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Baan Mankong: Slum Solution or Fiasco?
Bangkok Post, January 24, 2010

Dr. Sopon Pornchokchai
President, Thai Appraisal Foundation

In the world of low-income housing and human settlements, the concept of Baan Mankong (Secure Housing Scheme) in Thailand is understood to be a solution to the slum problem. Under this concept, security of land tenureship is delivered to the dwellers and a lot of assistance programs are conducted. There is one Baan Mankong slum which has received many awards and seems to have become the prototype for dealing with this type of problem. However, there is some doubt as to whether it is a genuine success or simply a case where positive propaganda has been accepted without question.

This slum is located along the banks of an old irrigation canal on land over which the dwellers are granted a very generous and secure land lease. The influx of substantial amounts of public funds has emerged to support numerous development projects. Its history has been documented and the resulting story has become well known, apparently demonstrating a successful solution to a significant slum problem.

However, this so-called success might not be as significant as it first appears, and there are a number of reasons that support this view.

  1. The slum does not really demonstrate a general solution to slum problems;
    it can be seen to make neither efficient nor effective use of public funds.
  2. The development which has occurred has resulted only through heavy investment of public funds.
  3. These public funds have been spent only on certain community groups and this has resulted in disparity between peoples.

Under these circumstances the case study represented by this slum should be regarded as an exception and not a general model capable of being used in dealing with many other slum problems. In fact, if the procedure followed in the case of this particular slum were adopted blindly, it is quite likely that we would lose our way in attempting to solve the problem of slums in developing countries.

The Inefficient Use of Land
One issue which is not usually considered seriously in the evaluation of this particular development is the extent to which the development represents efficient use of the land in question. This land, located within the city proper, comprises approximately 16,000 sq. metres of land and contains around 250 housing units. For a site of this size and location it would normally be expected to have been developed at residential densities which would allow the provision of around 1,600 apartment units; this form of development would have provided substantial benefits in housing low income groups in the community. However the land is exclusively occupied by a group of squatters who have illegally occupied public land for over 50 years without ever providing any payment or compensation in return for their occupation.

It would be fair to ask how could 1,600 apartment units have been built on the site? Under normal circumstances 80% of the total 16,000 sq. metres of land would be built upon while 20% would be used for open space and infrastructure. This 80% amounts to 12,800 sq.  metres. If typical 5-storey apartments were built, the gross building area would be 64,000 sq. metres. Then only 80% of the total building area would be the net usable area, amounting to 51,200 sq. metres. The remainder would comprise common areas, facilities and the like. Further, if a typical apartment unit comprised approximately 32 sq. metres, then the total number of units which could be built would be 1,600.

This is 6.4 times the existing density and could provide housing for some 1,350 households. Even if these squatters were to be allocated two units each as some sort of privilege, approximately 1,100 less-privileged households could still be housed on the site. It can be seen that the utilization of the land is at a much lower level than should be accepted in cities such as Bangkok.

Poor Return to the Public
If the potential 1,350 apartment units were built in order to rent them to other low-income groups at 2,000 baht per month (US$ 66 per unit), the revenue produced would be 32.4 million baht or US$ 1 million per annum. Because of the continuation of the status quo in the slum the public has not been able to realize this return. Instead, the public budget has been used for many development projects for this privileged group of 250 households.

In addition, each household is also subsidized at 80,000 baht or US$ 2,400 per year from public funds. Altogether, this represents a budget allocation of some 20 million baht or US$ 600,000. Yet, each household is eligible to get a loan of some 100,000 baht or US$ 3,000 for housing construction at a very generous rate of interest.

Very Cheap Land Rent
It is important to look at the value of the assets which are involved in this case. The land occupied by the existing slum may be worth about 4,000 baht or US$ 120 per sq. metre. If the government had provided generous compensation for the existing slum dwellers to leave the site, and given the fact that they have enjoyed free occupation for some 60 years, the site could have contributed 60 million baht or US$ 1.8 million or 240,000 baht or US$ 7,300 per unit to the public budget. Looking at the situation in this way, we could say that payment of compensation to the squatters in order to recover the land would probably be cost effective because the public should not be expected to continue to maintain this community forever.

On the other hand, if this piece of land could be developed for some alternative use, the value could be 12,500 baht or US$ 380 per sq. metre. The total value of the land could have been 200 million baht or US$ 6 million. If it could be leased at a return of 4% per annum, the annual income would be 8 million baht. The government could then spend this amount of money for the benefit of the public at large instead of supporting the living conditions of a relatively small group of slum dwellers by using the official budget supported from the taxes of fellow countrymen.

In this model slum the total value of assets being used by each slum draw is significant; each household occupies a site with a potential land cost of 240,000 baht, builds a new house at 200,000 baht, and roughly receives development funds of some 60,000 baht. This represents a total of 500,000 baht per household, which amounts to 125 million baht or US$ 3.8 million for all of the 250 privileged slum households. 

For these squatters who have stayed on this land for free for some 50 years, if their monthly cost of living in terms of accommodation were as low as 2,000 baht or US$ 60, the effective value of their free of cost squatting would total 1.2 million baht or US$ 36,300 per household. These figures should be given very careful consideration in order to ensure that the slum problem is, in fact, being dealt with in an effective and economically responsible way.

Unreal Savings
It has been mentioned that one success factor demonstrated by this project is the development of a savings program in the form of a saving cooperative in the community. This seems to be promoting the idea that success has not come from the injection of mainly public funded resources from outside the community.

In looking at this issue in detail, it is noted that the savings is 5 baht per day or 1,825 baht per annum (US$ 55).  At this rate of savings, 22 years would be needed in order to save enough to be able to purchase economical home furnishings at a cost of 40,000 baht.  However, in fact, the squatters save for only a very short period of time prior to achieving eligibility to borrow the money. This reinforces the view that the emergence and development of this project has depended largely upon a huge injection of resources from outside the community, not from the savings of the residents.

Inappropriate Low-rise Residence
The fact that 250 new row houses were built on this land represents an inappropriate use of the site and this has resulted from an unrealistic concept from the beginning. Almost 50 years ago, when Thailand first adopted walk-up apartments for city living, many scholars doubted that apartments were suitable for the Thai lifestyle. The view at that time was that housing units needed to be on the ground level.  However, the later emergence of more than half a million owner-occupied apartments or condominiums, which were mostly low-priced residences for low-income groups, has demonstrated the appropriateness of these types of multi-storey apartments.

In turn, any development of low-rise residences with a low density of land use should be regarded as inappropriate land-use, particularly in the sense of the ineffective and wasteful use of valuable inner-city land. In an open market, assuming the land had been available on the market, it is highly likely that those who would buy a townhouse in that particular location would have been middle-income groups. Condominium development as a viable alternative would provide more units suitable for low-income groups.

The Repeat of Mistakes
There is a conventional belief that poor people have poor land tenure; therefore, there is a view that they should be provided land without considering whether or not they can afford the true cost. In the case of non-slum households, when they want to buy a house, the budget constraints require them to purchase a small condominium unit or a small low-rise townhouse far away from the city centre, and that results in their having to sacrifice a lot of time to commute to work. The security of property tenure available for the poor should be reexamined in view of the likelihood of producing disparity among people.

In a particular slum in 1996, only 16% of the households were earning below the poverty line. Some 23% of them would have been able to afford to purchase a house in the open market. It is very likely that this situation has improved up to the present. Therefore, there are some well-to-do households that do not even like the minimum standard housing provided because they can afford something better. There are also some exceptionally poor households that cannot afford even a very highly subsidized housing unit. These households are likely to sell their right of stay and squat somewhere else. The provision of prototype tenure for all households without considering these differences in economic standing is thus inappropriate.

For over 20 years, there have been a number of land sharing projects which have been showcases of success. However, they are rarely mentioned today. Many of the households did not want to pay their housing loans. Arrears accumulated to such an extent that the authorities decided to write off their debts, simply giving them the land. In another community where the land lease was only one US dollar per month, many occupants are still in arrears. They  believed that the government should give the land to them for free.

Untouchable?
Sometimes, when authorities deal with the so-called poor, they seem to regard them as being untouchable. Realistically, slums in the city should all be rebuilt in order to pave the way for rejuvenated and intensified land use. If land is efficiently and effectively used in the city, sporadic or haphazard growth would be minimized. Infrastructure would not need to be expanded endlessly at a very high cost to the public. Pragmatically it would be a sound policy for most low-rise inner city slums to be demolished and redeveloped for high-rise dwelling units. In this way the land could be used to accommodate more people or could be reallocated for commercial premises for planned urban development. 

However, in an anarchist environment, it seems that any action which might disturb the poor is anathema. In Thailand, it is very difficult to relocate slums, in contrast to Singapore, Malaysia, Vietnam and other neighbouring countries; however, people should understand that things have to change over time. A more sensible treatment of slum redevelopment should be accepted because no planner can foresee or plan city development without some rearrangement of the use of the land in the city.

There is a good example which demonstrates the more effective use of land. The present location of the Ministry of Foreign Affairs, Mahidol University, and Rama Hospital in the Phyathai District of Bangkok was formerly the site of a large slum of around 1,500 households. It was the largest slum in Bangkok at that time. The government relocated the people and paved the way for better land use for the public good. If that slum had not been removed and the squatters were still living there, would it have been better for anyone? This case shows that substantial benefits can be derived from the redevelopment of slums.

In sum, any success cases of Baan Mankong scheme is rather an exception which cannot be made norm. To build up a success case might create disparity among the poor and other poor outside slum might be come less-privileged poor. Providing security of land tenureship for slum where land is scare even for non-slum groups to afford, should be reconsidered. Actually, slums can be relocated to provide better uses of land for slum dwellers themselves, for other poor and for all other beneficiaries in the city without creating disparity nor face-lifting.

Remarks:
Dr.Pornchokchai conducted a comprehensive survey of slums in Bangkok in 1984 and conducted another comprehensive survey of slums nationwide in 1996. He has been a consultant to different organizations of the United Nations in this field.

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