From Mumbai to “Slumbai”

When you fly into Mumbai and the plane is landing, the first thing that meets your eyes is a cramped sprawl of corrugated iron–roofed huts. They are right next to the airport runway, quietly yet powerfully reminding you that you are entering a city where nearly half of the population lives in slums. As India’s economic capital and most populous city, Mumbai has a total population of 12.44 million — 42 percent of whom live in slums. The percentage of slum dwellers in the city is so high that locals joke that Mumbai should be renamed “Slumbai.” 

In Mumbai, a highway divides the “formal city” and the “informal city.” (Photo by Yue Zhang, January 2016.)
In Mumbai, a highway divides the “formal city” and the “informal city.”
(Photo by Yue Zhang, January 2016.)

The definition of a slum has two dimensions. From a legal perspective, slums are unauthorized and illegal structures, where inhabitants do not have legal title to the land that they occupy. In terms of living conditions, slums are areas that are short of basic amenities and characterized by the prevalence of insanitary, squalid, overcrowded conditions, and hence become a source of danger to their inhabitants’ health, safety, or convenience.

Slum housing alongside the railway in Mumbai.
Slum housing alongside the railway in Mumbai.
(Photo by Yue Zhang, January 2016.)

In the first official survey that Mumbai conducted in 1956, 8 percent of the total population lived in slums. Over the years, the population of the city grew at a high speed and so did the number of slum dwellers. Today, nearly 5.2 million people live in slums, and the number is still increasing.

Nearly one million people live in Dharavi, the largest slum in Mumbai as well as in Asia, where the film Slumdog Millionaire was shot. It is home to a large number of microindustries, including pottery, tanning and leatherworking, and plastic recycling. A walk through Dharavi or any other slum would completely change your mind about what slums mean in Mumbai: they are not clusters of temporary shelters, but complex ecological and economic systems, “a city within a city.” Many slum dwellers in Mumbai are not the official poor who live below the poverty line, but are well-educated, middle-class people who are deprived of adequate housing.

Outside a pottery shop in Dharavi, the largest slum in Mumbai and Asia. There are many microindustries in Dharavi; pottery is among the major ones. A significant proportion of pots in India are made and sold here.
Outside a pottery shop in Dharavi, the largest slum in Mumbai and Asia. There are many microindustries in Dharavi; pottery is among the major ones. A significant proportion of pots in India are made and sold here.
(Photo by Yue Zhang, January 2016.)

 

Plastic recycling industry in Dharavi.
Plastic recycling industry in Dharavi.
(Photo by Yue Zhang, January 2016.)

Understanding the Prevalence and Persistence of Slums

Large-scale slum proliferation is a complicated issue relevant to a variety of factors. The scarcity of land, dictated by Mumbai’s peculiar geography and heightened by the competition from other economic activities, is one factor that has made formal housing unaffordable for most Mumbaikars. However, the expansion and persistence of slums in Mumbai is primarily a function of failed housing policies combined with other political factors.

In the past 60 years, a series of policies have restricted the land and housing supply in Mumbai, rather than creating a favorable environment for the construction of large housing stock needed for the growing population.

The percentage of slum dwellers in the city is so high that locals joke that Mumbai should be renamed “Slumbai.” 

The Rent Control Act, passed in 1947, led to the freezing of rents, which disincentivized private capital from creating housing stock for rental purposes. In 1973, the Rent Control Act was amended to provide all the tenants’ rights to the licensees, making the rental business even more difficult for the private sector. Further, the passage of the 1976 Urban Land Ceiling and Regulation Act put several tracts of land under litigation and restricted the supply of large tracts of land for the purpose of housing construction.

Even as the rental market has been dismantled and private sector has been disincentivized to create more housing stock, the government has made little effort to increase the supply of affordable housing.

In 2015, Prime Minister Narendra Modi announced the vision of “Housing for All,” in the hope of providing more affordable housing to the poor. This is the first time that the Indian government has brought up housing as a major issue on its agenda, but it is up to each state to formulate its own plans on how to achieve the goal. The Government of Maharashtra (which administers Mumbai) formulated a comprehensive and ambitious New Housing Policy and Action Plan that aims to provide 1.9 million houses, of which 0.8 million will be in Mumbai, for low-and middle-income groups in the state. But whether and how the plan will be implemented is still unknown.

Over the years, slums have become “vote banks.”

Politicians periodically provide services to slum dwellers in exchange for votes. The exchange through electoral politics brings about incremental improvement of the living conditions of slums, but does not solve the long-term problem of housing shortage. On the contrary, the exchange stabilizes existing slums and even provides incentives for the creation of new slums.

Government Responses: The History

The Indian government’s responses to slums have gone through several changes. In the 1950s and 1960s, the initial government reaction was to clear slums and rehouse slum dwellers in subsidized rental housing. This approach did not succeed owing to the shortage of resources to build and maintain housing stocks and the lack of political will to do so. Meanwhile, it was realized that slum dwellers contribute significantly to the local economy, so the government began to have a more tolerant attitude toward slums.

In the 1970s and 1980s, the government adopted a different approach to improve and upgrade the living conditions in slums. Through various acts and programs, specifically aid from the World Bank, the government provided basic services such as water, toilets, electricity, pathways, street lights, conservancy, and primary health care and education to slum dwellers. At the same time, leasehold tenure of land was transferred to cooperative housing societies of slum dwellers. However, the scale of the programs remained limited and did not prevent slum proliferation.

Current Model of Slum Redevelopment

After the previous two phases of slum clearance and slum upgrading, in 1995 the government started a new scheme of slum redevelopment. Under the current scheme, private developers can purchase slum land from the government at a relatively low price — 25 percent of the fair market value of the land — and redevelop the land through the incentive floor space index. (Floor space index, a ratio of built-up area to appurtenant land, is a planning and development control tool used to control population density and building design from the point of view of health and safety.)

Specifically, after purchasing the slum land and obtaining the consent of 70 percent of the slum dwellers in the community, the developer will clear the land and rehouse the eligible slum dwellers free of cost in multistory-building tenements of 269 square feet (upgraded from 225 square feet) carpet area per household. Only slum dwellers who have documents to prove that they have been living in the slum prior to the cut-off date of January 1, 2000, are eligible for the free housing. The rehabilitation buildings are on a part of the land occupied by the slum (in situ). 

Inside a rehabilitation unit. (Photo by the author, January 2016.)
Inside a rehabilitation unit.
(Photo by Yue Zhang, January 2016.)

In return, the developer can construct buildings on the rest of the slum land and sell them on the market as a free-sale component. Through this model, some of Mumbai’s most prominent real estate development projects have been built on former slum land. For instance, Imperial Towers, a twin-tower luxury residential skyscraper complex in South Mumbai, are the tallest buildings and one of the most expensive real estate projects in India. Inaugurated in 2010, they were built on former slum land where the current model of slum redevelopment was first put into large-scale practice.

Real estate boom in Mumbai under the scheme of slum redevelopment. (Photo by the author, January 2016.)
Real estate boom in Mumbai under the scheme of slum redevelopment.
(Photo by Yue Zhang, January 2016.)

Imperial Towers, a twin-tower residential skyscraper complex in South Mumbai, are built on former slum land. Surrounding the luxury towers are rehabilitation buildings for former slum dwellers.
Imperial Towers, a twin-tower residential skyscraper complex in South Mumbai, are built on former slum land. Surrounding the luxury towers are rehabilitation buildings for former slum dwellers.
(Photo by the Yue Zhang, January 2016.)

Inside a condominium in Imperial Towers. Each condominium is more than 4,000 square feet and sold at a price of US$3 million to US$5 million. (Photo by the author, January 2016.)
Inside a condominium in Imperial Towers. Each condominium is more than 4,000 square feet and sold at a price of US$3 million to US$5 million.
(Photo by Yue Zhang, January 2016.)

To ensure the implementation of the slum redevelopment model, the Government of Maharashtra created the Slum Redevelopment Authority (SRA) in 1997. The authority would be the agency responsible for evaluating and approving slum redevelopment proposals submitted by developers. The chief minister of Maharashtra is the SRA chairperson. In the past two decades, 0.15 million tenements have been rehabilitated in this model, against the target of 1 million in the first decade. Another 0.12 million tenements have been approved for rehabilitation, but construction is yet to begin.

In a recent conversation with Aseem Gupta, chief executive officer of SRA, he reveals that SRA will expedite the process by giving slum dwellers an ultimatum to select a developer to work with. If they fail to do so before the required date, SRA would designate a developer for the community in order to speed up redevelopment.

Problems of the Model

Mumbai is among the first cities in the world that have adopted a market-dominant model to redevelop slums. Given the limited resources of local authorities, the model provides an alternative approach to handling informal settlements, an issue that many developing countries are facing. As innovative as it is, the model demonstrates several problems.

  • The operation of the model starts from the direct negotiation between slum dwellers and developers. Although it gives slum dwellers the freedom to choose which developer to work with, it often leads to fights between developers, as they all have the desire to redevelop profitable areas. The unregulated and even vicious competition between developers also creates opportunities for rent-seeking.
  • The current model does not provide specific standards on the quality of rehabilitation buildings. Much discretion is left to developers. Some of the rehabilitation buildings are designed and constructed in a way that compromises the living standards of inhabitants. Some rehabilitation plots do not have sufficient amenities or open space. There is the danger that the rehabilitation buildings will become “vertical slums.”
  • Because of the cut-off date for eligibility of rehabilitation, the ineligible population is left with no option but to stay in unauthorized manner in slums. Many of them have to settle in a new slum after their previous slum is demolished by the government.
  • The current model provides free housing to slum dwellers, and developers have to load the cost of rehabilitation on the saleable component. Therefore, the model does not encourage the construction of housing at various price levels and ultimately leads to the increase of housing prices on the formal market.

Many slum dwellers in Mumbai are not the official poor who live below the poverty line, but are well-educated, middle-class people who are deprived of adequate housing.

 

In a rehabilitation building, residents are complaining to SRA officials about the poor quality of their building.
In a rehabilitation building, residents are complaining to SRA officials about the poor quality of their building.
(Photo by Yue Zhang, January 2016.)

Slum dwellers protesting outside the SRA office. Their homes were demolished by the government, but they are not eligible for rehabilitation because they do not meet the January 1, 2000, cut-off date criterion.
Slum dwellers protesting outside the SRA office. Their homes were demolished by the government, but they are not eligible for rehabilitation because they do not meet the January 1, 2000, cut-off date criterion.
(Photo by the author, January 2016.)

Policy Recommendations

Based on the problems identified above, the following policy recommendations can be made in order to improve the process and outcomes of slum redevelopment in Mumbai.

  • Reform the SRA model. The SRA has been functioning merely as an approving authority that scrutinizes the developers’ proposals on behalf of slum dwellers and approves or reject them. To streamline the process and guarantee the quality of rehabilitation buildings, SRA should act as a planner, facilitator, and anchor, not merely as an approving authority. It is important to mobilize the private sector in the slum redevelopment process, but the public sector should play a more active role rather than completely taking a backseat.
  • Increase the provision of affordable housing. The housing stock being created in the market outside of the rehabilitation component of slum redevelopment is mostly in the luxury or high-cost segment, and is not catering to the demand for affordable houses of the low- and middle-income groups of the population. The government should more systematically create housing stock for low- and middle-income groups.
  • Promote rental housing. Under the current regressive rent control law, 0.318 million (16%) of the total 1.935 million houses in Mumbai are unoccupied. The government must create an enabling environment to revitalize the Mumbai rental market, both private and public.

The Government of Maharashtra has set a goal to make Mumbai slum-free by 2022. This is an ambitious goal, considering the current pace of slum redevelopment. But perhaps what is more important than the pace of redevelopment is the approach of redevelopment — namely, whether the approach can efficiently provide quality housing to slum dwellers, increase the provision of affordable housing in the city at large, and ultimately contribute to the creation of more livable and inclusive cities.

Yue Zhang is an associate professor of political science at the University of Illinois at Chicago, and a 2015–16 Wilson Center fellow. She received her master’s and doctoral degrees from Princeton University and her undergraduate degree from Peking University. Her principal research interest is comparative urban politics and policy with a focus on urban governance, urbanization in developing countries, historic preservation, and globalization. She is currently working on a book project about informal housing and urban governance in China, India, and Brazil.