently, we had a > discussion on whether inequality is bad and whether it is desirable to > reduce it even at the expense of slowing down growth. Amit Varma pointed > out that India's greater problem is poverty and increase in prosperity, > while reducing poverty, would necessarily increase inequality. His argument > was that reducing inequality was a problem poor countries should not really > bother about. Poverty is the more serious one. > > I was broadly convinced but housing is one area where inequality seems to > skew things the most. Houses are the Indian rich person's favorite way to > store excess money, for some unfathomable reason, and this ends up pushing > up prices. Add to this the vested interest that these people now have in > the continuing appreciation of real estate and you have an active lobby > that doesn't want any change in policy that might reduce the prices of > housing. Every analyst worth her salt has been predicting a real estate > crash for the last decade or more but it hasn't happened yet. > > Thanks and regards > > Narendra Shenoy > > > > On Sun, 28 Apr 2019 at 13:01, Pooja Sastry <[email protected]> wrote: > > > > > > > I really don't think it's all THAT difficult to find land. Let us say > we > > > wanted to house 1 crore people - 10 million - or about 50% of the metro > > > population in the Mumbai area. If you assume 200 sq ft per person, > we'll > > > need about 200 sq km. The current density in slums, by the way, is > about > > 20 > > > sq ft per person. How much of a strain is 200 km on the city? Well, the > > > metro area is about 4500 sq km. > > > > > > > I completely agree. I don't buy the idea of scarce land + high density = > > high land prices. I've lived in (Navi) Mumbai for less than two years, > but > > it's clear that there's enough serviced land available in the Mumbai > region > > for any incoming population for the next 50 years, at comfortable > non-slum > > densities - the kind that Navi Mumbai hasn't even reached yet. And rail, > > road and basic services to these as-yet-undeveloped areas is already > being > > rapidly built. By contrast, Bangalore isn't creating serviced land with > > transport and infrastructure accessibility the way that Mumbai is, but it > > certainly has pretty much unlimited land. > > > > Theoretically, it may be possible to buy a house or even rent one within > > > one's budget but it might be entirely useless because it is so far away > > > from one's workplace, the other costs would make it unaffordable > > > > > > > This is the part I struggle with. We are forced to take these > > distance/budget payoffs as given, but to me, affordability means that > > workplaces are equitably distributed across the city, that (public) > > transport to them is easily available, AND that housing at a reasonable > > commuting time from any given workplace is easily found. For everyone. I > > admit that this does expand the problem beyond housing availability > alone. > > > > But should we define affordable housing necessarily as "home ownership"? > If > > > we are, then we are talking about something far more complex than > simply > > > shelter/housing because then we'll have to talk about property rights, > > > legacy ownership of urban land, et al > > > > > > > I do think we have a collective imagination of housing and land as an > > asset, as owned, as acquired - and hence the opacity and intrigue of land > > transactions. Is part of it a colonial hangover, or does it go back much > > farther, to the shaping of terrain for agriculture? I've been trying to > > trace this, although not very successfully, I'd be so grateful if anyone > > could point me to some related reading. It shapes so much of what we > > consider valuable, even in a time when more of us than before, perhaps, > > move cities and countries for work and family. > > > > Me, too, I would love to hear about a framework to think more about this > > issue. > > > > On Sun, Apr 28, 2019 at 11:35 AM Alok Prasanna Kumar < > > [email protected]> > > wrote: > > > > > To be quite honest, I'm not even sure how to think about affordable > > > housing. Theoretically, it may be possible to buy a house or even rent > > one > > > within one's budget but it might be entirely useless because it is so > far > > > away from one's workplace, the other costs would make it unaffordable. > > > > > > But should we define affordable housing necessarily as "home > ownership"? > > If > > > we are, then we are talking about something far more complex than > simply > > > shelter/housing because then we'll have to talk about property rights, > > > legacy ownership of urban land, et al. > > > > > > But if we define too broadly, there's no affordable housing problem at > > all > > > except for those who are homeless and living on the streets. > > > > > > I'd love to know if there is a good framework someone has come up with > to > > > think of this issue. > > > > > > > > > > > > > > > On Sun, Apr 28, 2019 at 9:18 AM Shenoy N <[email protected]> wrote: > > > > > > > One question I've always had is, Why is it so hard to have decent > > > > affordable housing? > > > > > > > > To amplify. Technological progress has made virtually all essentials > > more > > > > abundant, cheaper and better,such as food, clothes, vehicles, > > appliances, > > > > air travel, everything. Curiously, housing in urban areas has simply > > > grown > > > > more expensive. This is clearly an anomaly and I have no idea why it > is > > > so. > > > > The biggest culprit, everyone says, is land cost, because land is > > > scarce. I > > > > really don't think it's all THAT difficult to find land. Let us say > we > > > > wanted to house 1 crore people - 10 million - or about 50% of the > metro > > > > population in the Mumbai area. If you assume 200 sq ft per person, > > we'll > > > > need about 200 sq km. The current density in slums, by the way, is > > about > > > 20 > > > > sq ft per person. > > > > > > > > How much of a strain is 200 km on the city? Well, the metro area is > > about > > > > 4500 sq km. I don't think it would be very difficult to squeeze out > 200 > > > km > > > > out of that . It's less than 5%. And it would house everybody. With > > > labour > > > > and material efficient building technology, even the cost should be > > less > > > > than what developers incur, if you standardized things. And if you > > assume > > > > the cost of construction to be Rs. 1000 per sq foot, the entire > project > > > > would be 200,000 crore rupees. That's not a large number at Indian > > > Economy > > > > scale. Plus, its an investment, not a hand out. > > > > > > > > Also, the fact that such housing developments will have to be far > away > > > from > > > > the city center shouldn't be a deal breaker. There is enough mass > > transit > > > > technology available. > > > > > > > > What might be the reasons why this isn't happening? > > > > > > > > > > > > Thanks and regards > > > > > > > > Narendra Shenoy > > > > > > > > > > > > > > > > On Sat, 27 Apr 2019 at 10:38, Pooja Sastry <[email protected]> > > > wrote: > > > > > > > > > Hello all! > > > > > > > > > > I would love to hear what the members of this list think of > > affordable > > > > > housing - certainly from architects (hi Naresh!) and urban > > > policymakers, > > > > > but also everyone here. > > > > > > > > > > In my work as an urban planner, we throw around ideas like > > > affordability > > > > as > > > > > a function of land prices, minuscule floor areas, five times annual > > > > income, > > > > > construction quality and technique - but these, for me, completely > > miss > > > > the > > > > > mark. I'm a "millennial", renter, and likely never-homebuyer > myself, > > > and > > > > I > > > > > don't think it should be a stretch to see housing as an essential, > > > > > accessible (not to mention flexible and time-based) infrastructure > > > > instead > > > > > of a luxury. > > > > > > > > > > Thoughts? > > > > > > > > > > Pooja > > > > > > > > > > > > > > > > > > -- > > > Alok Prasanna Kumar > > > Advocate > > > Ph: +919560065577 > > > > > >
