The slum problem: not as easy as it seems

Slums are a huge issue that cities all over the world continue to struggle with. Even the rapidly growing economies in Asia are struggling to deal with what seems to be an inevitable consequence of that growth. People are rapidly migrating to cities in search of better lives and livelihoods, causing a great strain on the supply of housing. As housing prices rise and available supply falls, the poor are forced to build makeshift settlements which are often lacking in basic necessities such as water, electricity and sanitation, and are usually illegal.

One might wonder why it has been so difficult to deal with the problem. After all, if the problem is poor living conditions, isn’t it enough for governments, housing developers or charitable organizations to build more homes with living conditions that are deemed acceptable? Shouldn’t mass public housing projects be an effective way to solve the slum problem once and for all?

Unfortunately, it’s not that simple. There are several layers of complexity that have caused these solutions to fail and the slums to persist.

 

1. Misunderstood priorities

One thing that people tend to overlook about slum dwellers is that sometimes, living in slums is a conscious choice. People tend to think that everyone who lives in a slum has close to zero income and is barely able to maintain a subsistence lifestyle. Although this may very well be the case for some, there are others who are not so unfortunate that still make the decision to live in slums.

Slums present a way to save a significant amount of money on accommodations. Yes, the water is dirty. Yes, the electricity is intermittent and sometimes illegally obtained. But when the alternative is paying large sums of money for “proper” water and electricity, the former might seem more viable. For some of these low-income households or individuals, it would be better for them to stay in slums and be able to eat better food, keep their children in schools, or perhaps buy a TV set and motorcycle. Thus, it is not unheard of that when slum dwellers are relocated to public housing estates, they sell off their units for a nice profit and return to their old accommodation.

 

2. The self-targeting problem

This act of selling off their public housing units would not be possible without one crucial element: demand. Does this demand for low income public housing actually exist? Considering that proper care is taken to ensure that these housing estates are of an acceptable standard, i.e. having access to all essential utilities and amenities, the answer may very well be “Yes”.

This section is entitled “the self-targeting problem” because the existence of that demand is due to an issue that is often dealt with in self-targeted poverty alleviation policies. One of the essential elements in a typical self-targeted pro-poor policy is that the good or service provided needs to be sufficiently undesirable for other parts of society. Otherwise, there will be demand from the other parts of society, ultimately defeating the purpose of the policy.

For example, subsidized food products needs to be of lower quality than their normally-priced alternatives, in order to stop the richer people from buying them. Rogers and Coates (2002) mention food stamps and coupons only being able to buy less desirable brands of food, among other things.

When it comes to housing, it may be quite difficult to ensure that housing quality is significantly undesirable to all but the poorest parts of society. As long as the bare essentials (water, electricity, sanitation) are met, there will always be some amount of demand from the not-so-poor who, much like the slum dwellers, would rather save money on accommodation in order to improve other aspects of their lives.

 

3. Precedents and incentives

The final complexity I want to mention is the problem of precedent and incentive. Even if the slum dwellers are successfully relocated to housing estates of acceptable quality and no one attempts to “game the system” by selling their units, there is still one major question that governments and other organizations must tackle: what happens if/when more slums pop up?

Once people find out that the government will take care of their housing problems, they will see it as an incentive to move to the city. Governments are also put in a difficult position because if they do not provide housing for these subsequent waves of migrants, it will spark outcries of unfairness. These two factors will further intensify the rural-urban migration trends and exacerbate the strains on the destination cities. Thus, the public housing solution is not sustainable on its own.

 

It is extremely difficult to find a proper set of solutions for the slum problem that accounts for and addresses all these complexities. We can only hope that someone figures it out soon.