Addressing the housing needs of earthquake victims

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The powerful earthquake which shook Nepal on 25 April caused huge losses of life and property. As we gradually move from immediate search and rescue efforts to short-term relief and long- term rehabilitation phases, we also need to look back and reflect upon the lessons we can learn from similar incidents from other countries, on how to manage the reconstruction, rehabilitation and recovery efforts to make our city, villages and people resilient to similar disasters in the future.

There is no way of predicting earthquakes. They cannot be prevented as well. They are natural phenomenon. Disasters, on the other hand, are largely man-made and we can better prepare for reducing their impact. If Dharahara was not opened for public, 100 more lives could be saved; if a seven-story building wasn’t built in 2 anna land in Kapan, 29 more lives could be saved; if premises of old temples like Kasthamandap were not open for public gathering, many more lives could be saved. Losses of lives in these structures suggest we have miserably failed to put ‘safety first’ as our basic disaster-risk reduction principle. We should learn from Mexico City in sensitizing the public and enforcing building codes and regulation in order to reduce earthquake related disasters. There was no human death or injuries when a powerful quake of magnitude 7.2 magnitude jolted Mexico City on April 18, 2014; the only impact was some minor damages on physical infrastructures. This was made possible by a strict enforcement of building codes and regulations, and public awareness in addition to putting in place an early warning system after a deadly quake of 1985.

Media reports indicate that the quake completely damaged over 90 percent buildings in some of the worst-hit hilly districts in Nepal. In our country, home ownership is a significant component of household wealth after landholding. Nepal Living Standards Survey 2010/11 indicates that home ownership is around 90 percent, meaning 90 percent of households in Nepal own private house. However, due to a widespread heterogeneity in the quality of housing, it is difficult to estimate the share of housing in household wealth. But taking inference from other developing countries, the share of housing in household wealth composition could be around 30-40 percent in Nepal. It may be even higher in urban area. This is mainly because of the absence of alternative financial instruments that households can invest in other than land, housing, and gold. This means that families who lost their houses lost about 40 percent of their total wealth, making them poor. The loss actually increases when we account for loss of land, and livestock. 

How we are going to address the housing needs of the affected population and the quality of the new houses will determine the wealth status and poverty level of the earthquake affected population in coming years.  If we focus on quick-fix and construct low-value housing in the name of providing relief to the affected, that will push down their wealth status and they remain in poverty. So, instead of spending months in constructing temporary houses, we should think very hard and invest on transitional housing from the very beginning so that such houses can later be converted into permanent homes. If we fail to do this from the very start, affected population will remain in slums for many years.    

Evidence from Haiti indicates that people prefer to live closer to their lands or old houses. If we disregard people’s preferences and forget how they earn their living in the changing context, and try to provide engineering solutions by ignoring the reality of our rural agricultural economy we may fail to resettle the affected households. Therefore, blending improved engineering with good social science to construct better and resilient housing that are closer to their livelihood sources should be the guiding principle while planning for rehabilitation of the affected households. We should also take this opportunity to address other issues that have been the major public health issue in rural Nepal such as indoor air pollution and improper sanitation.

Reconstruction, especially backed by financial support from outside will create an incentive problem, popularly called ‘other people’s money’ syndrome. If the state or NGOs take complete control of constructing houses for the affected households with the financial support from outside, then there might be no incentive for them to economize or provide quality housing simply because it is not their money and they are not going to live in those houses.

Therefore, providing housing to the affected households is not just an engineering or financial issue. It goes beyond that. A good mechanism design is needed to avoid ‘other people’s money’ syndrome. To solve this puzzle, beneficiaries should be involved from start to end; they should be able to voice their needs, and be part of the entire process – from choosing a location to designing and constructing the houses. A partial funding plan where beneficiaries should also finance a part of the total costs will provide enough incentive for them to stay alert and monitor the entire process, keeping the costs within limits and maintaining the quality. The household can contribute in labor, cash or in kind or some combination of all. In some cases, household may not be able to afford or support anything where the role of state becomes critical.    

(Nepal is a Sr. Economist at ICIMOD/SANDEE)




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