The recent pandemic has shed light on the weaknesses of urban management systems, offering us a chance to rethink and redesign our cities. Slums are inextricably linked to the cities they emerge in, and the health of these communities has far-reaching implications on a city’s ability to respond to external shocks. This article explores how Dalberg is working to furnish the means for private capital and philanthropic organizations to collaborate with public and community stakeholders in order to effect transformative change in slum communities, with long-lasting benefits for future generations. 

The worsening climate problem and the convergence of economic crises with population growth, urbanization, and governance challenges will likely result in more people living in slums in the future. Slum residents suffer poor living conditions and uncertainty about their right to stay, making it difficult for them to address urban problems, even though they have strong community bonds. 

Official estimates indicate that approximately one in six people residing in Indian urban cities live in slums or similar substandard conditions unsuitable for human habitation. Slums are prevalent in all Indian urban areas, often resulting from misguided urban planning efforts. In larger cities like Mumbai, slum households account for as much as 30-40% of all households. Slums have also proliferated rapidly: between 2001 and 2011, their presence increased by 25% in cities and towns across India. Recent World Bank estimates suggest that nearly half of India’s urban population is composed of slum dwellers. 

Slums are not a homogenous urban phenomenon. These densely populated areas exhibit significant variations in terms of living conditions and are home to diverse groups of people with varying interests, resources, and backgrounds. Given the limited public funds available for slum prevention and improvement, private philanthropy and capital have become crucial to driving substantial change and enhancing the resilience of slum communities in urban India.

Understanding Slum Resilience

Resilient cities feature diverse economic activities, equitable access to jobs and services, active community networks, transparent governance, and robust infrastructure. However, there is no consensus on what constitutes “resilient slums”. Definitions vary, with many focusing primarily on physical housing infrastructure.  

Based on existing research, we define slum resilience as “the ability of slums to recover from, respond to, and prepare for external shocks and stresses.”

Much like the broader concept of city resilience, building resilience within slums necessitates multifaceted development across various fronts. This includes economic aspects such as ensuring access to livelihood and educational opportunities, societal factors such as safeguarding the health and safety of residents, addressing environmental concerns like improving public infrastructure such as streetlights, and implementing effective governance measures such as land titling and slum rehabilitation policies.

Resilient slum communities can foster strong social bonds within their neighborhoods to better navigate economic, environmental, and political challenges.

Gaps in Past Interventions Attempting Rehabilitation

The absence of slum resilience has far-reaching repercussions at the individual and community levels, and on society as a whole. At the individual level, non-resilience can adversely affect health, housing stability, and education, and may even lead to financial exclusion and gender gaps. At the community level, it can result in fragmentation and the loss of cultural identity. Societally, non-resilient slum communities can lead to higher costs for cities, deter private businesses, and result in inadequate disaster risk reduction measures. 

Past efforts to address slum challenges often focused on “slum clearance”, which resulted in either forced or voluntary resettlement of residents. While recent policies such as PMAY-U have seen relative success by focusing on in-situ redevelopment and offering credit-linked subsidies, the outcome of different program verticals is uneven and leaves economically weaker sections of the slum population behind. We believe these challenges can be overcome by building slum resilience using a two-track framework that focuses on prevention and rehabilitation. 

Achieving Slum Resilience

Efforts to prevent the emergence and proliferation of slums should focus on integrating migrants into comprehensive urban planning strategies rather than attempting to curb migration itself. It is also important that rehabilitation goes beyond the mere provision of physical infrastructure and addresses social, environmental, and economic dynamics within slum communities. These communities are diverse, with variations in socio-economic status, ethnic composition, political affiliations, land ownership, and housing quality. Tailoring interventions to suit local and contextual circumstances and involving communities and public authorities are crucial to any intervention. 

Deeper understanding of the factors driving slum development, adopting a perspective that is inclusive of migrants, and effective data and urban planning tools can collectively help mitigate the emergence of slums. Urban planning initiatives aimed at integrating migrants into the city can prove effective in this regard. Importantly, local authorities should collaborate with existing slum residents, grassroots organizations and private entities, and leverage data for precise planning that takes into account local contexts. 

Filling the Funding Gap

Despite increased financial support for slum development, a significant funding deficit estimated to range from $60 billion to $290 billion persists. The primary source of funding originates from government channels and is focused on the provision of physical infrastructure. Collaboration is key. Holistic slum rehabilitation relies heavily on the coming together of philanthropists, private sector players, governments, and civil society organizations. These efforts can drive systemic change, particularly in the area of affordable housing. 

As more robust evidence regarding outcome measurement emerges, there is an opportunity to utilize blended finance strategies that incorporate innovative funding mechanisms and vehicles. By aligning commercial and social objectives, blended finance creates synergies that benefit slum resilience initiatives. Small investments can yield significant results. For instance, a $50 million investment can map over 20 million households, enhance public officials’ capabilities, and produce valuable data that can be leveraged for slum redevelopment.

Private entities and philanthropy can play a pivotal role in achieving slum resilience through collaboration with public and community stakeholders. They can foster community empowerment, emphasize data collection, and develop effective rehabilitation models. Additionally, they can fund innovations in overlooked areas of slum resilience such as gender equity, capacity building and shifting mindsets.  

Given the urgency of the climate crisis, stakeholders must unite, creating innovative solutions using tools like blended finance to ensure resilient outcomes for all.