

Tatas to build world's cheapest home for Euro 500 - NonEUCitizen
http://timesofindia.indiatimes.com/city/hyderabad/Tatas-to-build-worlds-cheapest-home-for-Euro-500/articleshow/9241257.cms

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dav-id
€500 house sounds like they are monetising the construction of future slums /
shanty towns.

The Indian government need to get their act together and not leave it up to
the private companies to clean up the mess in India. I have spent time in
Delhi and what I have seen is shocking. Private companies run taxi services
for their workers because it is so unsafe and the government run services are
so unreliable that they are left with no other option.

The major commercial districts are built with private money and thus you see
great big modern buildings with dusty and potholed roads without any paths
connecting them so stepping outside the campus of these buildings you go from
1st world to 3rd world in a matter of a few steps.

There is more to making someones life livable than simply constructing four
walls with a roof and some windows. You need to implement proper sanitation
and other fundamental facilities such as appropriate policing and
transportation. without these you are just fueling the growth of these slums
and the internal migration from the countryside into the cities.

I can see India with an incredible future and rapid growth if simply the
corruption and mismanagement is sorted out in the government sector.

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jkic47
And so it starts. A decade or two after opening up the economy, Indian
companies have started moving up the value chain, creating solutions to local
problems instead of mindlessly building things designed elsewhere. Great to
see this happen in my lifetime.

~~~
keeptrying
Tata seems to relish creating products for the bottom of the pyramid that no
other corporation will touch. What they are doing reaffirms my faith in
capitalism.

~~~
jhpriestley
The article mentions that these homes are targeted at the beneficiaries of the
Indira Awaas Yojana - a government subsidy program. The article also mentions
that other companies are going after the same market (with limited success).

~~~
keeptrying
Actually there were quite a few companies trying to make a sub $2000 car but
only the tatas succeeded albeit at a slightly higher price.

Yes there is a government subsidy for the lowest cost home but in India
relying on the government keeping the same policy for more than 4 years is a
little insane.

~~~
jhpriestley
The program has been around for 25 years, according to wikipedia.

~~~
keeptrying
That might be true but having to deal with the government is a painful path.
And anyway there is a real risk that they can't actually engineer it so cheap
like the nano. But as in the nano's case it'll help a whole bunch of people
with low incomes.

And since other companies have failed at this, I still think it's very
entrepreneurial and ballsy to attack this problem.

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waivej
Off topic: I was part of an interesting contest to design a home for $300.
[http://www.300house.com/blog/2011/06/300-house-open-
design-c...](http://www.300house.com/blog/2011/06/300-house-open-design-
challenge-winners.html)

In the end, it behaved as you might expect. The rank changed rapidly in the
last hours as people motivated their social networks. Also, designs with the
prettiest pictures dominated and several were hopelessly over budget.

On the other hand, there were a number of really interesting designs. It's
worthwhile to read through the submissions if you are interested in
inexpensive housing.

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ajays
The Tata group is probably the only major group in India which prides itself
in hardcore engineering. Think of them like the "Google" of India.

Kudos to them for tackling India's problems.

~~~
bdhe
The Tatas have consistently impressed me. They're like Andrew Carnegie of
India. The patriarch Jamsetji Tata
(<http://en.wikipedia.org/wiki/Jamsetji_Tata>) help setup the Indian Institute
of Science (it is so intimately connected that in local parlance it is often
referred to as the Tata Institute) and TIFR both of which are premier research
institutions in India. Another Tata, JRD Tata is the most well known though
and helped grow and diversify the Tata industry in the 20th century.
(<http://en.wikipedia.org/wiki/J._R._D._Tata>)

For those unfamiliar the Tata industry is better compared to GE than Google in
terms of its diversification. They are involved in the energy, IT, automotive,
steel, and I'm sure a whole bunch of other sectors.

~~~
kubrickslair
I agree. Also they are the only old money people who refrain from overt
display of wealth. For an example, see this:
<http://en.wikipedia.org/wiki/Antilia_(building)>

It's unfortunate that I see similar behavior for all stratas of upper and
upper-middle class. In my community it's almost a norm to spend at least half
a million for the whole wedding affair. Weddings offer a dozen or so cuisine
or sub cuisine types, and in some cases I have seen fireworks as elaborate as
some 4th of July celebrations. It's even more unfortunate that we as a society
do not have any type of popular counter-culture or even a counter point. It's
all a blind race to the moral bottom. Sorry for going a bit off topic.

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w1ntermute
As with most things coming out of India, I would take this with a grain of
salt. There've been promises of things like a $10 laptop and a $35 tablet in
the past. When (if ever) they actually materialized, however, the price was
either much higher or the quality/features much lower than promised.

Relatedly, this is a big difference between India and China. In China, when
the CPC decides to do something, it happens, no matter how many heads roll in
the process. One of India's biggest failures has been its inability to keep up
with its promises.

~~~
dotBen
_In China, when the CPC decides to do something, it happens, no matter how
many heads roll in the process._

Sadly, 'heads rolling' is closer to the truth than you probably meant. Human
rights abuses of workers working on state-sponsored public-facing projects is
common. :/

~~~
w1ntermute
Oh, I meant it in the most literal sense possible. It is not possible to
achieve the kind of breakneck-pace modernization that has taken place over the
last ~30 years in a country as large and diverse as China without a very
centralized, authoritarian government that doesn't fuck around.

The reason why Japan (and Taiwan and South Korea, to a lesser extent) was able
to modernize at a similar rate from ~1950-1990 was because of its ethnic and
cultural homogeneity. They technically have a democracy, but everyone is so
alike that, in practice, the same political party (the LDP) stayed in power
for that entire period. There is no way in hell that a similar situation could
occur in China.

China's modernization has no doubt come at a terrible price, albeit one that
Americans, as a democratic and (supposedly) just country, are able to ignore
thanks to our ability to collectively ignore the cognitive dissonance.

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petercooper
Seems like this could have significant positive consequences in many regions.
Good on them. I don't know how the land would work for many of these homes but
I take it India's not as onerous as most of Europe where the price of the land
and permissions to build is usually far higher than the cost of the house
itself..

~~~
evolution
Actually its very oddly distributed in India. Being all economy centered in
cities, it depends where land is located. Land is very cheap in rural areas
but highest valued in cities like mumbai, delhi. In fact land in mumbai has
become most expensive in the world now a days.

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dotBen
It's kinda crazy to think that many tents at REI sell for more than $700/300€

eg [http://www.rei.com/product/779454/mountain-hardwear-
trango-4...](http://www.rei.com/product/779454/mountain-hardwear-
trango-4-tent)

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Lost_BiomedE
I have come across some very safe, efficient, and cheap building designs that
I would love to build on some land. In the U.S., it is very hard to go through
all the paperwork to get it built. If I had someone put a rickety frame in the
ground and slap on some drywall, it would be easy as pie to get the paperwork
done.

The U.S. building code seems broken from my perspective. Cheap homes are not
hard.

~~~
gregpilling
I built a strawbale house in 1998. Cost of the strawbales was about $1000, and
the cost of the rest of the house was another $85,000..... it was 1400 sqft.
Amazing how much the rest of the "necessities" cost.

The house had 2000 ft of CAT-5 in it, about 1000 ft of co-ax.

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CharlieA
A search for "Euro 500 house" on G.Images returns a bunch of stock photo
images of 3 actual 500 Euro notes bent into a house. Something weird (good
weird) about realising the same amount of money could potentially house 3
families.

As a side note, does anyone have links to images of what the completed homes
look like?

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wtvanhest
Price of Land = Value of Developed Parcel To User - Cost of Construction -
Legal and Government costs - Any other costs during the development or after
the development including Time value of money of property taxes.

This equation holds true in the US, and should hold true in India. The reason
for US subsidies is that sometimes, the right side of the equation is still
negative because the value to the end user is so low (think section 8 where
tenants only have $500/month or less to rent housing, feed their family etc.)

Building a $500 house will only be beneficial to people if the right side of
the equation has a value less than 0. If the value of the right hand side of
the equation is greater than 0 then the land value simply goes up.

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yalogin
The problem with these projects Tata is taking up is that by tying to gain
some press out of these its making these unusable. The cheapest car was
advertized as such a lot and so there was a stigma of sorts associated with
it. At the end of the day it was not that inexpensive (with added/needed
features) but by Nano is now branded as car for the poor and so people are not
inclined to buy it.

~~~
goombastic
To add to what you are saying, the problem with the Nano was that it was
addressed at a market where the average buyer will look at all options
available. A car is not a "life necessity" and that alone puts the prospective
buyer in a different class. This means that the Nano competes with the other
offerings on the market rather than being a separate market unto itself. The
Tatas envisaged a separate market developing around the product, which didn't
happen, and hence the low sale numbers. What they might want to do is try and
"create" the segment they want. How they do it is entirely up to their
marketing team, although being a marketeer I might be able to think some ideas
up as well.

The Nano stigma you talk about was the average car buyer looking at it and
thinking, _"That is a terrible car."_ Wrong audience. But I can understand why
they did it though. As a car manufacturer trying out new things, their
marketing did tend to see it as a "car market" problem -- hammer, meet nail.

Housing on the other hand is a "life necessity." If the houses Tata is
promising are able to deliver on quality, security, repairabilty, and
temperature issues, you might have a winner. It will also have to withstand
the endless jugaads people are going to subject it to in cramped urban spaces.

On the other hand despite Tata's tall claims, it's difficult to see their
marketing team do much about it. I don't see Tata Swach ubiquitously in shops
here, nor do they respond to inquiries about their solar cells (I tried).
Beyond the brochures and the websites, it's difficult to get Tata to respond
to you. This makes most of these announcements pointless.

As an Indian, all I feel is further dejection and the hopelessness of dealing
with a bunch of lotus eaters with press releases trying to solve problems of
an audience they do not understand.

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zalthor
Considering that 40% of Indians earn less than 1.25$ a day, this still is not
going to completely solve the problems faced by the "average person" in India.
Anyone who can afford this house is probably working in one of the cities
where the cost of land would be at least 10 times the cost of the actual
house. So who would actually be able to use this?

~~~
pstack
This would mean that the value of one of these cheap tiny houses is about the
price of three years worth of income. In America, a house (including land)
averages around $200k to $250k in a fairly populated area (Denver, Portland,
Seattle, etc - you can forget about SF) which comes in at around three years
or four years of income. It would seem kind of weird to be marketing a $200k
home as a "cheap solution" for the poor.

~~~
MartinCron
House in Seattle for $250k? Not really.

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BenSS
I don't have the link handy, but there was another article as a followup to
the $500 house saying the whole thing would hurt more than help. The
construction, maint, and customizing of the houses were an important part of
the local economy even as depressed as it was.

~~~
goombastic
In an Indian context, I don't think it would hurt. Housing is terrible right
now and a simple walk around an Indian city shows that conditions have hit
rock bottom. Governments in India have been nothing but populist with no
vision for the future. The complete lack of urban planning, a sensible
government, and the lack of basic necessities is shocking. Despite this most
government surveys act like there is nothing wrong.

For a country like India, what the Tatas are doing is simply commendable. They
are trying to step in and solve some fundamental problems here and I would
like to see them succeed -- if the governments and babus will allow them to.

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grandalf
It's Tata (singular). What a lewd misspelling.

~~~
digamber_kamat
It is very common practice in India to refer to Tata company as Tatas. I guess
this is more because the Indians look at them more as a family and less a
company. Tata is a family run business with several people having the surname
Tata. Hence we call them Tatas. It is not really a grammatical mistake but an
colloquial term.

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vladoh
The Tata car is a ridiculous piece of metal that should not be called a car.
So I hope the Tata home will be better... Not very optimistic though...

~~~
digamber_kamat
Have driven Tata Nano and must say they put an incredible engineering effort
into building that thing. It is a good car for that price.

~~~
vladoh
I respect the Indian engineering and the effort. I have several Indian
friends, who are very capable and intelligent people. But with $2500 you just
cannot make something I would call a car. See my other post on why.

