How Bus Rapid Transit can make housing affordable to low-income households

A paper in the latest issue of the journal Environment and Urbanization explores how affordable public transport – via a Bus Rapid Transit system – can make housing affordable for low-income groups. David Satterthwaite describes how a roll-out of this public transit could work in Mumbai.  

Blog by
6 June 2018

David Satterthwaite is senior fellow in IIED's Human Settlements research group

In Mexico City, the Metrobus BRT system carries roughly 250,000 people daily. It cuts workers' travel times and also helps to reduce carbon emissions (Photo: City Clock Magazine, Creative Commons via Flickr)

Improving public transport in cities usually pushes up house prices. But one of India’s best known civil engineers, Shirish Patel, along with two colleagues (Jasmine Saluja and Oormi Kapadia), have shown how a Bus Rapid Transit system (BRTS) can bring down house prices and generate funding to pay for all costs.

What’s more, much of the housing would be affordable to low-income households. How this is possible is outlined here – using a BRTS that feeds a suburban railway station.

Background: land is key

Perhaps the greatest constraint on expanding the supply and reducing the cost of housing in any city is the cost of well-located land that is close to employment opportunities and services, or at least close to stations on an arterial network that serves the city.

Land that is not well-located is cheaper – but low-income groups do not want to live there because of the distance from arterial stations (daily commutes to and from work last hours and become impossible). Connecting a far-flung land site with localised high quality public transport to an arterial station can lower commuting times to acceptable levels. 

Because the land is cheap, housing can be made affordable, particularly if it can be provided across the spectrum of income groups and it presents prospects of creating jobs. This makes an element of cross-subsidy possible, and housing becomes affordable for the lowest income groups while not pushing the middle and higher income housing beyond the range of affordability. A mixed-use and mixed-income development is often a more vibrant place to live.

Getting the land

The first task is identifying potential peri-urban, mostly greenfield, sites that can be connected to the city’s existing urban transit. For Mumbai, this means identifying railway stations on the city periphery with good arterial services to the rest of the city.

Buying land between one and five km from the stations is preferable – it is much cheaper than land next to or close to the stations. Negotiations on price with land owners are bound to be difficult, and must be based on the threat of abandoning the scheme altogether, if no agreement can be reached.

Setting up the BRTS

Feed the railway station with a reliable, bus rapid transit system. To make it fast and with sufficient capacity, it must mimic a railway system: exclusive right of way; boarding and alighting on platforms flush with the floor of the vehicle; wide doors minimising boarding time at stops.

Ticketed access to platforms minimises delays. The wait for a bus must never exceed 10 minutes – and be much less at peak hours. Figure 1 shows the connections between the BRTS, trains, pedestrians and conventional road traffic. The BRTS is two-way, at grade throughout the development, except where it comes to a roundabout near the station from where a single one-way loop climbs to deliver passengers at railway pedestrian footbridge level.

The connections between the BRTS, trains, pedestrians and conventional road traffic.

Who is served

A BRTS with stops every 700m can serve people residing within 500 metres on either side; a 10-km long BRTS line or loop would open 10 square kilometres (1,000 hectares) of land for new development.

Paying for the land

The entire scheme depends on governments being able to get the land at a reasonable price. But existing land owners (farmers and developers) will oppose any measures to acquire their land if governments attempt to pay the agricultural land value.

Rather than dispossessing existing land owners (and all the opposition they bring), make them part of the development. Offer them a stake in the new development – for instance an assured income equivalent to current earnings, building plots in the new developments and minority shareholding of a development corporation that owns all the land and implements the project, including the BRTS, and distributes dividends. 

The plan

Just over half the land is allocated to buildable plots including plots for households and space for industrial and commercial enterprise. The wealthy pay more for their land but are allowed to build higher. Thirty per cent of the total area is for roads and rapid transit, 4% for institutions (mainly schools and hospitals), 13% for parks.

The important constraint is that the road network is grade-separated from the BRTS, with underground passageways for cars at BRTS stops and the occasional overbridge for trucks. To ensure high speed, the road network and the BRTS never intersect.

Self financing

To make this initiative self-financing, the cost of land, physical and social infrastructure plus construction of homes must be recovered from the occupants – but at a price they can afford.

International practice recognises that house prices should be equivalent to no more than four years' household income. For Mumbai’s income profile this works as follows: from 1,000 households across the income spectrum except the top 5%, each pay the equivalent of four years’ household income, plus 400 workers’ spaces sold at market price.

After paying for all construction, a surplus of nearly US$48 million is left to pay for the 10 hectares of land needed, plus physical and social infrastructure and the BRTS. 

What is also striking is how little the BRTS costs in relation to all other infrastructure. The cost of constructing the track, stations, underpasses, overbridges, elevated track near the station, bus depot and an initial fleet is $54 million for 10 kilometres, which serves 1,000 hectares. This works out to $0.54 million for each 10-hectare development covering 1,000 household and 400 workers’ spaces, a fraction of the $48 million surplus needed for land and physical and social infrastructure. 

Reaching low-income households

Residential household densities are kept constant across all income groups. Wealthier residents, occupying more floor space, must build higher. Payment for land per square metre of buildable floor area is a simple way to provide the cross-subsidy that low-income households need. 

Global lessons

The principles that underpin this example are largely universal in growing cities. Introduce localised high-speed public transport to link new (mostly peripheral) land sites to the city and its larger public transport system; acquire the land served by the new public transit by offering the land owners a stake in the new development; build the BRTS, service the land and sell plots to households, developers and enterprises.

Recovering four years' income from each household generates enough funds to pay for all costs, including land, physical and social infrastructure and the BRTS. 


This blog draws on Patel, Shirish B.,  Jasmine Saluja & Oormi Kapadia (2018), "Affordable housing needs affordable transit",  Environment and Urbanization Vol. 30, No. 1. This is available to subscribers at http://journals.sagepub.com/doi/full/10.1177/0956247817738188. A copy may be obtained from david.satterthwaite@iied.org

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