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Tata Gives India the "World's Cheapest Home," But What Does That Mean For Cities?
Rendering of Tata's Shubh Giha Housing Complex in Boisar, India

Rendering of Tata's Shubh Griha Housing Complex in Boisar, India. Courtesy of Tata Housing.

Some companies seek to fill market niches, but the Tata Group is increasingly known for filling market chasms.  Tata boldly transformed the international auto industry late last year when it announced its intention to release the 115,000 rupee (US$2,500) Nano, potentially bringing car ownership within reach of millions of Indians in the coming years. Now Tata has introduced an even more ambitious project that could drastically change the Indian landscape and much of the rest of the developing world in the next decade: the 390,00 rupee (US$8,500) home. Dubbed “Nano Homes,” Tata is building one thousand 283 square-foot houses outside of Mumbai. Apparently they are not alone, according to The Globe and the Mail:

Matheran Realty, another real estate giant, plans to build 15,000 flats in the next three years in Matheran, outside Mumbai, available for about 220,000 rupees. India’s Godrej group, meanwhile, plans to build a low-cost township outside the western city of Ahmedabad, with apartments ranging from 500,000 rupees to two million rupees.

With at least 23 million urban Indian families in the middle- and lower-middle-income groups aspiring to escape slums and live in decent, affordable housing, it’s not hard see the logical conclusion of this business venture: millions of Indian families moving to the outskirts of Mumbai, Delhi, and Bangalore to take advantage of cheap and available land and the promise of a better life. According to the Mumbai-based research firm Monitor India, we could be talking about as many as 180 million Indian families, if you include rural households. If we extrapolate this to the rest of the developing world, we could be seeing a global trend towards suburbanization in the not-too-distant future.

Tata’s “Nano House” could raise the standard of living for millions of the world’s poor by pulling them out of squalid slum conditions, but like the “Nano Car,” it could drastically exacerbate mobility and pollution problems already facing dozens of cities in the developing world. That’s because cheap housing nearly always necessitates large tracts of cheap land on the outskirts of cities where developers can take advantage of the economies of scale that come with developing many houses at once. Is it any surprise that Tata and its competitors are all operating on the urban fringe?

Without an aggressive program of well thought-out dense development, integrated mass transit, and car-use demand management, the combination of cheap cars and cheap homes could create for India the same intractable land-use conditions found in every major metropolitan region in the United States since the end of World War II: ubiquitous sprawl, gridlock, loss of agricultural lands, and unheeded habitat destruction.

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  • randhir

    Dear TATA Groups,
    Please build some cheap flats in Bihar too, it will help to elevate Bihar.

    Warm Regards,
    Randhir Kumar

  • It’s dangerous to make assumptions about India. There has been an effort in some cities to bulldoze tracts of (relatively) lower density housing and replace it with high rise housing for low income (while the developer keeps other land and profits from market rate development. From newspaper articles I’ve read this is controversial in its own right, but it means that redevelopment doesn’t necessarily increases vehicle distance.

  • Simon

    Land shortage is a major issue in Mumbai. The government is keen to shift slum dwellers from central Mumbai to land on the rural-urban periphery in order to capitalise on the high land prices downtown. Some have been forced out; some larger more established slums (like Dharavi) remain. How long before these kinds of suburban developments encourage the government to shift the poorest again to make way for wealthier residents? Perhaps even further from the centre and employment.

  • Thomas

    Didn’t we learn a long time ago that this is the exact way to create a ghetto? Although this *may* be a step up (if you research the analysis on slums)… it’s going from one bad situation to another

  • mkm

    last week in toronto i experienced something very similar to the story about L.A. it was so clicheed — a road-raging SUV driver didn’t like that i had taken a lane to protect my safety on a downtown side-street near city hall. the driver pulled up behind me, honked his horn, then pulled fully into the lanes of oncoming traffic to get around me, then cut me off in my lane and abruptly stopped dead for no reason. i managed to get away from that vehicle as quickly as possible without anybody being injured.
    while that was a very bad experience, i think that many drivers in downtown toronto are very gracious people who have looked out for my safety before. this was just one bad and terribly dangerous apple.
    This comment was originally posted on Spacing Toronto • understanding the urban landscape

  • Yu

    The blog about “world’s cheapest home” worries about “suburbanization” in 3rd world countries as people move into decent and affordable housing. However, if you look at the proposed development, you will realize while it is going to be on the fringe of the city, it is probably going to be denser than Toronto downtown core. It is basically the same story in major cities in China, where “suburb” means clusters of highrise apartment building packed together. Not that it does not create problems, but their problems are vastly different from what we have in North America.
    This comment was originally posted on Spacing Toronto • understanding the urban landscape

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  • Robin

    Calling these high dense buildings “suburbanization” is a little far fetched considering the low square footage of the units—the reality is that they are still high dense. The real problem is not the buildings, but creating a market reality where they could be built in place of existing slums—this is probably best accomplished through appropriate transportation pricing as American Suburbs were and are fueled by cheap gas, not cheap housing.

  • I hope we get more Planned Cities because of private realtor projects. I am completely disappointed with the kind of urban planning the govt has been doing so far.
    This comment was originally posted on Reddit