urban – Pertinent Observations

The myth of affordable housing

Cities are unaffordable by definition because of the value that can be extracted by living in them.

A few months back, my Takshashila colleague Varun KR (Shenoy) asked me if there is any city where housing is not prohibitively expensive. It wasn’t a rhetorical question. While answering “no”, I went off on a long rant as to why affordable housing is a myth, and why housing in urban areas is by definition expensive. I had been planning to blog it for a while but I get down to it only now.

Cities are expensive to live in due to a simple reason – lots of people want to live there. And why do lots of people want to live in cities? Because the density in cities means that there is a lot more economic activity happening per capita that results in greater productivity and happiness.

If you are in a rural area, for example, there are few services that you could afford to outsource, for the small scale means that it doesn’t make sense for people to provide that service. Even when such services exist, lack of competition might mean a large “bid-ask spread” and hence inefficiency. This means you are forced to do a lot more tasks which you suck at, leaving less time for you to do things you are good at and make money from.

Needs of a rural area also means that there is a natural limit on the kind of economic activities that can be remunerative there, so if your skills don’t lie in one of those, you are but forced to lead a suboptimal existence.

Larger agglomerations (such as cities), by putting people closer to each other, provide sufficient scale for more goods and services to become tradable. Transaction costs are reduced, and you can afford to outsource a lot more tasks than you could afford to in a rural area, thus boosting your productivity.

Economist and noted urban theorist Jane Jacobs, in her book “Cities and the Wealth of Nations”, argues that economic development occurs exclusively in cities and “city regions” and proceeds to demolish different theories by which people have tried to create economic value in remote areas (my review of the book here).

The larger a city is, the greater the benefits for someone who lives there, controlling for ability and skill. Thus, ceteris paribus, the demand for living in cities exceeds that of living in smaller agglomerations, which gets reflected in the price of housing.

It might be argued that what I have presented so far is only an analysis of demand, and supply is missing from my analysis. (I don’t understand who is on the left and who is on the right on this one but) One side argues that the reason housing is not affordable in cities is that strict regulations and zoning laws limit the amount of housing available leading to higher prices. The other side talks about the greed of builders who want to “maximise profits by building for the rich”, which leads to undersupply at the lower end of the market.

While zoning and building restrictions might artificially restrict supply and push up prices (San Francisco is a well-known example of a city with expensive housing for this reason), easing such restrictions can have only a limited impact. While it is true that increasing density might lead to an increase in supply and thus lower prices, a denser city will end up providing scale to far more goods and services than a less dense city can, thus increasing the value addition for people living there, which means more people want to live in these denser cities.

As for regulations that dictate that “affordable housing” be built, one needs to look no further than the “Slum Rehabilitation Apartments” that have been built in Mumbai on land recovered from slums (the usual deal is for a builder to commit to building a certain number of “affordable” houses for the erstwhile dwellers of the slums thus demolished apart from “conventional” housing). Erstwhile slumdwellers rarely occupy such apartments, for they are willing to accept a lower quality of life (in another slum, perhaps) in exchange for the money that can be generated by renting out these apartments.

This piece is far from over, but given how long it’s been, I’ll probably continue in a second part. Till then, I leave you with this thought – a city becoming an “affordable” place to live is a cause of worry for policymakers (and dwellers of the city itself) because it is an indicator that the city is not adding as much economic value as it used to.

Car-free days, traffic jams and social capital

While most news nowadays is fairly hilarious, one piece was more hilarious than the others. This was about traffic jams in Gurgaon yesterday, a day that had been declared as a “Car Free Day”.

You might wonder why there might be traffic jams on days that are supposedly “Car Free”. I don’t know the precise effect this can be classified under, but it’s somewhere in a linear combination of Prisoner’s Dilemma and Tragedy of the Commons and correlation, all led by a lack of social capital.

There are no rules that declare the day to be car free. It’s just a “request” by the local government (traffic police in this case). While there were some nominal efforts to improve public transport for the day, etc, there was nothing else that was different yesterday from other days. So why did it lead to a traffic jam?

If you know it’s a car free day and you have a car, you’ll assume that other people are going to leave their cars at home, and that you are going to have a free ride in free-flowing non-traffic if you take out your car. And so you take out your car. Unfortunately, the number of people who think such is enough to cause a traffic jam.

The problem stems with a lack of social capital in Indian cities (based on anecdotal experience (my own data point from 2008-09), I would posit it is lower in Gurgaon than in other Indian cities). As a consequence, when people are trying to make the “great optimisation”, they allocate a greater weight than necessary to their own interests, and consequently a lesser than necessary weight to others’ interests. And thus you end up with outcomes like yesterday’s. More generally, “requests” to people to give up a private benefit for others’ benefits can at best turn out to be counterproductive.

While designing policies, it’s important to be realistic and keep in mind ease of implementation. So if the reality is low social capital, any policy that requires voluntary giving up by people is only going to have a marginal impact.

Coming back to traffic, I’m increasingly convinced (I’ve held this conviction since 2006, and it has only grown stronger over time) that the only way to make people switch to public transport is to lead with supply – flood the streets with buses, which among other things actually increase the cost of private transport. Once there is sufficient density of buses, these buses can be given their own lanes which further pushes up the cost of driving. Then we can look at further measures such as prohibitive parking costs and congestion pricing.

We can have these notional “no car days” and “bus days” and “no honking days” but it is unlikely that any of them will have anything more than a token effect.

Getting BRT to work

Dedicated bus lanes are neither a necessary nor a sufficient condition for BRT

After significant success in Ahmedabad and spectacular failure in Delhi, Pune is the latest city in India to embark on a “Bus Rapid Transport” (BRT) project. As the name suggests, the point of a BRT is to provide fast and convenient transport to people on buses that ply on existing roads, with some sections of some roads being reserved for buses.

However, in popular imagination, BRT has become synonymous with bus lanes (a lane of road reserved for buses), and the whole controversy in Delhi (which caused the project to be shelved) was about a lane of an arterial road being reserved for buses. In fact, however, a dedicated bus lane is neither a necessary nor a sufficient condition for implementation of BRT.

The attraction of BRT is that it comes with low infrastructure cost – unlike a train or monorail (or even a tram) line, there is not much investment required in terms of physical infrastructure. The challenge with BRT, however, is that its buses are liable to get stuck in traffic (just like every other vehicle) which might prevent it from living up to its middle name.

For this reason, certain changes are made to traffic patterns so that BRT indeed remains rapid. For example, traffic signals on arterial bus routes might be designed to give priority to the directions where buses travel. You might have bus stops in the middle of the road for people to get on to buses. And you might reserve lanes on roads for buses. Once again note that the last named is not a necessary condition for BRT.

What BRT should deliver is a dense and reliable network of buses. On arterial and other key roads, frequency of buses should be extremely high. Our current model of point-to-point and hub-and-spoke based bus routes need to be given up in favour of a more dense network, where it might be quicker for people to change multiple buses to get to their destination. This also warrants a change in the ticketing system, using a zone-based ticket than the current point-to-point ticket, and moving ticketing offline.

The fashion so far in India (with Ahmedabad being a possible exception) is to announce arterial roads as “BRT corridors” and start off the BRT services by reserving lanes on these roads for buses, without bothering about linkages and networks at either end. The problem with this is that the losers of the road space “pay” immediately, but the benefits of BRT are not immediately forthcoming.

A better method of implementation would be to make reservation of bus lanes the last step in BRT. The first should be to increase the density of buses and creation of networks. The problem with this is that it requires investment and the expanded (and densified) network might run far below capacity for a while. Yet, as the network expands (even without dedicated lanes), people will begin to see the benefits and convenience offered, and demand for BRT will increase.

Two things will happen – firstly, the expanded and densified network of buses will start crowding out (literally) private vehicles on the road. Secondly, people will see the relative benefits of taking these buses and these buses will start filling up. As these two effects take place, there will come a point when lanes can be reserved for buses without slowing down any of the rest of the traffic.

What we need, in other words, is “system thinking“, and to look at BRT as a solution to move people to their destination in a more efficient manner. Once policymakers recognise that bus lanes are only a means to this end, we can expect BRT to implemented in a proper fashion.

Health and fitness not a rural concern?

It is now well accepted among nutritionists that excessive consumption of cereals is actually harmful to to health and can lead to problems such as high cholesterol, triglycerides, diabetes and fatness. In response to this, we have a number of new-fad diets such as the paleo and the keto and the Atkins which restrict intake of cereals. Even though the number of people practicing such diets might be low, in general there seems to be a trend away from cereal consumption.

Anyway, yesterday Mint put out a set of charts on malnutrition in India and the relative success of the Public Distribution System (in terms of prices for the end-consumer and nutrition only – not in terms of efficiency). What caught my attention was the last chart – the one on per capita cereal consumption in rural and urban areas.

I wasn’t comfortable with the dynamic chart on the Mint website (they have a slightly better multiple-column chart in the paper this morning), so I redrew it using lines. I’m still not sure if drawing it using lines (since the X-axis is deciles which is ordered but strictly not numerical) is the most appropriate but haven’t been able to find a better way to draw it so here goes.

The Mint piece talks only about the ratio of consumption of top and bottom deciles in rural and urban areas and stop by saying that in urban areas the poorest consume more cereal than the richest. The “trends” in the above two lines tells me a different story, though.

As you see, as we go towards the right (i.e. richer people), consumption of cereal in urban areas (the red line) actually drops! I would put this down to greater health-consciousness among the richer people of urban areas who are cutting down on cereals (either voluntarily or following the discovery of a lifestyle disease such as diabetes or cholesterol).

The blue rural line doesn’t show the same effect though – in fact, the richer you get the more cereal you consume if you are in a rural area. It either means that rural people are immune to lifestyle diseases (unlikely), or their lifestyles means that they aren’t as affected by lifestyle diseases as urban people (rather more likely) or that their lifestyle diseases go undiagnosed (perhaps even more likely) or that they have no choice but to eat cereals (unlikely again) or non-cereal sources of nutrition are too expensive for even the rich in the rural areas because of which they just consume more cereal.

Nevertheless, the trend shown in this graph is extremely interesting, and definitely shows among other things the power of aggregation when it comes to analysing data!

Workforce Participation of Women

Krish Ashok and Puram Politics have been collecting data from various government sources and converting them to excel. This data contains a wealth of information on social indicators in India. You can expect the next few issues of RQ to be based on this dataset. Data is drawn from various government sources including the Ministry of Statistics and Program Implementation (MOSPI).

Today we will look at the workforce participation of women across the states of India. First, let us look at rural women. Notice that the all India average participation is close to 60%. Himachal Pradesh ranks the highest with over 83% while (perhaps surprisingly, developed states such as ) Delhi, Kerala and Punjab bring up the rear.

Next we will look at the workforce participation of urban women. Note now that the all India average drops to an abysmal 20%! While migration to urban areas is generally associated with increased standard of living, it is interesting to note that more and more women don’t work in urban areas. It is perhaps a reflection of the kind of jobs that are available in urban India.

Notice that once again, Himachal Pradesh is top and Punjab and Delhi bring up the rear. Actually there seems to be a correlation between workforce participation of rural and urban women across states. Let us explore that with a scatter plot.

Notice that there is a strong positive correlation. Interestingly, Himachal Pradesh and Tamil Nadu (states associated with excellent education levels) display superior participation of urban women in the workforce relative to the participation of their rural women. Karnataka, Andhra Pradesh and Rajasthan are also found to be above the regression line. Interestingly, it is hard to draw a pattern from this data in terms of which state is more developed.

Basavanagudi

Recently the Deccan Herald carried an article on how Basavanagudi was an extremely well-planned area. It showed the original plan of Basavanagudi (drawn up in the late 1890s in the wake of the plague that hit the Pete area), and showed how well planned it was – demarcating public spaces, market areas, clubs, schools and residential areas. What is remarkable to me is that an area that was drawn up in the late 1890s has roads that are mostly wide enough to take even today’s traffic (a contrast in Malleswaram, built in the same area, but with extremely narrow roads by today’s standards).

On Thursday, I had to go someplace in Gandhi Bazaar (in Basavanagudi) from my grandmother’s place in Jayanagar, and that was when it struck me how small Basavaanagudi is. South End Circle and South End Road actually demarcated the southern end of Basavanagudi, while the so-called “North Road” (also called Vani Vilas Road) marked the northen end of this area. And I ended up walking from my grandmother’s house (about half a kilometer south-east of South End Circle) to National College in about fifteen minutes – and if you go by the map shown in the article linked above, it is the entire span of Basavanagudi! If this was one of the “major” planned extensions of Bangalore in that era, it goes to indicate the city’s population at that time.

It is interesting to note in the plan (as published by Deccan Herald) that the area that is now MN Krishna Rao park was demarcated as a “public square”. While the area is still being put to public use nowadays I couldn’t help but think of New York’s Union Square, which is build on an area much smaller than Krishna Rao park, but which has multiple uses to different sections of the population. Krishna Rao Park, on the other hand, is now a typical example of a “Jairaj Park” (nomenclature I’ve come up with after the former BBMP Commissioner, who was responsible for populating the city with a certain kind of park). I wonder if people still play cricket inside the park.

Until I saw the plan of Basavanagudi I hadn’t realized the symmetry in design. If you notice, at each corner of the public square there is a large roundabout which is somewhat off-centre (Armugam Circle, Netkallappa Circle, Tagore Circle and Dewan Madhava Rao circle). Of these, Tagore “Circle” is actually a square which doesn’t particularly serve the purpose of the roundabout thanks to which an ungainly underpass had to be built recently. And if you notice in the map, beyond each of these roundabouts is a “diagonal” road. The symmetry in design is remarkable. As an aside, while I was walking back to Jayanagar from Gandhi Bazaar on Thursday, I realized that large roundabouts are pedestrian-unfriendly! Unless they allow the pedestrian to cut across them (like in New York’s squares), of course.

For a long time I used to wonder why there is a Muslim Ghetto in the south-eastern quadrant of Basavanagudi (area between RV Road, Patalamma Street and the extension of BP Wadia road towards “teachers college”). The plan explains this. In line with the sensibilities of those times, Basavanagudi had dedicated areas for different castes and communities, and this sector was probably the area “reserved” for Muslims. It is the same with other areas developed in that time – for example Malleswaram also has a “Mohammedan block”. What is interesting, though, is that even Jayanagar, which was planned post-independence, when secularism was in vogue, has its pockets of Muslim Ghettos. I wonder if they grew organically or were by design. Also, read the map carefully. You will see that different parts of Basavanagudi have been earmarked for different castes!

It would be interesting if someone were to dig up the original masterplans for different localities in Bangalore, and also in other cities. It would be instructive to see how cities were developed at different points in time (for example, immediately after independence came the massive localities of Jayanagar and Rajajinagar – neither of which can be walked across in fifteen minutes). Also, this plan for Basavanagudi indicates that there were no villages in the area where it came up – which was not the case with areas such as Jayanagar which were planned around such villages. Again it would be interesting to see how villages were co-opted into the city.

I can go on but will stop here. I encourage you to also take a close look at the map and make your own inferences, and share them in the comments section.

How urban and upper-class are Bangalore constituencies?

There are 28 assembly constituencies in the general Bangalore area. General discourse is that these are urban middle class areas. This is going to be a bit controversial but I use the proportion of SC/ST population as a measure of how "middle-class" a constituency is. Population density is a proxy for how urban a constituency is. Data is taken from http://bbmpelections.in/wards — There are 28 assembly constituencies in the general Bangalore area. General discourse is that these are urban middle class areas. This is going to be a bit controversial but I use the proportion of SC/ST population as a measure of how “middle-class” a constituency is. Population density is a proxy for how urban a constituency is. Data is taken from http://bbmpelections.in/wards