However, although the promotion and legalisation of cheaper materials such as these may help, they will only reduce at the margins the numbers of people in any urban society who are caught in the housing affordability dilemma. After all, standards in the UK allow for the possibility of building a house using straw bales for the walls, but this has evidently not addressed the housing affordability issue there. This is because the cost of the walls of a home in a city is only a very small fraction of its total costs over time. It is even a fairly minor element of the cost of the materials for the house per se. The costs of floors and roofs, windows and doors are all significant, and once the house goes beyond a single storey, cheaper wall materials may not work structurally – they definitely do not work for a high-rise building.
Another way of recognising the limitations of a focus on the costs of building materials is to realise that households may be able to afford to build solid, decent homes in rural areas using conventional, modern building materials but cannot afford to do so in the urban area where they need to be to earn a living. There are various reasons why. A significant one is the much higher cost of legal urban land, which is why there is so much emphasis on ‘providing’ such land in analyses of urban housing shortages. Certainly, if urban land were available at the same cost as remote, rural land, housing costs would fall sufficiently to allow very many more to afford an urban home. But, as previously pointed out, this only serves to prove the key argument: that urban housing costs set by formal-sector private, market forces are unaffordable for large swaths of urban populations. There are also the costs associated with energy, water and sanitation service infrastructure and, what is sometimes forgotten, the recurring costs of using these services. The density of urban populations – and density is a defining aspect of urbanity – may make many low-cost solutions such as wood fuel, pit latrines or wells problematic or downright dangerous, although they can work in some circumstances. There are some good reasons why urban housing standards are different from rural ones. Urban local taxes or rates to pay for other crucial services such as roads, street lights or policing add more costs.
Also, some of these issues about ‘inappropriate’ standards affect homeowners but are of less relevance to renters. The proportion of people who rent varies greatly across the world, with no clear pattern between the GS and GN, but broadly speaking it is more prevalent among poorer people (partly, of course, because they cannot afford to buy). As already explained, many of the regulations about housing in the UK are about rented accommodation because that is where the most flagrant and dangerous conditions tend to occur – the historical background to the development of ‘standards’ legislation needs to be remembered. But in much of the GS, renters have very little protection and are faced with dangerous and demoralising housing conditions. More regulations, not fewer, might help them. In Zimbabwe, in the planned low-income areas where the main targets of demolitions in 2005 were backyard shacks, most of those rendered homeless were tenants, while plot-owners and homeowners were left untouched (although they lost a significant income stream from forfeited rents).
While each element of ‘standards’ can be debated and possibly adapted to local circumstances, this can miss the point that the costs of a legal, formal, urban home that is located so that it is realistically possible for its inhabitants to be part of the city’s economic and social fabric are an assemblage of many market-set prices for different elements. In the end, once it is accepted that standards are necessary to keep people alive or healthy, it makes more sense to start with the issue of affordability and the profiles of disposable incomes (i.e. after tax and other deductions, and after basic needs such as food, water and clothes are taken into account) that are typical for the society in question. These can be used to create the housing affordability curves discussed in Chapter 2, which provide an indication of how many urban citizens cannot ‘afford’ formal-sector, market-priced housing. Where, as is common, there are significant differences in such profiles and housing costs between cities in any one country, with the capital city often far more expensive but also with very significant proportions of very poor people living alongside the country’s wealthiest, then separate affordability curves are needed. If these, for example, show that 50% of households in any one city cannot afford to pay the upfront and recurring costs of the cheapest, legal urban home, then it becomes apparent that reducing the costs of wall materials, or whatever, may help only a small proportion of these people and that the scale of the problem requires a different approach.
The bemoaning of inappropriate standards in housing in relation to the GS also has to be treated with some caution, as, although there are historical links to European standards, there have also been sensible adaptations in many countries. Furthermore, as noted earlier, implementation regimes, rather than laws themselves, are really more important. The vast majority of homes that do not meet standards across the GS – and also many in the GN – are not under threat. Knocking down unplanned extensions, as happened in Zimbabwe, is usually a GN issue. A bigger threat often arises over tenure – where homes are built on land under arrangements that are not seen by city officials as legitimate, particularly where the land occupied has, or has come to have, high value that more powerful interests want to obtain. Legislation about standards in the UK, for example, does not mention this: that is, there is no ‘rule’ in the statutes which says that rented or owned houses must have legal title to the land they occupy. It is largely taken as read, but for housing standards in the GS, it is quite often the ‘big issue’.
So what types of urban housing have been and are being produced in the world’s large cities? How affordable have they been and how affordable are they today? What makes houses more or less affordable for ordinary urban residents? How have all the hundreds of millions of urban households in the lower bands of national income groups managed to house themselves? What forms does their housing take? The answers to these questions involve a complex mix of private- and public-sector actors, trends in political economic ideologies, changes in the share of national income accruing to working people and those too old to work, key historical moments that create space for progressive outcomes previously constrained by powerful vested interests, and the history of past and current modes of production that underpin the ways in which urban land is owned and transacted. These are the topics of the next five chapters.
Private-sector urban housing provision: formal and informal
In the Global North (GN), most urban housing was built by the formal private sector with the aim of making a profit. In the Global South (GS), much, and sometimes most, was built by the informal private sector – if this is understood to include ‘self-help’ housing where homes are, usually gradually, built by their owners. The informal sector also builds plenty of for-profit housing, usually for rent, and many ‘self-builders’ pay small-scale informal enterprises to help build their houses. Many homes are also built by the public sector for renting, or homes for buying are subsidised by governments, not-for-profit actors and donors of various sorts. The focus in this chapter is on private-sector delivery of rental houses and houses for ownership by both formal and informal actors, with an emphasis on what has happened and why and the outcomes for urban populations. Key themes are the similarities and differences between these sectors and the pros and cons of each in terms of affordable housing ‘delivery’.
There are some straightforward similarities between the formal and informal housebuilding sectors in terms of market forces that influence things such as the pace of building, the height of houses or rental units (one storey or more),