July 6, 2011
This is a repartee to a post published by Vijay Govindarajan and Christian Sarkar in the Harvard Business Review blog who initiated the $300 house idea. Their post responded to our Op-Ed in the New York Times on May 31, 2011.
Dear Prof Govindarajan and Prof Sarkar,
We are deeply sympathetic to the efforts of designers, businessmen and academicians throughout the world who feel concerned by the living conditions of the millions of people who live in substandard housing in India and elsewhere. We too believe that there is a lot creative thinking and co-creation can do to improve living conditions in many parts of the world, including richer countries.
As the ongoing financial crisis reminds us, we are all connected in hitherto inconceivable ways. When the real estate market plunges in New York and Dubai, it surges to the point of becoming surreal in Mumbai and Shanghai. When the demand for high-end housing gets saturated in upscale Mumbai, investment shifts to affordable housing and the pressure for redevelopment increases in neighbourhoods denominated as slums.
In other ways too, parts of the world that we thought belonged to radically different realities, seem astonishingly connected. Many neighbourhoods of Tokyo and Mumbai share a common history of incremental development. The homeless of Los Angeles may not be much better off than the shack dwellers of Kolkata. Notions of poverty have become more layered and intricate. It is necessary to challenge our preconceptions and look at the world we live in a fresh way –one that our earlier neat ‘development’ categories never allowed us. It is equally pressing to understand and engage with contexts that are often diverse, even within the same city, before attempting templates for common solutions.
Creative thinking is never as powerful and constructive as when it is based on first hand experience and interaction with the parties that it seeks to help. Knowledge of the context seems to be a weak spot of the $300 house project. India is not Haiti, Mumbai is not Raipur. The urge to solve the problem of 1 billion slum dwellers is just as misplaced as a proposition that would pretend to address the problems of 1 billion suburbanites.
We do not intend in any way to belittle your work and the great network of people who are advising the $300 house project. We are just trying to understand how it relates with the reality that we know. The so-called slums of Mumbai are a very diverse lot. Dharavi in Sion is different from Utkarsh Nagar in Bhandup, which is a far cry from Shivaji Nagar in Govandi. They all have different histories, economies and levels of development. One thing that they all do share, however, is that none of them have any house that costs less than $3000 to build.
While there are homeless people and people living in cardboard shacks in Mumbai, this is far from being the norm. It is probably just as marginal and widespread as it is in New York or Los Angeles. Most people who live in what the Indian government calls slums live in houses made of brick, stone, concrete and steel. What makes some of these neighbourhoods difficult to live in is the lack of civic amenities such as sewage or toilets, sometimes even water. What they do not lack is an ability to build or invest in their homes. Our question is whether this is the market you are targeting. If this isn’t, then what is the market you are really looking at? Even in small towns and villages people have better living standards.
Even if no poor needs the $300 house in India, a market may certainly be found in other parts of the world. Maybe that the $300 house makes sense in devastated parts of Haiti or Japan. Maybe there is even a market in the urban fringes of North American cities, where people have lost everything, including sometimes – and this is the most debilitating thing – the ability of helping themselves. In India, the market for housing is nowhere as dynamic and competitive as in so-called slums. There are networks of contractors, masons, artisans, carpenters and plumbers who are busy everyday making and improving homes. We all have much to learn from this market. This is why one must study it carefully before attempting to enter it.
We are no experts in business strategy, but it seems to us that market research should come before the conceptualization and design of a new product. This is not how you have built your model. In the absence of any evidence to the contrary, we can only assume that this is because you have taken slums for granted.
We are not averse to market solutions. If you had taken the time to browse through our websites or read some of our publications, it would be evident we have faith in local markets engaged in construction. We believe that these should be recognized and infused with government support and better quality materials. The problem with most conventional market interventions is that they treat the poor exactly the way the socialist state often does – as passive consumers. A real market-based solution will understand the dynamism within the economy of poorer neighbourhoods and work with the actors there. We believe that the local construction industry in Dharavi or Shivaji Nagar and neighbourhoods throughout the country has proven to be the most efficient and quality-conscious provider of affordable housing.
Residents don’t need cheaper, lesser quality houses. The best thing to do would be to bring in new technologies, construction materials and design ideas to improve the houses people are already building for themselves. And in order to do this, the benchmark should be existing building practices and materials. Not some fantasy dollar figure.
That being said, we believe in the sincerity of your effort and find value in it. The fact that you have mobilized so many people and brought so much media attention to one of the most pressing issues of our times is commendable. We are also convinced that among the scores of design proposals generated in response to the $300 house challenge, some will break out of the box and have real impact. We only wish that you had made end-users and their contexts your starting point. This is the paradigm shift we are all yearning for.
For more on this theme see our study of a 2.5 lakh rupee house in Bhandup.