By Darshini Mahevia*
As a part of the second tranche of Rs 20 lakh crore economic stimulus package taking care of severe criticism of the Central government’s sensitivity to the migrant labour fleeing the cities, a rental housing policy for the migrant workers was announced on May 14, 2020. The rental policy, much in line with the subsequent two economic stimulus packages (on agriculture and infrastructure), is medium to long term.
The rental housing package, it has been made to appear, is a government response to the heart-wrenching stories and visuals of the migrants fleeing large cities, travelling by foot, cycle or any means carrying all their belongings and their families. The package comes amidst workers living in their factory premises or on construction sites being forced out of their living quarters by their employers on closure of work.
Individuals who had rented houses were asked by their landlords to either pay rent or vacate in spite of sermons from the Prime Minister in his first address to the nation asking the landlords in favour of a moratorium on taking rent. Left with no choice, the migrants living in such rental housing decided to go back to their native places.
While both the situations have occurred, those not in housing distress too seem to have left amidst the panic created by Covid-19 and a natural desire to be with the family in such a pandemic. Being locked down in a small house or one room house, which is where most workers live, they had limited availability of food, and no work. They were left with no choice but wanting to go back home.
Individuals who had rented houses were asked by their landlords to either pay rent or vacate in spite of sermons from the Prime Minister in his first address to the nation asking the landlords in favour of a moratorium on taking rent. Left with no choice, the migrants living in such rental housing decided to go back to their native places.
While both the situations have occurred, those not in housing distress too seem to have left amidst the panic created by Covid-19 and a natural desire to be with the family in such a pandemic. Being locked down in a small house or one room house, which is where most workers live, they had limited availability of food, and no work. They were left with no choice but wanting to go back home.
The package
There are two components of the government package. The first one seeks to convert the government-funded housing in cities into Affordable Rental Housing complexes under the public-private partnership (PPP) model. These are included under the existing Pradhan Mantri Awas Yojana (PMAY) scheme. The second one relates to Central government incentivizing manufacturing units, industries and institutions to develop affordable housing complexes on their private lands for their employees, to be given on a rental basis.
Under the second package, the government-funded vacant housing would be given out as ‘concessionaire’ to the private firms, so that these could be rented out to migrants on concessional rates. This means that such private firms may not have the liability of returning any profit to the government, while recovering the cost of managing units by collecting rent.
The package, in simple language, states that the housing built with government funds under PMAY, and presumably the former Jawaharlal Nehru National Urban Renewal Mission’s (JNNURM’s) Basic Services for the Urban Poor (BSUP), lying vacant, would be allowed to be converted into rental units under the PPP mode.
This new use of the PMAY and BSUP units means that the reference is to the lower end and not the lowest end of the rental housing market. While details are awaited, for those elated by the new announcement may have certain questions, which are being flagged below.
The question that has been rightly asked for PMAY and hence for even the new Affordable Rental Housing is: Affordable for whom? Those who can spend Rs 1,000 per month on rent (i.e. households whose income is about Rs 5000 to Rs. 6000 per month) or Rs 10,000 per month on rent (i.e. households whose income is about Rs. 50,000 per month), assuming that households spend 20% of their monthly income on rent?
At the lowest end of the urban labour market, the unskilled labour face great challenge with regards to affordable housing. There are three types of such migrants. One, those who cannot even rent a house due to extremely precarious employment conditions and irregular and low incomes and hence tend to squat. Two, those who cannot afford ownership housing, and hence tend to rent, often living in shared rental accommodation. Shared accommodation is largely by single male migrants, but we find, even families share single room units.
The package, in simple language, states that the housing built with government funds under PMAY, and presumably the former Jawaharlal Nehru National Urban Renewal Mission’s (JNNURM’s) Basic Services for the Urban Poor (BSUP), lying vacant, would be allowed to be converted into rental units under the PPP mode.
This new use of the PMAY and BSUP units means that the reference is to the lower end and not the lowest end of the rental housing market. While details are awaited, for those elated by the new announcement may have certain questions, which are being flagged below.
Whose affordability is being considered?
Two phrases require to be addressed: ‘Government housing complexes lying vacant’ and ‘affordable housing’. The phrase 'government housing complex' has already been explained. The phrase ‘affordable housing’ is illusionary. The entire PMAY, with the exception of the In-Situ Slum Redevelopment (ISSR) component, is illusionary, as it is based on the concept of ‘affordable housing’.The question that has been rightly asked for PMAY and hence for even the new Affordable Rental Housing is: Affordable for whom? Those who can spend Rs 1,000 per month on rent (i.e. households whose income is about Rs 5000 to Rs. 6000 per month) or Rs 10,000 per month on rent (i.e. households whose income is about Rs. 50,000 per month), assuming that households spend 20% of their monthly income on rent?
At the lowest end of the urban labour market, the unskilled labour face great challenge with regards to affordable housing. There are three types of such migrants. One, those who cannot even rent a house due to extremely precarious employment conditions and irregular and low incomes and hence tend to squat. Two, those who cannot afford ownership housing, and hence tend to rent, often living in shared rental accommodation. Shared accommodation is largely by single male migrants, but we find, even families share single room units.
In Mumbai, in the heydays of textile mills, the same bed space in a room was shared by two workers, one working in the night shift using that space in the day, and vice versa. In Surat, we have seen a 100 sq ft rooms shared by two families, who put partition in between for their privacy. Increase in real estate prices, leading to rents keep going up, has pushed workers at the low end to share rental accommodation.
Single male migrants sharing a rental accommodation also means that they are forced to postpone or abandon the plan of bringing their respective families to the city and permanently live as temporary migrants in the city. They are unable to get their permanent address changed to the city address, but must hold on to the address-identity of their native place.
Single male migrants sharing a rental accommodation also means that they are forced to postpone or abandon the plan of bringing their respective families to the city and permanently live as temporary migrants in the city. They are unable to get their permanent address changed to the city address, but must hold on to the address-identity of their native place.
Employer provided housing can be an option for those with bargaining power or are protected by law from exploitation, not migrantsIn times of disasters and pandemics, they are unable to prove their urban residency, and hence are deprived of any relief measures, if any. Most of such shared renting is in private (formal or informal) housing, wherein owners are petty landlords, or sometimes small entrepreneurs whose income is through constructing informal housing and then renting it out.
Petty landlords often have no or little income other than rent and hence they too cannot afford to forgo rent as advised by the Prime Minister during such pandemics. The entire incremental housing process in Indian cities, and in many developing country cities, is such that individuals build their housing and rent out in most cases one room to recover the costs through the rents earned, while the owner-household continues to stay in cramped dwelling.
Is this so-called new Affordable Rental Housing being created for those who are living in such rental accommodation? The Affordable Rental Housing package expects that some of such households would move to newly-designated rental housing.
In this category, there are further two kinds: Those who live on their work sites (factory, construction site, etc.) and not paying any rent for the accommodation; and those whose employers have rented accommodation and put the workers in them (in here workers may pay partial rent). When the employers provide accommodation in any of these forms, because they want stability of labour supply, it is beneficial to the workers.
But then, in this case, the workers are also tied to the employer and are forced to work at whatever wage rate the employer pays. Long time back, an NGO organiser of the workers in a ceramic factory in Ahmedabad was looking for liberating the workers from low-wage conditions. These workers were living in employer-provided housing, and felt that they were bonded to the employer through housing.
The employer provided housing can become an option for those who have bargaining power with their employers, or have protection of law from the exploitation by the employers. The workers at the lower end of the labour market, especially migrant workers, do not have such bargaining power, as is evident from the fact that they were forced to flee cities during the Covid-19 pandemic.
In response to a French politician and philosopher, who proposed converting tenants’ rents into purchase payments on their dwellings, arguing that it would end the exploitative relations between landlords and tenants and transform the property-less poor property owners, Friedrich Engels, in ‘The Housing Question’ wrote that there was no such thing as a housing crisis.
Bonded living in employee housing?
The third set of migrants/ workers at the low end of the labour market are the ones who live on employee-provided accommodation, in the factories, on construction sites, brick kilns, etc., often in conditions similar to bonded labour. According to media reports, some of them, who have been thrown out by employers when factories had to be closed due to the lockdown, were at the mercy of their employers.In this category, there are further two kinds: Those who live on their work sites (factory, construction site, etc.) and not paying any rent for the accommodation; and those whose employers have rented accommodation and put the workers in them (in here workers may pay partial rent). When the employers provide accommodation in any of these forms, because they want stability of labour supply, it is beneficial to the workers.
But then, in this case, the workers are also tied to the employer and are forced to work at whatever wage rate the employer pays. Long time back, an NGO organiser of the workers in a ceramic factory in Ahmedabad was looking for liberating the workers from low-wage conditions. These workers were living in employer-provided housing, and felt that they were bonded to the employer through housing.
The employer provided housing can become an option for those who have bargaining power with their employers, or have protection of law from the exploitation by the employers. The workers at the lower end of the labour market, especially migrant workers, do not have such bargaining power, as is evident from the fact that they were forced to flee cities during the Covid-19 pandemic.
In response to a French politician and philosopher, who proposed converting tenants’ rents into purchase payments on their dwellings, arguing that it would end the exploitative relations between landlords and tenants and transform the property-less poor property owners, Friedrich Engels, in ‘The Housing Question’ wrote that there was no such thing as a housing crisis.
Engels was deeply aware of the housing misery of the working class, as described at great length in his work ‘Conditions of working class in England’ (Engels 1845). Engels argued that the miserable living conditions of the workers was a crisis of capitalism in which housing conditions formed just ‘one of the innumerable smaller, secondary evils’ caused by the exploitation of workers by capital (Engels, 1872). He added, the misery of tenants was because they were workers and not because they were tenants. Then Engels goes on to argue in favour or abolition of capitalism.
But, even if we do not reach this conclusion, the employer-provided housing would lead to ameliorative living and working conditions of the workers, whether migrants or not, only if the workers have a better bargaining power, which is not so today in the conditions of surplus labour.
Under PMAY’s four verticals (click here for details), only two, the Credit Linked Subsidy Scheme (CLSS) and Affordable Housing in Partnership (AHP), entail houses constructed for those who are eligible for either 3% interest subsidy on housing loan interest rate, or a direct subsidy to the builders, respectively.
In these projects, subsidy is given to only those clients who are eligible based on income or dwelling-unit size criteria. In such housing schemes, there may be client households who may not have benefited form the subsidy under PMAY if their incomes are higher than the qualifying ceiling. It is thus not clear as to which vacant public housing is being referred to.
The Ministry of Housing and Urban Affairs (MoHUA) website states that a total of 97.48 lakh housing units are either under construction (64.02 lakh) or have been completed (33.46 lakh) since 2014 under PMAY as on April 20, 2020. The MoHUA website does not give breakup, but, in 2017-18, CLSS and AHP components together formed 40% of the total housing units. This would mean that about 39 lakh of the total 97.48 lakh housing units under PMAY could be considered as forming part of the vacant public housing stock.
There were 134 lakh households living in slums in urban India as per the 2011 population census. Thus, PMAY has not reached out to all the slum households, and even if half of them would like to move to new housing under the CLSS and AHP components, the supply will fall short of need. In such a situation, why is there vacant public housing?
The only answer to that it is because the prices of the CLSS and AHP housing components is higher than the affordability of those living in the slums. Claiming that there are vacant public housing units is an admission of the failure of the PMAY!
But, even if we do not reach this conclusion, the employer-provided housing would lead to ameliorative living and working conditions of the workers, whether migrants or not, only if the workers have a better bargaining power, which is not so today in the conditions of surplus labour.
Vacant public housing?
The question is: “Are there vacant public housing units, and if yes then why?” One can think of only two possibilities, if the BSUP housing constructed under the JNNURM or the units constructed under the ongoing PMAY are vacant. As per the last available data, vacant BSUP units were only in Delhi and not in other cities.Under PMAY’s four verticals (click here for details), only two, the Credit Linked Subsidy Scheme (CLSS) and Affordable Housing in Partnership (AHP), entail houses constructed for those who are eligible for either 3% interest subsidy on housing loan interest rate, or a direct subsidy to the builders, respectively.
In these projects, subsidy is given to only those clients who are eligible based on income or dwelling-unit size criteria. In such housing schemes, there may be client households who may not have benefited form the subsidy under PMAY if their incomes are higher than the qualifying ceiling. It is thus not clear as to which vacant public housing is being referred to.
The Ministry of Housing and Urban Affairs (MoHUA) website states that a total of 97.48 lakh housing units are either under construction (64.02 lakh) or have been completed (33.46 lakh) since 2014 under PMAY as on April 20, 2020. The MoHUA website does not give breakup, but, in 2017-18, CLSS and AHP components together formed 40% of the total housing units. This would mean that about 39 lakh of the total 97.48 lakh housing units under PMAY could be considered as forming part of the vacant public housing stock.
There were 134 lakh households living in slums in urban India as per the 2011 population census. Thus, PMAY has not reached out to all the slum households, and even if half of them would like to move to new housing under the CLSS and AHP components, the supply will fall short of need. In such a situation, why is there vacant public housing?
The only answer to that it is because the prices of the CLSS and AHP housing components is higher than the affordability of those living in the slums. Claiming that there are vacant public housing units is an admission of the failure of the PMAY!
In conclusion
The question is, if the Affordable Rental Housing is being seen as an economic revival package after the Covid-19 pandemic one needs to answer:- whose revival is being talked about? And
- would it benefit the distressed migrants walking / cycling back to their native places and whose housing rights have been discussed by NGOs working with migrant labour, construction labour and seasonal migrants (these are not mutually exclusive categories)?
However, one thing is clear: There is no additional money for rental housing or what government would like to call Affordable Rental Housing. It has allocated Rs Rs. 1,400 crore in the Union Budget of the Financial Year 2020-21.
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Visiting Professor and Programme Chair, School of Arts and Sciences, Ahmedabad University. Blog: Darshini’s Worldview
Visiting Professor and Programme Chair, School of Arts and Sciences, Ahmedabad University. Blog: Darshini’s Worldview
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