The re-housing option for Colombo’s poor

Prof. Krishan Deheragoda Department of Geography - University of Sri Jayewardenepura

It is unfortunate that most of the Colombo politicians are still exploiting the social vulnerability of Colombo’s poor who live in underserved settlements. Such politicians can depend on this vote bank as long as they remain in slums and shanties as poor, particularly by the UNP. Hence, any attempts to upgrade the housing and living environments of these people will be severely resisted by the UNP and other communal minded politicians who are enjoying the power at the cost of the future of the poorest of the poor in Colombo.

The all time strategy of the UNP regimes was to maintain the social dichotomy of rich and the poor in Colombo for their own political benefit, by letting it to grow in ad-hoc, unplanned and unregulated manner into a slum city.

The UNP administrations of both CMC and the country adopted the conventional shelter approaches such as “provision of sites and servicers”, “onsite upgrading” of slums and shanties, “regularization of shanty lands” etc. as their popular strategies to this acute social issue of the urban poor in Sri Lanka during past six decades. These have enabled the continuation of slums and shanties, while consolidating their vote banks due to the high degree of dependency of the poor on the politicians. Accordingly, the urban poor were often provided with short term on-site temporary solutions, such as, provision of few tin sheets for roofing, putting up few common toilets; drainages, internal roads etc. with a view to achieve devious political gains by the consecutive UNP administrations, instead of providing them with permanent solutions.

These measures were not capable of preventing low income housing schemes of Colombo becoming slums and fragmented on one hand and deterioration of their quality of life and perpetuation of poverty in them on the other. This was an inevitable negative social phenomenon particularly due to the failure or unwillingness of the consecutive UNP administrations at both CMC and the government to adopt pro-poor urban development approach to address this issue.

Urban shelter strategies

Urban housing should basically be a provision of opportunities rather than just addressing a basic need. This is something that Sri Lanka has learned through the failures of ‘In-situ Upgrading’ and ‘Site and Services’ providing urban shelter strategies in the City of Colombo during the past few decades. It is of vital importance to make sure that the urban shelter strategies are compatible with the market mechanisms, if at all to see their sustainability (Deheragoda, 20001; 20012; 20014 ; 2008).

Moving to high density vertical living will be the ideal market based housing option to optimize the available limited urban spaces, while creating new opportunities, livelihoods, lifestyles and efficient working and living environments (Deheragoda, 2007; 2008). However, in general there is some serious reluctance from the part of the authorities to change from the conventional in-situ-upgrading approach to a market based one, and to pitch into vertical, high density, modular solutions instead of horizontal development strategies.

Sustainable townships programme

Deviating from the above conventional shelter approaches, an innovative and a complete voluntary re-housing endeavour called Sustainable Townships Programme (STP), was introduced by the Real Estate Exchange (Pvt.) Limited or REEL which was incorporated by the government of Sri Lanka in 1998, to provide a fully market based and self-financing shelter option as an alternative new housing strategy for the urban poor in the City of Colombo.

A grand plan called Sustainable Townships Programme (STP) or ‘Thirasara Purawara Vedasatahana’ was introduced by the REEL under the patronage of then Minister of Housing, Construction and Urban Development Indika Gunawardene (1998) to rehouse 65,000 slum and shanty families of the city in several Compact Townships within the City limits of Colombo Municipality Area. The first project of this programme was completed in 2001 creating a historical change in the urban sector shelter strategy with the commissioning of first ever high-rise housing complex for the urban poor called ‘Sahaspura’ in Wanathamulle. It is sad to mention that this programme was not only opposed by the UNP but also pledged to reverse it, if it wins the 2001 December general elections.

In fact in 2002, the newly appointed UDA chairman executed that reversing policy and encouraged people not only to re-squat the lands liberated through the above REEL re-housing programme, but also allowed to put back unauthorized structures on the pavements of Colombo, already cleared in 2001, particularly in Fort, Pettah and Borella. This policy of the UNP was continued when the same UDA chairman became the Mayor of Colombo in 2002. This shows that none of the UNP administrations had any genuine interest in developing Colombo.

The basic implementation strategy of the Sustainable Townships Programme (STP) was to offer re-housing option for all the households currently sitting on USS, with no land titles. Going by the guidelines of the UNCHS in the Habitat Agenda-1996 and the Presidential Task Force on Housing and Urban Development (GOSL, 1998), STP has got the policy clearance from the GOSL to enable the encumbered families to trade - off the land on which they live against a new flat through this programme. This was a voluntary and participatory process and has no any political, social or ethnic discrimination when identifying the beneficiaries.

These households are offered modern flats in high-rise apartments constructed in fully developed compact townships in lieu of the land on which they lived. By adopting vertical densification strategies over 60 percent of the lands currently under the USS can be released to the urban real estate development market to enable financing of the re-housing process of STP. Once they moved into the new flats as a community, the settlement they have been living is liberated and disposed for the private sector based housing and/or urban development projects, and thereby generate capital to finance the re-housing programme, making the whole process a fully self-financing and market based one.

Basic concepts

The STP has mapped, listed and documented all the Colombo’s Under Served Settlements and the households and made available this information for public perusal at its REEL Trading Floor. This process has enables STP to keep track on any new squatters or occupants who come and settled in these lands. All the data pertaining to socio-economic conditions of the family, including photographs of the beneficiary families have been complied into a fully computerized database, to ensure their rights, transparency of the programme and to prevent any beneficiary fraudulently reappearing form another location.

The Sustainable Townships Programme is based on a series of new pro-poor shelter strategies that are compatible with market economic principals within an overall urban and shelter development context. These new concepts are: voluntary relocation instead of forced eviction; relocation instead of onsite upgrading; bottom up instead of top down approach; market based instead of provider and welfare approach; self-financing instead of state funding; enabling the urban poor instead of comforting; full ownership instead of conditional tenureship and household centred instead of chief occupant centered (Right to the new flat is given collectively to all the members living in the particular dwelling unit.

The mother, father, children and all other occupants whom they consider as part of the household are participating in the negotiations with the project). STP re-housing option is offered to all households living in a particular settlement instead of selecting few beneficiaries among them on political, ethnic, or other considerations as often happened in other projects. By giving a freehold house worth over Rs. 2 million STP has not only widened the home ownership but also strengthen the asset base of the beneficiaries (Deheragoda, 1998; 1999; 20001; 20011; 2008)

In order to fast track the implementation of the STP, a Special Purpose Vehicle (SPV) was incorporated as Real Estate Exchange (Pvt.) Limited (REEL), where all the slum and shanty land owning State agencies becoming its shareholders. This innovative re-housing programme is envisaged to fulfill the interests of all the major stakeholders including; a) Urban Poor - for the first time ever, the slum and shanty households got an opportunity to become a owners of modern flats to live with dignity, b) Government (GOSL) - a major project of re-housing 66,000 households and re-generating Colombo, c) Infrastructure Agencies - elimination of waste and improving Colombo as the major network and revenue base, and Private Sector - real Estate based securities market, land & market for developers, mortgage financing of housing etc.

Lessons learnt

The first re-housing project of the STP called ‘Sahasa Highrise Complex’, implemented by the REEL Company was a very successful endevour. Through re-housing of 671 families from 13 different locations of Colombo in a 14 storied condominium building, REEL has been able not only to widen the asset portfolio of the poor beneficiaries, but also transformed their life styles and livelihoods. The direct accesses to safe water, electricity, cleaner neighbourhoods, and healthy living conditions have created not only competitive opportunities, but also positive attitudes and social status among the residents of Sahasa Complex (Deheragoda, 2008).

Prior to the Sahasa Complex many have predicted that the slum and shanty families of Colombo would never be able to adapt into the high-rise living. Survey conducted by the Department of Geography, University of Sri Jayewardenepura (2004) on the social impact and the resident’s perception on the Sahasa Complex, among 165 households who have been living there for three years revealed that, none had any problems in adaptation to high-rise living. In comparison to the living and social conditions of their pervious USS, every responding family has acknowledged the benefits of the present living in the Sahasa Complex.

Accordingly, 63 percent out of 85 families who participated in the survey from among the residents of 1st to 7th floors of the building confirmed that they are free from the menace of mosquitoes and insects. The response to the same question by 80 families who were living in the 7th to 14th floor was as high as 71 percent (Deheragoda, 2008).

Drug addiction

According to the above survey, the school enrolment rate of the children below seven years has been increased by 73 percent among the Sahasa Complex residents. Drug addiction among the youth has been dropped by 75 percent, due to change of the social and living environment. Involvement in petty crimes has been dropped by 95 percent. Every family is now paying for their water and electricity bills whereas 35 percent of them were not paid for electricity and 75 percent were unaccountable for use of water previously.

Sixty three percent of the respondents confirmed that none of their family members have sought medical treatments for any illnesses during the past three months, whereas 37 percent of them used to see a doctor once or twice in every month at the previous place of residence. It is a remarkable change that 48 percent of the families are now maintaining savings accounts (Deheragoda, 2008).

Another important factor is that over 78 percent of the respondents of the above survey have confirmed that they are spending most of their income to meet the family needs including maintenance and buying items for their house. Almost every household had brought new furniture and household goods since moving into the Sahasa Complex. The phenomenon deference is that they used to waste over 65-85 percent their income on entertainment, alcohol, drugs etc. and other day-to-day needs, while they were in the former slum or shanty settlement. But after moving into the Sahasa Complex apartments, these families have completely changed their attitudes and perceptions towards living, lifestyles and social status.

The unemployment among the Sahasa Complex youths has been dropped to 18 percent where as it is over 50 percent in other USS. According to Hettige & Others (2004) people of deferent ethnic and religious backgrounds live in unity at Sahasa Complex.

REEL has successfully proven its ability to address the most acute twin issues of Colombo by adoption of densification strategy coupled with a high rise housing solution i.e. Homes for the Poor and Lands for the Urban Development. A two acre block of land was utilized for the construction 14 storied condominium apartment complex with all amenities at a cost of Rs. 580 million with all modern amenities and thereby liberated lands valued over Rs. 1,800 million, after re-housing the beneficiary families from 13 USS in Colombo. This best practice endevour of REEL in Colombo has proven the social, economic and financial feasibility of the project (Deheragoda, 2007; 2008).

This programme was presented to the UN-HABITAT in Nairobi by President Mahinda Rajapaksa as the Minister of Fisheries in 2000, who headed the Sri Lankan delegation as the initiator of the fisheries sector housing programme. In his deliberation at Nairobi, President Mahinda Rajapaksa said that the beneficiaries of the REEL Programme will not be evicted and relocated in distant locations as in the case of many other countries.

They will be re-housed in fully developed compact townships built in the vicinity of their current places of residence, highlighting the core principles of the REEL programme. It is encouraging to see that the core principles, concepts and the Strategies of the REEL Programme have been endorsed in the Mahinda Chinthana Way Forward agenda for action.

Today, President is consciously implementing a massive programme to provide 35,000 flats in Colombo to solve the shelter issue of the poorest of the poor in Colombo, through the Ministry of Defense where the UDA is. Unfortunately, once again the UNP has come forward to deprive the benefits of this endeavour to the poor in Colombo, in the similar fashion that they have been doing the same in the past, for the reasons best known to them.

Social mobilization

A strong social mobilization process coupled with policies and regulations to make condominium living comparatively cheaper as against the horizontal living is now required. Because supply and management of water, electricity, sewerage services are comparatively easy in condominium properties as all of them are concentrated at one location with huge initial investments by the owner, but not the by the service provider. Accordingly, the process of tax collection, billing for water and electricity etc. are easier in locations of a vertical development when comparing to a horizontally developed settlements. Therefore, the benefit of this comparative advantage should be passed on to the condo residents by charging them lower rates by the service providers. Such a policy regime may not only change the social attitudes of the residents but also encourages the condominium living as an economically viable and socially acceptable housing option to maximize the yield of the scares urban properties (Deheragoda, 2007; 2008).

Sri Lanka’s Sustainable Townships Programme implemented by the REEL Company has introduced a best practice example to the developing world showing the path to address the shelter issue of the urban poor. However, this programme is severely undermined at present by the authorities, perhaps due to political reasons or rather due to a lack of a broad based vision or commitment. The envisaged institutional support was not received by the REEL Company, which was created to be function on partnership basis in the absence of its own legal and statutory mandates. Therefore, it is necessary to revitalize this programme and implement with adequate institutional, legal and policy framework.

World Class City

The shelter issue of the urban poor in Colombo has reached to its peak. Thus the current initiative taken under the patronage of the President Mahinda Rajapaksa to address it as a part of his government’s overall strategy to make Colombo a World Class City is a step in the right direction.

The lessons learnt through implementation of the Sahasa High-rise Housing Complex revealed that Sustainable Townships Programme of the REEL Company has already been introduced a fully market based and self financing best practice approach that has the potential to address the shelter issue of the urban poor in Colombo. Creation of necessary policy environment to mix those experiences within an overall institutional framework will certainly help the GOSL to implement the ongoing re-housing programme for the poor in Colombo, more efficiently, cost effectively, bitterly focused with more transparency.

The institutional knowledge accrued by the REEL and NHDA in the urban housing sector will be of immense advantage to yield better, faster and accurate outcome in the implementation of ongoing 35,000 unit housing programme.

It is absolutely a necessity to introduce a new set of policies coupled with lower rate regime for supply of electricity, water and municipal services to make condominium living more attractive for the poor, cost effective and the Management Corporations are viable.

There is no any better option to make Colombo a World Class City, except providing re-housing option to the poorest of the poor, enabling them to ‘trade-off’ the small plot of land on which they live, in lieu of a brand new, lager, and modern flat in a healthy environment. This would not only widen their asset base as the full ownership of a collateral property worth over Rs. 2.5-3.00 million at current market price is given to them, but also create a ‘Win-Win Situation’ for the both poor and the urban development process in Colombo, as it will ensure ‘Homes for People and Land for the Urban Development’.