Placemaking and Peace: The Role of Housing in Designing Healthy, Peaceful Cities
Interview with David A. Smith, Affordable Housing Institute
By: Lisa Overton
Issue 12 Summer | Fall 2013<
Executive Summary
In 2010, for the first time in history, the United Nations (UN) estimates indicated that that the global population had tipped from being mostly rural to mostly urban. This trend has continued and the number of us living in cities is estimated to double by 2030. In the spring of 2013, protests in the streets of Istanbul provide a graphic demonstration of why rapid urbanization is relevant to a discussion of peace. The role of urban planning, housing, use of public space, and increasing commercialization of our cities will inevitably become crucial as cities grow.
The Affordable Housing Institute (AHI) is a non-profit consultancy that works to enhance housing ecosystems, expand business activities, and improve lives of impoverished people by helping housing finance and development entities throughout the world. Since David Smith founded the global organization in 2002, they have worked to increase the impact of Mission Entrepreneurial Entities (MEESs) in five continents, including countries such as Brazil, Haiti, Pakistan, United Arab Emirates, Turkey, and Uganda to identify and convert resources into delivery mechanisms for better homes and communities with strategies for sustainable scale and growth. Some months back, Catalyst’s Lisa Overton spoke with David Smith of the Affordable Housing Institute about the unprecedented move to cities and the search for peaceful solutions to urban problems.
CATALYST: How is housing instrumental in fostering peace?
David: Simply put, overconcentration of under-housed people living in close proximity to people who are successfully market-housed has throughout history been a formula for urban violence. There were housing and bread riots in Rome in 75 BC. The 1848 European uprisings all arose out of urban slums. In 1967 you could turn on your television and watch Walter Cronkite narrate how America’s cities were burning. In 2003 there were riots in Morocco. In 2011 we had the urban violence in Tottenham. Urbanization, large concentrations of rootless young men, substandard housing, lack of economic opportunity, when placed in close proximity to economic success and the rule of law almost always leads to urban violence. You can connect it to Egypt to Tunisia; you can connect the unacceptability of housing situations to urban unrest in Saudi Arabia and Bahrain as well. So, simply put, I do not think you can have a world, an interconnected urban world, that is at peace if there is generally unacceptable housing in large and rapidly growing cities.
I think the evidence is overwhelming that if you want a peaceful world you have to have successful cities; if you want to have successful cities you have to have successful affordable housing within those cities.
CATALYST: How has our current global financial crisis impacted slum dwellers?
David: The short answer is, not much, but it has shrunken the source of donor funding for experiments. Donors are more hesitant, and so some of the things I would like to see done are not happening because there is just less of this CSR and donor capital floating around, which is too bad.
CATALYST: What are groups like the Affordable Housing Institute doing to address this?
David: You want to turn a slum into an asset. I interpret the asset in economic and financial terms. A slum needs to be seen by the city as a neighborhood in the city in which the city gains revenue and provides services. Property within a slum needs to be seen by people who live in the slum as something worth investing in because it can be sold to recover the cost of the investment. To make that shift from something not being an asset to being an asset you actually have to formalize – the building structure has to be durable – you have to formalize legal structure so there is a right of transfer, and so on and so forth. So our theory is that we want to change slums into assets and we want to do that by changing the housing and the residential environment within those slums into something that is worth people’s while to invest in, to improve, and to deliver municipal services to.
In particular, we think that change is driven by entities, not by advocacy and not by government but by entities or enterprises or what some people call social enterprises and what we call mission entrepreneurial entities or MEEs. A MEE – “MEEs” like rhymes with bees, as in busy bees – that produces a product or service that poor people buy because they want to buy it, the doing of which, the MEE can make money at, and the successful doing of which causes everybody else to go, “Oh look, not all is hopeless in the slum.” So, savings groups, micro finance institutions, little bitty community developers, little bitty co-ops all make a difference. You can move up from that and say entities that organize or support these things are the magic change agents and we want to help them grow and thrive. We do that with financial consulting and financial advising that tries to connect them to formal institutions and formal capital markets. Those “pollinating bees” are the effective change agents to cause what was a slum to be changed into an asset, and we think that the support and encouragement and consulting and problem solving for those pollinating bees — what they need to grow, and so that is what we do. So that is why we are working in Haiti, to try to figure out how Core Data can develop this little bitty neighborhood and why we are working in Dubai, because I think the housing finance agency in Dubai is trying to be one of these bees. We will work any place and with anybody where – it can be a for-profit or a nonprofit, but do something that poor people will pay their own money to buy, maybe not the full cost of it, but they will pay something to buy it. The thing itself is an engineered financial product or physical product, it transforms the environment, it shows people how the ingredients can turn into something better. That is the theory of impact and that is what we do.
CATALYST: What are some of the challenges of poverty alleviation and improving conditions for the urban poor today? Can you speak to any current, modern influences on urban growth trends?
David: It is made more of a challenge – it is a challenge today for two reasons, both of which are global trends of long duration that we are only partway through. One of them is a fifty-year trend and one of them is a twenty-year trend. The fifty-year trend, which started about 1980, 1985, is this acceleration in the rate of urbanization. We are about halfway through that trend. People are moving to cities –the population of cities and the percentage of people who live in cities are rising at rates without precedent in human history. Every year 80 million more people live in cities than the year before. About half of them are rural-to-urban immigrants, and the other half are born in the cities. And that pace is overwhelming all capacity to provide a built environment to handle that urbanization. And in saying this I’m not criticizing any particular government or any set of policies. There have always been moments in time when the pace of people coming to the city has outstripped the capacity of the city or formal institutions to cope with them. And that is a fifty-year trend that will continue for another 25 years.
It is made more challenging now than it has ever been in the past because cities are more technological. So as buildings become more technological, become more sophisticated, they go up, to get more people on the same land. As you go up, the physical environment that constitutes a housing unit becomes a more sophisticated and a more highly engineered technological construct. The size of the building becomes larger, and therefore the number of people who are accommodated within one structure becomes larger. To get to the 12th floor you have to have an elevator, which presupposes a certain amount of electricity. It also presupposes structural steel reinforcement, steel and concrete reinforcement. And that means the business of responding to urbanization becomes more complex and larger scale.
Second big trend, the immediacy trend, – this is a twenty-year trend and we are ten years into it – information can no longer be caged. The Internet, broadband – as the speed and immediacy of information goes to infinity, as the cost of information goes to zero, the awareness by poor people of richness around them becomes omnipresent. The awareness of rich people of poor people around them becomes omnipresent. The world has not come to grips with this. Among the events that are illustrative of the challenge, when Muammar Gaddafi got killed, everyone in the world knew about it within fifteen minutes because somebody with a cell phone ran a scan of it and uploaded it, and not only did everybody know about it, you couldn’t not know about it. When Hitler was killed in the Führerbunker it took four months to establish he was dead. Well, there’s a flipside to that, and we have seen it in Tottenham and we saw it in the French riots in 2005 and the like. When the Internet is a great leveler of access to information, it means culture moves instantly and expectations move almost as instantly. Prior to urbanization, it was easier for the rich to be unaware of the poor and the poor to be unaware of the rich – that is impossible now. Internet technology is a leveler in making the case and getting the message heard. As information becomes truly free, the ability of a cadre of leaders to control the narrative vanishes.
In a global society where an increasing percentage of the value of goods is in the service component, the value chain, the intellectual add, if you isolate yourself from the free transmission of information you suffer a substantial economic comparative disadvantage.
In the Middle East, the Gulf states are now coming to grips with the fact that if they want an inclusive society, a global international society, if you want get peoples’ ideas and their money to come there then it has to be inclusive, and it is incredibly debilitating to try to control the flow of information. Nations have to go with the prevailing wind of urbanization and they have to go with the prevailing wind of information immediacy. Once you do those two things, then it becomes unacceptable to too many people that there is extreme poverty within a quarter-mile of extreme wealth. And all of the dictators in the world, whether they are autocratic or megalomaniac or anything in between, are coming to understand that they cannot stop this, and even if they thought they could stop it, their kids are going to do it. Their kids are going to make them change. So in that world,
if you are not tackling the problem of healthy cities you will have urban violence, and if you are not tackling the problem of affordable urban housing you will not have healthy cities.
CATALYST: You have said that slums are an important element in the urban eco-system. Can you expand on that?
David: Slums represent the adolescence of an urbanization environment because what’s happening is that some things – people moving to the city, investment in private structure, informality – are growing much faster than other things that take longer to grow – rule of law, extension of the municipal grid, making formality more inclusive. The reason people come to the city is that it is economically sensible to do so. They come for themselves and for their children. They are rational to do that. Throughout history, cities have been the wealth generators. So within a slum there are very few barriers to entrepreneurial creativity. That is the big comparative advantage.
Slums are entrepreneurial incubators, absolutely. And in particular informal communities are really good at innovating value chains that do not depend on expensive technology. They use interpersonal credit systems. Another example, again, that you can find going back through history: rag pickers. Rag pickers and night soil men have existed within informal communities since as far back as we can go. Rag pickers, as you know, are people who scavenge and then sort and then resell products, this could be recyclable bottles, it could be newspapers, it can be pieces of corrugated metal. One of my favorite examples of this is the Zabaleen of Cairo. The Zabaleen live in a ghetto neighborhood called Garbage City. They are essentially a guild of rag pickers and trash and rubbish and garbage people in Cairo. One of the things they use as part of their sophisticated value chain is pigs, because pigs will eat a great many things and will turn certain kinds of garbage into fertilizer and also turn it into ham. Of course, pigs are haraam under Islam. So, the Zabaleen are Copts; they are Christians. Cairo has been seeking to develop garbage-truck sanitation, and the Zabaleen have sought to compete for the contracts, and when they are allowed a fair competition they deliver higher-quality service at lower price.
So part of what I like about slums in the global environment is that to survive in a slum in the emerging world you have got to be entrepreneurial and you have got to have a work attitude. In the emerging world, if you live in the slums you work, and you run around and you do something and you sell it and you make ends meet. So those are the good parts about it; they reduce the barriers to entry, they reduce access. In cities entrepreneurs can make money formally, informally, or illegally. There are lots of things that are informal but probably ought to be legal. If you kill all of those then the only thing that is left that is informal is illegal. And if the only guy in the public housing project with a good car is a drug dealer, that is what you learn, that becomes your upward path. So you see this connection between slums and crime. You also see slums becoming vote banks. You see slums creating ward bosses, so Boss Tweed emerges out of slums, etc. and over time the only way you make them go away is the formal city has to out-compete them.
CATALYST:What are the environmental impacts of slums, and how do their surroundings affect the health and welfare of slum dwellers?
David: Ironically, for any given quantum of human beings, cities are greener than suburbs, suburbs are greener than the rural environment. For any hundred people, thousand people, 10,000 people, it is less stress on the environment for them to live in cities than to live anywhere else. Part of the reason being, going back to where we started with technology, in cities you share a wall, a floor, a roof with somebody else. And, as cities go up and become more technological, then you are starting to have a circulatory system: you bring water up, you bring [waste] down, and so on and so forth.
At the same time, rapid urbanization without concomitant infrastructure can overstress and potentially, essentially, blow out environmental capacity in certain cities. So if you go back in America’s urban history, The Boston Harbor was polluted, [in Britain] the Thames was undrinkable: there was something in 1855 called The Great Stink, where you literally could not approach within 300 yards of the Thames because it would make you ill. So we have this capacity, we can blow out the environment.
There is a temptation among rich people to blame the poor people for this, because it was the poor people after all who settled on the banks of the reservoir in Sao Paolo and polluted the water. So that is true, so what? What are we going to do about it? The poor people cannot afford to put the infrastructure in to clean it up, so the rich people have to put it in to clean it up in self-defense.
Do not think of slum upgrading as providing housing for poor people. Think of it as health and safety for all of us, because if the reservoir gets filthy, then your kid gets sick, too.
So, the urban environment under pressure from rapid urbanization is vulnerable to significant ecological and environment breakdown. It is also the case that poor people live in geologically unstable land; they live in low-lying or marshy land. And even at any constant rate of tornadoes, tsunamis, hurricanes, and rain, an increase in urbanization puts increasing numbers of people in climatologically at-risk places with inadequate infrastructure. So this is the discussion we had about Istanbul or Banda Aceh or Calcutta or Bombay. When the tsunami comes, it is going to affect more people.
We have recently been doing some work in Haiti. Some three hundred thousand people died in the Haitian earthquakes. Most of them died because houses fell down hillsides because they were geologically unstable because the hillsides were weak. They did not die because of what happened directly in the earthquake, they died as a consequence of a built environment on an unstable base. And so there is a significant risk of individual city environmental catastrophes arising out of all of this. That does not change my view about urbanization being desirable, but it is a reason why everybody else in the city should care about formalizing the informal communities.
CATALYST: Are there ways of empowering slum dwellers to improve their own living conditions? What is required for that to happen?
David: Answer: put money and property rights in their hands. Make it possible for them to have something that they own, that they are confident they will not be dispossessed of, that they can invest in. That is the message of microfinance. We take it, I would say, a step further and say, Microfinance works great if it is a cow or textiles or a sewing machine or a cigarette roller. It does not work so well with a house, which is a physical asset and also not directly related to the production of income, or does not seem that way. But when 80% of microfinance borrowers are women, most of whom are self-employed or informally employed, it turns out there are only so many hours in the day, and if it is easier for her to watch the kids or she can work at night because she has a light bulb, then you have changed her earning power and you have done that because you have enabled her to have a new home.
I will give you a last word. In the military, in Iraq and in other places, they are actually very good at systems analysis, and they envision that the process of preventing suicide bombers or guys who have IEDs can be depicted on a graph that runs from left to right, left to right representing a time sequence where at the right end the bomb goes off or the suicide bombers does the terrible thing. And they spend a lot of time thinking about how to reduce risk “left of boom,” meaning earlier in time to interdict the development of it. Well, I will suggest to you that war and violence and terrorism, if those things are societal booms, making cities work and making housing work is an intervention that reduces the likelihood of them occurring. Part of the reason the king of Morocco started his anti-slum program was because he had a series of terror bombings in Rabat and Fez and Casablanca, and all of the young men who carried them out were living in the slums of those cities. So I would say, affordable housing and urbanization and improving cities and cities’ infrastructure is how you intervene left of social boom…Yeah, I spend a lot of time thinking about what you do upstream.
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CATALYST INSIGHT:
By connecting informal entrepreneurs, co-ops, and organizations to formal institutions and markets, slums can become valued as an asset. This can increase economic and social value for a city and all inhabitants and build a foundation for living in peace.
STRATEGIES IN ACTION:
Investtime, energy and capital into slums; they are entrepreneurial incubators and assets to cities.
<strongEmpower the impoverished by helping mission-powered entrepreneurial enterprises.
Embrace the free transition of information; isolation from it inhibits social and economic advantage.
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About the Author:
David A. Smith is the founder of the Affordable Housing Institute, which develops sustainable housing financial ecosystems worldwide. With more than 30 years direct experience in affordable housing, David combines the roles of practitioner and theoretician, participant and policymaker.
His work as an international housing finance policy advisor/program developer encompasses projects on Brazil, Colombia, Egypt, India, Ireland, Kenya, Middle East, Panama, Sri Lanka, South Africa, Turkey, and United Kingdom, and he is a speaker on affordable housing issues around the world. A 1975 Harvard graduate, he is an award-winning author with more than 100 published articles in real estate, valuation, and policy periodicals, and a textbook, as well as an influential blog.
AHI™ is a USA-based global non-profit, providing housing finance expertise and
thought leadership to organizations working to make housing accessible to
low-income people. Their mission is to help pro-poor innovators build healthy
housing ecosystems worldwide.