The Risk of Destruction as a Blessing in Disguise
In case of destruction of a building, the culprit can always be found among the triplet of nature, rulers and owners.
When earthquakes, hurricanes, fires and floods destroy homes and their environment, this happens irrespective of the residents’ backgrounds. Rich and poor alike fall victim when the natural forces are at work. Nature is not impressed by the thickness of one's wallet. The only thing that affects the chances for victimization is the choice of the site. Land in higher ground is less prone to flooding. In flat land a landslide is less likely to occur than on a steep slope. The probability of a disaster depends on several factors and varies by location. Locations in risk areas are cheaper than in safe areas and slum is therefore often found in low-lying swamp land like Dharavi or on hazardous steep slopes like the favelas in Rio de Janeiro.
Leaders may decide that a building should disappear. Leaders are, in a formal society, the directors of the city. Homeowners are protected by law and can stop demolition of their home, if at least they own formally. An illegally constructed house of illegal residents stands little chance against the will of a formal ruler. This uncertainty is termed risk of destruction by experts and is often used in the field of poverty reduction. People who, for whatever reason, can not be part of the formal economy or not join the formalized society, are together with their difficultly accumulated existence continuously exposed to the risk of destruction.
Where government is weakly organized, other rulers emerge. For example influential businessmen and industrialists, in the worst case the Mafia. Between the two layers of formal power and informal leaders, other levels are found such as corrupt officials. They are the dark field of formal power being tuned by the informal power. Along this path of corruption after all money is being paid by the illegal for the use of land and utilities. In exchange, they become less prone to the risk of destruction. The boundaries between formal and informal, legal and illegal, sublegal and exralegal are very vague. In the chapter "Powertoni" in his book Maximum City1, Suketu Mehta describes inimitable how the play of forces and powers in Mumbai leads to a randomness of demolition operations in the slums.
The third potentially destructive factor to a building is the owner himself. When he decides that substitution is better than change, the fate of the old building is sealed and the demolition hammer brought out. Replacement (demolition and re-start) is economic when the investment in the old building is fully depreciated. This is an important difference between the formal and informal society. The reasoning in terms of investment and depreciation applies only in the formal society. In the formal economy, assurances can be given through property and land administration about the existence of property that may be pledged for loans. By the risk of destruction, the depreciation period does not apply in the informal society. As the bulldozer may be coming tomorrow, a depreciation of 20 years is absurd. A period of one day would be more appropriate. This clearly shows the crippling effect on credit. If no guarantee can be given that a building will be standing long enough to generate money to pay back the loan, the chances of getting a credit are nil. A mortgage with the property as collateral is unthinkable. The risk of destruction in this way limits the ability to make large investments and demolition of awkward buildings possible. Therefore modifying a building is the most common development in the informal economy.
Paradoxically, in a slum the risk of destruction prevents demolition.
1. Suketu Mehta, Maximum City, Bombay Lost and Found (Random House 2004)