On Housing Under Socialism

The contrast could not be more striking:

In the USA, the problem is that there is an oversupply of housing.

In the capital of socialist India, New Delhi, for the 5,66,906 people who had put up an advance payment of Rs. 1,50,000 for a DDA flat, only 5238 flats were allotted by lottery. That is less that 1 per cent. Here is the report.

DDA stands for Delhi Development Authority, which is a monopolist on real estate and land development in the capital.

Note that the DDA still gained: every applicant who did not get a flat lost 5000 rupees to the DDA. That is a neat 281 crore rupees (2.8 billion). What a rip-off.

I once lived in a DDA flat. It was horrible.

And these days, I often visit the DDA locality in Vasant Kunj – and it is a hell-hole. The roads are bad, the markets are bad, there is no place to park, and the flats are extremely ugly, a blot on the sky-line.

Yet, if you take any of the broken roads leading into the area behind Vasant Kunj, you come across lavish farmhouses. And you see that there is an abundance of unowned land just lying idle.

So there is enough land to build decent houses for all.

But there are not enough roads – because this is a government monopoly.

Hence there are not enough flats for Delhi-ites – because the DDA is a monopolist exploiting the consumers.

I spent Sunday afternoon with friends in a DDA flat in Munirka – an ugly, congested DDA locality in upmarket South Delhi. We discussed how DDA localities could be demolished and rebuilt by private developers. All that is required is that present flat-owners have property rights in the new development.

So my drastic solution: Shut Down the DDA.

And then demolish and rebuild every DDA locality.

While doing so, relay and redesign all the roads.

Of course, someone else will have to do the job – because I will be on the Konkan Coast, extolling the virtues of Free Trade.

Which brings me to an excellent piece by Niranjan Rajadhyaksha in today’s Mint, where he calls for free trade. He says the WTO is caught in a “Nath Equilibrium” and that this Big Nutt is widely regarded as a “one man roadblock.”

Rukawat Hatao!

Garibi Apnay Aap Hutt Jayegi!