Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/242881 
Year of Publication: 
2020
Series/Report no.: 
Working Paper No. 402
Publisher: 
Indian Council for Research on International Economic Relations (ICRIER), New Delhi
Abstract: 
Housing, particularly for low income urban households, is a long-standing challenge in India. In 2012, 96 per cent of the all India urban housing shortage of 18.78 million was confined to low-income economic groups. This study empirically examines three facets of urban India's housing demand using the latest available nationally representative household data on housing conditions. First, we estimate the urban housing shortage. Employing a methodology similar to that used by the Technical Group for the Twelfth Five-Year Plan (TG12) based on households which are physically inadequately housed, we find the shortage to be 29 million in 2018. However, the much needed and sustained policy focus on slum housing, which is not restricted to physically inadequate slum houses, warrants a broader approach to estimating housing shortage. Employing a broader approach, we estimate the upper bound of urban housing shortage to be 50 million. We find more than 99 per cent of the shortage has been confined to low-income economic groups in 2018. Second, we analyse the housing consumption demand of low-income households, or these households' demand for housing for purposes of residing or 'living in', and find demand to be price and income inelastic. Inelasticity or the lack of sensitivity of housing consumption demand to changes in price and income, is more pronounced in the case of poorer households and in the case of price. Third, since congestion in households is a prime cause of housing inadequacy, we focus on understanding the demand behaviour of congested households. We find low-income households seem to have accepted congestion as a way of life and it does not impact their housing demand behaviour, making the task of addressing congestion even more challenging. Our findings indicate that policies for housing urban India's inadequately housed households would have to work in tandem with efforts to improve their health, education, and livelihoods, focus on rental housing for the most vulnerable economic group among low-income households, and further incentivise incremental housing to address congestion.
Subjects: 
Housing shortage
congestion
housing demand
household surveys
slum
income groups
JEL: 
R21
R38
R00
Document Type: 
Working Paper

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