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Examining The Potential of Container Houses to Solve for Affordable Housing in Urban India


Container House (GGI)
Examining The Potential of Container Houses to Solve for Affordable Housing in Urban India: Landscaping Study

If you are interested in applying to GGI's Impact Fellowship program, you can access our application link here.


 

1.Introduction


In the context of urban India, the issue of affordable housing is compounded by extreme weather conditions, homelessness, and a lack of official documentation of fatalities. Homelessness exposes individuals to hardships such as malnutrition, poverty, limited healthcare access, and mental health issues, while stigma and the denial of basic human rights further worsen the situation.


Addressing this pressing challenge requires innovative solutions. With an estimated 1.77 million homeless individuals according to the 2011 census, the inadequacy of existing shelter homes and unutilized state funds pose obstacles. Additionally, the growing population and scarcity of land underscore the urgent need for fresh approaches to combat homelessness.


The purpose of this whitepaper is to examine the potential of container houses as a viable solution for affordable housing in urban India. We assess the current state of affordable housing, evaluate the feasibility and benefits of container houses, and examine their financial, social, and environmental impacts.



2.Current State of Affordable Housing in Urban India


In the context of the Indian housing market, there are several challenges and constraints that hinder affordable housing. Limited land availability, lack of technological innovation, legalistic delays in land acquisition, and reliance on traditional construction methods contribute to high prices and delays in project completion. This, coupled with potential economic volatility further escalate the cost of purchasing residential properties . The right to housing is recognized as a fundamental right, yet statistics indicate a significant shortage of houses, with an estimated urban shortage of around 1 crore houses in India. The shortage is concentrated among low-income groups, particularly in metropolitan areas such as Maharashtra, Tamil Nadu, Karnataka, and Delhi, especially as more rural to urban migration takes place as populations search for livelihood opportunities.


(Source: A Revenue Neutral Approach to Lower Stamp Duty and Registration Charges for Affordable Housing.MOHUA.)



(A Revenue Neutral Approach to Lower Stamp Duty and Registration Charges for Affordable Housing.MOHUA.)


To address the affordable housing challenge, the Indian government has introduced various initiatives and policies. Schemes such as the Rajiv Gandhi Awas Yojana and the EWS Housing Scheme aims to provide financial assistance and subsidies on home loan interests to make home ownership more affordable for lower and middle-income groups. State-specific schemes and approaches are also implemented to cater to different income brackets and increase accessibility. However, these schemes have several gaps and limitations. The houses built under these programs often suffer from poor quality, lack of essential infrastructure, and structural defects. Additionally, the relocation of slum dwellers disrupts their employment and social networks. Challenges with land titles and property records further exclude potential beneficiaries. The implementation of financial assistance components has also been problematic. As a result, these initiatives have not effectively alleviated housing poverty or provided adequate living conditions. To achieve "Housing for All," streamlining the housing market, reducing construction costs, and exploring innovative solutions like container houses are crucial steps. This will benefit potential buyers and make construction more cost-effective for developers.



3.Container Houses as a Potential Solution


With a growing emphasis on eco-friendly practices and the availability of inexpensive shipping containers, once at the periphery of the housing market, are now gaining mainstream recognition as an alternative housing concept.


The concept of shipping containers was introduced by Malcom Purcell McLean, a trucker from North Carolina, in 1937. Despite initial skepticism, McLean successfully implemented a container system in 1956, revolutionizing the shipping industry. Shipping container homes are built using recycled containers as the structure of the house, typically made of steel with boxy, rectangular shapes. They come in various sizes, such as 8×10, 8×20, or 8×40, and can be stacked or arranged side-by-side based on individual layout preferences. Certain containers, like refrigerated ones used for transporting food, are highly insulated, making them suitable for different climatic zones.


Container houses offer several benefits and advantages for affordable housing. They are affordable compared to traditional homes, with lower labor and construction material costs. One can acquire a container home for as low as USD 3000. Additionally, they are easy and quick to construct, with an average delivery time of 1-2 months. The use of Corten steel, which possesses self-healing properties, makes container homes more resilient to harsh weather conditions, enhancing their durability and long-term value. In India, the current cost of a corten steel shipping container is approximately under INR 100,000.


In South Africa, Empower Shack has emerged as a project addressing the housing crisis in Cape Town's Khayelitsha township. With millions of people living in informal settlements, Empower Shack provides affordable housing solutions coupled with essential infrastructure. The construction cost for a double-storey unit is currently at $8,000 or R90,000. Beyond housing provision, the project incorporates livelihood programs, microfinancing, renewable energy, water management, and skills training, fostering social, political, and economic structures that improve residents' lives. This holistic approach promotes community ownership and participation.


The success of Empower Shack in South Africa offers hope for India, given the similar socio-political context and housing challenges. Developed nations like the Netherlands, UK, and Germany have also embraced container homes to address housing affordability issues, particularly among the youth. In India, architects have proposed innovative solutions, such as "container skyscrapers" to replace slum housing in Dharavi, Bombay.


Container houses offer a compelling solution for affordable housing, combining affordability, ease of construction, and durability. As the concept gains momentum globally, it holds promise for addressing housing challenges in India and beyond. By embracing container homes and learning from successful projects, policymakers, architects, and communities can unlock the potential of this alternative housing concept and create sustainable, livable spaces for all.



4.Landscaping Study


Analysis of suitable locations for container houses in the urban landscape of India reveals a promising opportunity for the housing sector. The surplus of shipping containers in Indian ports following the pandemic, combined with their lowered prices, makes them an affordable option for refurbishing into homes. Coastal cities like Mumbai and Chennai, with major ports, experience the highest housing shortage, particularly in Maharashtra and Tamil Nadu. Utilizing shipping containers for affordable housing projects in these cities offers a significant advantage due to proximity to ports, enabling cost-effective

transportation to selected locations.


Implementing container houses in India involves considerations of regulatory and legal frameworks. Currently, there is no specific legal framework or procedure for building container homes for living purposes. However, regulations provided by the Ministry of Housing and Urban Affairs and state-specific area development authorities offer guidance on land laws, structures, and local permissions.


Infrastructure requirements and potential challenges associated with container houses include addressing thermal conductivity issues by providing proper insulation. While the cost of insulation remains a significant factor, further research can focus on reducing costs without compromising quality. Another challenge lies in finding suitable containers free from a history of transporting toxic chemicals or carcinogenic materials. Testing containers for toxins and using high-quality sealants and low VOC paints can mitigate risks. Additionally, common infrastructural requirements such as plumbing and electricity are necessary for container houses.


The emerging nature of container houses in India poses challenges in terms of a lack of skilled labor, experienced real estate developers, and standardized guidelines from government authorities. Overcoming these challenges will be crucial for the successful implementation of container housing projects in the country.



5.Financial Feasibility


Shipping containers offer cost-effective solutions for affordable housing, with shorter construction times compared to traditional homes. They provide a 40% cost reduction and can be stacked to address land scarcity in urban areas. However, private real estate companies face challenges in obtaining financing for EWS/LIG projects, leading to higher interest rates and lower profits. This results in low-quality housing and increased maintenance costs.


Under the current PMAY scheme, credit link subsidies are available for loans up to a certain limit, but housing options within this range are limited in major cities. Urban poor individuals are forced to borrow beyond the subsidy limit, increasing their loan burden and pushing them further into poverty. Utilizing shipping containers can help reduce the cost of houses and make them more affordable based on the financial conditions of the urban poor as cost of construction of these houses is congruent with the line of credit offered under PMAY. Notably, the cost of construction of a container home is USD 3000 whereas the average cost of construction of a unit house within slum rehabilitation is approximately INR 625,000 but with subsidy can also come down to as low as INR 250,000 i.e. approximately a 60% subsidy on cost of construction. Comparing this to the average cost of a container home INR 537526.83, which comes to approximately INR 215,000 with comparable subsidy. This is not only 14% more cheaper than traditional homes but comes with an added advantage of a rapid and eco-friendly solution to a pressing problem.


Additionally, high land prices in city centers make it unsuitable for private investors to undertake affordable housing projects. As a result, such projects are often located in the suburbs, lacking proper infrastructure and connectivity to workplaces. This increases the overall living cost for residents. Delays in project approvals further contribute to inefficiencies and cost overruns. Expedited and time-bound project approvals are essential to make affordable housing a reality.


In summary, shipping containers offer cost savings, efficient construction times, and long-term affordability for affordable housing. Their durability, insulation properties, and ability to withstand harsh weather conditions contribute to reduced maintenance costs and increased value. However, addressing funding challenges, improving project approval processes, and ensuring proper infrastructure and connectivity are vital for the success and long-term viability of container house projects.



6.Social and Environmental Impact


Container homes have significant social impacts for low-income communities. Inclusivity plays a key role, addressing factors such as gender, caste, and disability. Furthermore, providing a variety of common spaces for leisure and play can contribute to the overall well-being of residents. Take for instance the difference in container housing experiment in England vs South Africa. The success of the South African project is nestled in its ability to closely understand and integrate the community in its redevelopment efforts. By prioritizing community needs and fostering inclusivity, container homes can serve as sustainable and inclusive housing solutions for low-income communities.


Repurposing containers addresses resource scarcity and reduces the demand for new materials. However, the operational phase of container homes poses challenges, requiring energy-efficient practices. Incorporating renewable energy sources and eliminating toxic chemicals can enhance sustainability and create healthier living environments. To enhance the operational sustainability of container homes, the architectural design of the houses or housing complexes can be optimized to include green energy facilities. By incorporating renewable energy sources such as solar panels or wind turbines, container homes can reduce their reliance on traditional electricity grids. This not only contributes to environmental sustainability but also enhances affordability for residents by significantly reducing electricity bills. This integration of green energy facilities in container home design aligns with the goal of creating a sustainable and cost-effective living solution for affordable housing in urban areas. Additionally, to create a safe and healthy living environment, it is essential to eliminate toxic chemicals that are commonly used to treat shipping containers. Chemicals, such as benzene, toluene, styrene, phosphorus, chromate, and formaldehyde, can pose risks to human health and the overall well-being of occupants. Therefore, thorough removal of these chemicals is necessary to prevent any potential off-gassing and ensure a clean living space for residents.



7.Conclusion and Recommendations


In conclusion, container houses have the potential to address affordable housing challenges in urban India, provided inclusivity and sustainability are carefully considered. Further research is needed to understand resident readiness and overcome behavioral and cultural barriers. By implementing the following recommendations, stakeholders can achieve optimal outcomes and contribute to the "Housing for All" mission.


1. State Governments should reduce stamp duty and registration charges for affordable housing to make it more affordable, increase housing stock, and support the "Housing for All" mission.


2. The Government of India should construct container housing complexes in city centers to provide affordable housing for the urban poor, addressing urban migration and ensuring proximity to employment opportunities. Keeping this in mind, affordable housing should expand beyond the ownership paradigm to also expand options of accommodation to include rental units to solve for transitional needs of migrant workers.


3. Prioritize a critical review of existing building bye-laws and subdivision regulations. Optimize land resource utilization and embrace state-of-the-art construction technologies by revising regulations such as low Floor Area Ratio, low densities, and large floor area of dwelling units.


4. Streamline the documentation process for accessing cheaper housing finance, especially for low-income groups. Simplify requirements related to securities, income proof, and residential address to improve access to affordable housing finance options.


5. Developer sensitivity in designing these housing complexes is key to making them inclusive spaces for people marginalized across gender and caste identities, also those struggling with disability.


Further, to demonstrate the scalability of container houses, the solution should be piloted in smaller areas in select cities, such as Mumbai. This would need involvement from innovative players- government, private, and civil society and cross cutting partnerships to enable sustainable impact at scale.



Meet The Thought Leader




Laboni Singh is a mentor at GGI and is currently working at The Bridgespan Group as an Associate Consultant. She takes keen interest in socioeconomic development issues, public policy, and equity across different vectors of gender, caste, class, and ability, which in turn fuelled her transition from working at a global bank to the social sector. She is an Urban Fellow from the Indian Institute for Human Settlements, Bangalore and has a bachelor's degree in Economics from St. Stephen's College, University of Delhi.


Meet The Authors (GGI Fellows)



Harshita is an early career development professional focused on engendering school-towork transitions at Sattva Knowledge Institute. Harshita's true passion lies in fostering inclusivity and equity, and she actively engages with issues pertaining to class, caste, gender, and disability, prompting her transition from advertising to the social impact space. Harshita holds a Masters and Bachelors in History from the University of Delhi, studying at Jesus and Mary College and Indraprastha College for Women, respectively. She is an incoming student at the Institute of Development Studies, Sussex, driven to create positive societal change.



Swechcha is working at Honeywell UOP as a Technical Advisor. She greatly enjoys her job role which takes her across the globe, augmenting her passion for Travelling. As a professional, she is keen on taking up roles where she can make impactful decisions, contributing towards society and environment. She is actively involved with an NGO (DoaR) where she is responsible for imparting quality education to primary and secondary level students. She enjoys reading books and learning new skills. She holds a Bachelor’s degree in Chemical Engineering from BITS Pilani. She is a Bharatnatyam Dancer and also proficient in Carnatic Music Vocals.




If you are interested in applying to GGI's Impact Fellowship program, you can access our application link here.


 

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