Relocation or Upgrading in the Delta City
Marina Delta city (1.8 million people) has 14 informal settlements; six lie on a floodplain below 2.5 m elevation. A 2023 flood displaced 28,000 people. The city proposes either relocating 12,000 households to a site 9 km inland (capital cost $310M, 45-minute commute, no schools yet) or in-situ upgrading with drainage, raised platforms and tenure (cost $190M, residual risk of a 1-in-30-year flood). Census data show 38% of households are female-headed, 61% work informally, and 54% rent. The municipal budget is $220M over five years, and the national disaster fund requires measurable risk reduction. Residents' groups oppose relocation, but the flood agency warns that upgrading leaves people in danger. The council must choose a strategy and state the conditions attached.
1. Compare the two options using four criteria and recommend a strategy. Justify the weight you give to each criterion.
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Use four criteria: risk reduction, livelihoods, fiscal feasibility and equity. Relocation costs $310M, above the $220M budget, and moves 12,000 households 9 km inland with a 45-minute commute, no schools and likely loss of informal trading. It removes exposure for those moved, but residual risk remains for the 10,000 not moved and it may break social networks. In-situ upgrading costs $190M, fits the budget, and addresses drainage, raised platforms and tenure, but leaves a 1-in-30-year residual risk, which is real given the 2023 flood.
My judgement is a hybrid: upgrade the four settlements with the highest density and lowest elevation first, using $190M, and use the remaining $30M for managed relocation of the most exposed 1,500 households, not 12,000. I weight risk reduction and equity most heavily because the flood agency's warning is credible and because renters (54%) and female-headed households (38%) bear disproportionate disruption.
Conditions: tenure must be granted before upgrading so renters are not displaced by rising rents; school and clinic provision must be funded; and drainage must be designed for a 1-in-50-year rainfall, not the current 1-in-30-year standard.
2. Identify the data gaps that most affect the decision and explain how you would close them with rapid appraisal.
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Three gaps matter. First, the flood hazard is not specified by return period, depth or velocity; a 1-in-30-year residual risk is meaningless without depth-velocity mapping. Rapid appraisal: compile 2023 high-water marks, interview 200 households, and run a simple 2D model on a 5 m DEM; report depth classes rather than a single number.
Second, the 54% renter share means upgrading can trigger rent increases and displacement. A rapid rental-market survey of 150 landlords and tenants in two settlements would show likely rent changes and whether tenure should be individual or collective.
Third, female-headed households and informal workers have different mobility and credit constraints. Focus groups and a short labour survey would test whether relocation to a 45-minute commute destroys jobs.
These gaps are decision-relevant because they change who bears the residual risk, not just the total cost. I would not delay the first upgrading phase for them, but I would make tenure and school funding conditional on the results.
3. Explain why a purely economic cost-benefit analysis may mislead the council in this case.
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A conventional cost-benefit analysis discounts future flood damages and compares them with capital cost, but it misses distribution and irreversibility. The 2023 flood displaced 28,000 people; the damage avoided by relocation accrues mostly to households that move, while the costs fall on the municipality and on renters who lose proximity to work.
Informal livelihoods are not counted in GDP, so a market stall can be valued as zero. The analysis may also treat a 1-in-30-year residual risk as an expected annual loss, which understates the catastrophic tail and the irreversible loss of schools and social networks.
Equity weights are needed: a dollar lost by a female-headed household with no title is not equivalent to a dollar lost by a landlord. The cost-benefit analysis should be paired with a multi-criteria appraisal and a distributional analysis by tenure and income. Otherwise a project that looks efficient in aggregate can deepen vulnerability.