How Large-Scale Migration Impact Cities And Their Housing Markets

How Large-Scale Migration Impact Cities And Their Housing Markets

How Large-Scale Migration Impact Cities And Their Housing Markets

Migration of people from one city to another is a natural and global phenomenon. People migrate to a new location primarily for socio-economic benefits, which is a prime pull-factor. Urbanisation causes movement of people from rural to urban agglomerations. In India, the population of migrants is close to 45.36 crores and every third citizen in the country is a migrant.


As per census data, the southern states of India like Tamil Nadu and Kerala, have witnessed large- scale migration in recent years. Also, the population in most of the metropolitan cities will double in the next 12-15 years, according to UN estimates. Massive migration of the poor can impact the economic growth of the cities and can deteriorate the urban environment, leading to poverty, inequality, insecurity and exploitation. The real estate market too will witness intense turbulence as well as housing scarcity and breakdown of civic infrastructure.

Here's how migration impacts a city's real estate market.

Why do people migrate?

  • Better economic opportunities: Saturation of rural areas, attract the youth in large numbers to urban centres for better employment or business prospects. Family members that join them later, leads to further chain migration.
  • Change in status: Change in social or financial status can lead to migration. In case of women, marriage has been known to be a key reason for migration.
  • Improved living conditions: Urban localities are characterised by quality infrastructure. People looking for better education or medical facilities may migrate to neighbouring cities to seek enhanced social amenities.
  • Environmental factors: The occurrence of natural calamities e.g. earthquakes, floods, famines, etc., or unfavourable climatic conditions, also cause migration.
  • Political disturbances: Political instability in a city or community conflicts are some crucial driving factors for migrating population.

The connection between migration and housing

Population growth gives way to urban congestion, which refers to the emergence of new settlements on the city peripheries. Besides, migration greatly affects the infrastructural capacities of urban hubs. All these factors ultimately pose challenges for the government and planning authorities, who have to provide adequate accommodation, sanitation and necessary infrastructural facilities for the migrants. Unplanned and overcrowded settlements also invite serious environmental and health issues like degradation of land, depletion of the water table, flooding, faulty drainage systems, etc.  

Need for smarter urban policies

As urbanisation continues, the concern about the welfare of migrants and their integration into the urban economy becomes an issue of utmost importance. The adverse result of rural-urban migration and the increasing number of urban poor, has been the development of slums. Nearly half the population in most of the metro cities, live in slums.

Rental housing is also a vital component of the housing market in urbanising countries, as it allows greater labour mobility. People from the low-income groups who often work in the unorganised sector, mostly depend on rental housing. Besides, temporary migrants also contribute to the growth of the rental housing segment. A striking aspect of the rental housing market in metro cities, is that the majority of the renters are accommodated in the informal sector, i.e. without any written contract. This is mainly attributed to the underlying informality of the accommodation itself, that is, slum dwellings. The rental housing market in India, has ample scope for multiple reforms. Recently, the government has come out with a house rental policy, to enable migrants to take a house on rent from government bodies for a certain number of years and subsequently, own them by paying the entire cost in installments.

India can take a cue from Rental Management Companies (RMCs) and housing associations in Europe as well as smart housing policies in world's popular cities like Singapore, Chicago, etc. While migration is free in India, where a rural or urban resident can migrate to any part of the country without any restriction, the approach to urban housing policies is quite different in China. In China, a residential permit system called Hukou classifies Chinese residents into urban and rural, who are entitled to special benefits. Also, in a massive urbanisation drive, China has developed new areas, like the new city of Xiongan near Beijing. A special economic zone (SEZ), Xiongan will span an area nearly three times that of New York.

In order to bridge the rural-urban divide, the government is already undertaking initiatives such as the Shyama Prasad Mukherji Rurban Mission, which was announced in Budget 2015-16, for transforming rural areas into economically, socially and physically sustainable spaces. Government departments were recently asked to identify unused land, particularly in developed government colonies, to plan affordable housing projects. The government's ambitious 'Housing For All' project is expected to push a large number of migrants from villages, into cities. Thus, new cities have to be built with a density of nearly 12,000 people per sq km.  

The Indian government has taken cognisance of the fact that 'Housing For All' not only calls for affordable housing units for ownership but also abundant stock of rental units.

Last Updated: Thu Aug 10 2017

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