Urban Planning and the Informal Sector in Developing Countries

Rather than seeking to eliminate the presence of the informal sector, urban planning should seek to accommodate this important component of urban economies.
Photo: Deden Rukmana

Urban planning in developing countries -- particularly in cities with rapid urbanization -- is facing a problem with the informal sector. The businesses that comprise the informal sector, typically operating on streets and in other public places, are often seen as eye-sores and undesirable activities. Thus, conflicts arise between urban authorities trying to keep their cities clean and the urban informal sector operators who need space for their activities.

In many cases, authorities forcibly evict informal sector activities in the name of urban order and cleanliness. Yet, such eviction does not address the problem with the informal sector. It only relocates the problem and even exaggerates the conflicts between urban authorities and the informal sectors. Often many operators return to their places a few days after being evicted by the urban authorities.

Should urban planning accommodate the informal sector? Prior to the 1970s, there was no attention paid to economic activities carried out outside the formal economy. However, a few studies of developing countries began to explore the role of the informal sector, and the concept gained attention after a report by the International Labor Organization in the early 1970s.

Almost 40 years later, it's difficult to ignore the importance of the informal sector in many cities, particularly in developing countries.

In many developing countries in Latin America, Sub-Saharan Africa, Middle East and Asia, the informal sector accounts for most of the total employment. For example, the informal sector in Indonesia in 2004 accounted for 64 per cent of the total employment. The proportion of informal sector employment in urban areas was even higher during the economic crisis in the late 1990s when the closure of many manufacturing and service corporations pushed the newly unemployed into informal sector.

Street Vendors
Vendors line a street in Vietnam (Photo: Kent Goldman)

The growth of the urban informal sector is also nourished by the influx of migrants from rural regions surrounding urban agglomerations in search of work. With the formal sector unable to accommodate such large numbers of workers, the informal sector becomes the primary source of employment. Without the economic opportunities generated by such activities, the poor would certainly become a larger burden for the urban authorities.

It's also important to note that the informal sector is not only the domain of the urban poor. Many middle-class people in urban areas in developing countries greatly benefit from economic activities carried out outside the formal sectors.

The continuing study of urban informality has also revealed the important role of the informal sector in the process of urbanization. By linking various economic activities and urban spaces, the informal sector serves as a mode for urban transformation for many places. These findings seem to point to a need for new urban theories that can fully explain the phenomenon of urban informality in cities -- something mostly absent from urban theories such the urban ecology of the Chicago School and post-modern urbanism of the Los Angeles School, which are both rooted from cities in developed countries.

Yet, understanding the positive impact of the informal sector, many planners and officials still worry about the resulting urban blight. However, from urban environmental perspective, many of the problems associated with the informal sector are not attributes inherent to the informal sector but manifestations of unresponsive urban planning itself. The provision of spaces to informal sectors is an effective measure to reduce the environmental problems associated with such activities.

Accommodating – maybe even welcoming - the informal sectors in urban spaces will not only reduce the conflict between urban authorities and the informal sector, but also reduce the environmental problems associated, and eventually accelerate urban transformation and increase the quality of life in many developing urban areas.

Deden Rukmana, PhD is an assistant professor of Urban Studies at Savannah State University.

Comments

Comments

Informal economy

All pockets of poverty survive in the informal economy with "units of sharing" whether a unit is 10 people or 20 people: barter, share & under the table. Squatter settlements are villages complete unto themselves within cities with internal security, barber shops, food stalls, repairs, day care etc. To be "taken in" you have to have something to offer.

Informal Trade

Urban Renewal : Informal Retail Trade

Prakash M. Apte
Urban Development Consultant

Abstract:

The problem of informal retail trade occupying streets and foot-paths, is becoming acute in the metropolitan and middle level growing cities creating problems for the city management. A study of such an informal trade centre in an existing low income residential sector could possibly lead to an imaginative planning solution A preliminary survey was made in the suburb of Vikhroli in Mumbai. There were about 558 hawker’s shops operating in the colony. The ratio of shops to tenements varies according to the use pattern of that particular commodity. The average area used by the hawkers ranges between 1 sq.mt. to 15 sq.mt. Majority of the hawkers (41.3%) have less than 2.5 sq.mt. Area. Quantitatively, the area of shopping provided in the formal shops is far too inadequate and the quality of building and environment provided in the formal shopping is far too high for the kind of services required to operate economically and viably and for the population to afford it. It is suggested, as a planning solution, that the type of shop to be allowed on streets could be categorized on the basis of their area and space requirement. The planning solution suggested is to allow construction of semi-permanent shops within the front/side open spaces of buildings on streets with widths not exceeding 30.3 mts. The total area of the shop/shops within a single plot of the residential building shall not exceed 15 sq.mt. or 2% of the ground coverage of the existing building whichever is less.

The Problem:

The problem of informal retail trade occupying streets and foot-path, is becoming acute in the metropolitan and middle level growing cities. The trade mainly cater to middle and low income population, and is an essential part of the economy of a city. Its physical dislocation can result in hardship to the population it caters. On the other hand, it is a hindrance to the traffic, because it occupies the pedestrian space forcing pedestrians to walk on the street. Thus, the informal trade though an economic necessity, create problems for the city management.

It is necessary, to find a practicable planning solution to this problem, so that the trade can continue to fulfill the economic needs of the population; is not uprooted from the locations best suited for the residential population around and does not cause problems for traffic and transportation and the city management. A study of such a problem in an existing low income residential sector of a metropolitan city could possibly lead to an imaginative planning solution that can be replicable in similar situations.

Identification of Study Area:

A preliminary survey was made in the suburbs of Mumbai. In most suburbs there are large concentrations of informal trade with temporary structures mostly along the routes from the suburban railway stations to the residential areas. There are quite a few informal trade centres which are within a well defined and developed residential neighbourhood whose analysis and solution could have possibilities of replication. One such centre is in the erstwhile Maharashtra Housing Board’s (M.H.B.) Colony at Vikhroli, Mumbai.

Hawkers in Vikhroli:

Though the original informal ‘bazar’ started on the route from the first residential blocks to Vikhroli Railway Station; subsequently it has become the main shopping centre for the neighbourhood. The M.H.B. colony accommodates about 10,756 tenements of low and middle income groups. This entire neighbourhood depends mostly on the informal bazars at different points in the colony as far as consumer items and services are concerned. Thus, a population of about 52,800 in these 10,756 tenements is mostly dependent on the informal bazar in this area.

A TYPICAL HAWKER STALL

A SERVICE AND GROCERY SHOP

A TEA AND REFRESHMENT STALL

Geographic Location & Growth Pattern of Informal Trade:

There were about 558 hawker’s shops operating in the colony. This hawker’s bazar is now the neighbourhood shopping centre and an analysis of its character can lead to evolving replicable solutions for similar situations in our metropolitan cities where the problems created by such a bazar are felt far more acutely.

The highest number of hawkers are concentrated around the earliest formed locations in this colony. The commercial activity began near the first group of residential buildings. Later it spread to the Bus Terminus and the major junction branching into the housing colony and the area became a large informal market. It shows that hawkers tend to concentrate around major road junctions, street corners and public squares and then spread along the main roads.

The highest number of shops are those that provide frequently used services (about 16%) like “ata chakki”, barbar, ironing, old newspapers buyer (raddi) etc. Following table gives the total number of shops of each trade with their average area, derives the number of families required to support one such shop and thus gives a standard or norm of space for each activity.

INTERRELATIONSHIP BETWEEN ACTIVITY TYPE AND TOTAL FAMILIES

Activity Type No.of shops Average Area per shop (Sq.mt.) (approx.) No.of families that sustain one shop Area in Sq.mt per family (approx.)

1. General Provision stores 80 5.50 133 0.04

2. Pan and Cigarettes 50 4.00 225 0.01

3. Vegetable/Fruit vendors 75 1.80 142 0.01

4. Fish vendors 14 1.00 1000 0.001

5. Grocers and Oil Depot 42 4.50 266 0.01

6. Tea and Refreshments 30 4.50 357 0.01

7. Tailors 42 9.00 256 0.03

8. Services: Frequent 90 4.00 122 0.03

9. Services: Infrequent 47 4.00 228 0.01

10. Cloth/Jewellery/Cosmetics 9 3.00 1166 0.002

11. Hardware/Building materials 4 4.50 5000 0.004

12. Others 12 10.25 3750 0.002

The table shows that the ratio of shops to tenements varies according to the use pattern of that particular commodity e.g. shops of perishable and daily consumable items like vegetables, general stores, pan shops are more in number as compared to the non-consumable, luxury or expensive items like jewellery, ready made garments.

Second in number are General Provisional Stores (14.3%) selling items of daily consumption like biscuits, bread, eggs, butter, soap etc. followed by Vegetable and fruit vendor (13.4%), Grocers (7.5%) and Tailors (7.5%). The vendors of frequently consumed items and services like bread, pan biscuits, ironing, laundry, cobblers etc. are widely distributed.

Physical Aspects of Informal Shops:

The average area used by the hawkers ranges between 1 sq.mt. to 15 sq.mt. It varies according to the type of activity conducted e.g. Vendors occupy minimum area whereas a regular shop occupies more area. Majority of the hawkers (41.3%) have less than 2.5 sq.mt. Area. While 29.9% of hawkers have an area of between 2.5 to 5.0 sq.mt. In all, 71.2% of the hawkers have an area less than 5.0 sq.mt.

DISTRIBUTION OF SHOPS BY AREA AND ACTIVITY TYPE
Area occupied (in Sq.mt.) % Type of Shops

Upto 2.5 41.3 General provision, pan, vegetable/fruits, fish, tea and refreshment, frequent services, infrequent services.

2.6 – 5.0 29.9 General provision, pan, tea and refreshment, frequent services, hardware, others.

5.1 – 7.0 9.2 General provision, grocers, frequent services, cloth, building materials.

7.1 – 10.00 4.6 Grocer, tea and refreshment, frequent services, infrequent services.

10.1 – 20.0 12.6 Tea and refreshment, infrequent services like plumber, tailor etc.

Above 20.0 2.4 Medical stores, photography etc.
100

Legal Status:

There is a very complex system of legalising the hawker’s activity. The three governmental agencies involved are Maharashtra Housing and Area Development Authority, the Municipal Corporation and the Collector.

The shop owners are given photo passes for use of space. They have to pay a ‘monthly penalty’ at the MHADA office every month. The amount of penalty varies depending on the size of the shop. The vendors and mobile cart owners are charged differently. Every street vendor has to pay a ‘penalty’ per day, which is collected by the Municipal Corporation everyday on the site. Mobile cart owners are charged per day depending on the type of activity. They have to pay this amount at the municipal ward office every week. If they fail to do so, they have to surrender their carts to the Municipal Authorities.

Though these hawkers are charged for services like garbage disposal no proper arrangements are made. No such services exist in reality. Neither are they provided with electricity, drinking water or toilet facilities just because these hawkers are not considered as a part of the formal market.

In spite of various restrictive laws and regulations and sporadic raids by Municipal authorities, this activity continues to grow. A belated realization on the part of municipal authorities of this activity as a necessity has resulted in declaration of some roads and areas as ‘hawkers zones’ in the city of Mumbai. There is an urgent need to incorporate such commercial activity in the planning of the residential zones in our cities, specially in low income housing areas.

Conclusion:

It is clear from the data available that the hawkers bazar, which has developed at various locations in the area, caters to the entire population and is in addition to the formal shopping. The fact that a very large percentage (almost 98%) of the shops in the hawkers bazar provide goods and services which are not catered to by the formal shopping indicates that the standards adopted for providing shopping per unit of population are inadequate; both in terms of quantitative and qualitative aspects. Quantitatively, the area of shopping provided in the formal shops is far too inadequate and the quality of building and environment provided in the formal shopping is far too high for the kind of services required to operate economically and viably and for the population to afford it.

Obviously, there is a direct relationship between the purchasing power and the area of shopping to be provided, thus requiring different standards while providing for shopping facility for low-income area. There is also a direct relationship between the kinds of goods and services normally demanded by the low income population and the area and type of buildings and environment for this type of shopping.

There is also a third direct relationship between the total area of shopping and the general level of economy. While a single well stocked departmental store could serve a neighbourhood in a developed country, a large number of smaller shops can operate viably in a developing economy because each shop-keeper operates at a low subsistence level and does not expect to get the same percentage margin of profit as the departmental store in a developed economy.

Planning Solution:

The geographic location and the growth pattern of the hawkers clearly indicates their preference for plying their trade on busy streets. The activity thins out as the street enter small group of residential buildings.

The inter-relationship between activity type and the population indicates the total number of shops in each category, average area of shops in sq.mt, the number of families that sustain one shop and the area in sq.mt. for each type of activity per family. Following norms are derived from this data.

The area requirement per family for different type of trades ranges between 0.004 sq.mt. to 0.04 sq.mt. Significantly the minimum areas per family are for sale of goods like clothes, jewellery, cosmetics, hardware and building materials etc. The highest area of 0.04 sq.mt per family is required for goods like general provision stores and frequent/infrequent services such as plumbers, electrician etc. On the basis of this analysis the requirement of shop area can be broadly divided in 3 categories.

The average size of a shop in these three categories would range between 2 to 10 sq.mt. In the first category i.e. smallest type of shops are such goods and services as cigarette shops, vegetable, fruits and flowers, clothes pressing, electricians etc. The area of such shops ranges between 1.5 to 4.0 sq.mt and hence modules of 1.3 mt x 1.2 mt. (5ft x 4ft) and 1.3 mt. x 2.4 mt (5ft x 8ft) can normally take care of this category of shops. In the second category are such goods and services like old news paper buyers, tailors, plumbers, electrician, fast food joints, etc. they require larger space for work/storage and hence modules of 3.3 mt. x 1.2 mt. (10ft x 4ft) would generally suffice for this activity. In the third category are shops providing goods like general provision which require a module of 2.4 mt. x 3.3 mt. (8ft x 10ft).

The suggested plan for kiosks and cabins that can be constructed for this activity are shown in following illustrations.

The new Development Control Regulations for Greater Bombay 1991 Sec.52 describes ancillary uses permitted in residential zone with shop line (R2 zone). Residential zone with shop line in which shopping can be permissible, indicates plots in residential zone along roads on which shop line is marked on the development plan. It also includes plots along roads having existing or prescribed width between 18.3 metres and 31 metres in the suburbs and extended suburbs.

The residential zone with shopping line permits all types of shops offering goods and services which are generally required for the daily life of the people, and only excludes shops for consumer durables of high value and large show rooms.

Proposal:

It is suggested that the type of shop to be allowed could be categorized on the basis of their area and space requirement, traffic generated and any nuisance or pollution that may be created. With such a categorization; shops could be permitted on roads having a width ranging between 9 metres to 31 metres. For example certain small shops which are more in the nature of booths or stalls, like a ‘pan’ or tea stall may be allowed on the road width of 9 metres while larger shops like laundries, bakeries etc. could be allowed on roads having width of 12 metres to 31 metres. Wherever such a shopping line is prescribed, the shops would be part of the residential plots abutting a particular road. Normally, under the Development Regulations of Greater Bombay the front open space is prescribed to be 3.5 metres. As a result, the shops would be 3.5 metres inside the plot boundary. Thus, effectively, when the shops start functioning, the front open space of the building becomes more of a shopping arcade affecting the safety and security of the residential tenements above; apart from taking away the small front open space which could otherwise be used by the residents.

Therefore, instead of such a shopping line it would be desirable to allow construction of shop/shops abutting the plot boundary but restricting their coverage to the extent of the width of the side open spaces. This could be particularly useful and functionally desirable for plots on smaller roads of widths between 9 metres to 18 metres only where the smaller type shops and booths would normally prefer to be located. The depth of the shop can be restricted to the width of the front open space. The height of the shop should not exceed the height of the ground floor of the building and a loft to the extent of 50% of the shop area could be permitted; to be used as a work space as well as storage.

On smaller roads where only smaller shops, more in the nature of stalls like vegetable, fruit, milk etc. are to be located, no entry should be allowed directly from the road to the shop except for a service counter at an appropriate height from the road level.

These shops or stalls being part of the building plot can get electricity, water and sewerage connection from the building itself and will have to pay taxes to the local authority. Moreover, such stalls will then be less of a hindrance to the pedestrian and hence to the vehicular traffic. The residential premises in the plot can derive some income from the rental of these shops and may be in a position to maintain their common services more efficiently. Such a proposal will also retain the front open space of the building for the use of the residents and the customers of the shops will not create any nuisance for them.

Summary:

The informal trade though a felt need, unauthorizedly occupy space on the pavement of the roads blocking the pedestrian traffic which spills on the vehicular road causing traffic hazards. It also creates nuisance in the form of garbage and unsanitary conditions by use of stored water. Since they occupies the road space the ownership of which belongs to the local authority, it automatically becomes the responsibility of the local authority either to remove them or provide resettlement facilities.

The planning solution suggested is to allow construction of semi-permanent shops within the front/side open spaces of buildings subject to the following :-

(a) The plot of the residential building in which construction of the shop can be permitted should abut on a public street not exceeding 30.3 mt. in width.

(b) The ground coverage of the existing building in the plot should not be more than 35% of the plot area.

(c) The existing building should have a minimum ground coverage of 400 sq.mt.

(d) The total area of the shop/shops within a single plot of the residential building shall not exceed 15 sq.mt. or 2% of the ground coverage of the existing building whichever is less.

(e) The depth of the shop shall not exceed the extent of the front open space of the existing building if it is on stilts or ½ of the extent of the front open space if it is not on stilt.

(f) The height of the shop shall not exceed the height of the ground floor of the building or the height of the stilt as the case may be.

(g) The shop may abut the road and the compound wall of the building but shall not have access by a door from the road.

(h) The shop can be accessed from the street only by the counter at a height not less than 3ft. from the level of the road.

Such a planning solution will ensure that:

1) There is no encroachment on the roads or pavements as the shop area will be restricted within the plot of residential building and as there will be no access door from the street.

2) There will be no additional responsibility on the local authority as the permission for construction of the shop will be granted to the cooperative society of the residential building which will then be entirely responsible to provide water, electricity and sanitary facilities to the shop, and pay the taxes to the local authority directly. Payment of rent or service charges by the shop-keeper will be an internal arrangement between the cooperative society and the shopkeeper. If the shop is sold, the owner will have to be a member of the society and thus the onus of payment of all taxes to the local authority will be with the co-operative society.

3) The local authority without any addition to its tax collection apparatus will add to its income by recovering taxes from the co-operative society directly.

4) The local authority will automatically ensure a pollution free environment with no sanitation hazards as the supply of water to the shop, disposal of sewerage, storage of goods etc. will be within the compound of the residential building.

( The Author had conducted a study with financial assistance from HUDCO on the basis of which the proposals are framed.)

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