Fifteen Eighty Four

Making housing affordable is now a top priority for countries and subnational governments around the world. While much of the debate appears to be happening in countries like the United States and United Kingdom, low- and middle-income countries have been pursuing policies to make housing accessible for decades. What do these policies look like, what are their implications for citizens, and what can others learn from them?

Many cities in India, South Asia, and beyond, cannot house all of their residents. As individuals arrive from the countryside or other cities to seek job opportunities, the poorest have no choice but to live in the smallest shared quarters or in an informal settlement. These settlements, commonly known as slums, have been a defining feature of life in an Indian city for decades.

There is a need for better housing in rural areas, too. Much of the existing housing stock is made from materials like mud or thatch that are vulnerable to fires or the monsoon. Toilets are still rare in some villages, and homes without proper ventilation are filled with smoke from cookstoves that burn organic material.

In response to these problems, Indian central and state governments have launched an array of programs aiming to deliver adequate housing to urban and rural citizens. Particularly widespread is a family of initiatives that provides free or low-cost formal sector housing for households to own. In cities, households may be given free apartments or be offered the ability to purchase them at a heavily subsidized price. In villages, local governments have helped poor members of society construct their own units out of cement or locally produced lime. How do such initiatives change the trajectory of beneficiaries’ lives?

To date, the majority of research from political science, economics, and public policy has focused on the effects of two types of government housing programs. The first is low-income public housing found in advanced industrialized nations, particularly the United States, United Kingdom, and Japan. These programs provide beneficiaries with subsidized rental housing, or a stream of housing benefits without rights to ownership. In contrast, research from cities in Latin America, sub-Saharan Africa, and South Asia has focused on the effects of policies to accommodate slums and squatter settlements by transferring land titles to residents. Beneficiaries receive rights to ownership, but without an accompanying stream of housing benefits.

Building Social Mobility focuses instead on a third type of housing program extremely common across low- and middle-income countries including and beyond India: subsidized homeownership. These policies allocate beneficiaries ownership of housing for free or at a subsidized rate, thereby granting them both a stream of housing benefits and the rights to use, rent, or sell these benefits as they wish. In short, these policies provide both basic shelter and large wealth transfers to beneficiaries. Households use these transfers to invest in their futures and build intergenerational wealth.

 Not only is this type of housing program relatively understudied, but it also provides an opportunity to understand how wealth shapes the behavior of households in low- and middle-income countries. Existing research on social and political behavior in low- and middle income countries (LMICs) focuses on the poor, and does not satisfactorily explain the actions and motivations of those who climb the socioeconomic ladder.

Beyond building wealth, the book shows that these transfers further change citizens’ sense of dignity. The flexibility and certainty with which citizens can consume the transfers gives them a degree of agency over their lives. The social status associated with living in high quality housing outside of a formal settlement also improves their sense of agency in their relationships with others, especially those who may be higher in traditional structures of power.           

Wealth and dignity, in turn, fundamentally shape how citizens participate in the broader political arena. They are emboldened to make demands of their local government. They are, furthermore, especially motivated to do so as they seek to advance their own interests and protect the value of their new homes. This behavior can have important effects on service delivery and governance in the broader community, an important externality in contexts where local governments often fail to meet citizens’ needs.

In short subsidized homeownership helps even the poorest households build wealth, live with dignity, and exercise their voice as citizens–in both rural and urban areas. The book supports this argument with studies of three housing policies, household surveys,  in-depth qualitative interviews, a natural experiment, and an 18-year panel study,

The project makes numerous contributions to the study of economic, social, and political behavior in low- and middle-income countries. First, it characterizes subsidized homeownership as a large asset transfer that is distinct from  more commonly studied forms of low-income housing interventions. These in-kind asset transfers with property rights encourage investment in the future through the certainty and flexibility they grant citizens. Studying them also highlights the unique role of housing in economic, social, and political decision-making.

The book further demonstrates how wealth and dignity shape civic participation, ideas that are relatively unexplored in the literature on political behavior in LMICs. Defining and conceptualizing dignity is an important component of this contribution.  Further, contrary to notions based on societies in the West that argue that the interests of homeowners are at odds with those of the broader neighborhood, the evidence shows  that where the overall quality of public services is low, these programs can have positive externalities by creating capable and motivated citizens who demand more for their communities. Finally,  the book illustrates the multidimensional nature of household-level development by showing how a policy affects a broad range of behaviors –economic, social, and political– through interconnected mechanisms.

Ultimately, this is a book about both policy and behavior. It draws attention to and explores the effects of an important policy. Through the process, it reveals novel theoretical insights about how upwardly mobile citizens make decisions and the interactions between wealth, dignity, and voice in low- and middle-income countries.