Housing for Low- Income Urban Families
Total Page:16
File Type:pdf, Size:1020Kb
HOUSING FOR LOW INCOME URBAN Public Disclosure Authorized FAMILIES Orville F. Grimes, Jr. HD7391 .G74 c.2 Public Disclosure Authorized ~ih-tiljiMAiri.~~·,i~. le~~n pol icy in the developing Public Disclosure Authorized Public Disclosure Authorized Housing for Low-Income Urban Families WORLD BANK COUNTRY ECONOMIC REPORTS WORLD BANK RESEARCH PUBLICATIONS WORLD BANK STAFF OCCASIONAL PAPERS A WORLD BANK RESEARCH PUBLICATION Published for the World Bank THE JOHNS HOPKINS UNIVERSITY PRESS BALTIMORE AND LONDON Orville F. Grimes, ]r. Housing for Low-Income Urban Families Copyright© 1976 by the International Bank for Reconstruction and Development THE WORLD BANK 1818 H STREET, N.W. WASHINGTON, D.C. 20433, U.S.A. All rights reserved The views and interpretations in this book are those of the author and should not be ascribed to the World Bank, to its affiliated organizations, or to any individual acting in their behalf. Library of Congress Cataloging in Publication Data Grimes, Orville F., Jr. 1943- Housing for low-income urban families. Bibliography: p. 159 Includes index. l. Underdeveloped areas-Housing. I. Title. HD739l.G74 301.5'4'091724 76-4934 ISBN 0-8018-1853-2 cloth ISBN 0-8018-1854-0 paperback Table of Contents PrefaceD xiii One Introduction and Summary D 3 Housing and urban growth 0 0 4 Measures of the severity of the housing problem DO 6 Scope and conclusions DO 7 Two The Urban Housing Situation in Developing Countries D 10 Relatively high-income developing countries DO 13 Middle-income developing countries DO 16 The poorest developing countries DO 25 Three Housing in the Economy o 30 Housing and employment 0 0 32 Housing and city design 0 0 34 Labor productivity 0 0 34 Criteria for investment 0 0 35 Effects on macroeconomic performance 0 0 3 7 vii viii TABLE OF CONTENTS Four Supply Factors D 40 LandDD42 Services DO 44 Transport DO 46 Construction cost D D 48 Financial resources D D 56 Five Demando61 Housing need and effective demand DO 61 Housing cost and income DO 63 Six Market Imperfections D 82 Institutional constraints D D-84 Economic imperfections DO 86 Subsidies and market interdependence DO 88 Seven Housing Policy Options D 91 The policy framework D D 92 Policy instruments DO 94 Housing and public policy DO 101 Conclusions DO 108 Statistical Appendix D 111 Select Bibliographyo 159 IndexD 167 Table of Contents ix Tables 1.1. Estimated Urban Population of Developing Regions, 1960, 1980, and 2000, and Average Annual Growth Rate, 1960-80 and 1980-2000 oo5 2.1. Sites-and-Services Plots Completed and Planned, Zambia, 1973 0020 2.2. Housing Shortages by City Size, Korea, 1970 0022 2.3. Income Groups Served by Housing Construction, El Salvador, 1962-70 oo23 4.1. Cost of Basic Components of Residential Construction for Low- and Medium-Density Housing at Peripheral Locations in Selected Developing Countries 0049 4.2. Percentage of Cost of Basic Components of Low-Income Housing at Peripheral Locations ofSelected Cities, Single-family and Multifamily Units 0050 4.3. Basic Construction Cost per Square Meter of Livable Space in Buildings of Varying Height, Selected Cities 0050 4.4. Index of Materials and Labor Costs and the Cost of Living in Mexico City, Selected Years, 1954-69 oo52 5.1. Cost and Quality of the Cheapest Housing Unit Currently Provided by the Public Sector, Selected Cities 0064 5.2. Cost of Cheapest Housing Unit as Percent of Annual Household Income, Selected Cities, 1970 0066 5.3. Comparison of National Income per Capita with Percentage of Household Expenditure on Housing, Selected Cities, Various Years DO 67 5.4. Household Income and Percentage of Household Expenditure on Housing, Utilities, and Transport, Selected Cities, Various Years 0068 5.5. Estimates of Monthly Household Income Required to Purchase the Cheapest Existing New Housing Unit and the Percentage of Households Unable to Afford It, at Varying Interest Rates, Selected Cities DO 70 5.6. Reduction of Housing Cost and the Percentage of Households that Can Be Served, Selected Cities DO 72 5.7. Estimates ofCost of Housing Units ofVarious Standards and Locations and Percentage ofH ouseholds Unable to Afford Them, Selected Cities DO 76 5.8. Estimated Percentage of Population Unable to Afford Housing of X TABLE OF CONTENTS Va~ious Space Standards at Peripheral Locations, by Type of Housing, Selected Cities 0080 5.9. Percentage of Population not Served by Peripheral and Higher Density Alternatives in Intermediate Zones, Single-Family Dwellings, Selected Cities 00 81 A1 Population Growth, Income, and Housing Indicators for Selected Cities 00112 A2 Housing Indicators for Selected Developing Countries 00118 A3 Public Expenditure on Housing, Selected Developing Countries, Various Years 00128 A4 Housing in the Economy: Significant Regression Results of Preliminary Tests 00129 A5 Number and Population ofUrbanAreas by Size Class for Income Groups of Developing Countries, 1970 00130 A6 Cost of Residential Construction, Utilities, and Land Development, and of Land for Low- and Medium-Density Housing, Selected Developing Countries 00131 A7 Cost of Basic Construction, Land Servicing, and Raw Land as a Percentage of Total Housing Cost for Low- and Moderate-Income Housing, Selected Cities 00132 A8 Land Price Variations, Selected Cities, Various Years 00133 A9 Cost of Basic Construction, Land Servicing, and Raw Land for Low- and Moderate-Income Housing, Selected Cities 00133 A10 Indexes of Costs of Various Housing Components, Bogota, Yearly, 1969-73 00134 All Indexes of Costs ofVarious Housing Components, Nairobi, 1966 and Yearly, 1970-73 00135 A12 Trends in Costs of Housing Components, Selected Countries, 1960, 1965, and 1970 00136 A13 Comparison of Quality and Estimated Cost of Selected Housing Units for Low- and Moderate-Income Housing, Selected Cities 00138 A14 Size Distribution and Average of Monthly Household Income, Selected Cities 00144 A15 Range of Monthly Household Income by Quintiles and Lowest Decile, Selected Cities 00146 A16 Percentage of Household Expenditure Devoted to Housing, Utilities, and Transport by Salary and Wage-earner Households, Korean Cities, 1968-72 00147 Table of Contents xi A17 Estimates ofC onstruction Costs and Monthly Household Income Required to Purchase Housing of Various Standards and Locations, Mexico City DD148 A18 Estimates of Construction Costs and Monthly Household Income Required to Purchase Housing of Various Standards and Locations, Nairobi DD150 A19 Estimates ofC onstruction Costs and Monthly Household Income Required to Purchase Housing of Various Standards and Locations, BogotaDD152 A20 Estimates ofC onstruction Costs and Monthly Household Income Required to Purchase Housing of Various Standards and Locations, Ahmedabad 00154 A21 Estimates ofC onstruction Costs and Monthly Household I nco me Required to Purchase Housing ofVarious Standards and Locations, Madras 00156 A22 Implied Subsidy in Provision of Housing to Low-Income Families, by Location, Selected Cities DD158 Figure 5.1. Distribution of Monthly Household Income and Housing Affordability, Selected Cities DO 73 Preface THIS STUDY IS A PRODUCT of the interaction among World Bank staff members and consultants much more than an individual effort. Begun by the Development Economics Department as an attempt to under stand the role of housing in urban development and to find ways of reducing poverty in cities, the study was drafted in the Urban and Re gional Economics Division of that department and benefited from close collaboration with the Transportation and Urban Projects Department. At the same time three persons contributed so substantially to this work that it is impossible fully to identify their separate contributions or how they differ from mine. Helen Hughes was the study's mentor, guiding its development over months of research and drafting. Her per ception of the housing problem in general, as well as of the role of housing in economic growth and income distribution and of policy mea sures to tailor housing to the circumstances of low-income families, helped shape the analytical foundations of the study. She provided the framework of chapter two, most of what is valuable in chapter seven, and insight that improved the rest. John M. Carson designed the com parisons of housing cost and household incomes in chapter five and undertook much of the field work. In meetings and discussions he shared with us his perception of housing conditions and policies in developing countries. Without his enthusiasm and perseverance it is doubtful that the study would have emerged in its present form. Douglas H. Keare originally framed the cost-income comparisons of chapter five and con tributed in many other ways to the analytical content of the study. He carefully read all drafts and made many suggestions that improved their structure. Beyond this circle of principal researchers, special thanks are due xiii xiv PREFACE to those who helped in a variety of other ways to prepare the study: Pamela Brigg, Monique Cohen, John C. English, George Kottis, Carroll Long, Anna Sant' Anna, and Eleanor Sebastian. Mary Ann Heraud, Anne McKenna, Gwen Ritchie, and Darlene Hines supervised the typing of the manuscript with care and thoroughness. Wing Ning Pang skillfully assisted John Carson in presenting the data in chapter five and with many of the arguments of chapter seven. Nancy Hwang, Lea Adams, and Abdelaziz Khogali provided able research assistance. Michael A. Cohen contributed much to the overall design of the study in its early stages and provided encouragement throughout the writing process. Harrison Wehner later contributed many ideas, especially to chapters three and six. All those who helped prepare this study are deeply indebted to nu merous public officials and scholars in the cities in which field work was undertaken-Ahmedabad, Bogota, Hong Kong, Madras, Mexico City, and Nairobi-who answered our questions with perception and un failing good grace. We wish particularly to thank P. B. Buch, N. R. Desai, Jamnadis Patel, Ram Setya, and I.