International Development Planning Review

How is housing financed?: The case of a group of tenants who became property developers in Mumbai, India

International Development Planning Review (2004), 26, (3), 287–304.

Abstract

This paper explores how the construction of housing for lower-middle-class groups is financed in developing countries. Although it focuses on a single case study from Mumbai (previously Bombay), the case suggests that the conventional policy focus on mortgage finance for individual consumers may be insufficient, and that policy makers should also consider the problem of development finance for housing producers, including consumer cooperatives. Second, it indicates that successful financing strategies are likely to involve an overlap of both formal and informal practices. Third, in the documented case the tenants' group succeeded in leveraging the development potential of their land to cross-subsidise its housing costs. However, the paper highlights the difficulties involved and cautions against any policy reliance on such a strategy as a financing panacea.

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Mukhija, Vinit