Homes, starting at a price you can’t afford

Everywhere in the city, one can see large billboards advertising upcoming housing projects. Some are for apartments, some are for villas, and some are only for plots, leaving the buyers to build homes later. They’re also of different sizes. Some are no more than a single tower of apartments on a half-acre plot, and others are in giant new developments for thousands of residents. In another way, though, many are quite similar to each other -- so many of them are for the rich and the upper middle class.

The starting prices on a large percentage are not for the average Bengalurean. It’s quite common to read “Starting from Rs 1.7 crore” or something like that in a lot of the signs. This, in a city where the median annual income is barely more than 1% of that number. And in a lot of projects, a crore or more is the price for the cheapest unit, the one next to the waste management site or the sewage plant. The high-end is probably off the scale.

Forking out a lot of money for one’s dream house isn’t a sin, of course. If the market values someone’s skills highly, they should make that count for themselves and their families. And in Bengaluru, which attracts a lot of talent from other places, there are a lot of people who can afford a costly home. Sometimes more than one home, even.

But surely that’s not all there is to it. In the forest of billboards about these homes, we must not forget one thing. Less than 20% of the people in the city can ever hope to have enough money to buy such a home, so we should expect to see many more of the less expensive places that the majority can afford. Homes that cost between Rs 15 lakh and Rs 40 lakh should be the majority, based on the income distribution in the city. But looking at new housing projects, it is clear that is not the case.

There is one other thing we should be seeing a lot of, but we don’t. Rental housing. In other cities around the world, especially ones that have lots of young people and migrants like we do, there are lots of buildings in which all the apartments are rented. That is, the developers who put up those buildings do not sell the flat, but instead they rent them out. In some parts of such cities, such as in neighbourhoods around universities, rental housing is far more common than homes in which owners live. A gazillion Indians live in rented homes all over the Middle East. Why don’t we see that here?

It is ironic that in developed cities where people’s incomes are much higher than in India, there is so much rental housing. But here, where there is clearly a need for places to rent -- because so many people cannot put together the funds needed to buy their own place -- there is virtually no organised development of rentable units. Instead, the whole city is filled almost entirely with owned properties, and it is left to the home owners to let out their flats and houses if they wish to.

Who is the city for? How did we land up in a situation where most people who live and work here are forced to make do with unorganised and often illegal structures, while organised housing in planned layouts and new developments is entirely for the rich? And how did so much of the land end up in the hands of so few people, leaving very little lebensraum for the bottom of the pyramid or even the middle?

As if that is not skewed enough, new homeowners get a giant tax subsidy, with deductibles against their interest payments on mortgage loans. It seems if you are rich enough to buy a house, the government will even help you do it. And most property owners also expect to see their home prices rise, i.e., future higher prices are part of the reason why they have bought in the first place. This makes it even harder for the remaining 80% of the population, since home prices are always out of reach.

Why are we systematically excluding the majority of people from fair access to organised and well-managed housing? Who is the city for, if not for its own people? The answer, like so many other things in the city, is in our politics. There is an intricate web that holds this together, which serves many people’s vested interests. I’ll discuss those next time.