Understanding Urban Housing in India

This study aims to understand the factors that influence the equilibrium of poor housing quality in India, where low-income households (demand side) demand services from informally trained masons (supply side). This study proposes to understand the interactions between demand and supply side factors that result in the poor equilibrium in the housing market. On the supply side, the primary research questions focus on ways to increase in the masons’ knowledge and technical skills, improving the livelihood of masons etc. With the incorporation of the demand side, we can now examine questions on the demand side as well. From existing literature, financial constraints seem to be a major constraint in undertaking investment activities. However, from anecdotal evidence from talking to households and masons, there seems to be a mismatch of expectations with regard to the construction costs as well. So a reason for the lack of housing investments could be because households overestimate the construction costs and hence do not undertake them even though they are capable of doing so. In that regard, the study proposes to evaluate the impact of correcting the mismatch of expectations in undertaking investment decisions, both by households as well as the masons using a software developed by the partner organization, mHS. Taking into account the requirements of the project along with local prices, the software estimates costs and timelines for a construction project. Researchers will also investigate if intermediaries are needed to provide credibility to the software.