Rapid Urbanism is an integrated framework that is multidisciplinary and trans-professional. As such, it can be used for guiding the diagnostic analysis of urbanization (being a complex sector) and for framing respective programmatic recommendations as well as for structuring multi-stakeholder discussions and participation for diagnosis, programs or capacity development.

Moreover, the Rapid Urbanism Framework integrates a political economy view with multi-scale urban planning and financial modeling across time – to enable adequate habitat and housing during rapid urbanization. Models are geared towards analyzing inter-dependencies between housing, land, infrastructure, transportation, livelihoods and the environment during rapid urbanization, as well as towards structuring respective programmatic recommendations.

Rapid Urbanism considers various proven academic as well as hands-on professional frameworks, such as the Bertaud Model (Bertaud, Bertaud, & Wright, 1988) for financing urbanization or the MIT’s Urbanization Primer (Caminos & Goethert, 1978) for designing urbanization. Both approaches have been widely used in supply-side urban and housing programs in the 1970s and 1980s, inter alia by The World Bank, and have recently been reconfirmed (e.g. Owens, Gulyani, & Rizvi, 2018). These proven components are complemented with more recent innovations, such as a range of subsidy options and financial engineering commonly used downstream of World Bank-supported liquidity facilities with the objective of strengthening households’ demand for housing (e.g. down payment, buy-down, interest rate, vouchers; or, indexing for taking inflation out of the interest rate) or multi-story incremental housing as a means to generate higher densities and to pool the costs for accessing better/adequate land (Nohn & Goethert, 2017). The question how to access – especially pay for – adequate land is possibly the most critical subordinate research question in the context of urbanization and housing. In this regard, incremental housing can be seen as a means for increasing the payment capacity for land and to, ultimately, enable better approaches to urbanization.

The Rapid Urbanism Framework has been successfully employed hands-on inter alia for: preparing the recent USD500-million loan to Indonesia with the World Bank; developing a diagnostic and programmatic report for Vietnam, also with the World Bank; framing the financial strategy of UN-Habitat’s Participatory Slum Upgrading Programme in ACP states; training the EU-funded and UN-Habitat-executed housing reconstruction programme in Sri Lanka; reviewing the Bill and Melinda Gates Foundation’s grants to member-based associations of informal labourers and residents of informal settlements; or, setting up a private housing finance company and a private land and infrastructure developer in India.

Diagnostic model/approach

Figure 1 illustrates Rapid Urbanism’s understanding of typical causes and effects of unaffordable land, infrastructure and shelter: in the problem tree, causes and root causes are structured around four sectors: demand, finance, supply and governance: (i) weak demand as low disposable income due to, for example, low earning, high cost, and high risk/vulnerability; (ii) inaccessible affordable finance due to, for example, lack of eligibility, prohibitively expensive interest rates and lack of long-term credit; (iii) unresponsive supply due to, for example, high price, poor location, unsuited housing prototypes; (iv) ineffective governance due to, for example, poor legal frameworks, fiscal or investment policy. In regard to the effects, housing unaffordability exposes slum populations, unable to access adequate housing, to one or more of the five housing deprivations – nun-durable material, insufficient living area, inadequate access to water and/or sanitation, and lack of tenure security – and to other interrelated issues, such as disconnected sites that are developed with low-density sprawl, exposed to hazards, and lack other services (e.g. education and health amenities). In turn, this set of housing deprivations results in macro problems, including poverty, inequality, vulnerability, exclusion from government and markets, excessive resource consumption and pollution. This is a vicious cycle of housing and other forms of poverty where the effects aggravate the root causes.

Figure 1: Rapid Urbanism’s model problem tree
Causes and effects for the unaffordability of adequate land, infrastructure and housing
(Source: Nohn, Rapid Urbanism)

In response to the causes, preventive housing policies are structured addressing any combination of the causes and root causes and thus reducing households’ affordability gap; in response to the effects, curative housing policies address substandard land, infrastructure and housing as well as the macro-problems.

Framework elements

Four sectors of a political economy model, informing affordability

In line with the diagnostic problem tree, Rapid Urbanism promotes a political economy model considering interventions for improving access to affordable housing across four main sectors: demand, finance, supply and governance. Basically, this is an expansion of a classic demand and supply model, adding financial intermediation and the governance of the three sectors.

The economic aspect of the model is captured in Figure 2, showing the relationship of the three primary sectors and how each one contributes to affordability equation: housing demand (e.g. capacity to pay for amortization of a lump sum) and housing finance (e.g. access to low-interest and long-term credit) determine the affordable cost (capacity to pay x financial terms = affordable cost) and, thus, which housing options are accessible in a free market, given the price of different options of housing supply. 

Then, within a political economy model, adequate governance needs to balance the three primary sectors through adequate regulation (e.g. development control and incentives such as density bonus for social developments), taxation (e.g. land value capture) or investment (e.g. supply-side in public infrastructure, demand-side subsidies in downpayments, long-term low-interest rate credit, or rental vouchers); governance is further discussed below. 

Eventually, inequality compounds across the value chain, starting with income inequality with a factor of 12, and growing to housing inequality with a factor of 600: the table below indicates the market-based affordability level (i.e. before government involvement) in urban Indonesia in 2014 (based on stylized facts). Further, housing affordability should consider aspects of demand (e.g. payment capacity), financing conditions and cost of production/supply. Note that the table differentiates roughly any two/four income deciles in line with markets and policies: e.g. in Indonesia, the top two deciles can access mortgage finance and purchase in the market without subsidies while SDG 10 targets the bottom 40 percent that faces the largest affordability gap.

Figure 2: Housing affordability: A match of demand, finance and supply, enabled through governance
(Source: Nohn, Rapid Urbanism. Credit: Top: adapted from Lundqvist & Acioly; bottom: urban Indonesia, stylized facts in The World Bank, 2014)

Five project scales for adequate habitat and housing

Figure 3 portrays five project scales: (1) city (macro), (2) neighborhood (public), (3) tissue/cluster (semi-private), (4) starter buildings (semi-private or private), and (5) dwelling units (fully private). The scales are in line with conventional planning scales for human settlement and housing development, such as the Dutch Stichting Architecten Research (SAR) methods for designing neighborhoods with open buildings. Each scale corresponds to different steps in a value and delivery chain for urbanization and housing, thus allowing to structure respective responsibilities based on the principles of subsidiarity and comparative advantage. Furthermore, this approach allows addressing common project risks, such as (at the city scale) ensuring an appropriate relocation site that provides access to social and economic opportunities. Any higher-level framework (at the national or state level), such as any guiding policy or statutory legislation needs to consider these basic scales to frame and deliver successful interventions:

1. At the city-scale (focus: right to the city), improve the supply of adequate land with proper connectivity to life-affirming opportunities (e.g. through developments at improved location). This is inter alia relevant in order to understand and mitigate the potentially adverse impact of transportation cost on housing affordability.
2. At the settlement scale (public space), ensure access to adequate and affordable public space and land security for all (against evictions and hazards). This is inter alia important for promoting local socioeconomic opportunities and for differentiation infrastructure standards based on location to enable differential land pricing. 
3. At the tissue/cluster scale (semi-private), sub-partition private lands along public roads as well as larger off-grid partitions. In regard to the latter, differentiate semi-private clusters by grouping dwellings around collective spaces (e.g. courtyard) and infrastructure (e.g. community taps), effectively mimicking large lots to minimize public costs. Moreover clusters can play an important role as organizational unit for collective self-help, for example through collective land management and tenure, differentiated (self-managed) basic services, mutual-help construction or collective finance (e.g. top-down joint liability group, or bottom-up solidarity mechanism).
4. At the building scale (single or multi-household), chose among socioculturally, economically and spatially appropriate starter prototypes that minimize costs and maximize flexibility – while ensuring livability and safety.
5. At the dwelling scale (fully private space of individual household), finally ensure that the move-in-ready unit is affordable (with or without additional investment required from households) and support a decent housing career, empowering households to climb up the ladder from a basic and safe ‘starter home’ to a more complete ‘dream house’. This level is often the concern of out-put oriented programs producing complete housing units, but adequate ‘habitat and housing’ projects may focus on just a basic starter environment that can be self-improved by the beneficiaries over time. This approach aids freeing up administrative and capital resources, which can be invested in accessing ‘better land’ and developing ‘adequate habitats’ for all, rather than just ‘affordable housing’ for few.

Figure 3: Five project scales to ensure adequate habitat and housing for All
(1) city (macro), (2) neighborhood (public), (3) tissue (with semi-private clusters), (4) starter buildings (single or multi-household), dwelling unit (fully private of individual household).
Source: Nohn, Rapid Urbanism. Image Credit: EPC, ITDP, Nohn (adapted from Caminos and Goethert, 1978), Goethert, Wakely in Wakely & Riley (2010), Elemental, Rapid Urbanism, Sparc

Enabling development: incremental standards across two temporal scales

Rapid Urbanism considers the pros and cons of incremental development of land, infrastructure and housing. The objective is to reduce the cost of accessing the formal housing market, without unduly reducing the standard/livability/political viability of projects. Towards this end, Rapid Urbanism considers adequate starter environments that can be supported with strategically targeted subsidies, which then enable further market-based development according to the needs, preferences and resources of communities. 

Figure 4 demonstrates how strategic public investments into the Parivartan Slum Networking Programme in Ahmedabad, Gujarat mobilized additional domestic resources (community co-payments and further market-based investments), transitioning from subsidy-driven interventions towards private investments and local economic development. Moreover, Rapid Urbanism differentiates two strategic phases:

1. Phase I creates a subsidized starter habitat, including land security, basic infrastructure and resilient shelter, focusing on the three SDG 11.1 indicators (land, water, sanitation) and reducing/managing the risk of further investments as well as providing a ready-to-move, albeit basic and resilient, dwelling providing shelter against men-made threats as well as natural disasters.
2. Phase II leverages the enabling starter environment through access to affordable finance and technical assistance for community-driven marked-based incremental investments (addressing the last two SDG 11.1. indicators – improved dwelling material and sufficient size) and promoting inclusive local economic development.

This approach is not only common to the curative Gujarat-based Parivartan scheme but also a common feature of internationally-supported preventive interventions, such as World-Bank-funded sites and services. For example, the Indonesian Million Housing Programme considered a starter home to be of at least 12 sqm and be expandable to 36 sqm, eventually; the former being the affordable entry point to the formal housing market and the latter being the official minimum standard. 

Figure 4: Incremental development across two phases
Strategic subsidies reduce severe poverty and market risks, building an enabling environment; thereafter, communities can self-manage investments and improvement of their habitat and housing. (Source: Nohn, Rapid Urbanism)

Designing effective targeting systems: inclusive eligibility criteria and regressive subsidies 

Lastly, the enabling starter habitat may be partially subsidized, with the following objectives:

1. Ensuring standards and livability, inter alia enabling access to adequate habitat and housing, without exhausting the government resources and without crowding out the private sector – in other words, the subsidy allows households to access basic market-provided housing solutions, thus bridging the gap between potentially large-scale top-down housing schemes and likely small-scale community-driven housing schemes;
2. Redistribution for poverty reduction, for example focusing resources at the bottom 40 percent of the income distribution in line with SDG 10 – in other words, redirecting government investments towards the urban poor and low-income populations; and
3. Reducing/managing market risks, as discussed above – in other words, aiding economic development through reduced-risk business opportunities, employment generation and financial sector development.

To achieve these objectives, Rapid Urbanism employs proven instruments, particularly a range of subsidy options and financial engineering commonly used downstream of development-bank-supported liquidity facilities with the objective of strengthening the demand side (e.g. downpayment subsidy, buy-down subsidy (supporting step-up amortization mortgages), interest-rate subsidies (or emulation thereof through a downpayment subsidy as in India’s CLSS), vouchers for material or rental; or, rent-to-own or lease-to-own, indexing for and taking inflation out of the interest rate).

Further material 

Lectures on Rapid Urbanism’s approach and thinking are available on the resources page.