The extent of urbanization in Bihar is much lower than other states in the country; with only over 31% of the population residing in urban areas in Bihar. The inability of Bihari society to keep pace with the increase in population has resulted in an under-supply of housing units in Patna, of which nearly 95% affects the economically weaker sections (EWS) and low-income group (LIG) of the Patna population. No doubt that demand for urban housing will scale up based on the growth in population of Patna alone.
It also means an increasing number of people residing in slums in Patna. Rural migration is considered to be one of the most important contributors to the growth in the slum population. Patna gets rural migrants from all around Bihar being the capital of the state. Though the number of people that can be absorbed in agriculture as a percentage of population are on a steep downward curve, in the state; thus resulting in greater number of migrants to Patna. This increase in population, if not matched with the required increase in housing units in Patna could contribute to the development of further slums in Patna, creating a social problem and becoming detrimental to the overall health of the state economy. .
Creating flexible affordable housing in Patna with certain percentage reserved for rental schemes might provide a faster solution for a slum-free Patna. In Patna, affordable housing can be mainly developed through the redevelopment of existing slums due to the severe paucity of developable residential land. However, slum redevelopment projects are highly complex and time consuming in nature. The issue of ascertaining the rightful beneficiaries in a slum usually poses as a major problem. Additionally, getting the necessary regulatory approvals in place and arranging for the requisite funding for affordable housing projects are the other bottlenecks. With the RBI discouraging banks from lending to real estate companies, the fund flow for Patna‘s housing sector is minimal.
Now can we learn and develop some models for housing in Patna from other countries. It is important to note that in developed countries, public sector construction funding through risk free rates is used for social housing. In Scandinavian countries, Netherlands and France additional guarantees were provided for bringing down the rates further. On one hand reserves from rents and subsidies are used as equity to develop social housing by many social sector agencies. On the other hand, in Germany even private equity investment companies and REITs have invested in the social rented housing through large scale municipal sales. Similar models need to be introduced in Patna for large scale investments to take place in providing the necessary infrastructure, technologies and expertise to develop the necessary affordable houses in Patna on a mass scale in a time bound manner in Patna.
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