This timer figure is based on research undertaken by Vic Jennings (University of Melbourne), Bill Lloyd-Smith (Royal Melbourne Institute of Technology) and Duncan Ironmonger (University of Melbourne) using United Nations statistics which pointed to the number of households (using medium fertility rates) being at 1,908,854,742 in 2010 and estimated to grow to 2,794,601,318 by 2030. Using World Bank estimates of 80 percent of the global population living on under US$ 10 per day, we have broadly deducted 20 percent of housing allocation from this estimate producing a total BoP requirement of 708,597,261 units or 35,429,863 per year / 2,952,489 per month / 97,068 per day / 4,045 per hour / 67.41 per minute.
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We argue why an incremental slum improvement finance strategy is a not an adequate solution for the base of the pyramid.
The debate continues as to the true effectiveness of housing micro- finance as workable strategy for base of the pyramid populations.
POSTED BY Ruban Selvanayagam, August 29th 2012
One of the most obvious, yet frustratingly ignored, implications of the ever-intensifying base of the pyramid (BoP) housing crisis is the practically non-existent pathway to improving the long term health conditions of slum residents. Whilst governments and poverty theorists may point to lower infant mortality rates amongst other positive social indicators in certain parts of the developing world, there is little reason to cease pressing the issue when contrasting such statements with the pace of urban sprawl and the clear lack of permanent solutions.
The main problems stem from a lack of the most basic building or land regulatory standards being applied to informal housing creation. Structures continue to be mounted extremely haphazardly in regions invariably with little or no connection to clean water, adequate sanitation, waste disposal, electricity and other essential utilities (which are usually illegally tapped into, where possible). Due to the rare legal status of these self-created communities, not to mention the lack of profit making opportunities, governments are little incentivised and often oblivious to providing such infrastructure services – bar for the “creation” or “support” of token initiatives when some kind of favour is desired (around election time, for example). This unattractiveness, in turn, has also meant that much needed investment interest growth in the sector continues to remain negligible at best.
The real health damage as a result of this growing reality is uncomfortably stark, ranging from the physical (malnutrition, diarrhoea, anaemia, typhoid, cholera, dysentery) to the psychological, cognitive and mental (depression, neurosis). The table below – published in the book “Room for Development” in association with the Inter-American Development Bank – points to the prominent impacts:
Whilst the last international consultation focused on the matter run by the World Health Organisation in 2010 in Geneva called for “clearer guidelines” to be implemented, it is very hard to see what progress has been made. A fundamental step in the right direction is to examine the issue quite literally from the bottom up in the form of establishing clear land rights – thereby create opportunities for key housing based initiatives to grow. Yet; with many communities being located precariously (such as on peripheral sloped areas, floodplains, waste dumps, industrial polluted areas); the ability to regulate land with a view of creating healthy living environments remains a tough challenge, fuelled by the often inherent presence of corruption and other inefficient vested interests.
There is also a need to think beyond simply just providing a base for housing interests to grow – that often results in “legalised slum” environments due to the continued lack of cohesive solutions and control over the management of community development. Whilst we have seen some growth in housing microfinance targeted towards incremental improvements, the lack of demonstrable business models has meant that such initiatives are highly unlikely to be able to step up to dealing with the issue at the necessary scale. A commonly quoted example of this is the Piso Firme Mexican initiative whereby dirt flooring is replaced with cement, thereby intervening in the spread of infections and other illnesses (costing approximately US$ 150 for 50m² of space).
Again, whilst providing a certain step in the right direction, as has regularly been argued on this blog, solutions such as these represent another example of the bare boned nature of response to the core questions within BoP housing. Without the right types of business models that move beyond the very superficial attitude of initiatives being given the green light so as to demonstrate in annual reports that “something is being done,” the reality is that we are barely scratching the surface.