Tuesday, 29 May 2012

Rebuilding a Future

This week I started a project in my Human Geography class that focuses on redesigning an international city. I chose to look at Urban Development, and more specifically at slum prevention and then viable alternatives for future growth. The language of the universe is written in mathematics, from the interaction of particles at speeds near light to stars slowly (or at least relatively) orbiting one another. A statistical model can describe most of Human interaction and behavior that we call economics, and there is where I first turned. History tells us that there has rarely been an event where frugality didn’t play the key player and economics confirms that people look for the solution that is most viable with the highest profit for the party in power.

The question on the surface is what is the best solution, but ‘best solution’ is a subjective question. Everyone has an agenda, whether they are a high school student looking for a solution that improves foreign investment, gender equality, and human capital or a city planner looking to level the highest profit for the city or a slum dweller just hoping for a better life and better access to water. Obviously, leveling all the slums, building high rises, and shooing the untouchable further from the city center would be the most profitable for the city, but there isn’t a way that they could do that. Alternatively, they can’t invest their entire budget into the slums to bring them sanitation, bathrooms, water, and transportation systems. So what is the happy medium?

Well, first what are the main problems in the average slums today? And since this is a Gender publication what are the largest gender inequality issues? Slums are large expanses of land that are developed by migrants from the rural countryside to find jobs in the city. Generally, they aren’t looking for riches but a chance to survive. They build homes out of wood and cardboard. The average home size is about the size of half an American car parking space with an average house size of six to twelve members. In some house the members sleep on their sides and they almost fit. Sanitation is a huge issue, and women especially feel this, with few bathrooms that have constant lines and a surcharge per use and non-existent hygiene stations like sinks for hand washing. Most children just use the restrooms in the makeshift slum streets that run with water from the crowded and dirty water pumps that serve about 100 to a 1000 people each. Women are hard hit in these situations and are the first to feel the effects of poor sanitation through high birth-mortality rates, higher fertility rates, and little access to proper health care to boot.

In my project I followed the model that India is champing and combining it with western tax & property policies. The city I chose was Cairo, but I found that most developing cities are facing the same problems and that the solutions are more or less universal. First, land needs to be privatized to get anywhere. After that, there are a few roads that one could go down that could lead somewhere positive, the road I took was one where the city government and foreign investors came together to create change through free market competition. India champed this model, in a way; they would sell existing slum land to investors and give current inhabitants a lease in the building. In my model the land was sold anywhere from 16th to 1/3rd free market value, which would be rather high for land with that proximity to the city center and to charge an impact fee that would bring the sale price to about 2/3rds to 4/5ths the free market value. The impact fee would be used to purchase leases for 1.5 times the amount of space that current inhabitants previously occupied. Money would still be left over after those leases were paid and could be used to cover the cost of new infrastructure like water and roads. 

One major obstacle to this kind of plan is that slum businesses and services don’t want to, or can’t, pay the higher cost of business that urbanization brings. I proposed that the tax system be bracketed so that low-income businesses that operated in former slum land be given rent subsidization and that companies that hire low income workers on the books be given a tax credit. This would also encourage more companies to hire low-income workers and disperse more income. The next policy would be to create a perpetual sharing scheme in the city where infinite maturity bonds are sold and the profits be used to create infrastructure and finance the increased social sector, which I’ll touch on soon. All the citizens in the city, which would include the previous slum dwellers, will pay the interest that would be built on those bonds as they are cashed. This would mean that those who benefited from the projects would also be helping shoulder the cost. I wanted to create low-income housing for new residents to prevent future slums. However, they would only be able to retain residence if they practiced fiscally sound policy. That’s where the expanded social sector comes in; the city would need to train a fleet of social workers, which could be previous slum dwellers, which would help keep citizens on a fiscally responsible path.

This plan probably is too idealistic and too simple to spite the time I put into it, but I think that some of the ideas from the project could really be put into place to prevent, fight, and reverse slums in developing countries and help reduce gender in-equality and raise the standard of living across the board. 

By William Lynch

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