By Vinit Mukhija, Urban Planning Professor and GPA FCL of Global Urbanization and Regional Development
Mumbai, formerly Bombay, is India’s financial and commercial capital. It is the capital of the state of Maharashtra, India’s wealthiest province. Paradoxically, the city is known for both its high real estate prices and huge slum population. It has recorded some of the most expensive real estate transactions in the world (Economist 1995; Economist 2012) and, according to some estimates, has more slum-dwellers than any other city (UN-Habitat 2003). Mumbai has tried several approaches to improving living conditions within its slums. These include the leading conventional approaches of slum clearance and redevelopment, which involve the resettlement of slum-dwellers on alternative, usually distant, sites; and slum upgrading, which is based on in-situ and incremental improvements to slum-dwellers’ housing through tenure legalization and infrastructure improvements. For almost twenty-five years, Mumbai has also implemented an unconventional program of slum redevelopment and on-site rehousing. My blogpost focuses on this last approach.
A little more than a decade ago, I published a book focused on Mumbai’s slum redevelopment experiment: Squatters as Developers? Slum Redevelopment in Mumbai (2003). This blogpost revisits the book and the subsequent experience in light of a newly elected state government in Maharashtra (Firstpost 2014), with plans to revise the policy (Indian Express 2015).
Mumbai’s slum redevelopment and rehousing strategy leverages the potentially high real estate value of slum land in the city. Slums are demolished, housing is rebuilt at a higher density, and, contrary to conventional slum clearance and resettlement, slum-dwellers are rehoused in replacement housing on the former slum sites. In addition, new market-rate housing is also developed on the former slums, which cross-subsidizes the cost of the slum-dwellers’ replacement housing. The key policy intervention that facilitates slum redevelopment is a change to the land development regulations that allows for an increase in the intensity and density of redevelopment in the city’s slums. This increase in the permitted development attracts market-based, private developers and helps generate the cross-subsidy for the slum-dwellers’ housing. Slum-dwellers, both owners and tenants, receive completely cross-subsidized, replacement housing of 25 square meters or 269 square feet. Projects only proceed forward if at least 70% of slum-dwellers consent to redevelopment.
Slum redevelopment is an unusual strategy for assisting slum-dwellers. Typically progressive planners and policymakers oppose redevelopment because it usually leads to the displacement of the poor. The poor can be either directly displaced by the new land use or indirectly displaced through an increase in housing costs, including higher rents, property taxes, and maintenance costs. Mumbai’s slum redevelopment and rehousing strategy, however, avoids some of the shortcomings of redevelopment by resettling all slum-dwellers (including tenants) on their original sites in fully subsidized housing. Slum-dwellers also receive property tax rebates, and funding support for housing maintenance expenses from project developers. However, these carefully but narrowly defined benefits have a downside. In some cases, they prevent redevelopment projects from being financially viable to developers. In other cases, slum-dwellers find the defined benefits inadequate and unfair. I have argued that a deregulation of the prescribed benefits may lead to negotiations between slum-dwellers, landowners, and developers, and may result in more hybrid forms of upgrading and redevelopment, as opposed to comprehensive redevelopment (Mukhija 2003). At the same time, the city’s slum-dwellers also need alternative policy options, particularly programs that are easier and cheaper to implement.
By July 2011, almost 125,000 units had been constructed and occupied, and several hundred thousands more had received approvals for construction (Government of India 2012). Some critics are impatient and think the pace of progress is too slow. The new state government is one of them, and proposes to remove the need for slum-dwellers to consent to redevelopment (Indian Express 2015). However, the new government is mistaken.
First, removing the consent requirement is bad politics and is likely to be counterproductive. Unlike in places like Shanghai and Dubai that some Mumbai elite fetish, it will be difficult to move against the wishes of the city’s slum-dwellers. It does not matter whether slum-dwellers have formal powers of consent or not. Second, slum redevelopment is a risky policy. It is difficult for slum-dwellers to maintain their home-based businesses in their new apartment homes. It is good policy to let them decide whether redevelopment is in their interest or not. Third, Mumbai’s slum redevelopment projects have several problems, but slum-dwellers’ consent is not one of them. My research and the number of approved projects clearly show that many slum-dwellers are interested in redevelopment. Their consent is not holding up projects.
If the state and local governments want to increase the pace of redevelopment, they can help in several other ways. In addition to assisting with construction finance and temporary housing, public agencies can play a role in helping to address potential conflicts and disagreements, and ensure that slum-dwellers have full access to technical support and information in their decision-making and negotiations with the private market-actors. As the Imperial Towers case shows, there is tremendous potential profit in slum redevelopment (New York Times 2015), and public agencies have a role in ensuring that slum-dwellers receive high quality housing. In a similar vein, the Golibar Colony case shows that the government must provide the slum-dwellers with legal and physical protection from any potential coercion from developers (NAPM).
Further, if policymakers adopt a more flexible approach, as I have suggested, the program will result in more hybrid projects. Urban design and planning coordination will become more necessary and complicated, which will require more government involvement and leadership. The state government should focus on these avenues rather than on removing slum-dwellers’ ability to consent to projects. Perhaps, the most noteworthy feature of Mumbai’s rehousing approach is that slum-dwellers have the opportunity to approve or reject redevelopment proposals, and projects cannot be initiated without their approval. Preserving and strengthening this defining characteristic of slum redevelopment is important.