Skip to main content
SpringerLink
Log in

The Cyclical Interaction of Institutional Constraints to Formal Affordable Housing Market in Raipur, India

  • Chapter
  • First Online:
Land Policies in India

Part of the book series: India Studies in Business and Economics ((ISBE))

  • 466 Accesses

Abstract

The institutions that regulate the provision of housing in India enable and constrain the affordable housing market in many ways. These constraints are varied, interrelated and binded in varying degrees as indicated by the case study of Raipur. This chapter provides evidence about such constraints and how they interact with each other resulting in existing institutional arrangements. Because these institutions are connected to each other in complex ways, it is both difficult and inappropriate to isolate the institutions. Focus on individual key constraints as being critical should, therefore, not undermine the importance of the interaction between the institutional constraints.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution

Institutional subscriptions

Notes

  1. 1.

    Even if not of the same magnitude or nature, relating specifically to people on low incomes gaining access to adequate housing.

  2. 2.

    High income group (HIG) and mid income group (MIG).

  3. 3.

    The Economically weaker sections (EWS) and low income group (LIG) as defined by the government of India are herein referred to as the urban poor.

  4. 4.

    Assocham Excellence Award 2014 for its Special Contribution to Low Cost housing, HUDCO award for its remarkable work in fields of environmental management and energy efficiency through green building concept, EPC World Award 2012 for Affordable Housing, HUDCO Award for Best Practices to improve the Living Environment 2011–12.

  5. 5.

    Housing Affordability has to be always measured on a sliding scale as two families with the same income but with different family size might not have the same affordability.

  6. 6.

    1USD = Rs. 55.

  7. 7.

    North here was responding to Demsetz, who posited that institutions evolve so as to produce conditions for steadily increasing economic efficiency. North disagreeing with Demsetz, clarifies that vested interests can prevent movements towards greater economic efficiency.

  8. 8.

    There might be considerable dissent among the members of the society.

  9. 9.

    See Pellissery et al. (2016), for a study on how rent-seeking interests engineered through the nexus of politician-realtor class have legitimised evasion of rules as the norm and driven regulatory changes with regards to planning laws in Bangalore.

  10. 10.

    Based on the ancient Roman property law principles (usus, fructus, and abusus).

  11. 11.

    However, “if private property rights are not viewed as being legitimate or are not enforced adequately, de jure private property becomes de facto open access” (Feder and Feeny 1995).

  12. 12.

    It will begin with several transactions being perceived as ‘too costly’ that do not take place. Over the years, the system will either revamp itself, or result in a system failure.

  13. 13.

    The biggest reported constraint being non-availability of affordable housing.

  14. 14.

    Simple interest of 60% per annum.

  15. 15.

    For more details on the supply constraints to affordable housing market in Raipur, refer Ram and Needham (2016).

  16. 16.

    For details of how the informal land and housing market works in Raipur refer Ram and Needham (2016a).

  17. 17.

    While there is a requirement for builders to meet a certain standard, the monitoring and enforcement of such standards is often times lacking.

  18. 18.

    Even when the planning permission is granted for the entire project, the building permission is given in stages. For example: the building has 6 floors planned, the layout is approved fees charged for all 6 floors, with the permission to construct 2 or 3 floors. After the construction of 3 floors, a fresh application has to be put into seek permission for building the remaining floors.

  19. 19.

    183 out of 211 respondents.

  20. 20.

    7/30 builders (23.3%).

  21. 21.

    11/30 builders (36.6%).

  22. 22.

    165 out of 211 households.

  23. 23.

    The CMS study (2012), found that three out of every four slum dwellers claimed they were asked to pay a bribe to receive at least one of the following three public services: distribution of food rations or free kerosene; healthcare; and municipal services such as public sanitation and waste removal in the 12 months prior to the survey. About 35% of slum dwellers reported that they have been denied services at least once because they could not pay a bribe.

  24. 24.

    Average for the cities sampled by the study.

  25. 25.

    Does not include the time taken; time taken was separately calculated as number of days.

  26. 26.

    The stamp-duty varies from 12.5% of the property value (Kochi) to as low as 3% (New Delhi). It is 4.8% in Mexico.

  27. 27.

    A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 90 days, but this can depend on the contract terms.

  28. 28.

    Sengupta and Tipple (2007) have documented a similar story of the public housing agencies in Kolkata which seem to be operating on market principles; even where they are not involved with private partners, the public housing agencies are in the market to make profits (even if they don’t call it profits), like any other real estate developers, rather than building for low-income people.

References

  • Agarwal A, Jain V, Karamchandani A (2013) State of the low income housing market: encouraging progress & opportunity to realize dreams of millions. In: Monitor Inclusive Markets, India. Deloitte Touche Tohmatsu India Private Limited (2013)

    Google Scholar 

  • Allen DW (2000) Transaction costs. In: Bouckaert B, De Geest G (eds) Encyclopedia of law and economic, vol 1: The history and methodology of law and economics. Edward Elgar Publishing Limited, Cheltenham, pp 893–926

    Google Scholar 

  • Banerjee, A.V., Cole, S., & Duflo, E.: Bank financing in India. A tale of two giants: India’s and China’s experience with reform and growth. International Monetary Fund and the National Council of Applied Economic Research (India), New Delhi (2003)

    Google Scholar 

  • Berner E (2000) Informal developers, patrons, and the state: institutions and regulatory mechanisms in popular housing. In: ESF/N-AERUS Workshop ‘Coping with Informality and Illegality in Human Settlements in Developing Cities’. Leuven

    Google Scholar 

  • Berner E (2001) Learning from informal markets: innovative approaches to land and housing provision. Dev Pract 14(1)

    Google Scholar 

  • Boudreaux K (2005) The role of property rights as an institution: implications for development policy. Mercatus Center at George Mason University

    Google Scholar 

  • CGHB (2007) Housing revolution in Chhattisgarh: 3 years of Chhattisgarh Housing Board. Chhattisgarh Housing Board, Raipur

    Google Scholar 

  • CMS Transparency (2012) Press Release 7 Dec 2012—CMS-India corruption study 2012: expanding slums & growing corruption. Retrieved 21 May 2014, from CMS India: http://www.cmsindia.org/PressReleaseCMS_ICS_2012.pdf

  • Cushman & Wakefield. (2014). Housing: The Game Changer leading to double-digit GDP growth. Cushman & Wakefield Research Publication

    Google Scholar 

  • De Soto H (2000) The mystery of capital. Black Swan, London

    Google Scholar 

  • Deb A, Karamchandani A, Singh R (2010) Building houses, financing homes: India’s rapidly growing housing and housing finance market for the low income customer. Funded by First Initiative and Supported by the World Bank, A study commissioned by the National Housing Bank, India. Monitor Inclusive Markets

    Google Scholar 

  • Demsetz H (1967) Toward a theory of property rights. Am Econ Rev 57(2):347–359

    Google Scholar 

  • Eggertsson T (1990) Economic behavior and institutions. Cambridge University Press, New York

    Book  Google Scholar 

  • Ensminger J (1997) Changing property rights: reconciling formal and informal rights to land in Africa. In: Drobak JN, Nye JV (eds) The frontiers of new institutional economics. Academic Press, San Diego, pp 165–196

    Google Scholar 

  • Ensminger J (1996) Making a market: the institutional transformation of an African Society. Cambridge University Press, Melbourne

    Google Scholar 

  • Greif A (2006) Institutions and the path to the modern economy: lessons from medieval trade. Cambridge University Press, New York

    Google Scholar 

  • GTZ ASEM (2010) Slum Profile [Raipur]. Alchemy Urban Systems (P) Ltd. (Alchemy), Bangalore Consortium for DEWATS Dissemination (CDD Society) Bangalore, CEPT Research & Development Unit (CRDU), Ahmedabad. Report commissioned by GTZ for RMC, Raipur

    Google Scholar 

  • Hårsman B, Quigley JM (1991) Housing markets and housing institutions in a comparative context. In: Housing markets and housing institutions: an international comparison, pp. 1–29. Springer, Netherlands

    Chapter  Google Scholar 

  • Hugi A (2012) Transitions—India: Fighting graft at the grassroots, Sept 13. Retrieved 21 May 2014, from Foreign Policy: http://transitions.foreignpolicy.com/posts/2012/09/13/india_fighting_graft_at_the_grassroots_0http://transitions.foreignpolicy.com/posts/2012/09/13/india_fighting_graft_at_the_grassroots_0

  • Knight J (1992) Institutions and social conflict. Cambridge Univeristy Press, Cambridge

    Book  Google Scholar 

  • Mahadevia D, Joshi R, Sharma R (2009) Working paper 2: approaches to the lands for the urban poor. Centre for Urban Equity

    Google Scholar 

  • North D (1990) Institutions and a transaction-cost theory of exchange. In: Alt JE, Shepsle KA (eds) Perspectives on positive political economy (Chap. 7). Cambridge University Press, Cambridge, pp. 182–94

    Google Scholar 

  • North D (1986) The New institutional economics. J Instit Theoret Econ (JITE) 142(1):230–237

    Google Scholar 

  • Panchu S, Rastogi A (2013) The battle between corruption and governance in India: strategies for tipping the scale. In: Cisse H, Menon NM, Segger MC, Nmehielle V (eds) The world bank legal review, vol 5: fostering development through opportunity, inclusion, and equity. The World Bank Group, pp 381–398

    Chapter  Google Scholar 

  • Paul S, Shah M (1997) Corruption in public service delivery. In: Guhan S, Samuel P (eds) Corruption in India: agenda for action. Public Affairs Centre, New Delhi, pp 144–163

    Google Scholar 

  • Pellissery S, Chakradhar A, Iyer DK, Lahiri M, Ram N, Mallick N, Kumar N, Harish P (2016) Regulation in crony capitalist state: the case of planning laws in Bangalore (21 June 2016). Der öffentliche Sektor (The Public Sector): planning, land, and property: framing spatial politics in another age of austerity, vol 42, No. 1, pp 110, 2016. Available at SSRN: http://ssrn.com/abstract=2798748

  • Ram P, Needham B (2016) The provision of affordable housing in India: are commercial developers interested? Habitat Int 55(July):100–108

    Article  Google Scholar 

  • Ram P, Needham B (2016a) Why is public policy for affordable housing in India changing so slowly: explaining Institutional Inertia, environment and urbanisation, Asia, Special Issue “Towards HABITAT III: Housing and Sustainable Urban Development”, 7(2):177–195

    Article  Google Scholar 

  • Sengupta U, Tipple AG (2007) The performance of public-sector housing in Kolkata, India, in the post-reform Milieu. Urban Stud 44(10):2009–2027

    Article  Google Scholar 

  • WIEGO (n.d.) Street vendors in India. Retrieved 18 Feb 2014, from women in informal employment: globalizing and organizing (WIEGO): http://wiego.org/informal_economy_law/street-vendors-india

  • Working group on Construction Sector for Planning Commission (2012–17) (2011) Report of the working group on construction for the 11th five year plan (2012–2017). Government of India, New Delhi

    Google Scholar 

  • World Bank (2009) Doing business in india. World Bank and the International Finance Corporation, Washington, D.C.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Land Economy, University of Cambridge, Cambridge, UK

    Padmini Ram

Authors
  1. Padmini Ram
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Padmini Ram .

Editor information

Editors and Affiliations

  1. National Law School of India University , Bengaluru, Karnataka, India

    Sony Pellissery

  2. TU Dortmund University, Dortmund, Germany

    Benjamin Davy

  3. Department of Urban and Regional Planning, University of Wisconsin-Madison, Madison, Wisconsin, USA

    Harvey M. Jacobs

Rights and permissions

Reprints and permissions

Copyright information

© 2017 Springer Nature Singapore Pte Ltd.

About this chapter

Cite this chapter

Ram, P. (2017). The Cyclical Interaction of Institutional Constraints to Formal Affordable Housing Market in Raipur, India. In: Pellissery, S., Davy, B., Jacobs, H. (eds) Land Policies in India. India Studies in Business and Economics. Springer, Singapore. https://doi.org/10.1007/978-981-10-4208-9_8

Download citation

Publish with us

Policies and ethics

Search

Navigation