BoP Housing in Metro Manila – Challenges and Potentials

POSTED BY Ruban Selvanayagam, November 6th 2012

A guest post written by Franziska Mey based on a recent study conducted by the BCI Fellowship Program in collaboration with ASEI (Asian Social Enterprise Incubator).  The full study – accessible here – provides a comprehensive picture of the current socio-economic situation of the slum dwellers in Metro Manila, outlining several case studies whilst highlighting the ever-rising critical needs and requirements of urban poor housing in South East Asia and, indeed, throughout the developing world. The BCI Fellowship Program is part of BCI Media Group’s “Fair Building Network” initiative.

Imagine coming home to a small one-room apartment where you will prepare food and eat, socialise and sleep. For a person on a tight budget this is a realistic scenario.

Now imagine a family of four to five people sharing this living area. They will not only have to store their clothes, personal belongings and kitchen equipment in this constraint space, but also find enough room for everyone to sleep at night. This is the situation many low-income families in developing countries have to face in urban areas as they can only afford a squalid one-room house or apartment.

Overcrowding is one of the main characteristics of slums, according to the UN Habitat Programme. Together with the lack of water and sanitation, non-durable housing and insecurity of tenure, this issue manifests the housing inequality.

To date already two-thirds of the urban dwellers in Asia live in overcrowded conditions. This results from a combination of factors and is fuelled by the population and urban migration development in this region. The rate and scale of urban growth in Asia is exceptional worldwide. Its urban population has grown significantly over the last 60 years reaching more than 1.7 billion people.

The fact that sustained urban growth has become tantamount to the growth of slums and that many cities in the developing world are characterized by poverty and inequality is widely recognised.

Future predictions show that the urbanisation trend will continue and in 2050 Asian cities will agglomerate 3.4 billion people. Already in 2030, the region will have the largest urban population of all continents.

These figures indicate the high pressure placed on the land suitable for building in cities in the Asia-Pacific region. In combination with the strong economic growth over the recent years, land prices have been pushed up considerably. This applies especially to well-located ground in urban and inner-city areas. In combination with a current considerable deficit of housing stock in many Asian countries, affordable housing is scarce and the poor are confined to slum areas. However, not only the very poor occupy informal settlements. As a result of the increasing gap in the house-price-to-income-ratio, low and middle income families have also started to move into houses in the informal sector, and some are unable to move out despite risen income.

As the relative cost of housing is particularly high for people in lower income groups, they often cannot afford to spend high proportions of their salary on buying or renting a house. For them the informal sector often provides the only alternative.

The example of the Philippines reflects the situation of most other South-East Asian countries. Resulting from a rapid urbanisation and population growth in recent years, the country is facing a considerable lack of adequate housing. More than one third of the informal settlers of the country live in Metro Manila. After the latest census of the NSO in 2007 their number (in terms of households) reached nearly 545,000.  Assuming an average household size of 4.6 people it adds up to 2.5 million slum dwellers for the capital region. Considering an annual population growth of 1.7  and urbanisation rate of 2.1  this figure is likely to have increased to date to over 2.6 million people living in slums.

The growing number of informal settlers is a result of the sustained migration from rural areas and the escalating housing costs, which low and mid-income families struggle to afford.

At the foot of the high-rise buildings and modern designed towers, shanties are sprawling, revealing the city’s lack of formal affordable houses. The despair of people becomes obvious when considering the fact that danger zones, such as railroad tracks, garbage dumps and edges of waterways which are prone to flooding are also occupied.

With an average income of $290 US (11,000 PHP) per month, a 5-person family has little or no money to spend on a better home. More than half of their money will be spent on food, costs of utilities (such as electricity, water, communication), transportation and education fees.  The majority of the families living in Manila’s slums depend on the informal business sector in the vicinity of their living environment: often both parents work in the low-paying services category, such as junk collection, “sari sari stores” , tricycle driving and seasonal activities in the construction sector. Despite the low payment and often substandard working conditions, this sector provides semi-skilled or unskilled workers a chance to secure the livelihood of their families.

Income opportunities and free rent are the main reasons which are driving people to live in the informal settlements. Nevertheless, having the opportunity to move to an affordable and accessible housing alternative, they would do so.

Over the last years the National Housing Authority (NHA) has run different programs (such as the housing assistance program) to relocate slum dwellers under the pretext of development or embellishment work. Only recently, the former Interior and Local Government Secretary Jesse Robredo declared that lagoons and waterways in Metro Manila will be cleared of informal settlers in the next five years.  The latest floods and natural disasters spur those plans. These initiatives, however, are feared by the dwellers and have been often criticised for their rough methods of short notice demolitions and forced evictions.

The resettlement areas offered by the NHA, often do not meet the requirements needed. Despite relocation to formal buildings in safer areas of the city or in new town settlements, the new residents are experiencing lack of income opportunities, social services and public facilities. As a result some of the relocated families returned to their original settlements.

This is one of the effects that illustrate the failure of the Government’s housing assistance program to address the needs and requirements of the affected people. The lack of coordination with community members and missing integration of the new residents into the planning process of the new settlement counteract the efforts of the Government to deal with the housing crisis in the Philippines.

A neighbouring country has run another path. Indonesia hold some lessons learned regarding slum upgrading, as a less costly solution to the problem of providing adequate and affordable shelter for urban households. The Kampung Improvement Programme (KIP) in Indonesia, introduced in 1969, installed much needed infrastructure and improved the urban environment in rapidly deteriorating slums.  Indeed, slum upgrading was highlighted by the UN as one of the most significant innovations in housing policy. In the UN Habitat program it is regarded as the most cost effective means of improving the shelter conditions of the poor.

However, slum upgrading has not been prioritised by the Philippines government. Although the government’s Community Mortgage Program shows some promising approaches to enable the poor to access adequate and affordable housing by offering loans to low-income families. Due to the incapability of the Philippine’s government to cope with the housing problem, different actors have also taken action to improve the situation for the poor. Non-Governmental-Organisations as well as the private sector are providing assistance and strategies for affordable mass housing. Beyond that, a new type of institutional arrangement is emerging. Public Private Partnerships bring different governmental, civil and private stakeholders together in order to respond to the challenges of housing shortage in the country.

The collaboration of these stakeholders with community organisations of the informal settlements (which play an advocating role and help to mobilising people, raising awareness and educating community members) might be the key to providing adequate housing for the poor.

As relocation is not always the favoured alternative, slum upgrading and improving of the informal housing stock represent viable approaches. That is especially true when considering that poor families living in Metro Manila often use their own savings as well as their own labour for the construction and refurbishment of the houses.  The lack of access to land, tenure security and property rights remain major issues and they need to be solved on a higher level. Nevertheless, poor families need to be enabled to help themselves. The supply of affordable construction materials and technical assistance can make a difference for the Bottom of the Pyramid (BoP) market..

Categories: Base of the Pyramid Housing, Bottom of the Pyramid Housing, Disaster Housing Solutions, Global Affordable Housing, Impact Investment Housing, Low Income Housing

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