There is a common misconception that the poor can’t afford certain things, but the reality is that they end up paying far more than people think for services like electricity, housing and water, says Sarkar. This, he claims, is an enormous opportunity for more businesses to design profitable yet market-appropriate solutions.
Sakar’s $300 House idea, launched essentially out of a 2010 blog post in the Harvard Business Review by Sakar and Vijay Govindarajan of Dartmouth College, is an effort to find the people and companies who want to solve this problem, and encourage collaboration. “We want to push people to go down this road, and encourage big companies to get into the housing market for the poor, because it’s a giant market,” he says. According to the social entrepreneurship NGO Ashoka, the number of people in need of safe housing will triple to around 5 billion by 2030 – which makes this a multi-trillion dollar market opportunity.
Sakar and Govindarajan’s efforts led to the “$300 House Open Design Challenge”, which attracted everyone from the India’s corporate giant Mahindra Group, who won the corporate award for building an integrated village with civic amenities like sanitation, toilets and solar power, to Texan Harvey Lacey, a self-proclaimed "redneck engineer", who came up with a design based on blocks built out of recycled waste, called Ubuntublox.
Another winner was Patti Stouter, who is piloting and prototyping a low-cost, low-tech building material called “Hyper-wattle”. The idea draws from her experience building sustainable housing in Haiti, and based on something called Earthbags – bags filled with subsoil stacked to make a house. Stouter’s idea is a cross between two wall systems, using plastic mesh tubing (the kind used for erosion control), and a straw-fibre matrix encased in clay. This can be made using straw or hand-compressed trash, meaning it can be built locally and affordably in rural or urban slum settings, says Stouter, who runs Build Simple Inc, a company based in southwestern United States. “Hyper-wattle can be built by women, the elderly, or handicapped workers because it is much lighter than other masonry.”
Yet there’s one important thing to consider. The hopes and aspirations of most of the world’s poor – like the rich – are not to have houses built out of trash or mud, no matter how sustainable they may be. “A house is not just a house, it’s a status thing,” claims Sarkar, “and just because you can build it doesn’t mean people will live in it.”
In Nairobi, Kenya, which is home to one of Africa’s largest slums, one company is looking beyond improvements of slum dwelling, to actual home ownership for the poor.
Irfan Keshavjee, local serial social entrepreneur and Founder of Karibu Homes, a new company that aims to bring home ownership along with a secure, sanitary, and progressive community to low-income families, says that upgrading efforts like iShack or Hyper-Wattle houses are valuable, “but not the answer to the massive problem of rapid urbanisation.” What’s needed is to build something scalable, making real bricks-and-mortar housing more affordable and accessible to the poor.
Karibu Homes is developing low-cost, secure, housing complexes with 1,000 homes, in areas where urbanisation and slums are mushrooming – like growing industrial areas that are witnessing “the genesis of a slum”. They want to catch the problem before it happens, and give people the opportunity to settle somewhere more permanent.
“The hope of having a house bridges a great social divide,” says Keshavjee. He claims that only 10% of Kenyans can actually afford to buy the homes on the market, and that his lack of housing “creates a weak social fabric.” Alioune Badiane, a Director at UN Habitat, agrees, adding: “there are many people in the slums who are not poor. It’s just the market cannot afford them anything they want.”