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NOLEGEIN Journal of Business Ethics, Ethos & CSR
eISSN: 2581-5601
Vol. 1: Issue 2
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Review on Global Practice of Housing Demand Fulfilment for
Low Income Group People
S.K. Shah1, A.K. Mishra2*
1Engineer, Division Office, Department of Urban Development and Building Construction, Saptari, Rajbiraj,
Kathmandu, Nepal
2Assistant Professor, Shanker Dev Campus, Kathmandu, Nepal
ABSTRACT
The number of slums and squatters are increasing at very high rate. The overall objective of
this study was to review the practice of fulfilling the housing needs for the low-income group
focused to Nepal and India with reference of the global practice. Content analysis from
different sources has been done. The problem of housing for low income people is all over the
world different nation has adopted different approaches. The major cities are undergoing an
urban explosion rather than managed urban growth. Access to employment opportunities, the
market, infrastructure, suitability and affordability are major influencing factor to fulfill
housing demand. The rent should be based on their monthly income according to their
affordability. The suitability and affordability of the approaches need to study. Further study
to find the suitable way to address the housing need should be conducted for specific nation
and city. A detail study is required about the relation between the economic status and
housing need of the low-income groups to find out the most important factors necessary to
change the housing need into housing demand for validating the study by taking few cases
from densely populated city of the world.
Keywords: affordability, approaches, housing demand, suitability
*Corresponding Author
E-mail: anjay_mishra2001@yahoo.com
INTRODUCTION
Housing being one of the basic needs of
the people, it is necessary to make the
provision for providing the adequate
housing facility to the people of all the
groups including the people of low-income
group, poor and excluded group to pave
the path for the sustainable and equitable
development of the world. The price of
housing is increasing day by day which is
a big challenge throughout the world and
slum is a global issue and providing shelter
to homeless people is fundamental
requirement for the globe. Commonly a
question is arising on the ethical integrity
of the state to include the excluded. So, the
main purpose of the study is to review the
global practice of addressing the housing
need of low-income people. It will be
helpful to planner and policy maker for
overcoming the problem. Hope ignition of
idea of the state and sharing of knowledge
will result into global unity to overcome
the issue of homeless people. Deductive
and inductive both approaches have
adopted for the content analysis of
literature.
LITERATURE REVIEW
The Low Income Groups
According to the World Bank reports, the
groups of people with daily income less
than US $ 1.25 are considered as the low-
income groups or the poor groups. There
are also many other official standard
definitions of the low-income groups or
the poor groups based on calorie intake
and proportion of the expenditure on food
Global Practice of Housing Demand Fulfilment Shah and Mishra
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(70% of the expenditure on food) exists.
One of the Indian Philosophers, Amartya
Sen has stated that are five prime factors
responsible for poverty, which are: (i)
Over population, (ii) Imbalance of
distribution of resource, (iii) Insufficient
education, (iv) Low opportunity for
employment and (v) Environmental
degradation.
Similarly, Satterwaire in 2002 A.D., stated
that there are eight aspects of poverty
which provide a range of possible policy
responses, and they are: (i) Shelter (ii)
Provision of public infrastructures (iii)
Income (iv) Asset base (v) Provision of
social services (vi) Protection of public
right through law enforcement (vii) Lack
of safety net to ensure access to shelter and
(viii) Powerless political system.
According to the Nepal Living Standard
Survey (2012), the estimation of poverty is
based on the cost of the basic need
approaches where the poverty line can be
defined as the expenditure value (in terms
of local currency), required by the
individuals to meet their basic needs in
terms of both food and non-food items. By
estimating the expenditure on food of the
poor, the food basket of the poverty line is
constructed. As there is a calorie anchor
guiding the estimation of the food poverty
line, no objective minimum non-food
requirement exists a priori. Following the
international standard, it is assumed that a
household, whose food consumption is
close to the food poverty line, will spend
the minimum on the required minimum
calorie requirement of 2,200 Kcal per day
to fulfill the non-food needs. In 2011 A.D.,
the average price of the poverty line was
estimated as NRs. 19,261.00; the food
poverty line as 11,929.00 and the non-food
poverty line as NRs. 7,332.00. Whereas
for the Kathmandu Valley, the average
price of the poverty line was estimated as
NRs. 40,933.00; the food poverty line as
NRs. 26,323.00 and the non-food poverty
line as NRs. 14,610.00 [1].
Regarding the composition, on average,
62% of the household consumption is
spent on the food expenditures in the
country. The Share of housing
consumption is 11%, that of education is
5% and the rest 22% is accounted for by
other non-food items. However, the
households of the Kathmandu valley tend
to spend more on house, rent and
education relative to the other urban and
rural areas [1].
HOUSING NEEDS FOR THE LOW-
INCOME GROUPS
The pace of urbanization has remained
faster and is likely to remain so in the
future. Nearly, 17.1% of Nepal’s
population resided in 58 designated urban
areas according to the 2011 census.
However, with the addition of 131
municipalities in 2014, 38.26% of Nepal’s
populations reside in 191 designated urban
areas. There have been fluctuations in
inter-censual urban growth rates. Although
the growth rate in the inter-censual decade
was 3.43%, the average annual growth
between 1981and 2011 has remained at a
high rate of 5.3%. Urban rural growth
differential in 2011 is 2.4% [2].
Kathmandu valley is the hub of Nepal’s
urbanization. Over half of Nepal’s urban
populations reside in the hills and the rest
in the Terai. The Central Development
Region (CDR) including the capital region
of Kathmandu harbors half of Nepal’s
urban population. The EDR and WDR
share 17%–18% of urban population each.
Regional levels of urbanization differ
markedly across ecological and
development regions. The level of
urbanization is highest in the hill region
(21.7%) compared to the Terai (15.1%)
and the mountains (2.8%). Among
development regions, CDR has highest
urbanization level of 23.5%. Distribution
of urban population as well as the level of
urbanization is relatively low in the
MWDR and FWDR. Physiographic and
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connectivity characteristics are important
determinants of urbanization which result
wide variation in the regional levels of
urbanization. The level of urbanization in
the Kathmandu valley (three districts) and
Pokhara valley (Kaski district) comes to
96.97% and 79.52% respectively, while it
is only 18.28% for the rest of the hills.
Similarly, inner Tarai valleys have a level
of urbanization of 41.97% compared to
38.94% for the rest of the Tarai [2].
Urbanization picture is dominated by few
large and medium cities. Kathmandu is the
only city with over a million people. In
terms of size class of urban centers, 14
urban centers (4 in the hills, 10 in the
Tarai) in 58 municipalities, and 2 urban
centers (in the hills) in recently added 131
municipalities with over 100,000
population have 33.53% of Nepal’s urban
population. The rest 66.47% live in 175
municipalities. This distribution shows an
urban hierarchy that is truncated towards
the lower end notwithstanding the fact that
urban boundaries are notorious both for
including large rural tracts on the one
hand, and ignoring urban sprawl beyond
municipal boundaries, on the other. The
fact that municipal status is a political
decision rather than a technical one, it has
also contributed to this picture, between
1991 and 2011 to the number of municipal
areas [2].
After conducting the national housing
survey in 1988, no other survey regarding
the housing has been conducted in Nepal.
However, the conduction of housing in
rural and urban areas has been presented in
the subsequent censuses and living
standard surveys of Nepal. According to
the national housing survey of 1988, there
were 3 million residential houses in Nepal
including those urban and rural areas. A
total of 47, 67,196 houses/buildings or
residential structures have been found in
the preliminary result of the national
census 2011. A total of 56, 59,984 families
appear to have settled their in. Thus, the
ratio of family and houses has been 1.2:1.
The number of families was 42, 53,200 ten
years ago. In this way 10, 06,764 families
appear to have been added during the last
10 years. Regarding the size of the family,
there are 4.7 members per family in 2011,
which were 5.44 in the year 2001. 4.05
persons on average have been found in the
families in the urban areas, while this
number is 4.86 persons in the rural areas;
this number was 4.86 and 5.65 persons
respectively 10 years ago. In observing the
population growth of the last ten years, it
appears that the population of Nepal has
increased by 15%, whereas the population
of Kathmandu Valley appears to have been
increased by 52%. In this way, it has now
become indispensable to address the
growing problem of housing in the
Kathmandu valley [3].
According to the census of 2001, there was
41,74,374 houses /buildings or residential
structures in total, out of which about 1.3
million houses in the rural area and about 1
hundred thousand in the urban area were
temporary in nature, which means that
about 33% of the total residential houses
appear to have been constructed in a
temporary manner. According to the
standard of living survey of Nepal,
2003/04, the population living in the houses
of their ownership was about 91.6% and
those living on rent was 5.4%, whereas,
these numbers appeared to be 92.8% and
2.2% respectively in the year 1995/96.
From the result of Fiscal Year 2009/10,
these numbers appear to be 90% and 8%
respectively. In this way, the number of
populations living in a rented house has
increased from 2% to 8% compared to the
first Standard of Living Survey, i.e. during
the period of 15 years [3].
According to the Nepal Standard of Living
Survey 2003/04, the condition of housing
Global Practice of Housing Demand Fulfilment Shah and Mishra
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in the urban areas appears to be better in
the comparison to the same in rural areas.
In the urban areas, it appears that about
72% families reside in their own houses,
23.5% on rent. 3.8% of the population
lives without paying rent and the
remaining in other ways such as
unsystematic settlements (squatters). But
in the case of Kathmandu Valley this
number appears to be increasing
surprisingly, about 35% of the population
lives on rent in the Kathmandu Valley [3].
Whereas in 2011, it appears about 69.2%
families reside in their own houses, 26.5%
on rent and 4.3% of the population live
without paying rent and the remaining in
other ways such as unsystematic
settlements (squatters) in the urban areas
of Nepal. But in the case of Kathmandu
District this number appears to be
increasing surprisingly, about 51.9% of the
population lives on rent in the Kathmandu
Valley [1].
The number or population living on rent
has been increased by 3%; the population
living without paying rent by 0.4% and in
unorganized shelter from 2003 to 2011.
The number of populations living on rent
and in unorganized shelter is increasing
fast since the last decade.
The housing facilities are yet beyond the
access for the urban poor through the
private housing companies are playing role
for housing supply because the housing
companies charge more profit on the
housing units to sell them. The housing
companies are running the housing
business for their economic benefit only
rather than meeting the need of the
adequate and safe housing service for the
urban poor as corporate social
responsibility. Hence, there is an instant
need to address the housing problem for
the urban poor in Kathmandu Valley in a
proper way.
Housing Need Fulfillment Practices in
India
A major change in the housing perspective
came with the launching of the first five-
year plan (1951–56) in 1951 in India, with
the acknowledgement that the public
sector must play a positive role to fulfill
the housing need. The first plan also
recognized that the low-income groups of
people could not afford even the minimum
housing cost, and the government took up
the initiative to provide the housing
services to the low-income group of
people, which was later extended also to
the middle-income group of people in the
second plan (1956–61).
The implementation of the explicit policy
on granting security and tenure to the
urban poor in India could be taken as the
useful lesson that can be learnt from it. It
was realized that regularizing the squatter
settlements would be the most suitable
approach for extending the security and
land tenure to the urban squatters. The first
state of India to implement this policy was
Madhya Pradesh, and later it was gradually
applied to the other states of India. This
was done through the unique legislation,
widely known as ‘Patta Act’, which was
enacted in 1984 and provided the basis for
granting leasehold right to the Pattas to
every house with the physical
improvement such as water taps, latrines,
roads, drainages etc. [4]
The public sector is still playing a
remarkable role for ensuring the access for
the urban poor to the serviced land and
housing, in India. The method of land
supply through the acquisition process by
the public sector was more popular and
traditional preferred. However, due to the
growing unwillingness of the land owners
and increasing land price, this land
acquisition method is becoming more
difficult nowadays. Use of regular
framework to create conditions for land
supply for the poor through the market,
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Providing Institutional finance on
reasonable terms for land assembly and
development for the poor and making
better use of existing public land services
and by spreading cost and lowering initial
cost through incremental land
development are practiced.
THE HOUSING POLICY OF INDIA
The aim of the housing policy of India is
to promote the development of cost
effective, quality building materials and
technologies with view to bringing down
the cost of EWS/LIG houses. 80.7 million
People are below poverty line in India
which is about one fourth of the total
urban population of the country. The urban
poor constitute 26.7% of the total poor in
the India. So, the housing policy of India
has also facilitated to provide the flow of
large funds from the government and
private sources to address the housing
needs by designing and encouraging the
innovative financial investments.
Housing Lottery Scheme in Ahmadabad
This housing scheme was launched in
Ahmadabad, which is India’s sixth most
populous urban areas and the largest city in
Gujarat. The population of Ahmadabad is
about 6.4 million as per the census in 2011.
The housing lottery scheme was initiated in
Ahmadabad by the ‘Self Employed
Women’s Association (SEWA)’ with the
cooperation of the several government
agencies. The SEWA is a collection of
trade groups with membership of over
5,00,000 women in Gujarat [5].
This scheme was focused towards
providing the housing facility to the
‘beedi’ workers of the city with a monthly
income less than US $ 11.28, i.e., IRs. 700.
The key motivations of the housing lottery
scheme in Ahmadabad was stated as
reducing the housing cost and improving
the tenure security, both of which was
believed to contribute to school dropout
cost among the beedi workers’ children.
497 numbers of eligible women entered
the lottery scheme who basically came
from two caste groups; Kosthi (35%) and
Padmasali (41%), whereas Muslims (10%)
was the third largest group [5].
Six years after the lottery, the SEWA
Union worked with the Ahmadabad Urban
Development Authority (AUDA) to
construct houses on a vacant land situated
7.5 miles from the city centre. The housing
units were single storey row houses of
approximately 200 square feet situated
back to back with a narrow alley running
in between. The construction cost of each
housing unit was IRs. 45,000 and the
residents paid an initial deposit of IRs.
900. Then they paid IRs 124 in monthly
rent and this rent was guaranteed for 20
years, which was less than half the average
rent at the city area of Ahmadabad [5].
Housing for Economically Weaker
Sections (EWS), Madras
This program was launched for the low-
income group of people to provide the
housing facility at the minimum cost. The
size of each housing unit was 28.00 sq.
and the proposed cost was IRs. 67,000.00
per housing unit. The peripheral
development was subsidized by the
government of India and the contribution
for IRs 20,000.00 per unit was provided by
the Delhi Development Authority (DDA)
by taking loan from Plan Funds at the rate
of 9%. The beneficiaries have to pay IRs.
27,000.00 as an initial down payment and
the remaining cost in 15 years payback
period with the monthly installment of IRs.
399.00 at the interest rate of 9% [4].
The provision of the housing plot is also
based on cross subsidy; i.e. 70% of the
plot is allowed for the economically weak
sections of the society, 2% for high
income groups, 3% for middle income
groups and 25% for the low-income group
of people.
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State Housing Board
The Ministry of Works, Housing and
Supply of Indian Government developed
several housing schemes that were focused
towards providing the housing facility to
the different income groups of people.
The Integrated Subsidized Housing
Scheme is one of the housing schemes
developed by the Ministry of Works,
Housing and Supply, in which houses are
provided for the industrial workers and
economically weak sector of the society,
whose monthly income is less than IRs.
350.00. It is based on the principle of 50%
loan, 50% subsidy and 7% interest rate.
Similarly, The Low-Income Group
Housing Scheme is another housing
scheme in which houses are provided for
those whose annual income is less than
IRs. 7,200.00 and who are far away from
the housing facility. The individual is
provided the loan up to 80% at the interest
rate of 7.5% with the payback period of 25
years. The size of the housing unit is 232
sq. ft. to 1,200 sq. ft.
Dharabi Redevelopment Project
The Dharabi Redevelopment Project is
located between the two main sub-urban
rail lines of Mumbai. It provides the
affordable housing opportunity to those
who move to Mumbai to earn money for
their daily life. The cost of the project is
IRs.21,000 crores and the annual turnover
is estimated to be more than $ 650 million
per year. The main objective of this project
is to redevelop and transform the squatter
settlements into a modern township.
The residents of Dharabi were provided
with the tenements near of Dharabi or
Dharabi itself in the implementation phase
of the project. The developer bears the cost
on the rent of tenements; whereas the slum
dwellers bear the expenditure of
consumables (water, electricity, etc). A
guarantee of 15 years in the maintenance
of infrastructure services within the
apartment buildings is provided by the
developers, for the benefit of the residents.
The land owner is facilitated with 70%
premium and the investment from the
government side is not offered.
Slum Improvement and Upgrading
One of the major projects which are
playing a remarkable role both in slum
improvement and in slum rehabilitation is
the Jawaharlal Nehru Urban Renewal
Mission. The Jawaharlal Nehru Urban
Renewal Mission also provides the
security of tenure, affordable housing and
basic services to the low-income groups in
the urban areas of India. The provision of a
better environment is being encouraged
with cross subsidization and special
incentives by the inner-city slum
redevelopment programs for facilitating
the land development and improvement of
basic amenities in slums, the land pooling
and sharing arrangements would be
encouraged. The provision of housing to
the urban poor at their current location or
near their work place is emphasized
through the policy. The policy has also
made some efforts to ensure that the tenure
rights provided are non-transferable for
10-15 years of time periods. To provide
better shelter serviced by basic amenities
through thrift and credit-based CBOs, the
Groups Cooperative Housing Societies of
urban poor and slum dwellers is being
formed and encouraged across the country.
Considering the deficiencies in housing
and urban infrastructure emphasizing on
the urban poor and indicates a vision based
on various levels of spatial plans along
with the investment plan for their
implementation, a 15-20 years perspective
plan is prepared at the local levels by the
cities.
HOUSING NEED FULFILLMENT
PRACTICE IN PAKISTAN
Pakistan demonstrated an emergence of
informal slum settlements termed as
‘Katchi Abadis’ in the process of
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urbanization in 1980’s and 1990’s. In
order to address this problem, well
stratified plan of action was designed to
ensure a harmonious resolution of those
settlements. Upgrading of those Katchi
Abadis in Pakistan, recognized as sub-
system of the overall urban settlement
system, were done through the provision
of security of tenure, infrastructure, and
community facilities. The facilities
provided through the Orangi Pilot Project
launched in one of the biggest Katchi
Abadis in Karachi inhabited by 1 million
people, consisted of water supply,
sanitation and street paving; and other
facilities such as electricity, education, and
community welfare etc. were provided by
respective sectorial resources [6].
Fahad Square, which built 10 years ago, is
an apartment complex with 248 housing
units for low income group of people,
located near the city centre. It is different
from the other sites, as it is not a
settlement consisting of houses on
individual plots but a developer-built
apartment complex. It is located in an
urban-development project in sub-urban
Karachi and is designed by the Karachi
Development Authority (KDA) on 26,000-
acre (65,000 ha.) land. It is built on 1.5
acre (0.60 ha.) of land and consists of 248
apartments and 56 shops. Each apartment
has three rooms and a covered area of 68.2
sq. meters. The whole apartment is a walk-
up affair of ground plus four floors. The
average household size is 5.72 persons per
apartment, yielding a density of 2,329
persons per hectare. The housing units in
the apartment complex are also different
from those in other case study as they have
balconies, attached bathrooms with glazed
tiles and ‘American Kitchen’, and they
project a different culture and way of life,
which is imposed by the developer [6].
HOUSING NEED FULFILLMENT
PRACTICE IN BANGLADESH
In the scenario of the rapid urbanization
and increasing urban poverty, the national
constitution of Bangladesh has recognized
the housing as a basic need for the people.
As a result, the National Housing Policy
was formulated and implemented in 1993
A.D. in order to guarantee the housing
right to every people. However, the access
of poor and marginalized groups to the
proper housing is still insufficient.
In the recent decades, the urbanization has
reached a critical level due to insufficient
infrastructure services and employment.
Specially in Dhaka, 55% of its 6,00,000
per year population is increasing due to in-
migration from rural areas. In 1991, 46%
of the population of Dhaka were in-
migrants and most of them had to face
economic crisis and absence of accessible
and affordable shelter and services and
pushed them to shelter in the slums and
squatter, which they locally called as
‘bastees’. The number of populations
living in the bastee was realized to be
increasing in uncontrolled way, in 1971 for
the first time [7]. As a result, the
formulation of plans and policies were
prepared and implemented to solve the
housing problems for the poor, and many
projects were implemented to manage the
housing for urban poor in an effective
way. Among such initiations, the
‘Grameen’ is one of the micro-financing
organizations in Bangladesh, which
provides loans to the low-income groups
of people without conventional individual
collaterals. This concept was introduced in
1979 and the system is implemented in
forty-three countries now. It is based on a
philosophy that poor does not create the
poverty, but it is created by the institutions
and policies that surrounds them. It also
explains that, it is not only the lack of
skills which makes people poor [8].
‘BAAN MANKONG’ NATIONWIDE
SLUM UPGRADING PROJECT,
THAILAND
The Community Organization
Development Institute (CODI) of the Thai
Government implemented the ‘Baan
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Mankong’ Nationwide Slum Upgrading
Project in order to provide the housing
facility to the low-income group of people.
THE MILLION HOUSE PROGRAM
(MHP) IN SRI LANKA
The urban housing programs were
launched under the Million House
Program (MHP) for the low-income group
of people during 1980’s. This program
came up with several housing alternatives
and loan packages such as upgrading
package, new housing package, utilities
package, and site and service package
which were accompanied by a
decentralized implementation model. This
program opened a door for the active
participation of the urban local authorities
and community development councils in
the decentralized model for low cost
housing. The National Housing
Development Authority was entrusted with
program implementation at the central
level. This model has many positive
features that can be applied in the context
of Nepal also.
RENTAL HOUSING
The old flats are provided on rent at a very
low price by the government of China. The
flats are locally called 'Lian Zu Fang',
which literally means 'low-rent house' or
'low-rent housing’ in Chinese language.
The government of China has also
implemented another popular scheme
called the “Public Rental Housing” (PRH)
scheme which is the first initiation to use
non-ownership housing to solve the
housing problem of people, primarily
focusing on providing the housing
facilities to the local young staff and
migrant workers who have relatively low
income [9].
The Chinese government has also initiated
a variety of tax exemptions for companies
responsible for constructing and managing
public rental-housing projects, on state.
The government of China has also led
Low-income rental housing, using rent
subsidies and direct providing low-rent
housing. Rental housing subsidies mean
that the government provides different rent
subsidies to eligible family based on rent
standards, through the rental housing
subsidies schemes.
HOUSING NEED FULFILLMENT
PRACTICE IN AUSTRALIA
Affordable Housing
‘Australians for Affordable Housing’ has
been established with a coalition of over
60 national housing, welfare and
community sector organizations which
emphasizes on the problem of housing
affordability. The Australians for
Affordable Housing suggests all levels of
government to make the changes necessary
to ensure to provide affordable housing to
all Australians. As a result, the
governments at all levels influence the
housing market through tax incentives,
first home owner’s grants, affordable
housing programs, planning controls and
rent supports [9].
Since the government housing policy is to
ensure that all Australian households can
be accessible to the affordable housing and
that the coordination is required for the
government to achieve that goal, a
strategic national plan was necessary to be
prepared.
HOUSING NEED FULFILLMENT
PRACTICE IN UNITED STATES OF
AMERICA
Housing Choice Vouchers
Housing Choice Vouchers program
facilitates the beneficiaries to find their
own housing from private landlords, rather
than confining low-income tenants to
public housing sectors.
The housing choice voucher program
(originally known as ‘certificates’) was
implemented in the early 1970’s in the
United States of America (USA). It was
focused on the low-income rental housing
as a part of the federal housing policy of
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the USA. It provided the rent payments for
nearly 2.2 million low income groups and
individuals in the United States of
America. In this program, the individual
chooses a house or apartment available in
the private market and contributes 30% of
their income towards the rent with the
program paying the difference up to a
locally defined “Payment Standard”. After
receiving the first voucher, the low-income
groups are responsible for finding a house
or an apartment that meets the quality and
standards of the housing of the program,
with a landlord who is willing to
participate in this program. More often, the
landlords are convinced to accept the
subsidy payment from the program, and
the beneficiaries can remain in their own
housing units. Once the qualified units are
found, the families or individuals can
begin receiving the housing support [9].
The similar type of housing choice
vouchers for lower income groups are also
being administered in South Korea. The
housing choice voucher program is the
major part of the federal government of the
United States of America for supporting
very low-income groups, the old-aged, and
the disabled to afford decent, safe, and
economic housing in the private market.
The participants can find their own
housing, including single-family homes,
townhouses and apartments since housing
assistance is provided on behalf of the
family or individual. The beneficiaries are
free to choose any housing that meets the
program’s requirement and is not confined
to units located in subsidized housing
projects.
The public housing agencies (PHAs) have
administered the Housing Choice
Vouchers, which receive federal funds
from the U.S. Department of Housing and
Urban Development (HUD)to administer
the voucher program. A family which is
issued a housing voucher is responsible for
searching a suitable housing dwelling as
per the choice of the family where the
owner agrees to rent under the program.
The family's present residence may also be
included in this unit or dwelling. The
minimum standards of health and safety
must be met by the rental unit, as
determined by the PHA.
The PHA directly pays the housing
subsidy to the landlord on behalf of the
beneficiaries, and the difference between
the actual rent charged by the landlord and
the amount subsidized by the program is
paid by the beneficiaries. In some
situations, a beneficiary may use its
voucher to buy a modest home, if
authorized by the PHA.
Low Income Housing Tax credit
(LIHTC)
One of the largest and most successful
affordable rental housing production
programs in the United State, is the Low-
Income Housing Tax Credit (LIHTC).
This Program is an indirect Federal
subsidy used to finance the development
of affordable rental housing for low-
income groups. This program has financed
over 2 million homes since 1987 and over
1,20,000 annually in recent years. The
LIHTC has financed approximately, 90%
of all affordable rental housing in the
United State of America.
INITIATIVES UNDERTAKEN FOR
FULFILLING THE HOUSING NEED
IN NEPAL
Like other developing countries, Nepal has
also recognized the problem of housing
need for the low-income group of people
according to which several initiatives for
the fulfillment of the housing need have
been undertaken since long ago. However,
these attempts are of small scale compared
to the scale of the increasing housing
problem of the people.
Several models of land development
programs were launched in the mid-
seventies such as Site and Services (S&S),
Global Practice of Housing Demand Fulfilment Shah and Mishra
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Guided Land Development (GLD) and
Land Pooling (LP), by the Nepal
government. These programs were
conducted within the legislative
framework in the form of Town
Development Act 2045 (1988). Although
these programs achieved a considerable
progress in serving a population of the
urban areas, with 7665 developed plots,
they were meant only for the middle and
high-income groups of people and as a
result, the low-income groups were still far
away from the access of the adequate
housing facilities [10]. Although the
private housing companies, the
commercial banking sector and other
agencies are playing an active role for
providing the housing facilities in the
urban areas, they are more focused on the
high and middle-income groups of people
rather than the low-income groups.
The ‘People Housing Program (PHP)’ also
known as ‘Janta Awas Karyakram’ has
been launched in 2009, by The Department
of Urban Development and Building
Construction (DUDBC), Ministry of
Physical Planning and Works of Nepal
Government (Figure 1, 2).
Fig. 1. People Housing Program,
Rubandehi.
Fig. 2. People Housing Program,
Chitwan.
Lumanti is a non-government organization
dedicated to the poverty alleviation in
Nepal, through the improvement of
housing condition for the poor people. Its
establishment is related with the first
national workshop on ‘The issues of
squatter settlements’ organized in 1990.
Realizing the immediate need of rental
housing with all basic facilities in
affordable rent, for the low-income group
of Kathmandu Valley, Lumanti has
constructed the cheap rental housing at
Dhobighat in Lalitpur district to increase
the access of the poor people of the urban
areas to the housing facilities. It is a four
storey building with 24 rooms, constructed
at a cost of NRs. 22.5 million. The Kirtipur
Housing Project (KHP) is the first NGO
led squatter resettlement project for
evicted squatter families in the history of
Nepal. This project was launched in 2004,
primarily for the families residing in the
squatters at Dhumbakhel, Tankeshwori
and Kalimati, along the Bishnumati
corridor, in the centre of the Kathmandu
Valley, for the eviction of the settlement in
order to construct the Bishnumati Link
Road. This project was conceptualized and
initiated by Lumanti in association with
the Kathmandu Metropolitan City and the
genuine squatters. Lumanti launched this
project in Asia Coalition for Community
Action (ACCA) Model, in which on-site
upgrading process is applied, which is
considered as an ideal solution for
providing housing for the urban poor since
it causes minimum social disruption and
cost-effective options for a shelter delivery
mechanism, focused on low income
families. This project is located at Salyani
informal settlement in Bharatpur launched
in Frebuary2009 as the first community-
led housing and settlement upgrading
project. It has also been a learning
opportunity for the whole system [12]. It
covers 31 families. The Nepal Government
brought 20% of allocated land for the
urban poor from the Ichangu Land Pooling
Project, in which 233 units of cost-
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eISSN: 2581-5601
Vol. 1: Issue 2
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effective apartments are being constructed.
The whole housing project was
implemented in two phases. In the first
phase, 130 housing units in 3 blocks; B1,
B2 and B3 with housing units 40, 45 and
45 respectively were constructed. On
completion of first phase of Ichangu
Housing, the second phase of this project,
with 103 housing units is ongoing. The
Habitat for Humanity International (HFHI)
has been focusing on assisting to solve the
housing problem in the rural areas of
several districts of Nepal, by working with
the local agencies. Their housing module
consists of; housing development from a
basic module of two rooms with additional
one room, and the construction work is
carried out by step by step approach
promoting the locally available materials
with cost effective technology and transfer
of knowledge [11]. In 2009, The Habitat
for Humanity International worked on
5,000 units of urban slums upgrading
project in Kavre district, in the partnership
with the local saving cooperatives. The
UN-Habitat carried out the resettlement
project for the families affected from the
Koshi flood of August 2008 in the Eastern
Nepal, funded by UNDP and UN-Habitat,
and executed through the collaboration
with the local government, communities,
the NGOs like Lumanti and HFHI, and the
other concerned organizations. The
approaches of the project can be
summarized in the term of several aspects
such as working in partnership, facilitating
and supporting the participatory approach
and pro-poor approaches [11]. The Shelter
and Local Technology Development
Centre (SLTDC) applied mainly the
technologies to decrease the construction
cost of the housing units. Initially, 1 unit
of the housing was constructed for
demonstration, at Satungal, Kathmandu.
Its construction cost was just NRs.
5,00,000.00 including the cost of land too
[8]. The Ex-Kamaiya has been focused by
the Nepal Government and INGOs, after
they have been liberalized from slavery
system. The National Resettlement
Company completed ten resettlements
projects in seven districts till 1989 by
converting the forest areas into the
productive farmland. 19076 families in
total were resettled in 26347 hectors of
land in 26 years from its establishment
(Ratriya Awash Company, 2012).
CONCLUSION
The problem of housing for low income
people is all over the world. Different
nation has adopted one of the following or
mix of these approaches from Re-
settlement, On-Site Upgrading, The
Government-Built New Public Housing,
Site and Services, City Wide Housing
Strategy, Rental Housing, Private Sector
Housing and Land Sharing. The major
cities are undergoing an urban explosion
rather than managed urban growth. Many
low-income groups of people do not want
to move to the fringe area due to difficulty
in easy access to their employment
opportunities. So, the employment
opportunity is one of the most important
factors which affect the housing need for
the low-income groups. Along with the
employment opportunities, easy access to
the market area and the urban
infrastructures and services is the other
influencing factor for meeting the housing
need of the low-income groups since it
contributes towards the employment
opportunities eventually uplifting the
economic status of the low-income groups.
The price of land and the construction cost
of the building also influence the housing
need for the low-income groups. So,
economy in land price and construction
cost of building is also one of the major
factors that influence the housing need.
The reasonable cost of the housing also
includes the affordability and acceptability
of the targeted groups. The economic level
of different low-income groups of people
living in different nation is different. The
people may not afford the rent if it is
Global Practice of Housing Demand Fulfilment Shah and Mishra
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higher than their economic level. The
monthly rents of the housing allocated for
different category of low-income groups
are different. So, the rent should be based
on their monthly income according to their
affordability.
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