3.4 Job creation at the local level

Shelter projects can be a powerful means of facilitating economic mobility for low-income households. This can be most effectively achieved if residents are allowed to use their plots for commercial or industrial activity, or the provision of additional accommodation for rental use. According to Keare and Parris (1982: ix), a typical housing project of 7000 units financed by the World Bank generated 3700 person/years of employment and $US4.2 million (1978/79) in wage income. The leasing of rooms is also accepted as an effective means of increasing incomes and making plots affordable to the target populations. This process of economic development can even benefit households who do not, or cannot, invest in secondary activity, since the market value of even modest dwellings will usually rise as a result of investments made by neighbours. As a project area consolidates, and densities increase, the benefits of initial investments will yield results for some and encourage investment by others. Yet, the ability of shelter projects to generate economic benefits has not always been appreciated or realized. As a result, many projects remain as housing estates without houses, and furthermore, residents are discouraged from making investments in rental accommodation or non-residential activity that can provide an escape from poverty.

Opportunities for job creation are not improved in many shelter projects by restrictions on land use that prevent residents from using their plot as a source of primary or even secondary income. In Indonesia, NUHDC does not permit residents to use their plots for anything other than residence, even though most unauthorized settlements (in Indonesia and elsewhere) are bursting with economic activity. The low initial densities planned for in new low-income projects also inhibit the level of local demand necessary to support extensive economic activity.

This suggests that density and land-use restrictions need to be relaxed. Projects should be planned to allow for the level of densities and economic activities that are found in established unauthorized settlements. This would not only ensure efficient (and therefore more affordable) land development, it would increase opportunities for local employment generation as well. Recent projects in Indonesia have, in fact, incorporated house-shop units. These have been well received and have helped projects to become more self-sufficient (Herlianto, 1990: 85). Another beneficial outcome has been the tendency for private sector residential and commercial development to follow public-sector projects. This has provided additional employment opportunities for low-income households.

There has been a substantial development of economic activity for low-income groups at the Kalingalinga project in Zambia because of the sustained efforts of local NGOs and community groups (Oestereich, 1980, and Jere, 199 la). This development has not, however, been a component of shelter projects in Colombia (Utria, 1990: 101), or Turkey (Tokman, 1990: 35), where benefits frequently go to higher-income or non-resident groups. In Zimbabwe, the Kuwadzana project is considered to have been particularly successful in generating local employment. Nearly all households employed at least one builder, and about 2200 informal-sector builders had registered with the project within a few months of the project starting. This indicates a dynamic capability of the informal building sector given the appropriate opportunity.

The extent to which local residents can obtain employment in a project itself depends upon the nature of the project and the contractual arrangements for its implementation. In large new housing developments, where a large contractor is appointed to undertake the work and there are few, if any, people living in or near the site, the scope will generally be limited. In upgrading projects, or those undertaken by NGOs, however, employment opportunities may be regarded as an integral element of the entire project, as in the Hyderabad Slum Upgrading Projects in India. In this case, comprehensive vocational training programmes were provided to impart skills that they could use on the project and in adjacent settlements.