Rental Housing

RENTAL HOUSING
ISSUES & OPPORTUNITIES FOR URBAN POOR

(CASE STUDY: KATHMANDU VALLEY)
BY
POONAM BAJRACHARYA (063/MSU/F/205)
M.Sc. URBAN PLANNING
BATCH 2063
TRIBHUVAN UNIVERSITY
INSTITUTE OF ENGINEERING
DEPARTMENT OF ARCHITECTURE
URBAN PLANNING PROGRAMME

PULCHOWK CAMPUS, LALITPUR
NEPAL
DATE: 07 August, 2009

Rental Housing: Issues & Opportunities for Urban Poor
CERTIFICATE
This is to certify that this thesis entitled “Rental Housing: Issues & Opportunities for
Urban Poor” submitted by Poonam Bajracharya (MSU/063/F/205) has been
examined and it has been declared successful in the fulfillment of the academic
requirement towards the completion of the Master of Science Course in Urban
Planning of Tribhuwan University.
…………………………………..
Mr. Ajay Chandra Lal
(Thesis Supervisor)
Date: 07 August, 2009
M.Sc. Thesis in Urban Planning [i] Poonam Bajracharya (MSU/063/F/205)

DECLARATION
I declare that this dissertation has not been previously accepted in substance for any
degree and is not being concurrently submitted in candidature for any degree. I state
that this dissertation is the result of my own independent work/investigation, expect
where otherwise started. I hereby give consent for my dissertation, if accepted, to be
available for photocopying and understand that any reference to or quotation from my
thesis will receive an acknowledgement.
Signed ………………………
(Poonam Bajracharya),
Date: 07 August, 2009
M.Sc. Thesis in Urban Planning [ii] Poonam Bajracharya (MSU/063/F/205)

ACKNOWLEDGEMENT
This study is initiated to understand the characteristics of rental housing in
Kathmandu, intending to address the urban poor communities of the valley. I would
like to acknowledge my Thesis Supervisor, Mr. A.C. Lal for his continuous guidance
on my study. The credit for anything good output is attributed to his guidance.
Mr. P.S. Joshi of CIUD and Mr. Prafulla Man Singh Pradhan of UN-Habitat deserve
special appreciation for helping me on choosing the topic as well as case study sites.
A special thanks goes to my dear Yogeshdai for his support and time since the
beginning of my study. I am as well thankful to my friends of M.Sc. Urban Planning,
Deepak Chhetri, Deepak Shrestha, Rabin Shrestha and Sudeep Kumar Shrestha for
providing materials related to my thesis. My gratitude even goes to entire M.Sc.
Urban Planning team and library team for their kind co-operation and support.
Besides, I would like to appreciate valuable inputs from Mr. Puskal Pradhan of CARE
Nepal, Mr. Arun Dev Pant of Design Cell and our jurors: Dr. Jibgar Joshi and Surya
Bhakta Sangachhen.
It’s my pleasure to mention here the institutes namely SeaGate and AARC, which
provided space to work during load-shedding.
I sincerely gratitude my family members for showing patience during my entire study
and also for the support and co-operation.
Finally, I would like to thank all the tenants and owners of the case study areas who
directly or indirectly took part in the study.
M.Sc. Thesis in Urban Planning [iii] Poonam Bajracharya (MSU/063/F/205)

Abstract
Rental housing is a vital component in accommodating large number of families in
developing countries. The increase in urban population through both migration and
natural increase has been absorbed to a large extent by the rental market. In
Kathmandu Valley, more than 25% of the households are rented units. This
percentage will surely increase as there is no effective mechanism housing delivery.
National housing and strategies did not usually take account of the rental sector and
most rental opportunities are provided by the private sector. And in such a condition,
the most suffered one is low income group who tend to live in rented rooms.
The general objective of this study is to understand the characteristics of rental

housing of urban poor in Kathmandu and the specific objectives are to do a situational
analysis of rental housing of urban poor; identify the underlying problems in rental
housing of urban poor; explore the options of Public Private Partnership for the
improvement of living condition; and recommend the follow up actions based on the
findings for up grading the situation.
Case-study approach is adopted as a methodology for the study. As there is a

substantial rental market in slum areas especially in the inner cities, the case study
areas are selected on the basis of criteria like traditional fringe area; slum areas as
identified by different NGOs/Organizations and High Rental Occupancy. Accordingly
Sawal Bahal in Kathmandu Metropolitan City and Kumbheswor in Lalitpur Sub-
Metropolitan City are chosen, both of which resembles in locational as well in social
and economical aspects.
As per the case study, there is a dominance of male population with high working age
group in rental tenure. Owners are generally similar to their tenants in terms of social
and economical characteristics. There is a trend of living in a single room by sharing
with friends of similar ethnical background. The space being used by tenants is highly
compromised and far behind to be wholesome. On the other hand, the only way of
extra income for the poor owners is to build a house within their native land
occupying full plot for maximum return with no regards to ventilation for rent.
In particular, from the case study and literature survey the following issues have been
identified in the rental housing of urban poor:
M.Sc. Thesis in Urban Planning [iv] Poonam Bajracharya (MSU/063/F/205)

 Most of the landlords who cater to the low-income groups are less professionally
oriented which may create deficit in the supply of rental housing.
 The rental value charged is below the level required for the cost recovery which
will discourage the private investment on rent. On the other hand, for most of the
poor tenants, the rental accommodation is affordable only through overcrowding
which has lead to bad housing condition.
 Though there are no policies directed towards rental market in Nepal, the
experience in other countries show those measures are either not feasible carrying
excessive administrative burden or directly worsen housing access to the poor
particularly includes rent control.
 Many tenants undeniably live in very poor housing conditions, as do many resident
landlords and poor home-owners that live in the same neighborhood. Both tenants
and owners are equally suffering from the lack of services and facilities which
leads the owner difficult in raising expected rent charge and the tenants not been
satisfied for whatever being charged.
 The housing standards mentioned in building by-laws and building code does not
consider for the urban poor and it is specifically focused towards owner-occupied
buildings.
 There are no financial systems developed which can cater the low income people.
 Government policy is more focused towards promoting the house ownership
whereas renting part is been seriously neglected.
 Verbal contracts are not uncommon leading to insecure tenure relationship.
 Tenants are less motivated to join community projects and only the owners are
assumed to be local residents. Similarly, the community organizations which are
mostly dominated by owners also ignore the tenants in community development
works.
The poor cannot solely develop every aspect of their own shelter through their own
efforts, because they lack the economic and or political power. In such a case
Public/Private partnership is one of the best tool for assisting the urban poor in
dealing with these aspects of the shelter process. Hence, PPP is considered to be a
broader policy recommendation for the support and improvement of rental housing of
the urban poor.
M.Sc. Thesis in Urban Planning [v] Poonam Bajracharya (MSU/063/F/205)

TABLE OF CONTENTS
CERTIFICATE........................................................................................................................................I
DECLARATION....................................................................................................................................II
ACKNOWLEDGEMENT....................................................................................................................III
ABSTRACT...........................................................................................................................................IV
TABLE OF CONTENTS......................................................................................................................VI
LIST OF FIGURES...............................................................................................................................IX
LIST OF TABLES..................................................................................................................................X
LIST OF MAPS.....................................................................................................................................XI
LIST OF PHOTOGRAPHS................................................................................................................XII
CHAPTER 1 INTRODUCTION.....................................................................................................1
1.1 BACKGROUND..........................................................................................................................1
1.2 RATIONALE..............................................................................................................................2
1.3 PROBLEM STATEMENT............................................................................................................3
1.4 RESEARCH QUESTIONS...........................................................................................................5
1.5 OBJECTIVES.............................................................................................................................5
1.6 SCOPE AND LIMITATION.........................................................................................................5
CHAPTER 2 LITERATURE REVIEW.........................................................................................7
2.1 HOUSING..................................................................................................................................7
2.1.1 Housing Need.....................................................................................................................8
2.1.2 Housing Delivery................................................................................................................8
2.1.3 Rental Housing...................................................................................................................9
2.2 POVERTY................................................................................................................................10
2.2.1 Urban Poverty...................................................................................................................10
2.3 MIGRATION............................................................................................................................11
2.4 RENTAL HOUSING – NEED FOR URBAN POOR......................................................................13
2.5 HOUSING FINANCE AND ACCESS TO THE POOR...................................................................13
2.5.1 Housing finance...............................................................................................................13
M.Sc. Thesis in Urban Planning [vi] Poonam Bajracharya (MSU/063/F/205)

2.5.2 Housing Finance in poor countries.................................................................................14
2.5.3 Why can’t most poor people borrow money from banks?...............................................14
2.6 PUBLIC PRIVATE PARTNERSHIP...........................................................................................14
2.6.1 The theory of public/private partnership.........................................................................14
2.6.2 Public/private partnerships in developing countries.......................................................17
2.6.3 Modalities for Partnership...............................................................................................23
CHAPTER 3 RESEARCH METHODOLOGY..........................................................................24
3.1 RESEARCH STRATEGY..........................................................................................................24
3.2 RESEARCH TYPE...................................................................................................................24
3.3 RESEARCH DATA...................................................................................................................24
3.4 RESEARCH METHODS...........................................................................................................24
3.4.1 Identification of case study areas.....................................................................................24
3.4.2 Collection of Data.............................................................................................................26
3.4.3 Data Analysis....................................................................................................................26
3.4.4 Data Interpretation and Generalization..........................................................................26
3.5 SUMMARY OF THE METHODOLOGY......................................................................................27
3.6 RESEARCH FIELDS................................................................................................................28
CHAPTER 4 RENTAL HOUSING: NATIONAL & INTERNATIONAL CONTEXT..........33
4.1 RENTAL HOUSING IN GLOBAL CONTEXT............................................................................33
4.1.1 History of legislative intervention & government policies on rental housing................34
4.1.2 Basic changes in housing policies in developing countries............................................36
4.1.3 Some of the appropriate public intervention & assistance for rental housing..............37
4.2 RENTAL HOUSING IN NEPAL................................................................................................38
4.2.1 Rental Housing Scenario in Kathmandu Valley.............................................................40
4.2.2 Plan, Policies & Programs in national and international context.................................41
CHAPTER 5 EVIDENCES AND ANALYSIS............................................................................43
5.1 CASE STUDY AREA................................................................................................................43
5.1.1 Brief Overview..................................................................................................................45
M.Sc. Thesis in Urban Planning [vii] Poonam Bajracharya (MSU/063/F/205)

5.2 SURVEY & ANALYSIS............................................................................................................52
5.2.1 Demography......................................................................................................................52
5.2.2 Migration..........................................................................................................................57
5.2.3 Household.........................................................................................................................61
5.2.4 Socio-economic Aspects...................................................................................................62
5.2.5 Housing- Physical & Environmental Aspects.................................................................71
5.2.6 Rent...................................................................................................................................82
5.3 PROBLEMS IDENTIFIED.........................................................................................................88
CHAPTER 6 FINDINGS & CONCLUSION...............................................................................90
6.1 MAIN FINDINGS.....................................................................................................................90
6.2 MAJOR ISSUES.......................................................................................................................91
CHAPTER 7 RECOMMENDATION..........................................................................................96
7.1 POLICY RECOMMENDATIONS...............................................................................................96
7.2 PROPOSED MODELS............................................................................................................100
BIBLIOGRAPHY................................................................................................................................104
APPENDIX...........................................................................................................................................107
M.Sc. Thesis in Urban Planning [viii] Poonam Bajracharya (MSU/063/F/205)

LIST OF FIGURES
Figure 1: Problem Tree on Rental Housing for Urbn Poor............................................4
Figure 2: Conceptual framework of Urban Poverty.....................................................11
Figure 3: Distribution of population by age and sex....................................................52
Figure 4: Ethnicity Distribution in Sawalbahal............................................................53
Figure 5: Ethnicity Distribution in Kumbheswor.........................................................54
Figure 6: Employment in Sawal Bahal........................................................................55
Figure 7: Employment in Kumbheswor.......................................................................55
Figure 8: Literacy in Sawal Bahal................................................................................56
Figure 9: Literacy in Kumbheswor..............................................................................57
Figure 10 : Actual Household size distribution............................................................61
Figure 11: Occupation Pattern in Sawal Bahal............................................................63
Figure 12: Occupation Pattern in Kumbheswor, 2009.................................................64
Figure 13: Rent to income ratio for the owner, 2009...................................................66
Figure 15 : Per Capita Income per Day of the tenant (in US Dollar), 2009.................67
Figure 14: Rent to income ratio for tenant, 2009.........................................................67
Figure 16: Per Capita Income per Day of the owner (in US Dollar), 2009.................68
Figure 17: Expenditure pattern of tenant in Sawal Bahal............................................69
Figure 18: Expenditure pattern of tenant in Kumbheswor...........................................69
Figure 19: Per Capita Dwelling Space.........................................................................71
Figure 20: Type of the opening in Sawal Bahal...........................................................73
Figure 21 : Type of opening in Kumbheswor..............................................................75
Figure 22: Water Sources in Sawal Bahal....................................................................76
Figure 23 : Different Water Sources in Kumbheswor.................................................78
Figure 24 : One of the Reasons of Renting..................................................................83
Figure 25 : Pattern of Renting......................................................................................88
M.Sc. Thesis in Urban Planning [ix] Poonam Bajracharya (MSU/063/F/205)

LIST OF TABLES
Table 1 : Research Methodology.................................................................................27
Table 2: Basis for questionnaire development.............................................................29
Table 3: Tenure pattern in countries and their respective cities...................................33
Table 4: Household Distribution by Tenure Status (Percentage).................................38
Table 5: Household percentage by type of tenure ship................................................39
Table 6 : Purpose of Housing Construction.................................................................39
Table 7: Households by Type of Ownership of House/Housing Units........................40
Table 8: Number of Poor Rental Locations in Kathmandu Valley..............................40
Table 9 : Brief of the case study area...........................................................................51
Table 10: Percentage composition of duration and reason for migration....................60
Table 11: Household size distribution (in percentage), 2009......................................62
Table 13: Average dwelling size and occupancy status...............................................71
Table 14 : Solid waste disposal pattern........................................................................80
Table 15 Percentage for Reason for Renting...............................................................83
Table 16 : Opportunities for tenant as well as owners.................................................88
M.Sc. Thesis in Urban Planning [x] Poonam Bajracharya (MSU/063/F/205)

LIST OF MAPS
Map 1: Location map of the case study areas..............................................................43
Map 2 : Site boundary in Sawal Bahal.........................................................................44
Map 3 : Site boundary in Kumbheswor.......................................................................44
Map 4:Landuse Map of Sawal bahal............................................................................46
Map 5: Rental density in Sawal Bahal.........................................................................47
Map 6: Landuse map of Kumbheswor ........................................................................49
Map 7: Rental Density in Kumbheswor.......................................................................50
Map 8: Inmigration in Sawal Bahal.............................................................................58
Map 9: Inmigration in Kumbheswor............................................................................59
Map 10: Building Development Pattern in Sawal Bahal.............................................73
M.Sc. Thesis in Urban Planning [xi] Poonam Bajracharya (MSU/063/F/205)

LIST OF PHOTOGRAPHS
Photo 1: Tenants of Sawal Bahal.................................................................................70
Photo 2 : Access in Sawal Bahal..................................................................................72
Photo 3 : Inner Access in Kumbheswor.......................................................................72
Photo 4: Housing Condition in Sawal Bahal................................................................74
Photo 5 : Housing Condition in Kumbheswor.............................................................74
Photo 6 : Different Sources of Water in Sawal Bahal..................................................77
Photo 7 : Stone Spout as a major source in Kumbheswor...........................................79
Photo 8 : Poor Sanitation in Sawal Bahal....................................................................79
Photo 9 : Sewer as a disposal area in Kumbheswor.....................................................81
M.Sc. Thesis in Urban Planning [xii] Poonam Bajracharya (MSU/063/F/205)

Rental Housing: Issues & Opportunities for Urban Poor Chapter I - Introduction
Chapter 1 Introduction
1.1 Background
Kathmandu has become the focus for urbanization i.e. the concentration of
urbanization is greatest in the valley. Half of the urban population live in only 9 of the
58 municipalities and 31% live in Kathmandu valley (CBS 2004: NLSS II).Besides the
growing trend of living in nuclear families, analyses of 2001 census data reveals that
migration is the principal reason for urban growth. The regional imbalance is a main
cause for compelling the rural poor to migrate to the cities for employment and other
social and economical opportunities. The concentration of economic wealth and
political power compelled the rural poor to migrate for employment and other social
and commercial opportunities. About 41% of population of Kathmandu valley are
migrants (CBS 2004: NLSS II). According to the 2001 census, the actual population of
the Kathmandu city is just above one million. But combine it with the floating
population, visitors, job-seekers and residents of surrounding cities, and the figure
could reach anything between 1.5 million and 2 million. The urban growth rate of the
city is 6 percent per annum. If the present trend continues, experts predict that the
populations of the city will double every 10 years. (Manandhar, M.Sc. Thesis, 062)
And as such the demand for housing in the valley is increasing day by day and it is
estimated that the need will be increased by 5 % per annum (Lumanti). The housing
demands are being catered by rental housing as a quick response. The type rental
accommodations in Kathmandu can be divided as according to the types of renters.
Broadly speaking, it can be seen that the division is clearly visible for the Nepalese
people and for the people from foreign countries. It is also visible, that the immigrants
from outside the country gather around people from same countries. But in most cases
these renters prefer to hire housing near to their work place in the city. So, is the case
with the renters from within the valley and other districts of the country. The rental
accommodations for these two types of renters, from within the country and outside
the country have drastic difference in provision of facilities as well as rental charges.
Most of the people migrating to the city from other districts for the purpose of getting
economic opportunities and for having access to social infrastructure like education
M.Sc. Thesis in Urban Planning [1] Poonam Bajracharya (MSU/063/F/205)

prefer the city core areas where these facilities prevail. This may be the reason why
the centrally located historically planned city centers of Kathmandu and newly
growing areas within and near the existing ring road are crowding day by day. The
haphazard growth of houses in the sub-urban areas and unauthorized additions of
storeys in the historic areas are the results of the growing demands of housing
especially rental housing by the new migrants, immigrants and newly forming
households seems to cater only the requirements of floor area and provision of
physical enclosure of place, but lacks the other essential physical, social requirements
of living. The physical scenario of these places with haphazardly growing structures
and buildings which lack proper maintenance, reveal the poor social conditions as
well. People seem to fulfil the requirements of enclosed physical space but the desired
standards of housing requirements is available or not, becomes a matter of question.
Because housing means not only the physical structure built as enclosure of space, but
also the infrastructure facilities, including production and financing process and social
services needed for healthy living. (Manandhar, M.Sc. Thesis, 062)
In Kathmandu Valley, more than 25% of the households are rented units
(M.Shrestha, Urban Poverty and Housing). This percentage will surely increase as
there is no effective mechanism housing delivery. And in such a condition, the most
suffered one is low income group such as day labourers, hawkers and unskilled
workers who tend to live in rented rooms. Due to their incapability to afford and poor
policy support of government on shelter, they are bound to live on the rent with very
miserable condition.
1.2 Rationale
Although renting is one of the dominant forms of tenure in the city, it had been
seriously neglected in research and policy making by the public sector. National
housing and strategies did not usually take account of the rental sector. Generally poor
people rent because they can’t afford to own. Most rental opportunities are provided
by the private sector. (UNCHS, 1990)
Many initiatives have been taken by Public and private sector in providing access to
land for housing. However hardly anyone has considered or accommodate the need of
the poor families. Since the poor families neither can afford the available land in the

market nor do they have access to loan to purchase such land they are bound to cope
with such a situation. One of the alternatives for them is to rent cheaper rooms lacking
basic facilities with constant threat of increase in rent and eviction. This is obvious as
rent control act does not exist in Nepal. There is no system of signing an agreement
between the two parties except in special circumstances i.e. renting to a foreigner or
an institution.
Due to urbanization, the percentage of people living in rental accommodation and

more in the low income bracket will sure to increase in future but, there is no effective
housing delivery mechanism. Rental market could be one of the possible responses
for the supply of housing in the context of difficult land ownership. So, all the sectors
should give attention for the promotion of rental housing in order to prevent low-
income group from squatting to certain extent.
1.3 Problem Statement
The major problems in rental housing are in terms of cost, security (tenure ship) and
basic facilities. According to the study done by Lumanti, the biggest problem in
rented household is lack of adequate space followed by environmental problems,
strained relationships with landlords etc. Other problems are maintenance of houses,
water and electricity supply, high rent and pollution. House owners are also suffered
from untimely rent payments, improper care of houses, crowded occupancy and
misuse of housing facilities. These all have resulted in poor living standards of people
living in rented house. Though inhabitable those people tend to live there because of
their inability to pay high rent. The poor physical scenarios of these places with
haphazardly growing structures and buildings which lack proper maintenance reveal
the poor social conditions as well. The inadequacy of the basic needs may lead to
various undesirable situations such as health hazards in the residents, social
relationships, which in turn affect their economic productivity and other aspects of
life (Manandhar, M.Sc. Thesis, 062). As the survey conducted by Lumanti on
Bansighat squatter settlement, a higher percentage of the squatters were initially
staying on rent however after they got know about the area they started living there so
that they could save rent. Negligence and concentrated poverty in low income housing
sector can also contribute to increased crime.

Taking Poor Environment in Low income rental housing as a core problem area, the
cause and effects are mentioned in the following problem tree.
Further Poor Squatting
Condition
Decrease in Economic
Output
Unhealthy & Low educational Crime, Threats and

Unhygienic Living and social status Violence
Condition
Poor Rental Housing Environment

Among low-income group
Inadequate Affordability Security of Tenure

Infrastructure and
services
Shelter Housing Market Government Policy
Migration Sub-division
Employment Educational Trend of living in

Opportunity Opportunity nuclear families
Figure 1: Problem Tree on Rental Housing for Urbn Poor

Some of the key issues related to rental housing in Kathmandu, as mentioned by Dr.
Rabenau, are as follows:
 Most rental housing appears owner financed.
 Much of the rental stock appears to be in housing occupied by the owner.
 In urban areas, rental housing is predominantly for urban poor (Labourers,
construction workers, transport workers i.e. porters and similar service categories)
 Urban service level s are low for almost all urban housing, but, they are much
lower for rental housing in slum areas, using as evidence the low rent charged.
1.4 Research Questions
What is the characteristic of rental housing of urban poor in Kathmandu valley?
How the quality of life of urban poor living in rental housing can be improved?
1.5 Objectives
General Objective
The general objective of the study is to understand the characteristics of rental

housing of urban poor in Kathmandu.
Specific Objective
The specific objectives of the study are:
i.To do a situational analysis of rental housing of urban poor in Kathmandu Valley
ii.To identify the underlying problems in rental housing of urban poor
iii.To explore the options of Public Private Partnership for the improvement of
living condition of urban poor living in rental housing.
iv.To recommend the follow up actions based on the findings for up grading the
situation of urban poor living in rental housing
1.6 Scope and Limitation
• The study is based on primary data collected from two case study area selected
within greater Kathmandu.

• The existing condition of Rental poor is analysed in terms of socio-economic
and physical aspects.
• The conclusion and recommendation will be drawn on the basis of case study
and secondary study carried out by different scholars and institutions.
• The role of different stakeholders (government, private and civil societies) is

studied briefly in low income rental housing sector for the possible solutions.
• The result of the study will be applicable to the similar context.

Rental Housing: Issues & Opportunities for Urban Poor Chapter II – Literature Review
Chapter 2 Literature Review

2.1 Housing
Housing is a basic and fundamental right, since it not only provides shelter and the
space for households to live and to carry out their living functions, housing also
provides the point of reference through which households can access other services
and utilities. Access to Housing – that is, which households have access to what sort
of housing and on what terms – is a key determinant of urban conditions and of the
social status and well-being of the households. (Prof. Babar Mumtaz, Quick Guide on
Housing Finance)
Housing is recognized as one of the three basic needs of human beings, namely food,
cloth and shelter. Housing can be defined as a physical structure built on land to
accommodate people and facilitate their household activities. It needs to have basic
services and facilities such as water supply, sanitation, electricity, telecommunications
etc. The housing community also desires for social and cultural infrastructures.
Housing means many things to many people. Besides being a physical structure that
saves human beings from adverse effects of external environment and provide safety
and privacy to people, it encompasses various other factors such as social, cultural,
economic aspects of life in human civilization. Besides being an important entity for
the lives of the people in their individual sense, housing is often taken as criteria to
define a community and set the value of a place. (Manandhar, M.Sc. Thesis, 062)
Housing provides the owner with valuable assets. It is the most dependable asset. As
its value appreciates over time, it generates income and is a good insurance.
In addition to the use value, housing has an exchange value. As more and more land
came under commercial use, most houses in highly urbanized areas began to be
constructed as commodities, as something to be traded for (or to be rented). When
housing is produced as a commodity, the meaning of self help, people-bound
resources or the sense of belonging becomes less important. This is the case of
economic housing against the social housing. Real estate developers, private investors
are involved in these activities. (Joshi, Jibgar, 1999: 30)

2.1.1 Housing Need
Housing provides us all with privacy and security, as well as protection against the
physical elements. By keeping us healthy and productive, good housing contributes to
the well-being of both households and to a country’s broader economic and social
development. Housing is also a good investment, and house owners often use their
houses and land as a kind of savings account. Housing is an important asset for its
owner — it can be used as a place to generate income through home-based economic
activities and it can serve as collateral for loans. (UN-Habitat & UN-ESCAP, Housing
the Poor in Asian Cities)
2.1.2 Housing Delivery
There are different ways and means for the supply of housing in urban areas which
are described as below:
a. Government and Public Sector Housing
Government act as producer, financier, regulator or manager for producing house
usually targeting for low-income groups.
b. Private Sector Housing
The private sector is the major player in housing production, and is engaged in the
production of housing in three distinct ways. Firstly as the producer or supplier of
inputs to the housing process – including land, finance, building materials and
components and labour; secondly, it is engaged in the production of houses itself,
as a contractor, managing and operating the process for the government or
individuals; and thirdly, it produces houses as a commercial, speculative product.
c. Owner-occupied Housing
Many households, particularly in the upper income groups, use the opportunity of
their own housing construction to build housing unit on their (often) allocated plot
of land.
d. Rental Housing
Rental Housing is that form of accommodation which isn’t owned but a house or
room or a dwelling unit occupied by the individuals or a household for living by
paying some regular rents to the actual owner who is interested to sublet.( Karki,
T.K., Rental Housing: Third World Syndrome)

e. Social Housing
The concept of social housing has been put forward for those that cannot afford to
own or rent acceptable housing through the formal sector. Social housing,
properly used, can be an effective tool in keeping production costs and therefore
prices low, since it allows for wages (which have to cover the costs of housing) to
be kept lower than otherwise.
2.1.3 Rental Housing
Rental Housing are those in which residents and owners of the house are different and
the residents pay due charges at certain interval of time to the house owners for using
the property or the house. A resident who reside in houses owned by another person,
and pays due charges at certain interval of time, is called as a renter or tenant.
(Manandhar, M.Sc. Thesis, 062)
Why do people rent?
Rental housing patterns tend to be much higher in cities than in rural areas, and also
vary greatly between cities within the same country. People’s reasons for making
decision to rent housing are different based on their economical, social and cultural
values.
 Renting lets people stay mobile and move away when good work is available
elsewhere, without being tied down to any particular place or to regular house
payments.
 Renting gives people flexibility in how they manage their household budgets,
moving to cheaper housing when times are hard and to better housing when their
incomes increase, or freeing up more of their earnings for more essential needs like
food, education, medical care or emergencies.
 Renting accommodates people in transitory periods of their lives, when they are
not yet ready to settle down in one place.
 Renting accommodates people who may not want to make the long-term financial
commitment that comes with buying a house, or to face the long term costs
involved in repairing and maintaining their own house.
 Renting allows people to send more of their city earnings home to relatives, or to
invest in buying land or building a house back in the village.

2.2 Poverty
Amartya Sen, India’s Nobel-prize winning economist, defines poverty as a lack of

freedom to lead the kind of life a person values. Poverty cannot be seen only in
financial terms, he argues, but as having many dimensions:
Poverty of sufficient and stable income and productive assets
Poverty of access to safe, secure housing
Poverty of access to essential infrastructure and public services
Poverty of safety nets and poverty of the protection of legal rights
Poverty of power, participation and respect
If people are deprived of these essential things, they will have difficulty realizing their
full potential as human beings and as members of society. As such, they will not be
able to benefit from, contribute to or have much influence on their society’s
development.
Poverty is a multi-dimensional problem having different aspects in terms of

economical, social and environmental. Because of the multidimensional aspects,
poverty in urban area is different from the rural poverty.
2.2.1 Urban Poverty
In urban areas, an important aspect of poverty is often the lack of adequate housing
and infrastructure.
Poor people in cities may have greater cash incomes, but these may be unstable and
inadequate, especially when considering the higher costs of living in cities, such as
transport and housing. With a lack of formal housing options, many are forced to
settle in slums and informal settlements, often on unsuitable land, or live ‘invisibly’ in
overcrowded buildings, and far from employment opportunities. As they often do not
own the land they occupy, or possess housing registrations and building permits, they
lack a stable asset base, access to credit and basic services. Environmental health can
be a large concern, especially for children. Limited or weak safety nets can make
urban poverty particularly difficult, especially in times of crisis. (UN-Habitat & UN-
ESCAP, Housing the Poor in Asian Cities)

U
P
N
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M
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t
o
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ie
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s
2001)
Chapter II – Literature Review
Conceptual framework of Urban Poverty (adapted from Baharoglu and Kessides,
Figure 2: Conceptual framework of Urban Poverty
Urban poverty has many causes. Some of these are the willingness of new migrants to
take low paid jobs in the city, increases in the cost of land, long journeys to work, less
support from an extended family network, exposure to greater environmental risk, and
greater vulnerability to changes in market conditions in urban areas. Conditions of
urban poverty are worsened by the scale and speed of urbanization in many cities,
forces with which municipal governments cannot keep pace. In a situation of scarce
resource allocation, the urban poor are badly placed to compete for essential services
and shelter. Biases in investments, standards, pricing policies, and institutional
structures often skew services in favor of the better-off in cities. (______, Urban
Sector)
2.3 Migration
Migration is one of the crucial factors for the migration. As mentioned in a guide
book ‘Housing the poor in Asian Cities’, there are many different types of migration
which will likely to have different housing needs:

 People don’t only migrate from rural to urban areas — they also migrate from
one rural area to another and from one city to another.
 Some migrants move permanently, while others go temporarily, for a season or
for a few years, and then return to their villages.
 Some migrants are unmarried and move alone, some leave households behind,
while others come to the cities with spouses, children and parents.
 In some countries, it is mostly men who migrate, while in other places, women
are the main migrants.
There are different reasons for migration among which some major reasons are as
follows:
 The pushing and pulling forces of migration.
People migrate either because they are being pushed out of their place of origin,
or because they are pulled to their new migration destination. Or more often,
people move because of a combination of overlapping pushing and pulling forces.
 Most have little chance of making a decent living in agriculture. Most people in
the rural areas work in the agricultural sector, but agriculture is highly dependent
on weather conditions, rural land is limited and its fertility is sometimes low or
declining, land holdings are small, farm debts are high, and many households
have always been or have become landless. As a result, overall rural incomes
tend to be pretty low.
 Migration to cities improves the prospect of finding better jobs. Even when a
rural household can live off its land; the future for rural children is in non-farm
and more often in non-rural employment.
 People know what cities have to offer them. Although some rural households
have no choice but to leave the rural areas in order to survive, most migrants
make a deliberate choice to stay or to leave.
 Urban migration is often a survival strategy for rural households. In order to
spread economic risks, households may split into several groups that locate
themselves in different places: rural areas, small towns, and big cities, while
some household members may even move abroad.

2.4 Rental Housing – need for urban poor
Rental housing may be only a partial answer to urban housing problems, but it is an
important housing option — especially for the urban poor, and particularly in
situations where people are not ready or able to buy or build houses of their own.
Many poor households prefer to rent rather than own their house in a slum. They may
not be able to borrow enough or gather the resources necessary to informally buy a
plot or house in an existing slum, or to pay for the cost of building a house of their
own. Some may prefer to remain mobile and be able to move away when employment
opportunities change, especially when the household’s main income earners work as
casual laborers or temporary employees. Others may stay in the city only a limited
time and may wish to save as much money as possible for meeting other needs, or to
gradually build a house back in the village. Hence, rented rooms offer certain
advantages to the urban poor, giving them the flexibility to move on if they have to
find work elsewhere or if some emergency makes it necessary to suddenly leave
thereby allowing them to save as much money as possible and invests their savings in
other sectors.
For the urban poor: Rental housing might come in the form of cheap rental rooms in
small owner-managed apartment buildings, apartments of various sizes in subsidized
public housing blocks, or rooms built with substandard construction on illegally
subdivided land or partitioned within dilapidated older buildings. It could be a shack,
a room built in a slum or behind the owner’s house with shared services. It could be
rented space within a shared room, or even the right to store one’s belongings and
occupy a certain space within a shared room for part of the day, according to the
occupants’ working times. (UN-Habitat & UN-ESCAP, Housing the Poor in Asian
Cities)
2.5 Housing Finance and access to the poor
2.5.1 Housing finance
Whole process by which households get loans to buy a house, including all the rules
and procedures that go with that process. Housing finance covers the process of
giving and recovering loans, not only to individual households, but also to housing
developers, based on funds raised by the lender from the wider financial markets.
The shortfall of housing is primarily for low-income housing, where the population is
the least able to pay for rising land and housing construction costs and where the
market has not been able to provide affordable housing in locations where poor
people can access employment and others services. So, shelter is not affordable to the
poor, and this is where housing finance becomes so important.
2.5.2 Housing Finance in poor countries
In poorer countries, formal housing finance is often underdeveloped, because there

are many poor people who do not save in banks or cannot afford to save, and so there
isn’t a lot of money available from formal sources to lend.
Many people don’t trust banks and keep their money safe by stowing it under, for
example, mattresses or buying gold instead. Banks prefer to lend the money they have
to a business for a short period, rather than for housing over many years. The
economic and political situation is often unstable and that increases the risk that a
borrower may not be able to pay back a loan.
2.5.3 Why can’t most poor people borrow money from banks?
Obstacle for poor borrowers is the condition that they prove that they have a regular
monthly income, which most poor households working in informal sector, self-
employed or casual labour jobs do not.
Collateral: Another obstacle is the need to have legal title to the property they want to
buy, which most of the urban poor don’t have.
High down payments: To reduce the lender’s risk, many housing loans come with the
condition that a certain part of the total housing cost is borne by the borrower. Poor
households often do not have the means to raise such “down payments”.
Small loans: Given their low income, the poor often require small, incremental loans
which can be easily paid back. Processing such small loans is not cost effective for
banks.
2.6 Public Private Partnership
2.6.1 The theory of public/private partnership
The public sector refers to the institutions and responsibilities of government at local
(municipal), regional and national (central) levels.

The commercial private sector refers to institutions, firms and individuals active in
different aspects of the shelter process but always organized to generate a profit on
the investment of their resources.
The third sector refers to organizations of people which have as their objective the
promotion of the good of their members ("community-based organizations"), and to
institutions which support and mediate on behalf of these organizations ("non-
governmental organizations"). Individual men and women, and the households are
also included in the third sector.
The term "public/private partnerships" covers a wide range of arrangements in which
these three sectors cooperate with each other in a balance which changes according to
context.
Comparative advantage
The public sector tends to be bureaucratic and hierarchical, occupied as it must be

with enforcement (of law and order), collection (of taxes and other revenue), and
regulation (the maintenance of minimum standards). Public-sector agencies are not
good at producing low-cost shelter, since they lack the flexibility and ability to
innovate and to respond quickly and on a small scale to new opportunities and
circumstances. However, the public sector plays an essential role in setting the overall
legal and regulatory framework within which other actors can play their part more
effectively.
The following comparative advantages imply that the public sector should concentrate
on the following roles in the shelter process:
 Ensuring an adequate supply of land for low-income housing via reducing land-
use standards, simplifying procedures for obtaining secure tenure, ensuring that
laws do not reward speculation, utilizing its own land holdings efficiently, and
establishing land development agencies with sufficient authority and
accountability;
 Coordinating the provision of infrastructure and services, seeking the maximum
degree of cost recovery compatible with the preservation of access among the
very poor, ensuring that networks are developed on a rational basis throughout
the city, and regulating standards of quality and maintenance;

 Establishing a sound financial environment to encourage private investment in
shelter, maintaining market interest rates to avoid undue subsidies, and ensuring
access to sufficient housing finance for low-income groups on terms they can
afford;
 Liberalizing standards to permit the use of a wider range of building materials,
avoiding standardized and industrialized technologies and materials, and
promoting small enterprises in the shelter field.
The commercial private sector operates on the basis of adequate returns to investment.
This has limited its involvement in low-income shelter in the cities of developing
countries because the commercial private sector has normally been unable to provide
housing at a profit, at a price the poor can afford. The comparative advantages of the
commercial private sector in shelter can therefore be summarized as follows:
 Production and marketing of land and housing units for those who can afford
them (usually down to lower-middle-income households);
 Provision of infrastructure at full cost recovery in middle- and higher-income
settlements, and (if conditions are right) involvement in the provision of some
services (such as water and electricity) to lower-income areas;
 Creation of a private housing-finance market via the mobilization of domestic
savings, including secondary mortgages for middle- and higher-income
consumers;
 Production of standardized building materials for use in housing construction;
 Development of an efficient and competitive private construction industry using
industrial methods.
The third sector (and particularly individual men and women among the urban poor)
are and always has been by far the most important and efficient producer of its own
housing. People are highly skilled at making the most of limited opportunities, at
building incrementally, at innovating and at reacting quickly and flexibly to a rapidly
changing environment. However, they can only do these things if the wider
environment in which they operate supports them.
People and their organizations have no comparative advantage in large-scale service-
provision or in planning and coordination beyond their immediate neighbourhood.
Legal and regulatory frameworks are largely outside their control and they cannot,

from their own resources, generate" sufficient finance or secure sufficient land on the
open market to ensure adequate shelter for all.
Community-based organizations (CBOs) and non-governmental organizations
(NGOs) both falls into the third sector but have different strengths and weaknesses.
CBOs (such as housing cooperatives) are good at producing shelter and in providing
direct services to their members, and in community mobilization. NGOs, on the other
hand, rarely have a comparative advantage over the poor in producing shelter, but
play a vital role when it comes to facilitating (the supply of inputs, for example),
mediating (between people and the State, especially at the municipal level), and
communicating grassroots experience to achieve greater leverage over official
policies.
In summary, the most effective roles for the third sector in the shelter process lie in:
 Producing shelter at the lowest cost possible, modified to the individual

requirements and circumstances of people of varying income levels and family
circumstances.
 Developing certain kinds of infrastructure (particularly sanitation and refuse-
disposal) on a collective basis;
 Mobilizing people for collective action;
 Mediating between people, government and the commercial private sector;
representing the interests of the community in negotiations; achieving leverage
over official policy so that government decisions are informed by grassroots
opinion.
“Hence, partnership is a mechanism for ensuring that the comparative advantages of

different actors in the shelter process are exploited in a mutually-supportive way, i.e.,
that the strengths and weaknesses of the public, commercial private and third sectors
are harmonized so that maximum use is made of the strengths, while minimizing the
potential for inefficiency caused by the weaknesses.”
2.6.2 Public/private partnerships in developing countries
The urban poor have always relied on their own resources to house themselves
regardless of, or perhaps in spite of, the activities of governments and the commercial
private sector. However, the experience in other countries suggests, this situation is

far from ideal and housing outputs and housing standards would be very much higher
if the three sectors were to cooperate with each other in a positive way.
Partnerships in facilitating the supply of inputs into the shelter process
i. Partnerships in the supply of land
Land markets in developing-country cities have been allowed to operate in ways

which deny access by low-income groups and which promote the holding and
exchange of land for speculative purposes. Partnership is an essential key to
improving the operation of urban land markets because the efficient and equitable use
of land depends on maintaining a balance between different interests in the land
market. If left solely to the commercial private sector, land is likely to be held for
speculative purposes or turned over to more profitable uses such as commercial or
high-income residential purposes, at least under the conditions which hold true in
most developing-country cities. On the other hand, if left solely to the public sector,
the allocation of land to alternative uses and groups may be no more efficient,
probably slower and more bureaucratic, and equally open to corruption and
politicization. The role of the third sector in land development is crucial, but acting
alone and in isolation people and their organizations cannot ensure that land and
infrastructure across the city as a whole are developed in the most rational way.
Hence, there are strong reasons for encouraging partnerships in the land market as a
way of reducing the problems associated with monopoly control over land allocation
by any of the three sectors, independently of the others.
ii. Partnerships in the supply of housing finance
Experience shows that poor people can develop their own housing over time with
minimal external financial inputs, but constraints on the supply of housing finance
still form one of the most serious barriers to the enabling approach to shelter. All
housing-finance systems have to reconcile three objectives which may conflict with
each-other: afford ability to the borrower, viability to the lender, and resource
mobilization for the expansion of the system or economy as a whole. Hence,
affordable housing finance may not be viable (sustainable), and viable systems are
often not affordable, at least to the urban poor. As in the case of the land market,
public/private partnerships in housing finance provide a mechanism for increasing

access among lower-income groups while not sacrificing the efficiency, sustainability
or viability of the system as a whole, or at least while maintaining efficiency losses
within acceptable limits. This can be achieved by promoting credit schemes for the
poor outside of the formal housing-finance system (public/third sector partnerships),
by re-directing formal housing finance to lower-income groups (public/commercial
private-sector partnerships), or via a mixture of the two (partnerships involving all
three sectors). Because of the difficulty of promoting access by the poor to formal
housing finance on the necessary scale, public-sector agencies usually take a key role
in channeling funds to low-income builders, either directly or via intermediaries.
Public/private partnerships took many different forms:
 Direct government loans to private-sector institutions (but these can be costly due
to high administration costs and problems with repayment);
 Private-sector administration of public loan funds (where costs are lower);
 Using government funds to subsidize interest rates;
 Blending public and private-sector funds and institutions together in an integrated
system for housing finance;
 Using government guarantees for private-sector loans;
 Stimulating the development of a secondary mortgage market;
 Encouraging private-sector investment in housing finance via tax credits and
exemptions, special bonds, and other incentives.
However, a vital aspect of partnership in housing finance lies in increasing public and
commercial-private-sector support for informal (NGO and community) finance
institutions, including credit groups, cooperatives and traditional savings clubs. These
institutions are much more flexible than either the government or commercial private
sectors; they are well-rooted in local realities and have first-hand knowledge of their
borrowers; and they are able to support the kind of lending patterns required by the
poor - small amounts over irregular intervals, simple application and approval
procedures, low collateral requirements, and flexible repayment.
iii. Partnerships in the supply of building materials and construction skills
Lack of access to affordable building materials is a constraint on shelter development

and public/private partnership provides one way around this constraint. Partnerships

in this area may take the form of government assistance to small-scale suppliers,
"materials banks" developed by third-sector organizations, collective access to
materials (as in housing cooperatives) and research and information-sharing.
Partnership in the production of shelter outputs
While public/private partnerships in the supply of inputs to shelter are clearly crucial,
they also have considerable potential in facilitating the processes by which inputs are
transformed into outputs – the processes of construction, production and development.
i. Partnerships in construction and development
Partnerships in this area may take the form of public contracts with private
developers; public assistance to the commercial private sector in the form of land,
infrastructure, tax concessions and other incentives; government assistance to third-
sector organizations in providing more effective support to individual low-income
builders; and simplifying building regulations and streamlining approval procedures,
rent controls and other legal measures in order to stimulate the development of a
private rental market and/or inner-city redevelopment. Partnerships which support
individual producers and their organizations, and which remove the constraints which
often face poor people in their efforts to develop their own shelter, are critical to the
success of the enabling approach.
 Partnerships involving the commercial private sector
The experiences show that commercial interests can be encouraged into developing
land and turning over a portion of the lots or dwellings to lower-income groups. One
example is the development of publically-owned land by private developers who hand
the completed units back to public for allocation. Similar experiences are in inner-city
rental markets whereby private landlords are allowed to redevelop their properties on
condition that the original tenants are allowed to return to occupy part of the space
created. One of the conventional uses of private-sector developers is as contractors in
public-sector housing programmes.
 The role of cooperatives in public/private partnerships
Collective organizations such as housing cooperatives can bridge the gap between
needs and demands by acting as guarantors for loans, negotiating over land, and

pooling labour resources to assist labour-scarce households in the construction phase.
However, if they are to flourish, housing cooperatives also require support from
government (to ensure access to land, and the right legal and regulatory framework),
and from the commercial private sector (to facilitate access to capital and
credit).However, the success of cooperatives in shelter production also depends on the
existence and operation of creative partnerships.
 Other third-sector institutions in public/private partnerships
NGOs have no comparative advantage over people and private developers when it
comes to the actual building of housing, but they can and do play a critical role in
facilitating people's efforts by negotiating on their behalf, representing their interests,
providing technical support and advice, acting as a channel for credit and other inputs,
and assisting with community organization and mobilization so that individuals can
work together and pool their resources.
 Public/private partnerships in the production of rental housing
The great majority of rental accommodation is held in the private sector, though
usually on a small scale. Therefore, encouraging the production of rental housing via
public/private linkages is one of the most important aspects of partnership in the
development of shelter strategies.
ii. Public/private partnership in the provision of basic services
It is unreasonable (because of the high capital costs involved) to expect the urban poor
to develop their own infrastructure and services, especially in the areas of electricity
supply, drainage and sanitation. Therefore, public sector should focus on providing
things which the poor cannot do for themselves (such as services), rather than on
things which they can (such as housing). “However, direct public provision of
services is unlikely to be an effective solution to the needs of the urban poor (even if
it was an option, which it rarely is in resource-poor economies). Small-scale
privatization of services is bound to continue in most developing-country cities,
though this has more to do with sheer scarcity of resources than with economic
theory". Nevertheless, experience shows that private suppliers can enjoy significant
cost advantages over the public sector and are prepared to invest in service provision
so long as the risks are acceptable. They must, however, operate within a framework

supervised by government which can maintain the necessary levels of quality and
accessibility. Otherwise, commercial private companies will concentrate on higher-
income areas where returns are highest, leaving the poor to rely on more expensive
small-scale private vendors or on their own resources. “In order to balance cost
recovery with equity three conditions are essential. First, people will not pay for
services they do not want or find inadequate, so there must be a strong link between
cost and quality (hence the role of the private sector).Secondly, cost recovery is easier
where there is a high level of participation by consumers at all stages of the process
(hence the importance of third-sector organizations). Thirdly, sustainability and
access cannot be secured where municipal government is weak, since these processes
are complex and require effective administration and supervision (hence the
importance of the public sector). For all these reasons, partnership in the provision of
services and infrastructure is essential.”
Here are four different models developed in France for the provision of services
through PPP modalities:
(a) "Concession", in which a commercial private-sector company finances the capital
investment and sets the rates paid by consumers according to a contract issued by the
public sector. The private operator derives profit from the rates/payments while any
government costs are covered by surcharges;
(b) "Affermage", in which the public sector finances the capital costs and sets the rates
paid by consumers according to a contract, issued to a commercial private company;
(c) "Régie", in which the government finances the capital expenditure and sets the
rates paid by customers, but allows private companies to operate the service in return
for a percentage of repayments;
(d) "Gérance", which is similar to régie except that the private contractor is paid a set
rate and customers, are bound contractually to the local authority rather than the
company.
2.6.3 Modalities for Partnership
Public/third-sector partnerships
Partnerships between the third sector and government in the low-income shelter
process are critical for many reasons. Most importantly, these partnerships can
facilitate greatly the supply of housing inputs to the poor, especially in the case of

land. Secondly, all partnerships imply and require mediation between the interests of
the partners, and NGOs are ideally-placed to play this role. Thirdly, NGOs and CBOs
need to be involved as genuine partners in the policy debate over shelter at the highest
level, if government policy is to remain relevant, effective; and accountable. In turn,
the third sector cannot operate effectively without the support of the State in creating
an enabling environment within which NGOs and CBOs can flourish. The partnership
is therefore of critical importance to both.
Public/commercial private-sector partnerships
“This partnership will relieve pressure from the lower-income housing market and
help to prevent downward filtering." Government can also act to protect the interests
of the poor in particular areas of the city which are attractive to commercial private
capital (such as the city centre). In addition, there are certain aspects of the shelter
process (such as some basic services and employment-generation) in which the
commercial private sector can play a more valuable role.
Mixed partnerships in low-income shelter
Successful action in shelter on a significant scale often requires collaboration among

public, commercial private and third sectors, each of which has a different
comparative advantage and none of which can achieve success on its own.

Rental Housing-Issues & Opportunities for Urban Poor Chapter III – Research Methodology
Chapter 3 Research Methodology

3.1 Research Strategy
What is the characteristic of rental housing of urban poor in Kathmandu valley?

First research question will be addressed by the survey (physical and social) method.
How the quality of life of urban poor living in rental housing can be improved?
Second research question will be addressed through the archival analysis and case
study.
3.2 Research Type
The type of the study is deductive.
3.3 Research Data
Data that will be dealt in the study will be both quantitative & qualitative.
3.4 Research Methods
The research methods will include the following steps
3.4.1 Identification of case study areas
The areas in Kathmandu and Lalitpur were classified from the rental point of view.
Basic information of the classified area was collected through the reconnaissance
survey. And accordingly, two sites for case study were selected in traditional fringe
area. The selection of case study area for primary survey is based on the following
criteria:
Traditional Fringe Area
The traditional fringe area of the core city is mostly resided by traditional poor people
who are mainly belong to socially excluded groups. So, it is assumed that the people
who have to accepted to live in those areas must have even worst condition than
owners because of their poor economic condition. Due to location advantage in terms
of employment link and transportation opportunities, most of the low-income tenants
wish to live near the city centre.

The level of security may be less fragile in inner city areas, because of the density of
social networks and the availability of a wide range of housing options due to the
variety of job opportunities and income levels. (Quick Guide on Rental Housing)
Slum areas as identified by different NGOs/Organizations
Slum areas refer to poor and vulnerable areas which lack basic amenities and basic
facilities. The slum in core areas are characterised with highest density of houses with
very limited basic utility facilities, narrow streets, limited or no sunlight, litter and
stinks, are inhabited by both poor traditional communities and migrants. A substantial
market in rental accommodation is known to occur in the slums of Kathmandu,
mainly in the inner city areas with poor access. (CDS). About 22.1% households in
slum areas have rented out the rooms (Lumanti 2001). The total monthly rent
collected from the 65 households renting out rooms in the slum communities was Rs
93,900 (Rs 1445 per household) According to Jhigu Manka Samaaj, some of the
identified Slum localities are Dhaukhel, Dhumakhel, Hyumat, Inayatol, Kalimati,
Kohiti, Marudhoka, Ombahal, Ramghat, Tahachal, Tankeswar, and Teku-
Khichapokhari in Kathmandu Metropolitan City and Chyasal, Irti, Khapinchhe,
Kumbheswar, Lnolha, Naga Ga, Naudo, Satdobato, Tadhoka, and Talchhikhel
Lalitpur Sub-Metropolitan City.
High Rental Occupancy
For the site selection, the rental occupancy of the area is determined through
reconnaissance survey. High density settlement area is selected with high rental
occupancy where both the owner and tenant live in the same house.
According to these criteria, Kumbheswor in Patan and Sawal Bahal in Kathmandu are
selected for the case study. Both of these areas are resided by low caste groups like
butchers and sweepers and three out of every four houses are rented. In Kumbheswor,
most of the tenants are scavengers as well as students whereas in Sawal Bahal most
are working as scavengers.

3.4.2 Collection of Data
Primary data collection

This was done through questionnaire survey, visual survey and interview with key
personnel. The primary data collection was based on household survey conducted in
neighborhoods of the selected sites. The questionnaire was prepared focusing on the
research questions. Separate questions were prepared for the tenants and owners to
have different views. Visual survey and photograph methods were also used for the
collection of data. Some of the personnel of the site were selected for detail interviews
in order to prepare interesting case histories.
Secondary data collection

Secondary data were collected from the reports, literatures, previous research works
in the concerned fields, internet websites etc.
3.4.3 Data Analysis
The collected information from primary survey is presented in tabular form using
SPSS software tools. Maps and photographs are also included to present the visual
condition of the study area. The analysis includes cross tabulation of the parameters
related to research question. Analysis result of these data has been presented in
diagrammatic chart forms.
3.4.4 Data Interpretation and Generalization
The analysis results are referred for the identification of the problems and drawing the
inferences of findings. Set of recommendations are proposed to resolve the problems.

3.5 Summary of the methodology
The methodology is summarized in the tabular form below with the methods, tools
and output to deal with each objective.
Table 1 : Research Methodology
Methods/Activities Tools/Basis Output
Objective: To do a situational analysis of rental housing of urban poor in Kathmandu Valley

Literature Collection & Theoretical Review Problem Statement
Review
Books, Published and Research Questions
Finalization of the topic

Unpublished Documents, Policy,
Objectives
Acts, Plans and Programs
Experiences in National
and International Context
Initial Discussions NGOs, Experts Theoretical Background
Situation in Kathmandu
Site Selection
Development of Literature Review Final Survey Tools
Checklist/Questionnaire
Discussions Checklist / Questionnaire
(Tenants/ Owners/ Experts)

Survey Walk-over survey Primary data of case study area
(Observation/Measurement/Photo Map
graphy)
Household Survey
Interview – Household level
Individual level
Data Analysis SPSS – household database Existing situation in terms of
physical, social, economic &
Visual survey – maps &
demographic aspects
photographs
Inferences/Findings
Objective: To identify the underlying problems in rental housing of urban poor

Discussion with Experts Findings Problems & Issues

Methods/Activities Tools/Basis Output
Objective: To explore the options of Public Private Partnership for the improvement of living
condition of urban poor living in rental housing.
Revisiting the literature Urban Indicator Guidelines Model
Housing Standards Experiences
Options & Opportunity in PPP

Objective: To recommend the follow up actions based on the findings for up grading the
situation of urban poor living in rental housing
Recommendations Existing Plans, Programs & Policies & Plans, Programs
gaps, theories & Policies
Experiences in different countries;
MDG targets
3.6 Research Fields
The research has been carried out in the following fields as identified by an expert
group meeting, UNCHS-1989, Slum Upgradation Forum and other experts:
 The nature of low-income landlordism and the motives for letting
 Tenure preferences among different groups in terms of income, ethnicity, gender,
marital status
 Owner-tenant relationship
 The characteristics of rental units and owner occupied dwellings
 Rent, rate of occupancy and housing condition
 Provision of infrastructures and monetary return to the owners
 Locational preference of the low-income groups for rental accommodation
 The socio-economic characteristics of landlords, owner-occupiers and tenants
 Role of individual public sector, private sector and civil societies including Public
Private Partnership on the improvement of low-income rental housing
 The potential of house owners as suppliers of rental housing

Table 2: Basis for questionnaire development
Aspects Issue Key Information Key Indicator Data Required

Socio - Demography Population Age-sex Male and female
economical composition of population of
Rental Population different age group
Dependency Ratio Population of age
groups <15 years, 15
– 59 years and >59
years
Household Average dwelling Total sample of
size houses on rent and
the households
Average household Total rental
size household and total
population
Proportion of Number of
households with households with
more than three more than three
persons per room persons per room
and total sample
households.
Employment Unemployment rate Unemployment Economically active
rate(m/f) population and
population of
seeking job of age
15 years and above
by sex
Percentage of Number of
employed persons in employed persons in
informal sector (m/f) informal sector and
total population by
sex
Poverty Income & Rental expenditure Monthly rent and
Affordability percentage expenditure


Potential of house Percentage of rental Rented building area
owners as suppliers area. and total owned
of rental housing building area.
Education Access to education No. of primary/ No. of
secondary schools in primary/secondary
the ward schools nearby
Literacy rate General literacy rate Number of literate
persons and total
population of age 6
years and above
Participation in Annual rate of Total tenant
cultural activities participation in population and no.
cultural activities of cultural activities
Participation being participated
Involvement in Involvement rate Total tenant
clubs/organization population and no.
of people involved
Owner – tenant Dispute rate Total no. of tenant
Relationship and owner
households and no.
of disputes
Maintenance of the Way of the
Relationship
space maintenance
responsibility
Tenant – tenant Dispute rate Total no. of tenant
relationship/ households and no.
neighborhood of disputes
Vulnerable groups Tenure Preference Tenure preference to Total tenant
among different ethnic groups household and no. of
groups different ethnic
groups
Tenure preference Total single family
among genders tenant and total no


of tenant with single
woman
Crime in Crime rate No. of crime
Safety/Hazard neighborhood incidents in
neighborhood
Condition of Construction type Number of buildings
building by type of
construction of
Building
house
Age of building Number of buildings
of different age
Provision of open Proportion of open Total number of
Open Space space space tenant household &
use of open space
Access to improved Percentage of Number of
sanitation household with households with
sanitation facilities – sanitation facilities
type of toilet and total households
Person per toilet Total population and
Physical
total number of
toilets
Access to safe Median water Water fetching time
drinking water fetching time of all households
Services
Solid waste Percentage of Number of
management household by solid households by type
waste management of solid waste
management and
total households
Access to electricity Percentage of Number of
electrified households with
households electricity and total
households
Location Locational Proportion of Total number of


Preference households near to working tenant
their work place population and time
taking to reach their
work place

Rental Housing-Issues & Opportunities for Urban Poor Chapter IV – Rental Housing:
National & International Context
Chapter 4 Rental Housing: National & International Context

4.1 Rental Housing in Global Context
Rental housing is seen as a vital component in accommodating large number of

families in developing countries. Almost half the urban population in most developing
countries is made up of tenants. That is hundreds of millions of people (Source: UN-
HABITAT, 2003).Rental housing patterns tend to be much higher in cities than in rural
areas, and also vary greatly between cities within the same country. For example, the
national average proportion of renters in India is only 11% but for the city of
Bangalore, it is 55%.
Table 3: Tenure pattern in countries and their respective cities

Countries Cities
Owner Renter Other Owner Renter Other
Africa
s s s s s s
Johannesbur
Egypt 77 22 2 55 42 3
g
South-Africa 69 31 - Cairo 37 63 -
Asia
India 87 11 3 Bangalore 43 55 2
Thailand 87 13 - Bangkok 54 41 5
Latin-America
Bolivia 60 18 22 Santa Cruz 48 27 25
Brazil 74 25 11 Sao Paolo 70 20 10
Developed
Countries
Germany 40 60 - Berlin 11 89 -
The
53 47 - Rotterdam 26 49 25
Netherlands
United
69 31 - London 58 41 -
Kingdom
U.S.A. 66 34 - New York 45 55 -
Source: UNCHS, 2003
The developments across developing countries are strong indications that the “age of
free urban land” is over. There has been a slowdown in ownership and an increase
importance of renting in many developing countries. The other important
development is the growth of shared and other forms of non-ownership such as
borrowing houses or rent free accommodations. (UNESCAP/UN-Habitat, 2008)
In many Asian countries, investments by individual landlords in small, scattered,

independent rental units have increased dramatically. Many tenants in Asian cities

live in crowded, under-serviced and dilapidated housing, because that’s all they can
afford. Often, governments respond by demolishing this housing, but that only makes
housing problems worse and leads to even greater overcrowding elsewhere.
There are four major problems, as identified in UNESCAP/Un-Habitat, 2008 report,

with rental housing arrangements in the cities of developing countries today:
• Housing policies are often biased in favour of homeowners and fail to take
rental housing into account. This increases the risk of tenants being exploited,
especially poor tenants
• When rental housing conditions are poor, the problem is not usually with the
rental arrangement itself. Rather, it is related to the state of a city’s overall
housing conditions and the complex factors which cause poor living conditions
and poverty in general.
• Rental housing is closely linked to the way a city’s overall housing market
functions. Problems of rental housing are expressions of larger problems of how
the social, economic and political relations involved in land and housing are
balanced.
• Because so much of rental housing is informal and largely “invisible,” a lot of it

falls outside of the control of government rules and regulations. This has
allowed for a great diversity and flexibility in rental housing markets, but at the
same time has made it more difficult to plan policy recommendations and
interventions to support rental housing.
4.1.1 History of legislative intervention & government policies on rental housing
Developing countries have done little to stimulate the development of rental housing.
Indeed, the manner of their intervention in rental housing matters has actually
discouraged investors from increasing the supply of housing for rent. (UNCHS, 1993)
Rent-control legislation: Most governments first introduced rent controls at the time
of national insecurity or rapid inflation. The rationale behind introducing controls at
these times was the fear of what rapid inflation might do to rents. Governments were
concerned that the majority of their urban populations would be threatened with

excessive rent rises. Rent control was seen to be an effective way of protecting poorer
groups from exploitation.
The existing rent control law is unable to protect the low income households since
most low income renters dwell in self-help rental accommodations, where informal,
verbal contracts are not uncommon. In Mumbai, for example, where strict rent control
laws make it almost impossible for a landlord to increase the rent or evict a tenant, the
rental market is almost nil. In brief, the main problems with rent control are:
Equity: Rent controls can operate inequitably in three ways. First, they favour some
tenants at the expense of others. In particular, they tend to favour those who have
lived in rental housing for years against those who wish to become tenants. Secondly;
there is no guarantee that those covered by rent controls are actually poor. Thirdly,
tenants clearly gain at the expense of landlords. But, when tenants are more affluent
than the landlords, the effects of rent control are the reverse of what is intended.
Efficiency: By distorting market values, rent control often encourages the inefficient
use of housing. For example, small tenant households may occupy housing that is
much larger than they require, and for which they would not be prepared to pay the
market price, limiting the availability of accommodation to larger households. More
importantly, by holding down profits, controls discourage some landlords from
investing in rental property, although this claim is sometimes exaggerated and
contrary evidence also exists.
Maintenance: Where rent control makes rental housing unprofitable, a regular
complaint has been that landlords do not maintain the property. In Karachi, rent
control leads to “rapid deterioration in the quality of the buildings”. It is only when
the tenants have been prepared to take up the burden of repair that living conditions
have not deteriorated, something that apparently happened in parts of central Cairo in
the 1970s.
Hence, many governments have recently modified or even eliminated their rent-
control regulations.
Encouraging the building of housing for rent: on occasion many governments have
attempted to increase the supply of rental-housing generally by following one or

several of the following three methods: to build rental housing themselves; to
encourage private construction companies to build more homes for rent; and to
encourage, or sometimes require large employers to build housing for their
employees.
In India, public construction programs produced substantial number of public

buildings in some cities but most of the tenants didn’t use to give rent which resulted
in unsustainability of the building. Due to lack of resources for maintenances, most of
them converted into slum areas. So most of the rental units have now been sold to the
tenants.
Most governments have attempted to encourage the private sector get involved in
rental housing. In Mexico, the Government provided generous tax incentives to
companies building rental accommodation, permitting the sale of the rental units after
a period of five years. In practice, this produced little housing outside of the main
tourists’ resorts. In India, income-tax concessions were made available to companies
willing to build rental housing although they have been removed now. In Egypt, the
1981 housing law required two-thirds of units in new buildings to be set aside for rent
rather than sale. It has also offered concessions on property and income taxes.
However, these provisions do not seem to have stimulated much in the way of
construction. (UNCHS, 1993)
Similarly, a number of governments have sought to encourage major employers to

produce homes for their employees. In India, this practice was extended to include
some local personnel. While government agencies continue to provide rental housing
for certain employees, few private companies have been enthusiastic about following
this practice. However, they have been discouraged by the experience of workers
refusing to vacate the houses after retirement. As a result, few have been keen to
utilize the subsidies offered by the government for workers housing. (UNCHS, 1993)
4.1.2 Basic changes in housing policies in developing countries
Previous policies were not wholly successful and there is a shift in strategy with a
new approach called enablement strategies. The public sector should move out of the
housing arena and should play only the secondary role of providing infrastructures

and services and improving the regulatory environment. The private sector should
play a larger role in housing provision. Strengthening the housing finance system is
seen to be a critical means of increasing domestic resource mobilization.
4.1.3 Some of the appropriate public intervention & assistance for rental housing
Incentives for small landlords: In South Africa, Martin and Nell have proposed the
establishment of ‘The Household Rental Grant Programme’ comprising a capital grant
to households who are owners or have site permits and have built or renewed rental
accommodation on their properties to meet specified minimum standards. The grant
would be paid only once the accommodation has been built and inspected.
In Indonesia, the State provides credit for investment in rental housing and channels
this to "small developers". In order to facilitate access to this new credit line, loans are
available in small amounts, short maturities, and simple application procedures and
through community-based institutions.
Building rental incentives into upgrading programmes: Homeowners in upgrading

programmes were encouraged to increase the supply of rental housing. The Plan
Terrazas programme that was introduced in Colombia in the 1970s worked very well
in Medellín and Cali. The Managers offered subsidies or credit to finance room
additions.
Resettlement Programme in Voi (Kenya), where cooperative societies organize the

construction of two-room dwellings for their poorer members. While the family
occupies one room, the other is rented out. The money obtained from rent is used to
repay the loans
In Bogotá, a Colombian NGO arranged a credit line from BCH to acquire a large
number of tenements in two historic sections of the city - Egipto and La Candelaria.
These were then renovated and handed back to the original tenants at the same rent.
An interesting feature of the scheme was that collateral for the credit line was
provided by interest accruing on donations to the NGO.
Efforts to improve the quality of private rental housing: In the United Kingdom,
landlord forums have been established which organize meetings in which local
authorities and landlords can discuss issues of common interest. Such forums are in
operation in 146 local authority areas (41 per cent of the total), most having been
established in the last couple of years. The local authorities administered three
quarters of the landlord forums, and many of the rest were run by institutional
landlords (like universities) rather than by landlords. Almost half of all the forums
were meeting at least every four months.
4.2 Rental Housing in Nepal
In Nepal, about 6.7 Percent households live on rental accommodation whereas in the
context of urban context the percentage is large compared to the national data which
is shown in the following table.
Table 4: Household Distribution by Tenure Status (Percentage)

Particulars National Urban Rural
Squatters 7.21 8.61 7.02
Renters 6.7 24.46 4.28
Owner Builders 18.33 12.87 19.07
Owner Purchaser 2.79 3.47 2.7
Owner Occupier 64.97 50.59 66.93
Source: Nepal National Housing Survey, 1991
Table 2: Percentage of Total Households which are renting

Geo - Area Urban Rural Total
Himal n.a. 5.3 5.3
Hill 27.1 8.0 12.4
Terai 20.4 2.1 3.8
Nation 24.5 4.3 6.7

Table 5: Household percentage by type of tenure ship
of Nepal Urban Rural

Type
1991 2001 2001 2001
ownership
Owned 92.6 88.3 60.9 93.4
Rented 4.7 8.9 34.8 4.0
Institutional 0.5 2.4 3.7 2.2
Others 0.1 0.2 0.3 0.2
Not Stated 0.5 - - -
The percentage of households having owned house has declined compared to 1991,
whereas there is an increment in the percentage of household living in rented house
during the inter-census period. The size of urban population in Nepal has increased to
15 percent of the total population (CBS 2005) in 2004 from 6.9 percent in 1994. Due
to this reason, it is seen that an increasing percentage of households are living in
rented house in urban areas.
Table 6 : Purpose of Housing Construction

Purpose (Multiple Response) Urban Rural Total
Housing own family 59.1 60.3 59.5
Additional Space 14.8 20.7 16.8
Son/daughter’s marriage 0.9 1.7 1.2
Renting 22.6 6.9 17.3
Other 2.8 10.3 5.2
As housing is one of the means for economic generation, the renting response is much
higher in urban areas after the reason for housing own family.
4.2.1 Rental Housing Scenario in Kathmandu Valley
Being a focus for urbanization, rental tenure pattern tend to be much higher in the
valley compared to national and urban national context. More than half urban
households are living in rental accommodation in case of greater Kathmandu.

Table 7: Households by Type of Ownership of House/Housing Units
Municipaliti No. of Own Household Househol Househol Others %
es House House s in ds in ds in (not Househol
holds Rented rented Rent free specified) d in
House Institutio occupatio Rented
ns n House
Kathmandu 152,155 58,102 89,526 3,900 361 266 58.8%
Lalitpur 34,996 17,915 16,317 637 74 53 46.6%
Bhaktapur 12,133 9,437 2,560 128 8 0 21.1%
Madhyapur 9,551 6,326 3,061 147 11 6 32.0%
Kirtipur 9,487 6,397 2,838 239 13 0 29.9%
Total 218,322 98,177 114,302 5,051 467 325 52.4%
Source: Census 2001
“A substantial market in rental accommodation is known to occur in the slums of

Kathmandu, mainly in the inner city areas with poor access.” About 22.1%
households in slum areas have rented out the rooms (Lumanti, 2001).Poor renters
typically live in crowded conditions and share the same water supply and toilet of
landowners. Some renters live with their families, but there are many lone renters
working as pavement vendors, factory workers and others engaged in low-wage labor,
portage, sweeping / cleaning services, rag picking, small business / petty traders, and
hawkers using bicycles as mobile shops.
One of the studies has identified 368 locations of the poor rental areas within the
valley. Among five municipalities, Kirtipur with about 147 locations followed by
Lalitpur 70 locations has highest number of locations of poor renters probably due to
the close proximity to Kathmandu and lower rents than in Kathmandu.
Table 8: Number of Poor Rental Locations in Kathmandu Valley

Municipalities Bhaktapur Madhyapur Kathmandu Lalitpur Kirtipur
Total 52 47 52 70 147
Source: Genesis, 2003
4.2.2 Plan, Policies & Programs in national and international context
Rental Housing is not a new phenomenon in urban market. However there is no

policy on rental housing as such which deals with the interest of the landlords and the
tenants. Recently Nepal Government has introduced National Urban Policy 2064,

which has mentioned policy for the promotion of the rental housing. Even for urban
poor, there is no definite policy regarding housing.
National Shelter Policy, 1996

National Shelter Policy, 1996 was formulated by the government of Nepal, under the
Eighth Plan (1992-97), realizing the need for a national policy on shelter. The
objectives of NSP are to facilitate the housing production, ensure self-reliance, clarify
the roles of various actors, facilitate the working of housing and land markets and
reduce the adverse impacts on environment. It has formulated various policies and
implementation strategies to fulfil the objectives. It has emphasized to facilitate
affordable housing, reduce the adverse impacts on environment and clarify the role of
public and private sector for implementing shelter policy.
National Urban Policy, 2064

One of the objectives of National Urban Policy-2064 is to improve the lives of urban
people by creating healthy, secured and prosperous urban environment. To achieve
this objective, there is a strategy 3.2.5 which has mentioned to increase and ensure the
access of affordable land and housing. Regarding the strategy 3.2.5, there is a policy
and working policy 4.2.5 ‘tha’, which tells about the regularisation of rental market
and the promotion of rental housing for poor/low income families through private
sector involvement
Millennium Development Goal

MDGs are an agreed set of goals that can be achieved for the year 2015 if all actors
work together and do their part. Poor countries have pledged to govern better, and
invest in their people through health care and education. Rich countries have pledged
to support them, through aid, debt relief, and fairer trade.
Goal 7 – Ensure environmental sustainability Target 11-By 2020, to have achieved

a significant improvement in the lives of at least 100 million slum dwellers
UN-HABITAT has recently identified a number of substantive knowledge gaps that

need to be filled in order to strengthen the implementation and monitoring of the goal
of the United Nations Millennium Declaration on improving the lives of slum
dwellers. These knowledge gaps have become part of UN-HABITAT’s overall

research priorities. Research on the priorities specific to slums will have two
fundamental objectives: firstly, improving knowledge on slum conditions and trends
in a globalizing and urbanizing world; and secondly, identifying and analyzing best
practices and policies relevant to slums and slum dwellers. These priorities will be
addressed through in-depth analysis designed to answer the key research questions in
different housing sectors in case of rental housing following research questions are
put forward:
How is rental housing within the informal sector of developing country cities
evolving?
What are the main features of the mechanisms underlying rental housing for the
poor?
What are the effects of renting within slums and what are the implications to slum
upgrading?

Rental Housing: Chapter V–
Issues & Opportunities for Urban Poor Evidences and Analysis
Chapter 5 Evidences and Analysis

5.1 Case Study Area
For the case study, two areas viz. Sawal Bahal in Kathmandu Metropolitan City and
Kumbheswor in Lalitpur Sub-Metropolitan City were chosen. Both areas resembles in
locational as well in social and economical aspects. These areas are traditionally
fringe areas and have been identified as slum area by different agencies (Jhigu Manka
Samaaj)
SAWAL BAHAL
KUMBHESWOR
Map 1: Location map of the case study areas

Map 2 : Site boundary in Sawal Bahal
Map 3 : Site boundary in Kumbheswor

1.1.2 1.1.1 KUMBH

5.1.1 Brief Overview
Case Study Area I: Sawal Bahal, Kathmandu
Sawal Bahal is located in Ward No.21 of KMC which is surrounded Bhotebahal area
on the East, Bramha Tole on the West, Lagan area on the North and Teku on the
Southern side. For the survey, the lane which is demarcated as Sawal Marga by KMC
was taken. The area is situated on the elevated land after which there is a heavy drop
towards Teku main road. Being the peripheral area of traditional settlement pattern,
the majority of inhabitants are from socially backward groups of caste Pode and few
Kasain who are ethnically categorized as Sweeper and Butcher respectively.
The area of the study site is 7955 sq.m. with total number of 161 buildings. The
survey area consists of 151 residential buildings among which 53 buildings are rented
out for residential purpose. There are 21 buildings which are fully on rent whereas in
about 32 buildings both tenants and owner are living. The native households count
128 in number whereas the tenant household counts for 170 accounting the total
number of households as 298. These results in gross average household per building
as 2.Besides residential use, there are two government schools up to primary levels,
Kawads, garment factories and poultry located in the study area. The buildings are
arranged in a row fashion along the lane with sound open spaces after certain interval.
The site also contains some vacant plots which have been using by the tenants.
The rental history of this area started from 25 years ago however the mass has rapidly
increased since 15 years. As the area is near to Kalimati and city centre, most of the
people who are involved in informal jobs prefer to reside here as tenants. Similarly,
the owners, as economically also backward, have only way to make income through
letting rent a portion of their native property. Hence, the area has greater demand for
rent mainly for low-income groups.
The indigenous population counts 762 and the tenant population counts 722 in Sawal
Bahal. Population density of the area is 1865 ppha.


Map 4:Landuse Map of Sawal bahal

Map 5: Rental density in Sawal Bahal

Case Study Area II: Kumbheswor, Lalitpur
Kumbheswor is located in Ward No.22 of LSMC which is surrounded by Inakha on
the West, famous Temple complex of Kumbheswor on the South and Sankhamul
Stupa on the Eastern Site. There are two types of settlement in the case study area: an
old settlement on high land towards west and a newly developed settlement on low
land along sewer towards east. Agricultural use is still dominating in the low land.
The area consists of numerous stone spouts which is one of the causes for the increase
in demand for rent compared to other neighboring settlements. Similar to Sawal
Bahal, this area used to be fringe of Patan City so; the area is still resided by Pode and
Kasai caste groups.
There are 133 residential units, 3 Kawad, 1 primary school, factories, office building
and orphanage in the case study area. Among 133 residential units, 38 buildings have
been rented out and one factory has also been rented for the own workers. 15 numbers
of buildings are fully rented including factory whereas in 24 buildings both owner and
tenants are living. The case study area consists of 117 native households whereas the
tenants constitute 111 households which results in 228 households in total. Hence the
gross average household per residential building of the area is 1.7.
The total population of the area is 1201 in which 752 is native population and 449 is
tenant population including tenants of the factory. The population density of the area
is 662 persons per hectare.
Being near to heritage site, the people mostly involved in handicrafts used to rent in
core area of Kumbheswor. After the trend of building a house at low land by local
people, the renting process also started there.

Map 6: Landuse map of Kumbheswor

Map 7: Rental Density in Kumbheswor

Table 9 : Brief of the case study area
Description Sawal Bahal Kumbheswor

Location Ward No. 21, Kathmandu Ward No.22, Lalitpur
Area in Sq.km. 7955 sq.m. 17649 sq.m.
Dwelling Units according to Tenure
Rent-free 98 94
Whole on Rent 21 15
Both Owners & Renter 32 24
Household according to Tenure
Indigenous 128 117
Tenant 170 111
Population
Indigenous 762 752
Renters 722 449
Population Density per 1865 662
hectare
Major Caste Groups Pode & Kasaai Pode & Kasaai
Public Facilities
School 2 Government school 1 Technical School
Open Space 3 chowks Park
Other Land Use
Kawad 3 3
Factory 2 2

Source: Field Survey (Census), 2009
5.2 Survey & Analysis
5.2.1 Demography
Population
Sawal Bahal 2009 A.D. (shaded) & Kumbheswor 2009 A.D.
66+
61-65
56-60
51-55
46-50
41-45
36-40
31-35
26-30
21-25
16-20
11-15
6-10
0-5
20 15 10 5 0 5 10 15
Numbers
Distribution of Population by Age & Sex
Population distribution in Sawal Bahal:

Male number is highly dominant representing the migration of single and mainly
working age and sex. Maximum are Indians (about 56%) who prefer their wives stay
to their hometown. However, majority of the age group 0-5 children reflects the start
of the migration of the entire family along with their kids. Existence of the age group
above 50 reflects the old age group staying with the family having no residence to
stay back in their home town.
Population distribution in Kumbheswor:

Every age interval exhibit almost same male number to female which supports the
family migration rather than single workgroup. Work group population is dominant
(from the age above 20). Majority of age group 6-10 reflects the existence of the
phenomena of the trend of the family with the children of the age migrated from the
near by area for the education opportunity of the age group children in the technical
school (upto primary level- free of cost plus provision of food).Most of the family
rent in case of indigenous group is the result of family sub-division and tendency of
younger group to live in a nuclear family. No age group above 55 reflects the
phenomena of the back stay of the age group in their hometown so as not to increase
the burden of housing thus rent charge to the family.
Ethnicity
Caste Composition in Sawalbahal

1%
9% Podar (Basbaniya)
Muslim
4% Chaudhary
2% Damai
Bishwokarma
Magar
Tamang
11% Lama
Gurung
51% Yadav
1% Yadav
2% Chhetri
2% Brahman
Newar
3%
Pode (Deula)
4% Kasaai (Khadgi)
11%
Source: Census Survey, 2009
Figure 4: Ethnicity Distribution in Sawalbahal
Majority of tenants are Podars having ethnic occupation of vessels and Kawad.
Nearby Kawad and relatives has tended these caste groups to live in Sawal Bahal.
Most of the caste groups are involved in the same occupation and they tend to bring
their relatives and friends in the same occupation. Since the owners are of

disadvantaged groups, high caste group seems to accept very little for renting in
Sawal Bahal. Few ethnic groups and Dalits viz Damai having occupation nearby are
residing there.
Caste Composition in Kumbheswor

1%
12%
14% Podar (Basbaniya)
2% Muslim
2% Chaudhary
Damai
4% Bishwokarma
Magar
12% Tamang
Lama
Gurung
11%
Yadav
Majhi
3%
Chhetri
Brahman
Newar
12% Pode (Deula)
Kasaai (Khadgi)
15%
1%
2% 1% 11%
Source: Census Survey, 2009
Figure 5: Ethnicity Distribution in Kumbheswor
Opportunity to work in different fields at Kumbheswor has lead to diversity in caste

composition of tenants. Though there is no dominant caste group in Kumbheswor like
in Sawal Bahal, presence of ethnic and scheduled caste group resembles to the
previous study area.
Employment
Scenario in Sawal Bahal

Reflecting the same scenario of Kumbheswor i.e. male working group are the earning
population in Sawal bahal. On the classification of all age groups into three broad age
groups, younger age group (below 15 years), working age group (15 – 60 years) and
old age group (above 60 years), dependency ratio is .64. However, considering
economically active and inactive population (students, housewives and non-workers),

the actual dependency ratio is much high i.e. .85.(note: only migrant composition is
considered and not in the back town)About 34% of the age group 6-15 is under the
earning group and all of them are engaged in Kawadi works. Deficit economic
condition has led the children even under the age group of 6 to work for earning.
Working Group (shaded) & Sawal Bahal 2009 A.D.
66+
61-65
56-60
51-55
46-50
41-45
36-40
31-35
26-30
21-25
16-20
11-15
6-10
0-5
20 15 10 5 0 5 10 15
Numbers Source: Household Survey, 2009
Figure 6: Employment in Sawal Bahal

Working Group (shaded) & Kumbheswor 2009 A.D.
66+
61-65
56-60
51-55
46-50
41-45
36-40
31-35
26-30
21-25
16-20
11-15
6-10
0-5
15 10 5 0 5 10 15
Numbers
Scenario in Kumbheswor
Source: Household Survey, 2009

Figure 7: Employment in Kumbheswor
Among the work group almost all the male are engaged on one or the other job.
Female and children population supports their migration along with their earning
members. According to age-group, dependency ratio is .59 however according to

economically active population, actual dependent ratio is found to be 1.32 (note: only
migrant composition is considered and not in the back town)
Literacy
Literacy Rate (shaded) & Sawal Bahal 2009 A.D.
66+
61-65
56-60
51-55
46-50
41-45
36-40
31-35
26-30
21-25
16-20
11-15
6-10
0-5
20 15 10 5 0 5 10 15
Numbers
In spite of the free government schools, Podar families are involving the age group of
6-10 in the Kawad. Female literacy rate (50%) is higher than male as most of the
woman of Podar Family migrated mainly after marriage giving them opportunity to
study in their own village.
Figure 8: Literacy in Sawal Bahal
Besides the Podar families, who tends to involve their children of 6-10 in Kawad, all
the rest of the age group are the school students enjoying the opportunity of the
existing technical school.
As most of the tenants are migrated from the villages of Nepal, which lack
educational opportunity in remote areas as well as socially biased towards female,
female literacy rate (47%) is much lower than male literacy rate (74%).

Literacy Rate (shaded) & Kumbheswor 2009 A.D.
66+
61-65
56-60
51-55
46-50
41-45
36-40
31-35
26-30
21-25
16-20
11-15
6-10
0-5
15 10 5 0 5 10 15
Numbers
Figure 9: Literacy in Kumbheswor

5.2.2 Migration

About 66% of the tenants in Sawal Bahal are migrated from India in which 63% are
from different villages of Bihar and rest is from Uttar Pradesh. Most of them are
relatives or friends, who initially comes with friends and later bring their relatives and
make them involve in the same job. According to them, it is easier to get in
Kathmandu than in the Indian cities that’s why most of them choose Kathmandu as
their working place. The only reason for their migration is occupation. As the tenants
from the same village are of same caste group having similar works, they could not
sustain there. Except in few cases, most the families own property in their homeland.
Some migrants started to live in the valley since 35 years and following the same
work and also bringing others in the family for the same work.
1.1.3 Source: Household

Survey, 2009

Besides Indians, migration to Sawal Bahal is from both Kathmandu valley and other
places from Central Development Region as well. Most of their reason for migration
within the Valley is family sub-division whereas the major reason of other migrants
are occupation, health etc.
Map 8: Inmigration in Sawal Bahal
Some of them directly migrated to the current location whereas some migrated to
some other place in Kathmandu valley initially and then gradually migrated to Sawal
Bahal. Most of Podar families used to live in Sawal Bahal and nearby areas as it is
near to Kalimati. They only shifted from one building to another in the same location
for their own convenience or others. Similarly, the local families who get subdivided
tend to live in live in the same neighborhood area.
Unlike Sawal Bahal, Kumbheswor does not contain significant migrant from a single
place. However, a large number of tenants in Kumbheswor have been found to have
migrated from places in the Central Development Region, mainly from eastern part of
Kathmandu Valley viz Kavre, Dolkha and Ramechhap.
Because of the opportunity on working nearby technical school and other factories,
the migrants working there tend to bring their relatives and friends to involve in the

job. One of the major reasons for the migration in the valley is the availability of
educational facilities and 18 % tenants here have migrated for the same reason.
There are about 15% Indian tenants who have migrated from Bihar. They almost
belong to the same caste and are involved in similar occupation. Some of them have
been living in valley since 28 years.
Map 9: Inmigration in Kumbheswor
Like in Sawal Bahal, some migrants have directly come to the current location
whereas some lived in other places of the valley and gradually shifted to the present
place. Almost all Podar families have been living in Kumbheswor area on rent since
many years and they use to shift from one building to another. Other caste groups like
Tamang, Magar, Lama etc. used to live near to Kumbheswor area and shifted here
because of the availability of water, near to educational facilities and work place.

Table 10: Percentage composition of duration and reason for migration
Duration of Rent Long-term Rent Short-term Rent
Health
Security
Landlessness
Occupation
Education
Family Sub-
Escaped from
Reason for Migration
division
Sawal Bahal 84 3 3 7 3
village
Kumbheswor 64 3 4 4 18 7
Case History I: Mobility of Tenant
Mr. Abdulla Khan, 45 years old tenant of Sawal Bahal, came to Kathmandu in 1986
A.D. He was brought here by his cousin who was involved in tailoring. He started
to live with his elder brother on rent in Khichhapokhari. His brother was mechanics
and used to work in a workshop at Jyatha. Mr. Khan also joined there to learn the
mechanical works. He worked there for two years and then, joined another
workshop at Siphal. He started to live with his new friends of workshop on rent in
Sundhara. About four friends used to live in a single room sharing the cost.
However due to far workplace, he thought its better to look for a new job rather
than shifting the room as most of his relatives were near to the area. As soon as he
got job in Maruti Showroom at Pulchowk, he came to Sawal Bahal 15 years back
and started to live on rent in an old house. At the mean time his nephew Foul Khan
was living in Bhote Bahal with his friends. He called him to live in the same room
and work in the same company. In between they had to live in Kalanki with relatives
for about 3 months, as the building at Sawal Bahal was reconstructed. They started
to live on the same building after reconstruction. However they had to leave after
few weeks because the room was given for shop. As the rent was cheap, they
preferred to remain in the same place rather than other location. So, they moved to
another old building in Sawal Bahal. They again had to leave the building for
reconstruction, so they decided not to shift in old building. Finally they found the
current building which was constructed just two years before at that time. As the
rent charge was high for them, they called two other friends to live in the same
room so that the expenditure could be minimized. If there is no objection made by
owner, he wants to live there until his work time in Kathmandu. According to him,
though they have to pay, they are getting at least drinking water from the owner
which other tenants of Sawal Bahal do not have and get only after long queue.

However they use to bath and wash clothes in their workshop due to lack of
sufficient water. Now, he is planning to bring his son to work here.
5.2.3 Household
Average household size

The households in Sawal Bahal include single family and family with relatives and
friends. As there is trend of living in a room by sharing with friend or relatives,
though the household with single person counts only 6.2%, the number of single
person migrated without family living either with friend or relatives counts much
higher which is shown in the graph.
25
20
15
10
0
1 2 3 4 5 6 7 8 9
Number of Persons in a Family
The average household size of the tenant in Sawal Bahal is 5 whereas the average
household size of the owner is 8 which show that owner family size is higher than
tenants.
Unlike Sawal Bahal, there is not much tendency of sharing a single room by number
of families except in the case of students. As in Sawal Bahal, household having
number of members 4 is higher in percentage depicting the trend of living two-
generation family. As in Sawal Bahal, the average household size of owner is greater
than tenants.

M.Sc. Thesis in Urban Planning [63]
Figure 10 : Actual Household size Poonam
distribution
Bajracharya (MSU/063/F/205)
Table 11: Household size distribution (in percentage), 2009
Household Size Sawal Bahal (%) Kumbheswor (%)

1 6.2 7.1
2 6.2 7.1
3 12.5 25.0
4 28.1 28.6
5 15.6 17.9
6 9.4 10.7
7 12.5 3.6
8 6.2
9 3.1
5.2.4 Socio-economic Aspects Source: Household Survey, 2009
Education
Except in the case of students, the education level of both working as well as non-
working groups is much lower in the case study areas. The maximum level of
education being attained by them is S.L.C. The major reason for not attaining higher
education is due to economic reasons and the need to earn for livelihood as well as
lack of educational opportunity. This lagging behind in education has led tenants from
proper employment in turn has affected on the economic status.
Occupation
As more than half tenants belong to Podar, the occupation related to their ethnicity is
higher in number. However Podar families who once used to work on vessels are
gradually shifting towards Kawad works as whole family members even females and
children can get involved in that occupation. The trend of buying accessories from the
mobile-seller is getting less, so most of their area of sale is the satellite towns like
Khokana, Lubhu, Chapagaun, Godawari etc. however they are living in Sawal Bahal
only because it is near to Kalimati which is main area of suppliers.

Occupation Pattern in Sawal Bahal

45.00%
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
r i s r or e g er e l l l er
to ad om ic lle t rs rin ag at ta te ta
r ac aw ro an Se ac Nu il o h r iv To _Ho _To Pott
nt K ow
h
ec Fi sh tr c p r _ r r
n Ta Ex r_ n e l pe pe
Co Sh e M Co ils pe l ea e el
i_ _ ns e H
ad aff t ov te
e C H
w St S U Sw
Ka
Informal economic activities are seen to be the major basis for livelihood. Some of
them mainly Pode families, are also found to be in the formal sector as a sweeper in
municipality, private organizations etc.
Figure 11: Occupation Pattern in Sawal Bahal
Occupation pattern is seemed to be highly guided by location and nearby job-

opportunities like garment factory, Kawad, Technical school etc in Kumbheswor.
Diverse caste composition as well as migrated place has led to diverse in occupation
pattern.
Being near to the heritage zone, most of the people’s occupation is related to the arts
and crafts in which females are engaged in Technical School.

Occupation Pattern in Kumbheswor

40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
ke
r er or g er al ee al an
t
at
e xi se r
l e nes
s
le
r al
or nt ct rin eav ot l oy ot Ta ou el el To
t
pe ra ia l o la _
T p i _T s i st pri v r _
_H _S si s S r_
W
Ca
r nt T et
W
ic m d A s _ i ve r
pe
r B u
si l e
on Co _e aw a l th vi
ce Dr pe en
tt
as a rp c h n
adi K a r He
l Pa U t Po
e
M C Te aw He S
K
Almost all Podar families are still involved in their ethnic works i.e. of vessels and
Kawad, however most of them are engaged in Kawad compared to vessels. Though
the dealer of vessels at Kalimati is far from the area, the vessels workers are residing
Figure 12: Occupation Pattern in Kumbheswor, 2009
there only because of the relatives. The local households who are in rent after family
sub-division are still continuing their ethnic jobs as in Sawal Bahal. Most of Dalits are
working as laborers reflecting the community trend.
Access to Public Services
Being in the inner part of the city, both of the areas are facilitated by proximity to
places of employment or schooling, health services, accessibility and availability of
public transport facilities etc.
There are two government schools which use to give free education up to primary
level in Sawal Bahal area. Most of the tenants as well as owners have sent their
children in these schools. In Kumbheswor, there is one technical school, which
provides food up to kinder garden level as well as free education has played a vital
role in the education level of the children.
M.Sc. Thesis in Urban Planning [66] Source: Household

Poonam Bajracharya Survey, 2009
(MSU/063/F/205)
In Sawal bahal, a medical store in Lagan area is famous among poor tenants and some
of them prefer to go in Teku Hospital. In Kumbheswor, most of the tenants use to go
in free DOTS clinic at Bangalamukhi for minor diseases whereas Patan Hospital in
case of major diseases.
Rent Charge
Rent charge highly depends upon the size and quality of the accommodation, the
structure of dwelling unit and the level of finishing and access to basic infrastructure
and services.
In both of the case study areas, the average rent paid for an approximate size of 12’ x
10’ room is Rs 1000 per month which is for accommodation only. Besides this, other
charges for electricity, cable line and in some cases maintenance charges are taken
separately by owners. Rent is increased in different ways such as increasing small
amount of money like Rs 20 or so in every 6 months, increasing Rs 50 every year.
According to the owners, inability to increase a sufficient rent charge is mainly due to
unavailability of water and level of services.
Rent levels can increase due to rising land values but low level of services and
amenities as well as the social context of the owners has leaded them to charge rent
level too low. The availability of inherited land has made the possibility of low rent
level.
In Sawal bahal, the total income include only 25 % rent to almost half of the owners
whereas in Kumbheswor, the rent covers not even 15 % of the total income to half of
the owners except in cases to some owners whose about 90% of the income from the
rent only. Hence the rent constitutes very little portion of the total income of the
owners depicting the chance of less feasible.

The survey suggests that a 120 sq.ft. room is rented in Rs 1000 per month which
sounds high. However assuming a real interest rate of 10%, the construction costs of
Figure 13: Rent to income ratio for the owner, 2009
Rs 1000 per sq.ft. and the occupancy status to be 80% in a year; then the cost for
constructing 120 sq.ft.room is Rs.120,000 and the pay-back period comes to be 27
years which is quite discouraging to the owners.(Calculation-Annex) This suggests
that the market rent is below the level required for cost recovery.
The tenants are found to be paying 20% of their income in rent which varies from 5%
to 60% and even 100% in some cases of Sawal Bahal, whereas in Kumbheswor half
of the population are paying less than 10% of their income in rent. In Kumbheswor,
the rent charge seems to be acceptable to the tenants however in some cases of Sawal
Bahal, where a higher portion of their income is spent on room; there is a chance of
squatting where at least room rent could be saved and an opportunity could be found
to improve by saving certain amounts every year.

Income and Expenditure Pattern
Figure 14: Rent to income ratio for tenant, 2009
Figure 15 : Per Capita Income per Day of the tenant (in US Dollar), 2009

Taking per capita income per day of 1.25 dollar as a base line for poverty
measurement in developing countries as set by World Bank, almost half of the tenant
population in Sawal Bahal are below poverty level and in Kumbheswor, more than
half tenants are below poverty level.this shows that the absolute poverty in
Kmbheswor is more than in Sawal bahal.
Figure 16: Per Capita Income per Day of the owner (in US Dollar), 2009
In case of owners, more than half are above the poverty line however, the per-capita
income almost resembles to the tenants in both cases.
The expenditure pattern of the tenants also helps to show the level of poverty. More
than half percent of Income goes for food in Sawal Bahal. As there is not tendency of
sending children to school, the expenditure on education is very low. The amount sent
to their home, which is saving of the tenant, is more in Sawal Bahal because there are
more single persons living as a combined family sharing the cost of rent as well as
others. And this has also lessened the expenditure on rent as shown in the chart. Since
most of the tenants have working place near to the rent, the expenditure on daily
transportation is very less however as most of the tenants are Indians having their
families at home province, they have to spend on transportation at least once in a year.

Expenditure Pattern
Expenditure Pattern in
in Sawal
Kumbheswor
Bahal
9%
2% 12%
1%
2%
2%
Food
Food
4% Clothes
Clothes
Education
Education
5% Transportation
Transportation
22% Sent
Sent toto home
home
5% 52% Medicine
Medicine
Miscellaneous
Miscellaneous
Rent
Rent Charge
Charge
63%
9%
8%
3%
2%
Figure 17: Expenditure pattern of tenant in Kumbheswor

There are more than half tenants below poverty level in Kumbheswor; hence the
expenditure on food is more than 60 percent. The expense on education is slightly
higher than in Sawal Bahal. Unlike Sawal Bahal where most of the Indians prefer to
buy clothes on cheap rate in India, the tenants here are bound to spend little bit more
money on clothes. As most of the household constitute a single family, the amount
saved is quite low compared to Sawal Bahal which can be seen in the amount sent to
home. As already discussed, most of the tenants are living with families rather than
with friends sharing the accommodation charge, the expenditure on rent is slightly
higher than in Sawal Bahal.
Figure 18: Expenditure pattern of tenant in Sawal Bahal

Photo 1: Tenants of Sawal Bahal

Issues & Opportunities for Urban Poor
Evidences & Analysis
5.2.5 Housing- Physical & Environmental Aspects
Average Dwelling Size & Occupancy Status

According to Nepal Living Standard Survey II, the average dwelling size is 780.8
sq.ft. in urban area whereas it is just 614sq.ft. and 492 sq.ft. in rented buildings of
Sawal Bahal and Kumbheswor respectively. Almost all the tenants’ accommodation
consists of a single room. The person per room is high in both case study areas
indicating the phenomena of overcrowding. The main reason for living in
overcrowding situation is to share the cost of rent.
NLSS II Sawal Bahal Kumbheswor
Persons/room
4 3.4
(Tenant)
2
Persons/room
2.1 1.5
(Owner)
Dwelling Unit Size
780.8 614 492
(Sq.ft)
Table 12: Average dwelling size and occupancy status
Per Capita Space is very low in both of the case study areas as compared to the
average per capita space of urban area i.e. 135 sq.ft./persons (NLSS II) Almost all the
tenants are living in very congested environment which may later effect on the
personal development of the inhabitants especially the children.
Accessibility

Being an old settlement, the access to the buildings is from the alleys and chowks in
Sawal Bahal. There are two chowks at the two ends of the access and large vehicles
can enter only up to here. Rests of the areas are pedestranized which has given the
benefit for tenants’ children to play safely in the road. All the access roads are stone
paved making which has helped for keeping environment fair.
Photo 2 : Inner Access in Kumbheswor Photo 3 : Access in Sawal Bahal
Kumbheswor contains an old settlement as well as a new settlement. The main stretch
of the old part is vehicular and brick paved while the inner roads are non-vehicular
with very narrow lane and in unmaintained stage. In the new settlement, there is not
any defined path as many buildings have encroached the road. The access is generally
foot tracks with small bridge over sewer. As almost all inhabitants use to dispose
garbage in sewer line, the environment of path along the line is very miserable.

Source: Household
Openings Survey, 2009
Type of the Opening in Sawal Bahal
With the
13%
extension
3% of family,
Door + Openable Window there is
Only Door
Door + Fixed Window
tendency
Door + Ventilation of adding
25%
59% a building
at back-
yard
without
set- back
and even at the frontyard thereby creating a room without ventilation and openings.
Figure 20: Type of the opening in Sawal Bahal
Most of the upper floors are resided by owners whereas the lower floors are being
rented out. Since the owners have separate kitchen, there may not be severe problem
to them. However for the tenants who use the same room as kitchen may lead to a
disastrous situation.
Map 10: Building

Development Pattern in
Sawal Bahal
Photo 4: Housing Condition in Sawal Bahal

Type of the Opening in Kumbheswor
4%
Door + Openable Window

Only Door
96%
The case is different in Kumbheswor, where the tendency of building a new building
nearby area is more than adding a building in the old one.Either the whole building is
left out for rent or the owner shifted to the newer one. This has created proper
ventilation either being rented the old building or the newer one.
Level of Services
Urban service levels are much lower in the case study areas using rent charge
increment as evidence.
Water Supply
Access to a regular supply of water is a problem for most people in the Kathmandu
Valley; however the problem is seemed to be more severe in the case of Sawal Bahal.
Almost all the houses are connected with pipeline from Nepal Water and Sanitation
Corporation, but it has been about 15 years that no water being supplied. As the
problem became harsher, the local club of Sawal Bahal decided to distribute water
through tanker to 130 households. However, the program couldn’t be successful due
to disputes among locals at distribution area. Later on, new pipe network was laid out
Figure 21 : Type of opening in Kumbheswor
on each household and started to distribute water from tanker.

Water Sources in Sawal Bahal

70.0%
58.1%
60.0%
50.0%
40.0% 35.5%
30.0%
20.0% 12.9% 16.1% 12.9% 16.1%
10.0% 3.2% 3.2% 3.2% 3.2% 3.2% 3.2% 3.2% 3.2%
0.0%
ne ap ell n ty n ys es ce nk ys t
ou ream ewe
ll
eli alt W upo p ali u po da u pe O ffi
s ta da sp t
p i 4 r' 15 b
Pi un Co ic Co n r e S
Tu
m er_ un u t_ eri er7 w ne ery ton
m nk S
Co r M itho wn Jar
p O
re
v
Ta nke w O k e
Ta r_ m n
nke l fr o l Ta
Ta 0 na
s +4 r so
e Pe
pe
ru
30
per
r
Ja
Figure 22: Water Sources in Sawal Bahal
Later on this was also stopped. On those days, people used to stay in queue overnight
in Yangal for water from communal tank. Looking at those problems on the request of
another local club, which is associated with a political party, water tanker of
municipaltity was brought up to Teku charging Rs 5 for 3 gagris. Nowadays charge is
taken only if any community works need to be done and water is distributed daily
once at Teku and once in the Tole. On the other hand, with the aid of ADB, different
NGO’s also started to distribute water twice in a week with the agreement of Rs2 per
20 litres. The local club use to collect the charge (Rs 5 per 3 gagris) and spend it on
community development works. Allocation of water is according to the coupons
distributed and about 300 Households including rent have coupons and have also
formed Water Users Committee. As soon as the tanker arrives, a portion of water is
separated in jars which are sold to the local residents having no card with high charge.
Besides these, the club also uses to sell a jar in Rs 7 forSource: Household
the local Survey,
residents 2009
and renters
who don’t have time to wait in queue. For this the support has come from UN-Habitat
& different other NGOs.

Photo 6 : Different Sources of Water in Sawal Bahal
Distributed water from a single source is not enough to most of the houses, so they
have to depend on the entire available alternative sources. Almost half a day of people
mainly of housewives is being spent their time on water. As different organizations
are involved in distribution of water at different time in the same place, the users have
to face lot of problems for the queue. From the survey, about 60 percent people use
the water with coupon and those having large family size use that only for drinking
purpose and for other purpose, they even use other sources like communal tap for
which also they have to stand on queue. Most of the families spend in an average Rs
200 only for the water in a month. Most of the tenants have a complain on the locals
and club volunteers who don’t let the renters in queue before the locals though they
have coupon.

Though
Different Water Sources in Kumbheswor
there is
120%
no
100%
100% access
80% to
piped
60%
water
40% in most
of the
20%
7%
4%
0%
Pipeline Well Stone spout
households in Kumbheswor, number of stone spouts in the areaSource:
have Household
helped to Survey, 2009
Figure 23 : Different Water Sources in Kumbheswor
overcome the problem of water to certain extent. People not only in Kumbheswor but
also around that area like Chyasal, Balkumari, Shankhamul etc depend upon the same
source. One of the reasons for choosing Kumbheswor by tenants is also the
availability of water compared to other places. The Public Private Partnership concept
seems to be working well in Kumbheswor area for the effectiveness of traditional
spouts. There are different committees formed for the conservation and preservation
of different spouts in which NGOs, municipality and users are involved. For the
effective use of wastage water discharging at the night time, they use to store and
redistribute water to household levels through the pipes connected to the security box.
For the storage and distribution, overhead water tank has been kept at different places.
There is not allowed to dig wells or hand pumps for water in Kumbheswor in order to
preserve spouts.
For the households who have connection with pipelines also use to give water to the
tenants. However for the tenants who don’t have owner use to have problem. During
dry season, as there is no sufficient water in the spout, people use to pump water
whenever possible for filling the tank. But this has created a lot of problem to the
tenants and other households who depend directly on the spouts. There are also
separate stone spouts used for bathing and washing clothes. All of the tenants as well

Photo 7 : Stone Spout as a major source in Kumbheswor
as owners use stone spouts as a primary source which creates mass at the source
thereby lengthening the fetching time.
Sanitation & Drainage

Almost all surveyed households have toilet facilities except in one building which use
the toilet of another building of the same owner. Though the facility is available, large
numbers of families have to share a single toilet. In the owner occupied building
where the tenant families exceed 5 numbers, the owner does not prefer to share the
toilet even though all tenants have to use a single toilet. Even 11 tenant families have
found to share a single toilet depicting poor living environment of the area. Very few
cases are there where a person is
employed for cleaning the toilet of
tenants for which monthly charge is
added on the rent. The household
having few rented family use to
share the toilet and the condition is
seemed to be well maintained.
More number of owners of

Kumbheswor use to share toilet than
in Sawal Bahal. However as in Photo 8 : Poor Sanitation in Sawal Bahal
Sawal Bahal, persons per toilet are
very high causing unhygienic condition.

All the families who have separate kitchen use to dispose gray water in toilet.
Unavailability of washing and bathing space is one of the problems in Sawal Bahal.
Most of them use front yard to washing and bathing whereas some even goes to
riverside for washing. In Kumbheswor area, most of the tenants use to dispose gray
water in open sewer and for washing and bathing; the tenants of Kumbheswor have
benefit of stone spout areas which the tenants of Sawal Bahal do not have.
Solid-Waste Management
As most of the owners are involved in the sweeping occupation in the municipality,
Solid Waste is well managed in the area. Initially the area was used to be as dumping
site of the city which created a lot of problems in the health. People did not even want
to pass from Sawal Bahal area. This initiated a local club to work for solid waste.
Table 13 : Solid waste disposal pattern
Disposal of solid waste Sawal Bahal Kumbheswor
Home Service 66% 11%
Collection corner 6% 11%
River 9%
Paid Home Service 19%
Open Sewer 79%
They organized different programs regarding solid waste management to raise

awareness among the local people which has helped a lot in changing the environment
of the area. Generally, Solid Waste Disposal of tenants is based on the system that the
owners are following. Almost all tenants are benefitting from daily municipal service.
About 20% tenants are using private service as used by their owners paying Rs 20 per
month. Rest of the tenants who are not available at service time use to throw garbage
in the river bank or collection corner on their way to job. The local clubs of Sawal
Bahal frequently organizes different programs for solid waste management. However,
they do not use to ask for the participation of tenants and the tenants also do not show
interest on those programs.

Though the area is resided by Sweeper Caste in
Kumbheswor as in Sawal Bahal, the local people
don’t seem to be aware for the cleaning of own
area. As most of the owners use to dispose their
garbage in open sewer, the tenants also use to do
so. This activity has spoiled the environment of
low land very much. 20% of the tenants on the
high land are using home service for which the
owners use to pay the charge. The local club
organizes a cleaning program weekly, but
limited in high land area only. They also use to
Photo 9 : Sewer as a disposal area
dispose waste collected in the sewer. in Kumbheswor
Case History II: Struggling life of Tenant
Laxmi Chhetri, though only 16 years old girl, has to act as a head in the family. She
used to have hard life since her birth which further added after her father left her
pregnant mother in a hospital. Now, she has a mother, one younger brother and two
younger sisters in a family.
They used to live in Kuleswor with her father on rent. Her father sold all his
ancestral properties at Trishuli. After her father left them, they found it very
difficult pay rent because no one of them used to work. So, they started to look for a
new place where the rent was cheap and could find job nearby. As her mother
belongs from Podar family, she got to know about Kumbheswor through the
relatives living there. Finally, they choosed an old building in Kumbheswor for rent
because there are Kawads nearby, water is easily available and the rent is cheaper
than former.
As soon as they shifted to Kumbheswor, Laxmi got job as a helper at two housed in
Chakupat and her brother also joined Kawad. She gets Rs 1700 in total from her
service and her brother earns Rs 100-150 per day from Kawad. Besides these, to
meet the expenses, she uses to carry water for her owner and other neighbours from
dhungedhara for which she gets Rs 25 per day. However, they always use have
deficit economic condition in the family. They have to pay Rs 850 for the rent
including electricity and cable line. Their daily expenditure on food goes up to Rs

200 and they usually buy things on credit. No one has ever bought a single piece of
cloth for themselves. Generally they put on clothes given by others. Laxmi has left
school after 3 classes whereas none of her sister and brother has gone to school.
They are unfamiliar about free education in nearby technical school.
They are living in a single room of a very building of size 10’ X 12’. A corner of the
room is used as kitchen where they have made small cooking place. They use
fodder, which her brother brings, as a fuel. Near to the door, they have kept a
bucket and tub where they use to wash the vessels. This has made the floors very
muddy. They use to store water in buckets and keep in the lobby. As the building is
located in the alley, the tall surrounding buildings have block all light making room
more unhygienic.
However, they are satisfied with whatever they have. They say at least they have a
place to live and afraid if they could not pay the rent and being evicted. So they try
to manage the rent even by taking advance from Kawad.
5.2.6 Rent
There is a phenomenon of social divide among renters, non-renters and tenants in the
society which has created a difference on the perception for looking toward renting
and towards each other.
Rent from the perspective of the owner
Reason for Renting

The dominant reasons for renting are income and extra rooms. In Sawal Bahal mostly
they have rented because of extra rooms whereas in Kumbheswor mostly they have
rented basically for income. Since, Sawal Bahal is an old settlement area with narrow
alleys, after the extension of family, the one who needs extra room starts vertical
expansion adding the floors which affects the low-height building by blocking sun-
light. So, one with less number of floors also extends the floors for light, though not
required for space, resulting the lower floors disused. Rather wasting the rooms, they
feel good to rent which helps in earning too.

Figure 24 : One of the Reasons of Renting
Table 14 Percentage for Reason for Renting

Reason for Renting Sawal Bahal Kumbheswor
Income 39% 50%
Extra Room 52% 36%
Security 6% 4%
Long term relationship 10%
To pay the loan taken for the construction 3% 11%
Used for renting since bought 3%
In newly developed area of Kumbheswor, quite a number of owners have also rented
to recover the loan taken for the construction of building itself. From the study above,
the owners can be categorized mainly within three groups:
 Owners who invest to make income from the property.
 Owners who have spare rooms.

 Owners who are in need of money to meet deficit daily expense, squeezing oneself
in less number of rooms creating virtual spare rooms. Rental income helps these
owners to pay installments on house or to meet the expenses of repairs,
maintenance or improvement works.
Preference for Rent

In both the cases, owners often are found to rely extensively on relatives, friends and
associates for tenants. They often are observed to prefer the one recommended by
relatives or friends. Generally, they prefer a family rather than a single person for
renting considering social security.
Acceptability
In both case study areas, owners often tend to rent out the tenants with resembling
social and economic status to oneself. As owners themselves are scheduled caste
group, they accept the other lower caste for rent which others do not readily accept.
Besides caste, there exist similarities in occupation pattern as both of them are
involved in solid waste management job.
Rent from the perspective of tenant
Reason for Renting

The major reasons for staying in rent are unaffordability and short-term stay. The
tenants, migrated for employment, often stay in rent at the initial stage due to
unability to own the house. One who has property in their hometown also prefers the
rent.
Preference for location

Tenants usually prefer the location where the unnecessary expenses on utilities,
services or transportation due to precarious employment, varying sources of income
and unexpected expenditures. Besides that they also prefer the location next to the
relatives for the social security.

Information about the rent
Most of the tenant families mentioned that they get information about the vacant
rooms through friends and relatives. When the room is needed, they pass the
information to them and ask for their help in looking for the place.
Reason for shifting rent place

There are mainly three factors which tends the tenant to shift the place viz. for the self
convenience, for the owners convenience and third because of misunderstanding
between them.
Rent from the perspective of the society

Society always behaves the tenants as outsiders though staying next to them for a
number of years. The people of Sawal Bahal are found to blame the tenants as the
cause for poor environment. According to them, the tenants do not have feeling of
belongingness towards the place so do not take responsibility of maintaining the
public utilities and services. As they are indigenous, the local inhabitants claim the
right for taking services at first. The local shopkeepers also complain that the tenants
are not dependable enough to give credit as they tend to escape if they could not pay
rent.
Owner Tenant relationship

The relation between tenant and owners are frequently portrayed as posing one of the
major difficulties of rental housing. However, in the case of both study areas, the
relation between most of them seems be easy going may be because of the similarity
in socio-economic status. Relationship seems to operate best where the owners and
tenants live in the same building. This is because they get to know one another and
sometimes develop a level of mutual dependence. Most of the tenants say that the best
part of the current rent is their good and patience owners. Good relation between
tenant and resident owners are also helped by the fact that those who live with their
owners tend to have better housing condition than those with absentee owners. The
responsibility of maintenance is generally taken by owner in that case.
However, few owners have complains over tenants for untimely payment of rent,
misuse of premise and leaving the room without payment.

Case History III: Owner together with tenants
Parbati Pode is 33 years old widow, living in Sawal Bahal with her son. Her
husband died 10 years back when her son was just 6 years old. She used to have a
job as a sweeper in municipality which was not enough to sustain. As her son was
small, she could not join other jobs too. So she found no other way to make income
except giving the extra rooms on rent. As almost all neighbouring buildings had
given rent, it was not difficult for her to look for tenant through them.
Now she has given three rooms on lower floors on rent to two Podar families.
Though the income from the rent is not much, according to her, the amount has at
least supported the payment of electricity bill and the education of her son. As her
room is not partitioned i.e. open to the staircase, initially, she used to feel unsecure
from tenants of being theft. However, with the time she has got attached with them
and now feels more secure. Their relation has created some sort of mutual
dependence among themselves. Whenever, she needs to go out, she uses to leave the
rooms on their trust. She is very happy to be with them as she says she got family
members with whom she could share the things.
Case History IV: Owner separate from tenants
Maiya Pode is 44 years old unmarried woman, living in Sawal Bahal. She owns
another building, which she had bought 8 years before, is fully on rent. It was on
rent since before buying, so she thought to let it for rent to the same tenants until
she requires room for the family. However, she is now regretting for her own
decision of that time. The building contains 15 rooms and about 13 rooms are in
rent and rest are being used by self as store. The tenants are mostly labourers and
according to her, except few no one pays rent on time. As her family does not live in
the same building, some tenants use to escape without payment. The rent charge
ranges from Rs 750 to Rs 1000 per room and whatever charge collected need to
spend on maintenance only. No one among tenants bother for the maintenance and
cleaning of the place. This has created very stinking environment inside the
building. She further adds some tenants use to burn wood during winter which has
made the ceiling of the room black. She even found sub-renting among tenants i.e.
tenants themselves giving rent to other tenants and collecting the charge to pay the
rent to the owner. She felt about the need of rental agreement in order know about
the tenant families and their occupation because their used to live a group of

thieves as tenants which they knew only after the police case. So now, she has
decided to evict all the tenants within a year and let it keep empty because
according to her expenditure is more for the building the income from it.
Pattern of Renting
Owners prefer to rent out the rooms in different floors as per their convenience. In
Sawal bahal, most owners have rented the lower floors, whereas the upper floors are
fully resided by themselves whereas in Kumbheswor, various cases are found
according to the floors being rented. The owners have rented the rooms in all floors
and they are also living in the same floor sharing the space. In some cases, the owners
have rented the middle floor residing own selves in lower and upper floors along with
the middle floor. Owners have even been living in the lower floors renting the upper
floor.
There are different opportunities for tenant as well as owner on living different floors
and sharing the floors which are demonstrated and summarized below.

Figure 25 : Pattern of Renting
Table 15 : Opportunities for tenant as well as owners
Tenants have tendency to bring friends and Tenants have hesitation on bringing friends
relatives in the room as the owners get less and relatives in the room as each activity get
distracted from the tenants activities. known to the owner.
Usually the facilities mainly toilet and Terraces and toilets are shared without
terraces are less shared with the tenants hesitation.
which makes more use of nearby chowks or
lanes by tenants.
Owner occupied floors are well maintained As the space and facilities are shared by
and serviced which lacks in tenant occupied both , the areas are seemed to be moderately
floors maintained. However, there may create a
tension in the relationship for the
responsibility of maintenance.
5.3 Problems Identified
Vulnerable groups
The owners generally try to avoid the family with small children or a single person for
renting. Usually, they do not provide a single woman or a girl with rent.
Security of Tenure
Due to lack of rental agreement, the tenants have to leave the room as per owners
choice. One always needs to be mentally ready for departing the room without former
notice.

Maintenance Responsibility
Relationship between tenant and owner as well as among the tenants gets worse due
to misunderstanding on the matter of responsibility for maintenance. The poor
tenants, for whom the charge is high, think responsibility should be taken by the
owner. Whereas the owner, for whom, the weightage of rent is very low, thinks it is a
responsibility of tenant to maintain. Lack of proper maintenance and timely repairs
has made rental housing of inferior quality.
Physical infrastructure
Urban service levels are low for all urban housing; in addition they are much lower
for rental housing. Both tenants and resident owners use to spend more time for water,
especially the women. This has resulted in the restriction of women from gaining the
opportunity of self-empowerment. Sanitation facilities are very poor in rental housing.
The tenants and owners share the utilities with no regards to the total number of users.
Accommodation occupied by tenants often consist of a single either sharing with
friends or family members performing almost all the functions on same room. Other
utility areas such as washing, cooking are often absent in these rental housing. These
all have resulted in the deterioration of housing condition which has inverse impact on
the personal development.
Participation
Tenants generally do not exhibit interest on the community works. The local people
also do not intend to make them participate along. As community organization is one
of the gateways for the alleviation of poverty related problems, the problems of the
tenant remain unspoken.

Rental Housing: Chapter VI–
Issues & Opportunities for Urban Poor Findings & Conclusion
Chapter 6 Findings & Conclusion

6.1 Main Findings
There is a dominance of male population with working age group in case of rental
tenure which shows the need of housing of that particular group. There is a trend of
living in a single room by sharing with friends of similar ethnical background. Most
of them use the room as night shelter only.
Renting is said as a transition phase but this is not true in the case of poor. There are
some tenants who had migrated here for occupation more than 35 years back and have
still been on rent. This shows that the migrants also tend to live for a long run in rent.
However, most of the tenants are mobile in nature. They frequently use to change
their place as per convenience.
Most of the occupation is related to informal sector which shows insecurity and may
also results in more bad conditioned housing or squatting. Lack of education and
tendency of not sending children in school mainly for work as a part of earnings also
tend for difficulty for them to enter in formal sector jobs.
Owners are generally similar to their tenants in terms of social and economical
characteristics. If the tenants having low caste with such occupation pattern were not
accepted by owners then there would be no option for them to get shelter except
squatting. Similarly, the tenants have also supported the owners economically by
accepting them as owners. However, owners generally prefer family and male with
friends for renting. So the single woman and the family with children often get
difficulty for rent.
Rent constitutes very little portion of the total income for the owner which is so less to
be financially feasible. It seems private investment on rent is not encouraged. On the
other hand, rent levels for the poor tenants are often such that they can afford the
accommodation only through overcrowding and decrease the rent load per capita.
The only way of extra income for the poor owners is to build a house within their
native land occupying full plot for maximum return with no regards to ventilation for
rent. And, there are some cases where the tenants are displaced against the increasing

demand of room for the owner themselves. As in most cases, the owners let rent only
because of extra room. This may gradually decrease in rental supply.
Both tenants and owners are equally suffering from the lack of services and facilities
which leads the owner difficult in raising expected rent charge and the tenants not
been satisfied for whatever being charged. Even in the available services. Almost all
the tenants are using public water sources and facilities which have directly impact on
the time taken to collect water and the availability of water. The space being used by
tenants is highly compromised and far behind to be wholesome. Limited space has
serious ramifications for the personal development of the people mainly on the
academic development of children.
Tenants do not tend to participate in community works and even the local people do
not want them to participate which show the lack in the feeling of belongings as well
as the attitude of local people towards renters.
6.2 Major Issues
The analysis of the case studies, theoretical frameworks and outside practices exhibit
different issues which need to be addressed in order to understand and assist the
current rental housing market. The issues can be categorised into the following broad
headings:
6.2.1 Supply of the rental housing

Most of the landlords who cater to the low-income groups are less professionally
oriented. Letting is undertaken primarily as income supplement to cover basic needs
and that also only if there is an extra space leading the renting phenomena as an ad-
hoc business. However due to rapid urbanization, the demand for housing, especially
on the rental sector, is undoubtedly increasing. And if renting is not adopted as a
professional business, there will be huge deficit on the supply of low-income rental
housing, which will ultimately force the urban poor to squat.

6.2.2 Rental price and increment basis

Rent constitutes very little portion of the total income for the owner. The rental value
charged is below the level required for the cost recovery thereby discouraging the
private investment on rent. On the other hand, for most of the poor tenants, the rent is
affordable only through overcrowding which has lead to bad housing condition. This
reflects the rent which is financially viable to the owner is too high for a tenant to
afford individually.
Because of the low rent charge, the quality of the accommodation is depleting as a
landlord is left with not even a handful amount to maintain and repair and provide
other amenities. With the market escalation, the basis of rental increment is weak
reflecting the non-sustenance of the overall business.
6.2.3 Rental regulating instruments / measures

There are no policies as such directed towards rental market in Nepal. However, the
experience in other countries show the policy measures are either not feasible carrying
excessive administrative burden or they worsen housing access to the poor like in the
case of rent control. The implication of rent control has discouraged the owner to
make new rental rooms or units and those who rent one rental unit once, never tried to
leave since it was cheaper and secured. This kind of policy will restrain the increase in
the supply of the rental housing stock and further accelerate the shortage.
Supply incentives like tax incentives, interest and subsidies are some measures used
for the promotion of rental housing. However these subsidies carry a large
administrative burden and a great potential for abuse and being misdirected. A
developing country, which itself is weak in resource and where the poor count is
greater than non-poor; it is really a difficult task to accumulate sufficient resource for
all needy groups.
Direct government supply is also an unsuccessful and expensive attempt in other

countries used to assist the rental housing. Lack of maintenance is one of the major
issues which have resulted in the conversion of most of public rental housing into the
slum areas.

6.2.4 Quality of the housing

Many tenants undeniably live in very poor housing conditions, as do many resident
landlords and poor home-owners that live in the same neighbourhood.
Accommodation occupied by tenants often consist of a single either sharing with
friends or family members performing almost all the functions on same room. Lack
of proper maintenance and timely repairs has made rental housing of inferior quality.
The tenants and owners share the utilities with no regards to the total number of areas.
Other utility areas such as washing, cooking are often absent in these rental housing.
Urban service levels are low for all urban housing but they are much lower for rental
housing. These all have resulted in the deterioration of housing condition which has
further impact on the personal development.
6.2.5 Government standards

Governments prescribe minimum plot sizes for the construction. The restriction for
minimum plot areas has eliminated poor income groups to purchase plots and build
housing. This will reduce the supply of rental units as these groups are substantial
suppliers of rental housing for the urban poor. Besides, the housing standards
mentioned in building by-laws and building code does not consider for the urban poor
and it is specifically focussed towards owner-occupied buildings. Majority of tenants
and owners in multi –family rental housing are living in crowded, under serviced and
dilapidated housing condition and these high standards, if implemented strictly, may
lead them to homeless.
6.2.6 Financial Mechanism

The provision of housing finance in Nepal benefits only to the higher income and
middle income people. There are no financial systems developed which can cater the
low income people. There are several private banks and institutions for providing
housing loans. In order to access those loans, land has to be put in collateral or a
monthly income should be shown. This has made poor people away from the
opportunity to access to the housing loan, this has disadvantaged poor people to build
the house who are the most substantial provider of rental units. As ownership and
renting are interdependent, this has had an adverse effect on the supply of rental units.
Most rental opportunities for the poor are provided by low-income home owners.
Letting part of their property is one of the way to supplement their income for the
basic needs. So, the easier it is gain access to ownership the lower the demand will be
for renting and the higher the supply of potential accommodation for rent.
6.2.7 Housing Policy

Government policy is more focussed towards promoting the house ownership whereas
renting part is been seriously neglected. National housing and development strategies
did not usually take account of the rental sector. That was probably because attention
had been firmly focussed on encouraging access to house ownership as the desired
form of tenure. The policy does not even focus on the issues that address broader
housing concerns including the lack of long term finance, difficulties in land assembly
and the recovery of infrastructure costs which has benefit on the rental segment of the
housing market.
“The issue of rental housing is more crucial to the low-income groups as it is unlikely
that they will be able to own a house unless there is some plan or policy to support
their housing needs.” And it is a responsibility of government to widen the range of
housing options available to each income group.
6.2.8 Legal and eviction issues

There are many cases where the tenants have to leave the room within a day when the
owner needs a room. Similarly, owners are equally suffered from the tenants who use
to escape overnight without paying a due. Only a verbal agreement is enough for them
to start tenure relationship with no regards to the duration of stay, rental increment
basis and especially the responsibility for maintenance. Besides due to lack of written
agreement, sub-letting is also occurring in some cases.
6.2.9 Participation
Tenants are less motivated to join community projects and only the owners are
assumed to be local residents. Similarly, the community organizations which are
mostly dominated by owners also ignore the tenants in community development
works. Community involvement in local improvement projects does not work unless
the tenants are also involved. The lack of stability and roots in urban areas of the

tenants affects community involvement. However if tenants are not also considered as
local residents, community involvement in local development does not work.
Thus, renting is one of the common and dominant forms of tenure in the urban area.
The access to land and housing is beyond the reach of majority of people so rental
accommodation has become only the option for them especially the urban poor. Room
renting is a dominant form of rental accommodation to them as they cannot pay for
the whole unit or flat. On the other hand, most landlords among the urban poor are
poor themselves and own property only on a very small scale. Most of the poor
landlords spare one or two rooms of the house for subletting mainly to supplement
their income. This phenomenon has proved to be beneficial to both parties.
“A substantial market in rental accommodation is known to occur in the slums mainly
in the inner city areas.” Poor people give more priority to the shelter or
accommodation than services and quality as they cannot afford for all. In spite of
difficulties, they are forced to live on rental rooms with great deal of congestion and
inconvenience resulting poor housing condition and unhealthy society. However,
neighbourhoods are not only a place for people to sleep and work, but also the place
where people want to live and prosper. So, there is a need for intervention from
government and other sectors to assist low-income rental area.

Rental Housing: Chapter VII–
Issues & Opportunities for Urban Poor Recommendation
Chapter 7 Recommendation
Government should recognize the important role that rental housing plays in
accommodating the urban poor. Regarding the necessity and the issues related to it, it
is necessary to introduce some kind of policy and models to implement the policy,
with an objective to facilitate the lower-income people to have an access to affordable
and adequate shelter (rental housing) and at the same time also taking care of the
concerns of the owners.
7.1 Policy Recommendations
7.1.1 Encouraging the production of housing for rent
In order to increase the supply of rental housing, particular emphasis needs to be

given to the institutional, commercial and household sectors. Government should
facilitate them through a wide variety of measures to increase the production of rental
housing.
a. Provision of rental housing to low-income groups by government themselves
Government should use public rental housing as one of the housing strategy for low
income households. Experiences in other countries show that government as a direct
provider is not economical. So government should act as a facilitator for the provision
of public housing. It should be more focussed on the special needy groups like
footpath dwellers, disadvantaged or vulnerable group and transient population.
Government should organize the finance and construction arrangements and then pass
it to tenant cooperatives to run the property.
b. Promote private or commercial sector to get involved in rental housing
Government does not have the capacity to supply rental housing on the scale required.
This role has to be played by private sector too. The private companies should also be
encouraged to get involved in low-income housing sector. But, the private
commercial sector is generally not interested in providing a better shelter for the poor.
Hence, government should produce a conducive environment for commercial sector
to get involved in low-income housing where owners are encouraged to let. Different
incentives for the promotion of private sector may be in the form of
 Provision of construction materials and credit

 Taxation measures – exemption of tax from low-income properties
 Modification in planning and building regulations in the design of low-income
rental housing- provision of greater FAR
c. Production of rental housing through Public Private Partnership
Poor people themselves are best equipped to produce and improve their own shelter to
a standard they can afford, at a pace they can sustain. However, the process of shelter
development by the poor themselves has to be supported and facilitated by other
actors and institutions if it is to be successful on the necessary scale. Hence, poor
families living in rental accommodation need to be addressed jointly by private sector,
public sector and civil societies so that their living conditions are improved and they
also have access to housing. Therefore, Public Private Partnership has to be addressed
as a broader policy recommendation.
Support is required not only on the supply of essential inputs into the shelter process
but also on developing basic services and infrastructure that the poor cannot develop
for themselves and enabling low-income families to interact effectively with the
environment so that they can secure lasting improvements in their shelter standards.
7.1.2 Promote the institution or companies for the shelter insurance of their
employee
In order to decrease the demand for rental housing, the policy should include the
strategy for the insurance of shelter to the employees by institution and organized
sector employers. There should be a provision of houses for industrial workers in new
industrial areas or growth centres by public and private employers as a part of project
cost and for stimulating this by appropriate fiscal concessions and institutional finance
under industrial policy.
7.1.3 Encouraging the existing low-income house owner for renting through
incentives
Most rental opportunities for the poor are provided by low-income home-owners.
Generally, owners get benefit from rental income by letting part of their properties
whereas tenants are benefitted from lower rents. Small-scale landlordism is the best
way in which to reduce supply constraints in the rental market, but of course for this
strategy to continue, poor families must have access to the inputs they need to develop

their housing. Most often, however, these households lack resources to extend or add
space for housing. The provision of credit to small scale landlords will encourage
them to engage in rental business. At the outset, encourage small scale landlords to
provide more and better rental accommodation through the following measures:
 Provide micro credit through banks
 Create appropriate planning and rental regulations in low-income rental
settlements
 Provide financial support as an investment in low cost renting.
7.1.4 Introduction of different types of housing finance schemes

Access to finance by the formal financial institutions is one of the biggest problems
facing by urban poor. There are no acceptable guarantee mechanisms in the finance
institutions, they need some collateral. This situation has led to a virtual exclusion of
urban poor from formal credit markets.
As such, governments should encourage banks to move into the low-income housing
sector and to lend to landlords wishing to enlarge or modify their properties. They can
be encouraged using various forms of guarantee or support, or through untapped
sources of funds, such as credit societies or secondary mortgage markets, which takes
off some of the pressure on housing markets. The various measures could be as
follows:
 Community-managed savings and credit programs should be developed and these
saving schemes should be linked with housing development. Government should
help to establish link between these credit groups with banks or other financial
development agencies.
 Government should establish a revolving fund which poor communities can tap for
their own development activities.
 Formation of co-operative societies with the help of NGOs by taking loan from
government financial institutions at the nominal rate of interest
To support the housing finance scheme, there should be legislation supporting

Government and NGOs as financial intermediaries for borrowing money

7.1.5 Set the minimum housing standards
Government should establish minimum housing standards related to the health and
safety for the improvement of the overall well-being. The adequate standards aimed at
should be identified on the basis of an analysis of the standards and options affordable
to the target population and society at large. However these standards should not be
significantly high because in rental sector, majority of tenants in inner city are living
in crowded, under serviced and dilapidating housing and high standards may lead
them to homeless.
The existing standards like in by-laws should be normalized so that it is applicable in

the case of multi- family housing also. It is unreasonable to use significantly higher
standards in the rental sector as in case of owner occupants that are affordable to the
population at large. So, minimum requirements about space, washing facilities, and
fire are sensible. The housing standards should be slowly raised for the entire housing
stock before turning to the rental sector.
7.1.6 Recognizing the ineffectiveness of rental regulatory measures particularly

rent control
The rental value charged in the market is not sufficient to the owner; it is below the
level required for the cost recovery. This shows that there is no need to impose the
control legislation by government as the evidence from the cases of several countries
show that usually those types of legislation can’t regulate the rental market. The rent
control only results in poor supply due to unprofitable rental housing, little of no
housing maintenance or investment and overcrowding. The only effective way to
lower the rent is through the supply side.
7.1.7 Promote for the formation of organizations of owners as well as tenants

Government should encourage for the formation of tenants and owners society so that
their real scenario and problem come out. These organizations should be promoted to
establish joint landlord-tenant councils which could act as information and advice
centres and could also help tenants find accommodation when they need to move
house

7.1.8 Formalization of the relation between owner and tenant in Rental Business
Government should formalize the relationship between landlords and tenants through
the compulsion of the agreement. To support this, it should formulate guidelines for
legal relationship between landlords and tenants appropriate to both. Standard
contract forms should be available in local shops or newspaper stalls. Such “standard
rent contracts could be a relatively easy way of improving the tenant-landlord
relations”. Length of tenancies should be agreed between landlords and tenants at the
start of the tenancy with perhaps a minimum period of notice being laid down by law
Because of the fear to pay tax, people may not want to do agreement. In that case,
government should raise awareness program for the tax.
7.1.9 Encourage for the Participation & Sense of Belongingness

Tenants are less motivated to join community projects. Similarly, the community
organizations which are mostly dominated by owners also ignore the tenants in
community development works. Community involvement in local improvement
projects does not work unless the tenants are also involved. The lack of stability and
roots in urban areas of the tenants affects community involvement. So, more
knowledge on the nature of tenant communities is needed as a basis for developing
the communities. NGOs should act as an effective – should facilitate access to the
skills, materials and finance required to increase the participation. Providing the
tenants community a “sense of belongingness” also affects the community
development programs. So knowing the nature of tenants, they should be empowered
by having the opportunity to decide on the process of the improvement works.
Government should promote to form the tenants organizations which will help in
increasing the awareness among tenants for the need of participation.
7.2 Proposed Models
Based on policy recommendations, different models are proposed here for assisting
the urban poor in dealing with different aspects of the shelter process.
7.2.1 Seasonal shelter scheme in the existing public buildings

There are several types of public buildings; either belongs to Guthi Sansthan or
private Guthis, in the inner city. These public buildings are in use on certain days and

festivals and remain unused in most of days in a year, especially the upper floors.
Though cannot be used for permanent residential purpose, if permissible these spaces
can be used as seasonal shelter for transient population accommodating low-income
facilities.
The government should initiate the program by converting one of the self –owned
public buildings into seasonal rental house. The whole phenomenon is to be
conducted through the PPP modality. This will be an example for other private guthis
to run their buildings as seasonal shelter. The accommodation includes bed, wardrobe
and sanitation facilities, for which the tenants are charged. The responsibility for the
maintenance is to be taken by guthis. There is a provision of rental agreement for the
security purpose. To run the scheme, the rental information centre is established so
that the tenants can be easily shifted to another public building when required by
guthis.
7.2.2 Night Shelter scheme through public effort
Most of the working age group male tenants live singly but in a group with friends
and relatives sharing a single room and facilities. Generally, they leave the room very
early in the morning and come back late in the evening as if they require the space
only for the night. Targeting such groups as well as other needy groups like pavement
dwellers, a model for night shelter is proposed.
Government invests for the construction of a building for night shelter near the core
area. For the operation and maintenance, management contract is provided to the
private parties. Nominal facilities like bed and wardrobe are provided for which they
are charged. Public toilet and public mesh hall is associated with this scheme.
7.2.3 Using the regulatory framework to create conditions for the poor in private
development
Private developers are allowed to assemble the land of more than specified for
residential housing development only in the condition if certain portion of land is
reserved for low-income groups. Greater FAR is provided in reserved low-income
bulk which gives an advantage of additional floors. The low-income groups are
encouraged to own the house there through the provision soft-loans by financial

institutions with government as guarantee. The access to the credit line is further
facilitated by simple application procedures and through community-based
institutions. As low-income groups have an advantage of additional floor, they tend to
give extra rooms on rent for supporting the payment of the loan. In this way,
government can stimulate the rental market by facilitating the access to low-cost
home ownership.
7.2.4 Encouraging the low-income households (existing) through incentives
A revolving fund in a local level is established by government with its own seed
money as a program for rental grant. The resources are used to provide subsidized
credit to the low-income owners who want to add or extend the building for rent.
Certain criteria are developed by the program for the provision of fund like one must
be resident of specified locality should have income below urban average level, and
building should meet minimum standards regarding ventilation, sanitation facilities
and utilities after construction. For the management of fund, a committee is formed
with the representatives of owners, local authorities and NGOs.
The owners, who want to fully reconstruct the building and have already on rent, can
borrow money only if the old tenants are assured for renting before reconstruction.
7.2.5 Financing scheme for the existing landlords for the maintenance of
infrastructure
Owner Co-operative society is formed with the help of NGOs by taking loan from the
government financial institutions on the prevailing rates of interest. The board of co-
operative society includes representatives from landlords, tenants who are staying in
the current place since two years, NGOs and experts. Landlords are encouraged to
deposit certain amount of their rent on monthly basis as saving deposit. High interest
rate is provided for the deposit in maintenance account. The interest is provided tri-
monthly which should be used for the maintenance and repair of the housing. Separate
group is formed by co-operatives themselves to monitor the housing condition.
However, NGOs should also actively involve to ensure the tenants that improved
condition do not tend to raise the rental price.

7.2.6 Construction of Public Toilet and Mess Hall for Tenants through PPP
Private company is allowed to build a public toilet for tenants in public land near to
low-income rental settlement area. NGOs are involved to encourage the owners, who
have multi rental families and do not have space for providing sufficient sanitary
facilities, to participate in the scheme. The charge is to be paid through co-operative
society of owners on monthly basis and is according to the number of users. The
service also includes shower and washing facilities but to the local tenants only. The
charge on using toilet for those from other communities is little bit higher. The
maintenance responsibility is of the private company and they are encouraged to
employee the local residents.
Local tenants’ organizations are formed through the initiation from NGOs. If space
available, a mesh hall is established through the tenants’ organization near to the
public toilet with maintenance responsibility from the same group. In other case, a
building is taken on the lease by organization to establish the mess. The unemployed
women from local tenants are encouraged to work. The mess mainly serves the
tenants who are sharing a room with friends and also the one who have number of
family members living in a single room. The maintenance cost is bear by owner’s co-
operative society. The charge for the food is set within their affordability limit
concerning its ratio on daily expenses.
From the cases of other developing countries, direct government intervention on the
provision of housing has proved to be infeasible and expensive. Similarly, large-scale
involvement by the commercial private sector in the low-income rental market has
been shown a decline in housing standards, increasing costs (rents), and the
concentration of profits in the hands of a small number of landlords. For the existing
trend of rental housing where both the parties viz. tenants and owners are not
satisfied, in order to have access to housing and improve the living conditions, poor
families living in rental accommodation need to be addressed jointly by private
sector, public sector and civil societies.
“In summary, even though public/private partnership is not a panacea for the shelter
problems facing the urban poor, in the right circumstances, it can provide an
effective mechanism for improving the shelter options of low-income groups, for
which partnerships have to be limited in scale and reach among the beneficiaries.”

Rental Housing: Issues & Opportunities for Urban Poor Bibliography
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Prafulla M.S. Pradhan, 1997, Low Income Rental Housing Situation, Lumanti
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_______________, 2001, Nepal Urban Development Sector Study, ADB,
Naved Hamid and Mildred Villareal, 2000, Asian Cities in the 21st Century, ADB
Afolabi Aribigbola, 2008, Housing Policy Formulation in Developing Countries:

Evidence of Programme Implementation from Akure, Ondo State, Nigeria,
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Vaastu, Vol.9
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and Sustainability, UN-Habitat, Nairobi
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Dr. Rabenau B. V., 1990, Issues in Housing Development, UDLE
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developing countries
Marife M. Ballesteros, Discussion paper series no. 2004-47, Rental Housing for
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Gilbert, A., Mabin, A., Mccarthy, M., Watson, V., (1997), Low-income rental
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Settlements, United Nations Human Settlements Programme, Earthscan Publications
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_____________________, City Development Plan-Gangtok City

Rental Housing: Issues & Opportunities for Urban Poor Appendix
Appendix
Annex 1: Poor Rental Areas in Kathmandu

Ward Location Ward Location
5 Kalo Pool Khusibu
Mahankal Kushle Chaur
6 Baudha Area Kal Dhara
17
Jorpati (Dakchin Dhoka) Dobichaur
Jorpati (Tinchuli) Chettrapati
9 Gausala Ratopool Dalko (Syambhu Marg)
13 Baphal (Seuri Phaka) Thahiti (Kwabahal)
Baphal (Khola pravesh marg) 18 Nar Devi
Baphal (Gautam Tol Marg) Kilagal
Bunche Bhariab Marg Inath Tol
19
Sunar Marg Maru Dhoka
Bhim Multeshor Maru Hiti
Kalimati (Behind Tarkari Bazar) Damai Tol
Kalimati Tankeshor 23 Jor Ganesh
Bishnumati 24 Ootu
Kalanki (Samagic Marg) 25 Yatkha
Kalanki (Budha Marg) Indrachowk
Godhar Marg 26 Nar Devi
14
Tasindol Marg (Rabibhawan) Kilagal
Kalanki (Krishna Marg) 27 Asan Tauda
Kalanki (Lampati Marg) 28 Tangal
Baphal (Matatirtha Marg) Jyatha
Kalanki (Gitapanchbawan Marg) 30 Asan (Kunna Tol)
Dallu (Riverside) Asan (Balkumari)
15
Tulasidhara Maha Baudha
Maitidevi chowk
33
Maitidevi (Sidhi Marg)
Source: Genesis 2003

Annex 2: Poor Rental Areas in Lalitpur

Ward No Location Ward No Location
1 Kopundol Gunsingal 11 Tusibah Nani
Kupondol Thaina
Sanepa Gusingal Naudo
2 Gusingal 12 Tangal Ganesh
Rajtitha Kalopul Tangal
Sanepa sanchal Tangal
3 Dhobighat Prayag Pokhari
4 Dhobighat Ekanta Kuna
Dachhinkali Tole Baghdol
13
Dachhinkali gali
5 Nakhu Khola
No1
Dachhin Reejal Tole Kuounti
Mahalaxmi Sthan 14 Thasikhel
6 Thapahiti Tiki Dewal Chok
Hall (back side ) Chobhahiti
Hall side Chobhahiti
Bhairbanath back
16 Dhalacha Chok
side
Teta Dhaugal Bazar
Tagha Nani 17 Gw arko
7 Jasi Nani Lukhusi Tole
Bhagi Nani 19 Tabahal Back Side
Dhalachhen Khyabahil
Gw arko 20 Tadhoka Tole
Sa kwe Tyagal Tole
Chapat Purna Chandi
Kuti Saugal Pim Bahal
21
Chapat Mikha Bahal
Subahal Shree Bahal
Subahal (Malay) Kumbeshwor Mandir
Muldhoka 22
Kumbeshwor Bahal
8 Lolha
Kupundol 9 Chyasal Ganesh Sthan
Hunumanthan Chyasal Bahal
Lampate Kupundol Dewke Bahal
Kupundol River
10 Side
Jw agal
Source: Genesis 2003

Annex 3: Feasibility Study
Bank Interest 10% per annum

Room Area 120.00 sq. ft.
Rate of construction 1,000.00 rupees per sq. ft.
Rent charge 1,000.00 rupees per room
Occupancy 80%
Principal 120,000.00 rupees
Earning
Yea Principal Capitalize Interest Expected Net Interest Principal
Interest after
r remaining d Interest Remaining Income Income Paid paid
interest
1 120,000.00 12,000.00 12,000.00 2,400.00 12,000.00 9,600.00 9,600.00 - 0.00
2 120,000.00 12,240.00 14,640.00 5,040.00 12,000.00 9,600.00 9,600.00 - 0.00
3 120,000.00 12,504.00 17,544.00 6,984.00 13,200.00 10,560.00 10,560.00 - 0.00
4 120,000.00 12,698.40 19,682.40 9,122.40 13,200.00 10,560.00 10,560.00 - 0.00
5 120,000.00 12,912.24 22,034.64 10,514.64 14,400.00 11,520.00 11,520.00 - 0.00
6 120,000.00 13,051.46 23,566.10 12,046.10 14,400.00 11,520.00 11,520.00 - 0.00
7 120,000.00 13,204.61 25,250.71 12,770.71 15,600.00 12,480.00 12,480.00 - 0.00
8 120,000.00 13,277.07 26,047.79 13,567.79 15,600.00 12,480.00 12,480.00 - 0.00
9 120,000.00 13,356.78 26,924.56 13,484.56 16,800.00 13,440.00 13,440.00 - 0.00
10 120,000.00 13,348.46 26,833.02 13,393.02 16,800.00 13,440.00 13,440.00 - 0.00
11 120,000.00 13,339.30 26,732.32 12,332.32 18,000.00 14,400.00 14,400.00 - 0.00
12 120,000.00 13,233.23 25,565.56 11,165.56 18,000.00 14,400.00 14,400.00 - 0.00
13 120,000.00 13,116.56 24,282.11 8,922.11 19,200.00 15,360.00 15,360.00 - 0.00
14 120,000.00 12,892.21 21,814.32 6,454.32 19,200.00 15,360.00 15,360.00 - 0.00
15 120,000.00 12,645.43 19,099.75 2,779.75 20,400.00 16,320.00 16,320.00 - 0.00
16 118,737.73 12,277.98 15,057.73 - 20,400.00 16,320.00 15,057.73 1,262.27 1262.27
17 113,331.50 11,873.77 11,873.77 - 21,600.00 17,280.00 11,873.77 5,406.23 5406.23
18 107,384.65 11,333.15 11,333.15 - 21,600.00 17,280.00 11,333.15 5,946.85 5946.85
19 99,883.12 10,738.47 10,738.47 - 22,800.00 18,240.00 10,738.47 7,501.53 7501.53
20 91,631.43 9,988.31 9,988.31 - 22,800.00 18,240.00 9,988.31 8,251.69 8251.69
21 81,594.57 9,163.14 9,163.14 - 24,000.00 19,200.00 9,163.14 10,036.86 10036.86
22 70,554.03 8,159.46 8,159.46 - 24,000.00 19,200.00 8,159.46 11,040.54 11040.54
23 57,449.43 7,055.40 7,055.40 - 25,200.00 20,160.00 7,055.40 13,104.60 13104.60
24 43,034.38 5,744.94 5,744.94 - 25,200.00 20,160.00 5,744.94 14,415.06 14415.06
25 26,217.81 4,303.44 4,303.44 - 26,400.00 21,120.00 4,303.44 16,816.56 16816.56
26 7,719.60 2,621.78 2,621.78 - 26,400.00 21,120.00 2,621.78 18,498.22 18498.22
27 - 771.96 771.96 - 27,600.00 22,080.00 771.96 21,308.04 7719.60

Rental Housing

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RENTAL HOUSING

ISSUES & OPPORTUNITIES FOR URBAN POOR

POONAM BAJRACHARYA (063/MSU/F/205)

M.Sc. URBAN PLANNING

URBAN PLANNING PROGRAMME

DATE: 07 August, 2009

Mr. Ajay Chandra Lal

Date: 07 August, 2009

M.Sc. Thesis in Urban Planning [i] Poonam Bajracharya (MSU/063/F/205)

Date: 07 August, 2009

M.Sc. Thesis in Urban Planning [ii] Poonam Bajracharya (MSU/063/F/205)

M.Sc. Thesis in Urban Planning [iii] Poonam Bajracharya (MSU/063/F/205)

The general objective of this study is to understand the characteristics of rental

Case-study approach is adopted as a methodology for the study. As there is a

M.Sc. Thesis in Urban Planning [iv] Poonam Bajracharya (MSU/063/F/205)

M.Sc. Thesis in Urban Planning [v] Poonam Bajracharya (MSU/063/F/205)

1.3 PROBLEM STATEMENT............................................................................................................3

1.4 RESEARCH QUESTIONS...........................................................................................................5

1.6 SCOPE AND LIMITATION.........................................................................................................5

CHAPTER 2 LITERATURE REVIEW.........................................................................................7

2.1.1 Housing Need.....................................................................................................................8

2.1.2 Housing Delivery................................................................................................................8

2.1.3 Rental Housing...................................................................................................................9

2.2.1 Urban Poverty...................................................................................................................10

2.4 RENTAL HOUSING – NEED FOR URBAN POOR......................................................................13

2.5 HOUSING FINANCE AND ACCESS TO THE POOR...................................................................13

2.5.1 Housing finance...............................................................................................................13

M.Sc. Thesis in Urban Planning [vi] Poonam Bajracharya (MSU/063/F/205)

2.6 PUBLIC PRIVATE PARTNERSHIP...........................................................................................14

2.6.1 The theory of public/private partnership.........................................................................14

2.6.2 Public/private partnerships in developing countries.......................................................17

2.6.3 Modalities for Partnership...............................................................................................23

CHAPTER 3 RESEARCH METHODOLOGY..........................................................................24

3.1 RESEARCH STRATEGY..........................................................................................................24

3.2 RESEARCH TYPE...................................................................................................................24

3.3 RESEARCH DATA...................................................................................................................24

3.4 RESEARCH METHODS...........................................................................................................24

3.4.1 Identification of case study areas.....................................................................................24

3.4.2 Collection of Data.............................................................................................................26

3.4.3 Data Analysis....................................................................................................................26

3.4.4 Data Interpretation and Generalization..........................................................................26

3.5 SUMMARY OF THE METHODOLOGY......................................................................................27

3.6 RESEARCH FIELDS................................................................................................................28

CHAPTER 4 RENTAL HOUSING: NATIONAL & INTERNATIONAL CONTEXT..........33

4.1 RENTAL HOUSING IN GLOBAL CONTEXT............................................................................33

4.1.1 History of legislative intervention & government policies on rental housing................34

4.1.2 Basic changes in housing policies in developing countries............................................36

4.2 RENTAL HOUSING IN NEPAL................................................................................................38

4.2.1 Rental Housing Scenario in Kathmandu Valley.............................................................40

4.2.2 Plan, Policies & Programs in national and international context.................................41

CHAPTER 5 EVIDENCES AND ANALYSIS............................................................................43

5.1 CASE STUDY AREA................................................................................................................43

5.1.1 Brief Overview..................................................................................................................45

M.Sc. Thesis in Urban Planning [vii] Poonam Bajracharya (MSU/063/F/205)

5.2.4 Socio-economic Aspects...................................................................................................62

5.2.5 Housing- Physical & Environmental Aspects.................................................................71

5.3 PROBLEMS IDENTIFIED.........................................................................................................88

CHAPTER 6 FINDINGS & CONCLUSION...............................................................................90

6.1 MAIN FINDINGS.....................................................................................................................90

6.2 MAJOR ISSUES.......................................................................................................................91

7.1 POLICY RECOMMENDATIONS...............................................................................................96

7.2 PROPOSED MODELS............................................................................................................100

M.Sc. Thesis in Urban Planning [viii] Poonam Bajracharya (MSU/063/F/205)

Figure 2: Conceptual framework of Urban Poverty.....................................................11