Housing poverty and inequality in urban India

Abstract

Inequitable distribution of resources, including physical capital such as housing, poses a threat to sustainable development. Employing a case of housing in urban India, focusing on renter and slum dwellers, this study documents housing inequality and poverty, examines whether and why there is a gap in living standards (measured by dwelling size), and estimates the demand for housing. The study uses decomposition analysis to identify causes of inequality and estimates demand for housing among owner, renter and slum dwellers, employing a national representative microdata over a survey of 50,000 households. The results revealed that the average floor area consumption in renter/slum households is about two-third of the owner households, ceteris paribus. The reason for poor quality of renter/slum dwellings is not limited to differences in endowment levels, but also includes different ‘rates of return’ to these endowments. In order to enhance housing consumption in renter/slum dwellers, in addition to income improvement strategies, there needs to be a focus on skills upgradation and provision of a stable employment base. Moreover, renters/slums dwellers are concentrated in million plus cities and in the western and eastern regions of the country. Therefore, specific housing programs should be designed to target these regions.