About the Author
My name is Arshad S. Balwa and I am currently studying at the Dhirubhai Ambani International School, Mumbai, India in the 11th Grade of the IB Diploma. My family has been in the real estate business for many decades and as such I have grown up in a “brick and mortar” world. I have travelled around the world including the United States of America, Europe, Africa, etc. However every time I returned to Mumbai, I was overwhelmed by the lack of infrastructure, lack of civic amenities and generally the urban decay prevalent in Mumbai. While, I was always fascinated with the Real Estate business my fascination turned into intrigue, leading to this report. Through this report, I have made an effort to highlight the urban chaos and made some recommendations.
This report is by no means an exhaustive all-encompassing solution to the urban decay prevalent in Mumbai. A study in much greater detail is required to be carried out across Mumbai and other urban centers in India. However, I am hopeful, this report will encourage others including the Municipal Corporation and the State Government to undertake a detailed study and take measures to reverse the urban decay in Mumbai and other urban centers.
I have taken due care to give due credit to the authors of articles I have referred in my report. If for any reason, any of the article referred to, has not be given due credit, the same may be certainly an error, which if it is, then it is, sincerely regretted.
Finally, I would like to thank my father Mr. Shahid Balwa for being patient with me and encouraging me throughout the entire process.
ARSHAD BALWA
2. About the Author
My name is Arshad S. Balwa and I am currently studying at the Dhirubhai Ambani
International School, Mumbai, India in the 11th Grade of the IB Diploma. My family has
been in the real estate business for many decades and as such I have grown up in a “brick
and mortar” world. I have travelled around the world including the United States of
America, Europe, Africa, etc. However every time I returned to Mumbai, I was
overwhelmed by the lack of infrastructure, lack of civic amenities and generally the urban
decay prevalent in Mumbai. While, I was always fascinated with the Real Estate business
my fascination turned into intrigue, leading to this report. Through this report, I have made
an effort to highlight the urban chaos and made some recommendations.
This report is by no means an exhaustive all-encompassing solution to the urban decay
prevalent in Mumbai. A study in much greater detail is required to be carried out across
Mumbai and other urban centers in India. However, I am hopeful, this report will
encourage others including the Municipal Corporation and the State Government to
undertake a detailed study and take measures to reverse the urban decay in Mumbai and
other urban centers.
I have taken due care to give due credit to the authors of articles I have referred in my
report. If for any reason, any of the article referred to, has not be given due credit, the
same may be certainly an error, which if it is, then it is, sincerely regretted.
Finally, I would like to thank my father Mr. Shahid Balwa for being patient with me and
encouraging me throughout the entire process.
ARSHAD BALWA
DATE : 9th June 2012
1
3. Abstract
This report investigates the current state of urban chaos in India and particularly in Mumbai.
This report is a study in exploring the efficacy of Urban Renewal in not only addressing
urban decay but also in emerging as a growth driver for the economic development of the
city. The study examines the socio economic pressures of urbanization, the causes of urban
decay and the various approaches to urban renewal with reference to international
experiences. The study illustrates and highlights the tremendous potential of urban renewal
and the need for government policy, which can benefit millions of people. The report also
presents an opportunity for renewal of Kamathipura and other precincts in Mumbai
The report highlights that a mere rethink on the role of the government from a regulatory to
facilitative approach can ensure success of urban renewal, which in turn can throw open the
possibility of revitalizing hundreds of such inner city clusters, leading to all round
sustainable economic growth and overall improvement in socio-economic conditions of
people.
The report highlights the urgent need for Urban Renewal projects to be taken up across
Mumbai which can lead to broad based economic development and impact millions in a
positive manner.
2
4. Contents
Introduction …………………………………………………………………………………………. 5-7
Urban Renewal ……………………………………………………………………………………… 8-9
The Inevitable Urban Sprawling and its impact on the city of Mumbai ….. 10-12
Brief History of Mumbai ……………………………………………………………………….. 13-15
Socio Economic Costs of the Urban Sprawl ……………………………………………. 16-19
Urban Sprawl and Urban Decay ……………………………………………………………. 20-27
Government Apathy – Catalyst to Urban Decay of Mumbai ………………….. 28-31
Government Policy, Initiative and Regulatory Framework (Past and
Present)
- The Bombay City Improvement Trust (BIT) 1898-1920 32
- The 74th Constitutional Amendment Act 32-34
- Jawaharlal Nehru National Urban Renewal Mission (JNNURM) – The best of 34-35
intentions but half hearted implementation
- Building Bye Laws and population density 35-36
- Redevelopment of Dilapidated Buildings (Development Control Regulation 36
33(7))
- Cluster Development (Development Control Regulation 33(9)) 37
Urban Renewal over other schemes ……………………………………………………… 38
City Planning in Mumbai – Plan exists only on Paper !!………………………….. 39-42
Urban Renewal – Can it be a catalyst to transform Mumbai ? ……………….. 43-44
Case study of the Economics of Urban Renewal in the Indian context –
The Umar Jamal Compound – A Transformation.
45-48
- Umar Jamal Compound – Before the Initiative..
48-51
- Process of Transformation
51
- Public Exchequer – The biggest beneficiary of Urban Renewal
52-54
- Project Economics of Umar Jamal Compound
54-56
- Socio – Economic Benefit
3
5. Urban Renewal – The Low Hanging Fruit in Mumbai ……………………………… 57-60
- Saifee Burhani Urban Improvement Trust – Bohri Mohalla – A path breaking 61-62
Initiative
- Kamathipura – An Opportunity for the Government to display its 63-67
Commitment
Conclusions and Recommendations ……………………………………………………… 68
- Strategy for Urban Renewal 69
- Single window clearance 69
- Creation of an “Urban Renewal Authority” 69
- Encourage Private Participation 70
- Risk Mitigation 70
- Dispute Resolution 70
- Property Tax 71
- Planning and capacity building 71
Epilogue 72
4
6. Introduction
[1] Fact Sheet : Urban India : Understanding in the Maximum City – Uncovering the myth of urban development in Mumbai – S.Parasuraman-page 39
S.Parasuraman
The fact sheet at the outset describes Mumbai which, like many other cities in India today
describes,
presents a study in contradictions manifested in the disparities and social inequities resulting in
inequities,
cities within cities; one, the city of the poor and the other, the city of the rich. Poverty, hunger,
squalor, decrepit and dilapidated dwellings are enveloped by skyscrapers, landscaped gardens,
IT parks and fancy cars on the streets. This is the view of life which hits the Mumbaikar i.e.
Citizen of Mumbai as he goes about his daily life in a seemingly unaffected manner.
“Mumbai, the heart of India’s financial sector, 65 percent of employment is in the informal
sector, as opposed to 83 percent in the country as a whole. Through the long years of India’s
command and control economy, its cities appeared as frozen in time as the elderly Ambassador
cars built with production lines shipped from Britain” - DeyanSudjic, Director of the Design
Museum in London[2]
5
7. This describes the state of affairs in Mumbai. The city and particularly the Island City seems
to be frozen in time with little or no change since Independence. The state of Maharashtra
has one of the largest urban population in the country. Mumbai – the capital city of
Maharashtra has seen a tremendous rise in its population due to the continuous influx of
migrants from the hinterlands attracted by the job opportunities. The city’s infrastructure
has however not been able to keep pace with the rising population.
“The current forms of migration in Mumbai, according to S. Parasuraman, are not only a
The
sign of dynamism – they also reflect the problems associated with increasing inequalities,
declining rural economies and inadequate employment generation that affect many parts of
rural and urban India”.[3]
[4] Four Indian Cities –Urban Age City Data page 19
[5] Cities and Region – Urban Age City Data page 20
Much of the population of Mumbai comprises of migrants, who have migrated to the city in
m
search of better employment, enhanced standards of living and access to amenities.
However over generations most of them have ended up in miserable living conditions.
6
8. [6] Urban India – Understanding in the Maximum City – The Future of Indian Cities Dr. Amitabh Kundu – page 6
Urban Population continues to grow unchecked across India and the story is no different in
Mumbai. The mismatch between increasing population and Mumbai’s inconsistent urban
planning and governance impeded by archaic legislation and the bureaucratic machinery,
has resulted in a quagmire of urban poverty, housing shortage, slums, deterioration of
existing buildings, overburdened public and social infrastructure (roads, schools, hospitals
etc), lack of water supply , lack of sanitation and pollution.
In purchasing power parity (PPP), Mumbai is estimated to have a US$143 Billion economy.
Per capita income is US$ 12,070. Traffic congestion, loss of wetlands, and flooding as well as
the critical housing issues and slums are key challenges facing Mumbai. Some projections
state that Mumbai could overtake Tokyo as the world’s largest city by 2050. [7]
Is Mumbai ready to be the next Tokyo of the world? Probably yes but herculean efforts
would be required by all stakeholders for Mumbai to reach its destiny !!
7
9. Urban Renewal
The Encyclopedia Britannica defines Urban Renewal as a comprehensive scheme to redress
a complex of urban problems, including unsanitary, deficient, or obsolete housing;
inadequate transportation, sanitation, and other services and facilities; haphazard land use;
traffic congestion; and the sociological correlates of urban decay, such as crime. Early
efforts usually focused on housing reform and sanitary and public-health measures,
followed by growing emphasis on slum clearance and the relocation of population and
industry from congested areas to less-crowded sites.
Each country approaches urban renewal according to its means and its political and
administrative systems. One of the chief components of urban renewal is redevelopment,
which is achieved through the clearance and rebuilding of deteriorated or obsolete
structures. Other aspects of urban renewal involve the reuse of land for new purposes,
rehabilitation of structurally sound buildings that have deteriorated or lost their original
functions, and also conservation.
As is known, the concentration of populations with lesser purchasing power and greater
social needs in certain neighborhoods is a direct result of the process of urban segregation,
that is, the phenomenon through which, due to their respective options in the land and
housing market, different social groups tend to become separated in urban areas. As the
capacity to choose a place to live depends on both personal and household income, those
with greater income obviously have greater liberty when it comes to choosing where they
want to live, while households of lesser financial means are generally pushed to places
where prices are lower. Hence, social groups with lower incomes and higher social needs
tend to group in urban areas with greater urban deficits.
Neighborhoods inhabited by lower income populations are those where, in principle,
buildings tend to be older and of poorer quality and hence, the owners experience greater
difficulties in maintaining them. Moreover, the concentration of rather problematic social
situations in such areas reduces expectations as to property values and this influences land
owners when considering engaging in possible renewal projects.
8
10. Urban Renewal encompasses the following :
• Redevelopment projects, which may include new construction, expansion and/or
renovation
• Small-business loans and tax incentives to improve property
• Housing or home-improvement loans, particularly for affordable housing or for
assistance in restoring or updating buildings and Land purchase
• Streetscape improvements for roads, lighting, sidewalks, adjoining buildings, etc.
• Transportation improvements for public transit, intersections, etc.
• Historic preservation projects
• Creation or improvement of open spaces
9
11. The inevitable urban sprawl and its impact on the city of
Mumbai
The website of the Brihan Mumbai Municipal Corporation (BMC), the local body that
umbai
governs Greater Mumbai has a large map marking Dahisar and Mulund as the borders of its
468 sq km jurisdiction. On the web
website of the Mumbai Metropolitan Region Development
etropolitan
Authority (MMRDA), the organization responsible for development of 4355 sq km Mumbai
Metropolitan Region (MMR), the map is even larger. It includes Thane district, Uran and
),
Pen – satellite towns and villages whose economy is inextricably linked to Mumbai’s
economy. But for most Mumbaikars the city ends only where the last local train does. On
Mumbaikars,
the Western Railway, that means Virar. On the Central Railway, it could be Kasara, Khopoli
or Panvel.
[8] Map of Mumbai – Metropolitan Region (MMR)
The railway lines have provided the blueprint for Mumbai’s growth, observed noted
observe
architect Charles Correa in his perceptive essay Public Transport as DNA. “The urban
structure of Mumbai was not ordained by any city planner”, he wrote. It was “really
10
12. determined by the railway engineers” who laid down the Western and Central Rail
Railway local
lines. Since the end of the nineteenth century, Mumbai has grown in the direction the train
tracks led.
[9] Mumbai Rail Network
Statistics show that of the 3.8 million people who moved to the city between 1991 and
8
2001, roughly half have settled in the suburbs. The 1991 census shows that the population
of Kalyan (a satellite town) on the Central Railway exploded by 645 % in the ‘80s and the
Mira Bhayander (another satellite town) region along the Western Railway expanded to 583
% during the same time.
11
13. [10] Uncovering the myth of urban development in Mumbai – S.Parasuraman – page 39
These statistics confirm that Mumbai in the recent past has had one of the largest
population growth in the World. The growth of Mumbai’s population has to be seen in the
background of the fact that Mumbai City (excluding MMR) has probably one of the smallest
land mass available for development excluding the no development zones and forest areas.
In the backdrop of these facts, Mumbai poses the greatest challenge for efforts to
undertake Urban Renewal. However the challenges also have several opportunities as this
report highlights.
12
14. Brief History of Mumbai
Mumbai is the Capital of Maharashtra. Before it became the capital of Maharashtra it was
the most important city in the British Empire and in terms of economic importance was
considered more important than the Capital of the British Raj i.e. New Delhi. Mumbai’s
onsidered
population of 20.5 Million makes it the most populous city in India and the 4th most
populous city in the world[11]. Situated on the Western Cost of India, Mumbai has a deep
natural harbour and is surrounded by water on almost all sides.
Pre – Independence Map of Mumbai
[12] [13] Map of Portuguese Mumbai
Originally Mumbai comprised of 7 islands, which were gifted by the Portuguese to the
British. In the mid 18th Century the 7 islands were reshaped by a massive reclamation
project and which resulted in a contiguous Mumbai mostly resembling the modern City.
The British also built major roads and railways and transformed Mumbai into a major
Mumbai
seaport and a trading center. Mumbai as it exists today is the Commercial and
Entertainment capital of India and generates about 5% of India’s GDP.[14]
gen
13
15. The pre-eminence of Mumbai can be known by the fact that important Financial Institutions
like the Reserve Bank of India, The Bombay Stock Exchange, the National Stock Exchange
and the Corporate Head Quarters of several Indian and Multinational Corporations are
Corporation
situated in Mumbai.
[15] Reserve Bank of India
Bombay Stock Exchange
[16]
14
16. [17] National Stock Exchange
Since Independence, Mumbai’s position in the Indian context has continued to remain pre
as pre-
eminent and as a result the city has seen massive expansion and creation of new suburbs.
Mumbai’s first experience with reclamation post Independence was in the late 1960’s when
post
Nariman Point and Cuffe Para
Parade was reclaimed and developed .
[18] The Bombay
Metropolitan Region Development Authority (now known as MMRDA) was set up in 1975 by
an
the Government of Maharashtra as an apex body for planning and co ordination of
co-ordination
development in metropolitan region
lopment [19] . Since the 1960, no reclamation of any kind has
been undertaken by the Government and as a result, the land mass of Mumbai, which owes
aken
its existence to the reclamation, has remained unchanged. The issue of reclamation is
important for the simple reason that stringent Coastal Regulation Laws do not allow
reclamation of land into the sea. With continuous influx of migrants and rising population
on
the only way therefore to accommodate the residents of Mumbai is to renew Mumbai
Mumbai.
15
17. Socio Economic Costs of the Urban Sprawl
With Mumbai, spreading in all directions, the distance between work place and home
continues to increase. The Urban Sprawl is evident in all cities and is often presented as the
natural consequence of a high rate of economic growth and prosperity. The eve stretching
ever
cities have led to increasing commutes with millions of people travelling everyday to work
and spending precious time and money. The increasing daily commute places a huge burden
on the society in more ways than one.
[20] Image from Maximum City – Suketu Mehta – page 43
[21] – Moving in the City – page 30
16
18. [22] – Moving in the City – page 30
On an average a Mumbai resident spends 4 hours (17 % of 24 hours) in his daily commute to
)
work. This leaves them with little time to lead a normal life of socializing, recreation & leisure or
sleep and relaxation. With little time and energy left for these basic needs, the society ha
has
witnessed a lot of negative outcomes like a breakdown of relationships, diminishin health and
diminishing
fitness profiles, depressed psychological states, alienation from family and a general apathy.
[23] Urban Transport in Indian Cities – Dr. Geetam Tiwari – page 9
17
19. As communities get disconnected thanks to the ever stretching city limits, the Indian way of
life has given way to a “modern” existentialistic way of life. The Indian youth is left grappling
life
with little social connect which has had far reaching implications on the society.
Sectors of Employment in Mumbai
[24] The Economy of Cities - Page 32
The city has a relatively high rate of unemployment yet it continues to act as a magnet for
thousands who throng the city daily from all corners of India.
The design of a city is recognized to be a dynamic imprint reflecting the changing needs of
the society. It is supposed to leave enough room to accommodate the requirements of a
ety.
18
20. society not just for their basic living needs but also for leading a full life. As its residents
move to a faster world with the growth in technology the expectation of a response from
the City is expected to be commensurate with the expectation of its inhabitants. However,
Mumbai continues to be in hibernation, largely due to the lack of political will and also to a
great extent attributable to the “Chaltahai”* (meaning accepting status quo) attitude if its
citizen.
Urban sprawl and its negative effects now being felt are bringing in focus the possible and
overlooked deficiencies of urban centralization. While the city has been witnessing the
urban sprawl, the same urban sprawl is also responsible for the decay of the inner city
districts as well as the emergence of the distant suburbs.
* “ChaltaHai: in Hindi means “anything will do”
19
21. Urban Sprawl and Urban Decay
“It is worthwhile to understand the initial development of suburban areas of Mumbai from a
historical perspective. Upon the circular issued to the Bombay Chamber of Commerce and
the Municipal Corporation in 1908, inviting suggestions of addressing the problem of acute
shortage of housing for the poor, Arthur Crawford, the then Municipal Commissioner,
emphasized the importance of comprehensive urban planning in his “The Development of
New Bombay : A pamphlet.” This was the beginning of the city’s urban sprawl”. S.
Parasuraman[25]
The Crawford Market in Mumbai was named after this dynamic Municipal Commissioner.
However little did he know that the trend of creation of the suburbs would ultimately lead
to the demise of the city. World over, suburbs act as feeder to the city, ensuring the
survival of the city in perpetuity. However, the suburbs of Mumbai have taken over the
function of the city and in the process lead to the decay of the city.
Economic changes lead to change and as such it is inevitable. Many industries, such as the
cotton mills in Mumbai declined; port and berthing activity near the Bombay Port got
replaced by the Nhava Sheva Post of Jawaharlal Nehru Port Trust and the once busy
[26]
warehousing areas on PD Mello Road and busy ports fell into disuse. Textile Industry, which
was virtually the growth engine of the city for over hundred years, was completely
paralyzed subsequent to the huge strike in 1982 also referred to as the “Great Bombay
Textile Strike” in which nearly 250,000 workers employed by several textile mills across the
city, participated.[27]
20
22. [28] A View of a defunct Textile Mill
This eventually led to the demise of the textile mills and on a conservative estimate could
have affected about 1 million people. The allied textile activity also died and affected even
more people. The impact of the demise of the Bombay Port Trust and the Textile Mills on
the population of Mumbai and the resultant urban decay cannot be undermined. Mumbai
was the principal manufacturing and trading center for textiles in India. However with
.
closure of the Textile Mills and new mills coming up in the South of India in places like
tile
Coimbatore, etc Mumbai lost its place of pre-eminence in the textile business.
[29] A view of the Bombay Port Trust
21
23. The once bustling Bombay Port Trust, became practically empty. It occupies several
thousands of acres of land, in the heart of the city but due to general political apathy,
continues in ‘status quo’.
The Textile Bazaar (Cloth market) situated near the Crawford Market in the heart of the city,
which had seen the emergence of the likes of Mr. Dhirubhai Ambani amongst other
industrialist of India today does not even represent the reflection of its past glory. The
es
entire area has decayed beyond recognition
recognition.
The Textile Market of Mumbai – Once Booming today empty
[30]
There are several such precincts in Mumbai, which used to specialize in a particular trade
and with the decline of the trade, the areas in which such centers were located have
trade s
declined. Examples of such decay are prevalent in the Fort Area (an erstwhile Shipping and
Trading center), The Crawford market Area (a textile and general trading Center), The
Carnac Bunder Area (a shipping and trading center), The Masjid Bunder Area (a grain trading
center), The Null Bazar Area (a Grain Trading center) etc.
22
24. [31] Once bustling Fort area now houses ramshackle offices
F
The Fort Area , which was the Central Business Distinct (CBD) of not only Mumbai but also
the rest of India’s, today houses ramshackle offices of business too insignificant to count.
CBD’s across the world have faced similar challenges and there are several examples of
cities addressing them successfully. However in Mumbai, the lack of vision, plagued with
es n,
archaic laws has led to decay to these most historically significant and beautiful precincts.
[32] The Crawford Market once the nerve center for all wholesale trade is no more than a retail market
23
25. [33] The Masjid Bunder Area – A ghostly reflection of its past glory
The Null Bazar – no more the center of wholesale grain trade in India
[34]
24
26. The list of areas which have fallen into decline and which once used to be thriving centers of
trade in the heart of Mumbai is endless. Mumbai is divided into wards for decentralization
of administration. Each ward is denoted by an Alphabet starting with Alphabet ‘A’ i.e. ‘A’
ward. The ‘A’ ward represents the location of the BMC headquarters. The Island City of
Mumbai extends generally upto the ‘G’ ward. The wards beyond the ‘G’ ward i.e. ‘H’ wards
onwards are part of sub-urban Mumbai. Practically the entire A-Ward, B-Ward, C-Ward, D-
Ward, E-Ward, F-Ward and G-Ward in the Island City has lost its prominence and today is in
the midst of unending downward spiral. These areas though situated in the most beautiful
parts of Mumbai, have decayed due to general change in economic situation and general
apathy by successive governments. Decline in the economic importance of these areas has
resulted in these areas being neglected. The poor generally have congregated in these
areas, which were once the abode of the rich and famous.
[35] Google Image of the Island City
Mumbai was planned like any other city. The workers accommodations were naturally
located besides the large factories, mills, ports etc. However with the decline of these
activities the workers became jobless and redundant. Coupled with aggressive and militant
trade unions, the entire work force remained unemployed for years altogether. Years of
25
27. impasse between the trade unions and the employers virtually sealed the fa of these
employers fate
enterprises and its workers.
The workers, however continued to live next to the factories and mills which were now
closed down and defunct. Years passed and as families of the workers out
. outgrew their
dwelling units, the new generation was forced to move out to the distant suburbs. The inner
city continued to decay with old erstwhile factory and mill workers residing in ramshackle
ld ram
“chawls” (workers buildings) which were rent controlled while simultaneously the city kept
simultaneously
expanding to accommodate the offspring’s of the erstwhile factory/mill workers and
migrants from all over India.
The term “Urban Decay” is often used to describe the process where a part of the city falls
into a bad condition leading to high unemployment, bad effect on economy, deserted
buildings and poor families.
[36] An example of decaying structures across the city
26
28. Urban Decay is a continuous process. It never has a single cause and always occurs owing to
a combination of interrelated socio economic conditions, which include the planning of
urban cities, physical connectivity to different areas, poverty of the population,
depopulation, governmental neglect and overall in-tolerant colonization restrictions. Urban
Decay in Mumbai has lead to overexploitation of the urban resources and unsustainable
growth.
27
29. Government Apathy – Catalyst to Urban Decay of Mumbai
“Mumbai grew large as a trading post of the British East India Company, and it is still a
gateway between India and the rest of the world. Unfortunately, it also adopted some of the
worst aspects of British urban policy, such as severely restricted building heights, that have
building
made it too flat, too congested and too expensive. Some skyscrapers have gone up recently,
but Mumbai’s entrepreneurial people remain cursed by a dearth of good buildings and good
transport options.” Edward Glaeser in “Triumph of the C
City.”
[37] Mumbai Skyscrapers
Interestingly in India the Government policy as expressed in its legislation from time to time
has led to rapid urban decay. The purpose for which these legislations were enacted has
ed e
been defeated due to skewed interpretation and selective implementation. The role of the
he
government rather than being an enabler of development has over the years t
tended
towards being prohibitive and development averse, discouraging all attempts of the
l
community for regeneration of inner cities. Thanks to a media which draws from its leftist
cities.
moorings, no opportunity is spared in reporting most initiatives of urban renewal as a move
to displace the original residents and profiteering by the developers.
28
30. “India’s administrative complexities and its overlapping systems of state, city and federal
power, mean for example that Mumbai’s city government found it impossible to introduce
the plan of vaccinations for all newcomers” – DeyanSudjic. [38]
In a country where vaccination cannot be done by consensus, speaks volumes of the level of
conflict between the stakeholders. Urban Renewal obviously is seen as a gravy train and all
want to jump on it. This tainted perception has given rise to successive governments
assuming a protectionist stance which is reflected in scores of legislations which though
enacted to protect the rights of the residents have ended up stalling the natural growth and
rejuvenation of the city rendering it in a state of stunted disfiguration. Some of the
legislations which have outlived their utility are enumerated in this report.
Bombay Rent Control Act
One example of a legislation enacted with the most noble intentions becoming a cause of
urban decay over the years is the Bombay Rent Control Act. The Bombay Rent Control Act
was enacted almost a century back in very different circumstances.
Wartime conditions had resulted in unavailability of building materials and consequently an
acute shortage of rental housing. The shortage of rental housing led to a rapid deterioration
of the urban neighborhoods and that of the basic infrastructure as also an uncontrolled
increase of rent. In this backdrop the Rent Control Act was introduced. The first rent control
legislation was introduced in Mumbai in 1918 to counter the inflation on the aftermath of
First World War. The law was implemented as a temporary measure to provide relief to
tenants from demands of exorbitant rent and forceful eviction by landlords rampant at that
time. A similar legislation was implemented in Calcutta in 1920, in Delhi in 1942 and by the
end of Second World War, in other major cities of India. These laws have been modified
over time but with no significant changes.
The Rent Control Act served in fixing a standard rent on specific housing markets and
provided a ceiling on maximum rent. The Rent Control laws varied from one jurisdiction to
29
31. another and from one state to another, not only protecting tenants from paying more than
the standard rent but also protecting them from forceful evictions under certain conditions
defined in the law such as breach of condition of tenancy, subletting etc. Evictions are a rare
event even for bona-fide self use. Instances of landlords living in slums and tenants living in
large apartments are not uncommon.
While the Rent Control Act served the purpose of controlling the upward spiraling of the
rentals in the short run, it ended up artificially stagnating rental values and over a period of
time made real estate investments non remunerative. Only a few states allowed the
periodic increase in standard rent. From 1947-1993, as per Bombay Rent Control Act, the
standard rent stands frozen at 1947 levels and there are cases of people paying Rs. 10-20
rent per month at prime locations in Mumbai.
This had several negative and unintended effects :
• Deterioration of existing housing stock: The low rentals left the landlord with no
incentive and surplus to maintain the property.
• Reduced supply in rental market: landlords withdrew their vacant premises from the
market for fear of losing its control to tenants.
• Negative investment in housing sector: low investment due to low rate of return
because of rent ceiling
• Encroachments/ Slums: unavailability of rental homes lead to illegal houses on
vacant govt. and private lands
• Loss of revenue on municipal property tax: as it is based on “controlled” rent and
not actual rent
• Emergence of black market in rental housing and illegal transactions like payment of
“Pagdi” before entering into any tenancy
• Deterioration in the provision of civic services
30
32. Annexure: Indicative State-wise list of Rent Control Acts
Sl.
State Name of Act
No.
The Andhra Pradesh Buildings (Lease, Rent and
1 Andhra Pradesh
Eviction) Control Act, 1960 (Act No. 15 of 1960)
Andaman & Nicobar Islands Rent Control Legislation
Andaman and Nicobar
2 notified on 19.10.1965 is applicable in Port Blair
Islands
Municipal Area.
The State Government is yet to enact a Rent Control
3 Arunanchal Pradesh
Act in the state.
The Assam Urban Areas Rent Control Act, 1972
4 Assam
(Assam Act No. 17 of 1972)
The Bihar Building (Lease, Rent and Eviction) Control
5 Bihar
Act, 1982 (Bihar Act No. 4 of 1983)
6 Chattisgarh No new Act enacted. Following the parent state Act.
7 Dadra and Nagar Haveli No State Rent Law in force.
8 Delhi The Delhi Rent Control Act, 1958 (59 of 1958)
The Goa, Daman and Diu Buildings (Lease, Rent and
9 Goa and Daman & Diu
Eviction) Control Act, 1968 (Act No. 15 of 1968)
The Bombay Rents, Hotel and Lodging House Rates
10 Gujarat
Control Act, 1947 (Bom, Act No. 57 of 1947)
The Maharashtra Rent Control Act, 1999
11 Maharashtra
(Maharashtra Act 18 of 2000)
In all there are 34 Rent Control Act’s operating across different states of India.
31
33. Government Policy, Initiative and Regulatory Framework
(Past and Present)
The Bombay City Improvement Trust (BIT) (1898-1920)
The earliest example of a governmental initiative in urban renewal in India was The Bombay
City Improvement Trust (BIT) which, was created on December 9, 1898 in light of the Plague
of 1896. It was created to help Bombay Municipal Corporation in dealing with the problems
of overcrowding, insanitary conditions and other urbanization problems. From 1898 until
1920, the BIT took host of measures like promoting co-operative housing, building chawls
for the working class and building modern thoroughfares. [39]
The planned development of some suburbs such as Matunga, Sion, Dadar, etc. is attributed
to the Trust, which relieved much congestion from the island city of Mumbai. The Dadar-
Matunga-Wadala-Sion suburban development was started in 1899 with well laid out plans
and the project was successfully completed in 1900.
However by 1920, Mumbai was again facing rapid urbanization and by 1933 BIT had become
nearly ineffective and was merged with Bombay Municipal Corporation.
The 74th Constitutional Amendment Act
Tip O’Neil former Chairman of the United States’ Congress said “All Politics is Local”[40].
However, Indian politicians have seldom understood this. Before the 1990s, the Constitution
did not make local self-government in urban areas a clear cut obligation and contained
inadequate provisions. It resulted in weak and ineffective Urban Local Bodies. To counter
this and to strengthen decentralization of urban governance, 74th Constitutional
Amendment Act (CAA) came in force in June 1993. The 74th CAA requires the state
governments to amend their municipal laws in order to empower Urban Local Bodies (ULB)
“with such powers and authority as may be necessary to enable them to function as
institutions of self governance”.
32
34. The Current structure of Indian Government is depicted above
[41]
“In Mumbai, a city in which water and power are erratic, in which the suburban railway
network is so overcrowded that commuters who fall off the trains are killed everyday, the
private sector has been asked to create alternative forms of settlements that c provide
can
solutions. All this is occurring in a highly centralized political context where, even though the
councilors of Mumbai’s Municipal Corporation are locally elected, the state still holds
ultimate control” DeyanSudjic.[42
[42]
What this effectively means is that since Mumbai is part of Maharashtra, it is g
governed by
leaders who have no connect to the issues facing Mumbai. The Corporations and Councilors
elected by the residents have no power and are mostly indulging in practices unbecoming of
them. Therefore in effect , the residents of Mumbai are governed by people who have
governed
never lived in Mumbai and have no idea of the problems faced by people in Mumbai .
The main provisions of the 74th Constitutional Amendment Act, includes constitution of
wards committees, deciding powers and functions, elections & reservation of seats,
deciding on duration of municipalities, finances & finance commission, district and
metropolitan planning committees, etc. The 74th CAA, expects ULBs to assume
33
35. responsibilities for urban planning, water supply, social and economic planning, slum up-
gradation, public health, etc.
However in reality, the BMC is controlled by the State Government of Maharashtra and has
no planning powers or authority.
Jawaharlal Nehru National Urban Renewal Mission (JNNURM) – THE BEST OF INTENTIONS
BUT HALF HEARTED IMPLEMENTATION
“(JNNURM) is seen to suffer from an intrinsic process of decentralization that requires
support from the national government”[43]
Jawaharlal Nehru National Urban Renewal Mission (JNNURM) is a huge city renewal scheme
launched on December 3 2005 by the Government of India under Union Ministry of Urban
Development. Under the scheme approx. Rs.55,000crores (U$11 billion) will be spent during
seven year period of 2005-2012. 65 cities are identified under Urban Infrastructure and
governance component under JNNURM.[44]
Objective of JNNURM
The primary objective of the JNNURM is to create economically productive, efficient,
equitable and responsive cities. In line with this objective, the Mission focuses on:
• Integrated development of infrastructure services
• Securing linkages between asset creation and maintenance for long-run
project sustainability
• Accelerating the flow of investment into urban infrastructure services
• Planned development of cities including the peri-urban areas, outgrowths, and
urban corridors
• Renewal and re-development of inner city areas
• Universalization of urban services so as to ensure their availability to the urban
poor.
The scheme also aims for various urban sector reforms to strengthen municipal governance
in accordance with the 74th Constitutional Amendment Act, 1992.
Note : US $ 1 = Rs.50
34
36. However the requirement of a city like Mumbai is much greater than the meager allocation
it has received from JNNURM. Moreover, as global experience confirms, that the
Government is only required to play the role of a catalyst. An interventionist role is bound
to fail. The JNNURM has no statutory power to actually implement an Urban Renewal
Scheme and eventually it is the State Government, which wields the authority for such
functions.
“The incapacity of the state and local governments to make adequate investments to
alleviate this crisis has led to a government restructuring and reduction of public expenditure
in many Indian cities” Dr. Amitabh Kundu [45]
Kundu.
Building bye law and population density
g
Mumbai, due to its geographical constraint of being a peninsula, has limited land supply.
The city is very densely populated with a density of >20000 people/sqkm. It has resulted in
scarcity of vacant land parcels (especially in the neighborhood of commercial districts in
(especially
island city) for development to fulfill the demand from rapidly growing Mumbai population.
growing
The table below highlights the density of Mumbai relative to other cities of the World.
[46] Mumbai’s density is highest in the world compared to any other comparable city of the
world.
35
37. “The Population density defines as number of persons living within an area of 1 Km
presents the most striking feature about Mumbai. In 2001, the average population density
for Mumbai City was 27,000 people per km . Ward C is one of the most densely populated
areas with a density of 114,001 people per km ”.[47]
To solve this problem, the Government of Maharashtra came up with various development
schemes, most of them specific to the city of Mumbai, like Urban Renewal Scheme (URS),
Slum Rehabilitation Scheme (SRS), Mill land development etc. for incentivizing developers
by sanctioning a higher than normal Floor Space Index (FSI). It was expected to be a win-win
situation for all. In slum schemes and Urban Renewal Schemes for example, the
stakeholders i.e. tenants/slum-dwellers would get better housing/commercial units, the
developer would get free sale area in lieu of the redevelopment work, government would
benefit with higher revenue collections through Property Tax, VAT, Income Tax, Stamp Duty
etc. and the society would benefits with better Infrastructure and facilities. However red
tape bridled any hope of a large scale urban renewal in Mumbai. The URS renewal scheme
is a classic case of noble intentions not achieving desired goals.
Redevelopment of Dilapidated Buildings (Development Control Regulation - 33 (7))
Under this provision, the total FSI or FAR (Floor Area Ratio) for the plot is allowed up to 3
times the plot area against the base FSI of 1.33 in the Island City of Mumbai. In simple
terms for a 1000 sq.mts piece of land as against normally permissible built up area of 1333
sq.mts, the scheme allows built up area upto 3000 sq.mts. Normally under this scheme,
small projects with one or two buildings are redeveloped. On the negative side, because of
the size of projects being small there is lack of space for parking, playgrounds and
upgradation of necessary infrastructure like drainage, drinking water and electrical facilities.
According to official statistics, there are 19,642 old and dilapidated buildings in Mumbai and
which have been declared unfit for living. Out of these, 16,502 buildings were constructed
before 1940 and are eligible to be redeveloped under the current incentive scheme.[48]
36
38. Cluster Redevelopment (Development Control Regulation - 33 (9))
The scheme is applicable for any plot with a minimum area of 4000 sqmt and which consists
of mix of structures with different characteristics such as MHADA Certified cessed buildings,
buildings constructed before 1969 (and hence declared by respective governing body i.e.
MHADA or BMC, as unfit for living), including existing slums on the plot. The total FSI for the
plot is allowed up to 4 against the base FSI of 1.33 in Island City.
37
39. Urban Renewal Over Other Schemes?
The transformation of Mumbai, or for that matter any megalopolis, cannot be done by
redeveloping building by building in isolation and without taking a holistic view.
To make it clear, let’s take a scenario of a 10 acre plot with 100 old and dilapidated
buildings. As per Development Control Regulations of Mumbai, 1991, half the buildings
would come under either road widening or would be reserved for green space or other
reservations required. Buildings affected by such public reservations are of no interest to
developers and remain in a dilapidated condition for public purpose. Moreover, by
developing one building or 2-3 buildings combined together there is no space for parking,
playgrounds, upgradation of electrical, plumbing & drinking water facilities and other
amenities. The only benefit in such schemes is a slightly bigger house with better sanitation.
Further, new residents in incentive free sale potion only add to the density in the already
congested development.
This has resulted in the city having 20-30 storey buildings in plots of 100 sq.mt to 200 sq.mts
with little or no open space. Certainly in the years to come these buildings will also face the
same situation as the buildings they replaced.
On the other hand, if the same locality is developed through cluster based development
with all buildings developed together, a few tall buildings can be built and ample free space
can provide for up-gradation of a lot of common infrastructure such as road widening,
ample parking, playgrounds, green spaces, footpaths, etc. It not only provides for better
living environment but also increases the value of the neighborhood. Several countries
have infact made it mandatory to construct highrises so that more open spaces are left for
the residents and the city. However, no such regulatory requirement exists in Mumbai as a
result the development is hap hazard.
38
40. City Planning in Mumbai – Plan exists only on paper !!
One of the reasons amongst many reasons why the various schemes of the Government
have failed is the City Planning in Mumbai. A “living space” is more than the mere confines
of a 100 sq ft room. A living space extends from the home to the schools, parks, commercial
schools,
centers, shopping etc. all of which enhance a person’s mere biological existence to that of
leading a fuller life.
[49] City Planning ??
Where are these spaces in the Indian cities of today ? Except for the planned areas inherited
from the British, most Indian cities – Delhi, Mumbai, Kolkata, Bangalore have been
,
witnessing a “stretched” growth with the city limits being redefined continuously to
39
41. accommodate an unstoppable influx of people from the hinterlands. The planned city
providing for allocation of specified zones for residential, commercial, recreational
residential,
application of land have given way to “Colonies” which are merely human settlements -
dwellings of people and not planned living spaces which should normally be describing a
city.
Mumbai got its first city development policy as early as 1909, a 20 year plan designed to
policy
control landlords and develop homes for the poor. It had a town planning scheme in Bandra
and Khar by the 1920s, zoning laws in 1951 that prevented the construction of factories in
the island city and a sprawling colony for the middle income group in Bandra East by the
ing
1960s.
All development in the Mumbai metropolitan region is supposed to be planned by the
MMRDA. But the region also has several other entities such as : the Brihan Mumbai
Municipal Corporation (which manages Greater Mumbai), 12 other municipal councils (for
Thane, Khopoli, Virar, Alibaug etc.), the City & Industrial Development Corporation of
Maharashtra (CIDCO). The CIDCO is responsible for the planning of Navi Mumbai.
Mumbai.
[50] MAP of MMRDA
40
42. With several corporations (ULB) and several planning authorities the situation of planning
in the MMR and BMC areas is nothing but utter chaos. Coupled with skewed legislation,
the inadequate and sporadic city planning has further accelerated urban decay in
Mumbai.
Effective urban planning requires design and regulation of optimal use of space/area to
boost the economic functions and improve the physical infrastructure for a positive impact
on society and environment. In most of the cases, the unexpected increase in urban
population and the need of good urban planning is marred by ineffective urban governance
due to lack of resources, capacity, bad municipal management, fund allocation issues and
transparency issues etc.
In the context of post independence Mumbai, the first Development Plan (DP) and
Development Control Rules (DC) were put in place for the first time in 1967. The DC Rules
1967 were superseded by the Development Control Regulations (DCR – 1991) of Mumbai
and the Development Plan (DP) of 1991. However the DP of 1991 was ill conceived and
further aggravated the urban quagmire with errors apparent on record.
[51] Google Image of JSS Road
41
43. For example a small piece of land of plot admeasuring 5 acres between JSS Road and Cavel
Street in C-Ward had 73 buildings (see Google image on page 42). The entire built up plot
ings .
was earmarked for a garden and road widening in the Development Plan 1991. In reality,
1991
several land parcels earmarked for parks, playgrounds and road widening are actually
densely populated areas with structures existing thereon. Such unmindful planning has
.
deprived people of basic amenities such as parks and playgrounds.
Moreover, in the context of Mumbai most of the open spaces other than such unmindful
planning errors are either protected forest, mangroves, salt pan or no development zones.
The breakup of open spaces though looks impressive on plans, actually does not exist for
l
the people of Mumbai.
[52]
Hundreds of such examples across Mumbai City, highlight the complete lack of planning by
highli
the BMC and MMRDA. As a result the Development Plan of 1991 which is still in force,
remains a plan on paper atleast in the context of the island city of Mumbai. All this clearly
depicts the apathy of the Government and the crying need for immediately putting in place
a 20 year plan made with inputs of Mumbaikars.
42
44. Urban Renewal – Can it be a catalyst to transform Mumbai?
Urban Renewal presents itself as a possible catalyst for addressing the multiple problems of
Urban Decay in Mumbai. Renewal is the process of ensuring survival to perpetuity. Urban
Renewal assumes many approaches as the community explores ways to accommodate the
diverse requirements.
Several precincts, like the Mumbai Port Trust Area and the warehouses along the PD Mello
Road in Mumbai can possibility be regenerated with the combination and cooperation of
Government policy, the resident community and private enterprise.
Urban Renewal is to be seen as more than merely a means to extract well located city land
parcels for real estate. Real Estate Development has to be seen as the fuel for the urban
renewal activity. The objective has to be to achieve full economic development and urban
renewal certainly presents itself as a viable and an inclusive method for achieving this
objective of overall development.
There have been several successful examples of Urban Renewal across the world. Behind
every successful Urban Renewal project, it is invariably the full might of the Government
which leads to it success. However in India, the complexities of Urban Renewal are much
more than anywhere else in the World.
A legislative framework around this facilitative approach can present India to the world with
a great opportunity of building the nation and spurring economic revival and reconstruction
while ensuring that the biggest beneficiary is the community and the society at large.
A recent study by the Maharashtra chamber of Housing Industry (MCHI) has revealed that
the real estate business supports upto70 allied business such as cement, steel, etc. Urban
Renewal has been used as a tool globally by Governments to spur growth in the economy,
however in India, the Government has been quite lackadaisical to recognize its importance.
43
45. The term Urban Renewal in different context has different meanings. For e.g. in China, the
term urban renewal means the unilateral planning by the executive, leading to the
displacement of hundreds and thousands of often unwilling people and construction of
gleaming skyscrapers in its place.
In the context of every country, Urban Renewal, represents different sets of challenges. In
the Indian context it probably has the greatest challenge. Urban Renewal could be seen as
land grabbing by Developers under the political patronage of the ruling class. India thrives
as a democracy and people of this country have learnt to live with the chaos such a
multiparty democracy brings with it. As a result every effort to change, is opposed by
sections of the political class, and on most occasions it transpires that such opposition was
mindless and against the interest of the people, such political leaders pretend to protect.
Therefore, the process of Urban Renewal in Mumbai has to be implemented in the most
inclusive and democratic fashion. It is a general perception that Developers profiteer at the
cost of hapless tenants. This may be true in some cases. However a generalization can lead
to alienation of a pivotal player in the entire Urban Renewal Scheme. Having studied some
of the Urban Redevelopment projects going on in the city, a unique model of an inclusive
urban renewal project at Mumbai Central stood out which is presented as a case study in
this report.
44
46. Case study of the Economics of Urban Renewal in the Indian
Context – The Umar Jamal Compound – A Transformation
The UMAR JAMAL COMPOUND is an accidental initiative in Urban Renewal undertaken by
the inhabitants of an inner city cluster in Mumbai by leveraging the expertise and enabling
finance of private enterprise and by capitalizing their tenancies to promote a success story
of urban renewal at a micro level. The initiative has revitalized the entire neighborhood and
transformed lives. It is a unique example of the Urban Renewal process where profits of the
redevelopment were democratically shared between the resident community comprising of
mainly tenants and the other stakeholders of the development project including the
developer. Prime land was used effectively to maximize its utility and in turn increase the
overall profits –both social and commercial.
Umar Jamal Compound- Before the Initiative…
The Umar Jamal Compound owes its name to two brothers who were probably the early
tenants of the structures. Situated on the bustling Belasis Road, which was once the Centre
of the City, the land was originally owned by an English Man. It was part of an undivided
larger plot. In the years 1903, the land was sold to a philanthropist Haji Zakaria Haji Ahmed
Patel who built stables on the land for horses. The nearby Byculla Club, (which today is a
large bus depot), provided the horses and a steady income to the landlord. With the
construction of the Royal Western India Racing Club (RWITC) at Mahalaxmi, the Byculla
Club soon became redundant. The horses moved to RWITC. Haji Zakaria decided to lease
out the entire land with its structures to a Parsi Gentleman Mr. Jahangir Hormus Sorabjee,
who divided the stables and converted them into smaller units which could be rented to
tradesmen, workshops, etc. Mr. Jahangir Sorabjee continued to pay lease rent to Haji
Zakaria who had by now passed away but had created a trust which was the beneficiary of
the lease accruing from the land. Mr. Jahangir Sorabjee passed on the business to his young
lawyer son Mr. Soli J. Sorabjee, who continued with the business of collecting rent through a
rent collector and paying an annual lease rent to the landlord. Mr. Soli Sorabjee, went on to
become the Attorney General of India, mostly unaware of the going-on at the Umar Jamal
Compound. As years passed, the structures grew old and so did the businesses. Both out of
sync with modern times.
45
47. Umar Jamal Compound comprised of 13,837.06 sq.mt. land in a prime location of South
Mumbai close to the Mumbai Central Railway Station. The property over the years was
Station
completely occupied by shanties, garages, small scale businesses etc. and was occ
occupied by
275 tenants. The rent payable by the Tenants was fixed by the Rent Control Act, 1939 and
1944 and Mr. Sorabjee had an annual rental income of Rs.26,000/- (US $ 520 per annum)
d rent 0
from all the tenants.
Note : US $ 1 = Rs.50
46
48. [53] Umar Jamal Compound (Year 2004) before the renewal
The structures in the premises were in a much deteriorated state with Mr. Sorabjee
unwilling and unable to repair and renovate the structures owing largely to the negligible
rental income from tenants. The tenants were not authorized to carry out the renovation of
their premises under the Rent Control Act. The condition was not only unfit for living but
Act.
also unfit for the small scale businesses there.
Household Income profile
(Per Annum) %
45
40
35
30
25
20
15 Household
10 Income profile (Per
5 Annum) %
0
Pre-Urban Renewal
Note : US $ 1 = Rs.50
47
49. Types of Structures %
80
70
60
50
40
30
20
10 Types of
0 Structures %
[54] Pre Urban Renewal
Process of Transformation
In 2004, Neelkamal Realtors & Builders Pvt. Ltd, a DB Group company (Company) acquired
leasehold rights of the entire premises from Mr. Soli Sorabjee on payment of Rs.70 million
(US $1.12 mn)as consideration and also acquired the ownership rights from M/s. Haji
e Haj
Zakaria Haji Ahmed Patel (Mohamedan Orphanage & Asylum Fund) Trust on payment of
(Mohamedan
Rs.10 Million(US$0.2 mn).
In a normal redevelopment scheme, land is redeveloped without change in the land use.
The existing tenants continue t occupy the same space and continue with the same
to
occupation. As a consequence the tenants experience no change in their socio economic
.
condition. Such redevelopment only replaces an old building with a new building and has
building
minimum impact on the socio economic front.
pact
Post acquisition, the company representatives met with existing tenants to understand their
requirements. Initially the tenants desired to build an industrial park on the same plot and
ly
wished that they be allotted an equal area so that they could carry on with their current
equ
activities. However it was apparent from the scale of the establishments that merely re-
re
housing them in a new building would not alleviate their impoverished conditions.
Note : US $ 1 = Rs.50
48
50. During the previous decades, there had been a sharp decline in industrial activities in
Mumbai (esp. in Island City) due to the high cost of production and labour. The costs had
made industrial activity virtually unviable. The tenants / occupants were carrying on the
trade inherited from their fathers / grandfathers and for want of a better opportunity were
continuing with the activity passed on to them. Most of the tenants were carrying out their
trade from their impoverished work sheds and not getting any return from the premises
occupied by them.
Keeping in mind the prime and strategic location of the plot coupled with decline in
industrial activity, the developers felt that the current proposition did not provide for the
optimal use of the site and was not appropriate and beneficial for both the parties involved
i.e. developer and the tenant. The developer therefore decided to explore an alternative
model and proposed a shared development model to the tenants. The tenants and the
developer conceived the idea to build a shopping mall and a residential building. As per the
scheme, tenants were to get an equal area in the shopping mall. The developer undertook
the responsibility of leasing the mall on behalf of the tenants. The residential building was
to be sold by the developer to recover the costs and for profit. The tenants committee
actively involved itself in all important decisions that were taken for redevelopment. It not
only increased the faith of the tenants, but also helped in the smooth and quick clearance
of the land.
The tenants handed over the premises for redevelopment during Jan 2005 to Feb 2005. The
company gave a hardship compensation of Rs. 50/- (US $1) per sq.ft. per month to all the
tenants during the period of construction of the shopping centre. The compensation was
paid in proportion to the areas occupied by the tenants prior to development.
Note : US $ 1 = Rs.50
49
51. [55] Umar Jamal
In the year 2006, the company completed and handed over the shopping mall – Orchid City
Center to all tenants on ownership basis. The developer also formed a Mall Owning
company and the tenants were given shares in the company on a pro-rata basis. The tenants
were also allotted area on a pro-rata basis in the shopping mall. The tenants became
owners of their respective areas in shopping mall in August 2006.
The developer there after facilitated lease of the entire shopping mall to Pantaloon Retail (I)
Ltd (Pantaloon) w.e.f. 22nd August 2006 on a monthly rent of Rs.125/- ( US $2.50 ) per sq.ft.
per month. The lease rent was to be paid by Pantaloon directly to all co-owners bank
account through Electronic Clearance System (ECS).
[56] Umar Jamal after Urban Renewal
50
52. The redevelopment of Umar Jamal Compound created a Win-Win arrangement benefiting
all the stakeholders including the landlord, tenants and the developer :
Landlord: Mr. Soli Sorabjee used to get negligible rent from the property and had no right to
increase the rent or to vacate the tenants. He received a lump sum amount ofRs.70 million
(US $1.12 mn) from the company against sale of his leasehold rights.
Tenants: The Tenants who were living in dilapidated structures and had frugal sources of
income, became owners of the new premises in the shopping mall and beneficiaries of lease
rent income from the retail outlet “Pantaloon” providing them with a steady monthly
income apart from creating a bankable asset. Most of them also continue with their small
scale businesses at other locations in Mumbai. Many of them were able to receive loans as
and when required by mortgaging their premises. The tenants who were not part of the
organized business and were accustomed to borrowing from private money lenders, pawn
brokers etc. were now in the mainstream of commercial banking and organized business.
The Company (Developer): The Company developed two 55-storey residential towers on
the plot of land and earned a profit on sale of flats in towers estimated to be approx.Rs.2
billion (US $ 40miillion).
Public Exchequer – The biggest beneficiary of the Urban Renewal
However in the process the public exchequer emerged as the biggest beneficiary. The
Government collected and continues to collect substantial tax and levies from the
development on account of stamp duty, property tax apart from the tax gains like income
tax and VAT associated with thriving commercial activity which the shopping centre
afforded. The socio economic profile of the neighborhood underwent a dramatic change,
generating employment from the mall and ancillary economic activity.
Note : US $ 1 = Rs.50
51
53. Project Economics of Umar Jamal Compound
Current Rent paid to the new owners by Pantaloon India
Lease Rent Per Annum
400,000
300,000
200,000 Rs ('000)
100,000
-
Pre Urban Renewal Post Urban Renewal
Source : Research by author
The Income of the erstwhile tenants jumped several folds pursuant to the urban renewal.
The Revenue generation to Government increased several folds in the form of…
• Property Tax
Property Tax Per Annum
40,000
30,000
20,000 Rs ('000)
10,000
-
Pre Urban Renewal Post Urban Renewal
Source : Research by author
52
54. • Income Tax Deducted at Source (TDS) from rental income amounting to Rs.35 million
( Rs.
(US $0.70mn)per annum
Income Tax Per Annum
40,000
30,000
20,000 Rs ('000)
10,000
-
Pre Urban Renewal Post Urban Renewal
Source : Research by Author
• Value Added Tax (VAT)
• An amount of Rs.3000 million (approx) is generated by sales from the shopping mall
on which VAT at the rate of approx. 12.5% is paid to the state exchequer by the
ch 1 %
retailer.
VAT Per Annum
500000
400000
300000
Rs ('000)
200000
100000
0
Pre-Urban Renewal
Urban Post Urban Renwal
53
55. • Electricity Duty
Electricity Duty Per Annum
30,000
25,000
20,000
15,000 Rs ('000)
10,000
5,000
-
Pre Urban Redevelopment
RedevelopmentPost Urban Development
As will be seen the Government’s revenues increased from Rs.0.9 million to Rs.385 million
revenues Rs.
during the process of Urban Renewal. Mumbai has more than a thousand such potential
clusters for Urban Renewal. On a conservative estimate, the Government Revenue from
such schemes can touch Rs.15000crores (US $ 3 billion*) without any significant investment
15000crores nt
by the Government.
Socio – Economic Benefit
In all 990** families today benefit from the rent being paid by Pantaloon. From a
dilapidated urban mess, today Umar Jam Compound is a shining example of sustainable
oday Jamal
urban renewal which has benefitted the society at large.
fitted
• Estimated by Author on the basis of the Umar Jamal compound Urban Renewal Data
** Though there were 275 tenants, there were s
several co-tenants for each unit.
54
56. TENANTS DEVELOPER
•Additional rental revenue •Revenue from sale of flats
•Better lifestyle
•Loan availability against property mortgage
REDEVELOPMENT
GOVERNMENT SOCIETY
•Taxes (Property tax, Income tax etc) •Generation of employment in Mall
•Stamp duty on residence •Socio economic growth of neighborhood
•VAT from Mall
It is also important to highlight that the project was planned as an Environmentally
Sustainable Development as opposed to its earlier avatar. Urban Renewal Projects generally
are far more environmentally sustainable as opposed to the status quo, due to stringent
environment norms imposed on new construction by the Government.
The direct/indirect benefits of the renewal process at Umar Jamal compound are much
larger than what appears to be. A small project spread over only 3 acres of land (approx)
has potentially changed the lives of a thousand families. Mumbai today has several
thousand such opportunities, which are highlighted in the later chapters.
The lives of the tenants and their families have changed for good. A few testimonials of
tenants and now owners give a perspective of the life changing development.
Name of Tenants Mr. Feroz M. Papar
Income (Prior to Urban Renewal) : Rs.9,000 per month
Additional Rental Income post : Rs.124,320 per month
Urban Renewal
In Mr. Feroz Papar’s words “I am very conservative by nature. The proposition of shutting
down my paper factory and accepting space in a retail mall sounded preposterous.
55
57. However, with some amount of convincing by the Developers, I finally agreed. I today
consider it the best decision I have ever made. I had been postponing my mother’s by-pass
open heart surgery for years. With a 10 fold increase in my income, I was able to afford
medical treatment for my mother. The change is transformational. I continue to operate
my paper factory from Daman while I have steady source of income for my family from the
mall. “
Name of Tenant : Mr. Sayed Maqbool Sikander
Income (Prior to Urban Renewal) Rs.7,600 per month
Additional Rental Income post
Urban Renewal Rs.17,220 per month
In Mr. Sayed’s word “I thank God the day I decided to agree to the redevelopment. I could
not have made a better decision. I encourage everyone to accept change. Change will
always bring good in the long term”.
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58. Urban Renewal – “The Low Hanging Fruit” in Mumbai
[57]
Though the graph above looks like Manhattan, in reality it is the exact opposite in Mumbai’s
context. “Mumbai constitutes a category on its own. The territorial constraints of this island
Mumbai
city have created unusually high urban densities. Within the city limits, the average density
surpasses the mark of 27,000 people per km - a figure that rises to well a
above 50,000
people per km (if one only takes the built up area into account), a level higher than even
built-up
the highest density peaks in New York City’s borough of Manhattan. Furthermore, it is not
rare for the densest neighborhoods of Mumbai, such as Dharavi, to accommodate as many
as 100,000 residents per km ”[58]
Google image of the C ward of Mumbai paints a story of City’s unbelievable density. Narrow
density
congested streets with virtually no open space.
57
59. [59] Google Image of C-Ward (Part)
Some of the areas, which are referred to as the “low hanging fruit” are shown in the slide
shown
above.
These areas were centers of bustling activity once upon a time. Today they are in a state of
urban decay. The picture demonstrates a complete lack of civic amenities. Most of these
areas do not even have a full grown tree to boast, leave alone gardens and open spaces.
t
These areas represent the highest density of population per sq.km in the South Mumbai
region and perhaps the world. All these areas at some points in time were trading hubs but
.
have now lost their relevance to the shifting business and changing economics of business.
58
60. [60] Morphology of Shanghai and Mumbai
The Morphology of Shanghai and Mumbai in a way is unique and resembles each other.
However, the similarity ends there. The two cities present a completely different picture on
the ground. One which has found place for itself in the world and the other looking to find
looking
its relevance in the world.
[62]
[61]
59
61. However this by no means indicates that it is the end of the road for Mumbai. There are
several areas in the city of Mumbai ripe for Urban Renewal i.e. which are “The Low Hanging
Fruit”. Some of these areas are :
1) Kalbadevi : The heart of the ‘C’ Ward and famous (or in famous) for having the
highest population density in the world.
2) Kamathipura : The infamous red-light district of Mumbai. Spread over 30 acres
(approx), it is situated in the heart of the city and could be transformed into a world
class residential district.
3) Mohammed Ali Road and its surroundings : Located strategically adjoining the P
D’mello Road on one side and the Mohammed Ali Road on the other side, this entire
precinct could be converted into a Mixed used development.
4) Fort and Ballard Estate : Located in the most beautiful parts of Mumbai, this entire
area could be renewed into a heritage district by conserving the various historical
buildings and converting them into a prime entertainment and hospitality district for
tourist.
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62. Saifee Burhani Urban Improvement Trust – Bohri Mohalla – A Path Breaking Initiatives
A pioneering initiative has been undertaken by the Dawoodi Bohra Community in the
direction of Urban Renewal. The Bohras are a rich and educated community who owe their
grass roots to an area called Bhendi Bazar or Bohri Mohalla.
The project has been undertaken by the Trust known as Saifee Burhani Urban Improvement
Trust (SBUIT) and is spread over 18 acres of land entailing Urban Renewal of the entire
precinct. 3500 families spread across 281 dilapidated building and 1500 shops and offices
will be provided world class redeveloped dwelling and plac of work. [63]
places
The project is expected to transform the entire area and will serve as a bench mark for
urban renewal in the city.
[64] Pre Urban Renewal
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63. [65] Post Urban Renewal
When the project is completed 3500 families will get new self contained larger dwelling
units. Most of the residents will have their workplaces within walking distance from their
homes. The process of urban renewal will ensure that the quality of life for most of the
for
people changes for the better. Earlier in the report the negatives of urban sprawl and in
particular the impact of long commutes on social life ha been highlighted. Projects such as
has
the SBUIT mitigate the risk of such break down of social ties and could provide for a
ate
wonderful and wholesome living experience. The economic benefits to the society and the
exchequer highlighted in the case of the Umar Jamal Compound Development will obviously
be emulated in the case of SBUIT on a much larger scale.
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64. Kamathipura - Another opportunity for the Government to display its commitment.
Another low hanging fruit in the list of potential urban renewal precincts in Mumbai is
Kamathipura. Kamathipura was infamously Mumbai’s oldest and Asia’s second largest red
light district. It used to serve as a comfort zone for the British troops during the British raj.
However with changing times it no longer is the red light district it used to be. With the
redevelopment of certain buildings in the area especially the Umar Jamal Compound,
Kamathipura has the potential of becoming a prime residential area. In all today there are
300 land parcels (approx.) ranging in area between 10 sq.meters to 300sq.meters. The land
parcels are so small that independently they cannot be developed. There are 32000 tenants
(approx) occupying these land parcels and the entire precinct covers area of 120,000
sq.meters (approx.). It is the most appropriate project for the government to declare as an
Urban Renewal Precinct pursuant to which the entire area can be re-planned and created
into a prime residential area with all the civic amenities that one would expect in a
developed country. The benefit of the urban renewal of this area will be enormous
considering that all the buildings in the precincts have not only outlived their utility but are
also in a dangerous and dilapidated condition. As in the case study of the Umar Jamal
Compound, which is adjoining this precinct, it is expected that the economic benefit for
renewing the Kamathipura area will be enormous for all stakeholders. Considering the
same benchmark set by the Umar Jamal Redevelopment Project, it is expected that on an
annual basis the government will increase its property tax and other tax collection in this
area by several hundred folds. A study undertaken by DB Realty Limited, reveals that the
renewal can be undertaken with minimum displacement. A pictorial representation of the
project is given in the forthcoming slides.
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68. Kamathipura – Step 2 for Urban Renewal
Kamathipura – Completion of Rehabilitation in Urban Renewal Scheme
[68] Source : All Images DB Realty Limited
A detailed study is proposed to be published on the Kamathipura Urban Renewal Scheme in
the future.
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69. Conclusions and Recommendation
As is evident neither the central government nor the state government have taken any
major initiative to ensure successful implementation of urban renewal schemes except
passing some laws and largely, leaving it to the will and determination of the entrepreneur
and the tenants to enable Urban Renewal albeit on a much smaller scale. By and large the
Government has largely remained a silent spectator.
Reasons for failure or slow progress of Urban Renewal initiatives can be summed up as..
• No consensus between BMC and the Government of Maharashtra on issues of Urban
Renewal.
• In many states including in Mumbai, the elected Mayor does not have executive
powers and therefore the elected representatives of ULB’s have no say.
• Property tax, the main income source for BMC, has not increased due to constraints
of rent control, non-updation or improper updation of property rolls.
• Multiple layers of bureaucracy and multiplicity of permissions required to undertake
an urban renewal project.
• Lack of foresight in planning and non-identification of precincts for urban renewal.
• No mechanism to fast track dispute resolutions between tenants and developers,
developers and landlords and government and developers.
• Nonexistent or loose legislative framework resulting in frequent intervention by the
judiciary leading to diverse judicial pronouncements in similar cases
• Lack of political will
It is believed that the following recommendations may act as catalyst in the process of
renewing the city of Mumbai and the improving the lives of its citizens.
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70. Strategy for Urban Renewal
For rendering an enabling environment for the community and private enterprise to
participate in the process of development and urban renewal of the City, there is a need for
the government to initiate constitutional amendments and reforms in governance. While
constitutional amendments may be long drawn process rife with the potential of going
astray on political considerations, enough wherewithal is available with the State
Government to amend existing laws and set up mechanisms and processes which encourage
such initiatives rather than frustrate them.
Single Window Clearance
Currently for any Urban Renewal project 56 approvals* are required to be obtained from
several different authorities. Urban Renewal Schemes inherently have a long gestation
period since it involves acquisition of several land parcels from several landlords and
negotiations with several thousands of tenants. Coupled with long process of approval, the
entire scheme not only looses momentum but also becomes unviable. Therefore there is a
need to provide single window clearance to large urban renewal projects by bringing in an
enabling legislation.
Creation of an “Urban Renewal Authority” :
In case of Urban Renewal Schemes (URS) in Mumbai, the main reason as explained above
for slow progress is the requirement of different approvals (as many as 56) from various
authorities. A tangle of bureaucratic red tape complicates and frustrates the delicate
process of urban renewal.
Whereas the Government of Maharashtra took an important step in slum redevelopment
with the creation of Slum Rehabilitation Authority (SRA) in 25th December 1995, there is a
need for creation of similar body for Urban Renewal Schemes. All Urban Renewal Schemes
(URS) would then come under the jurisdiction of the Urban Renewal Authority which would
be designated as the nodal local planning authority to provide all the requisite approvals for
Urban Renewal Schemes and act as a facilitating agency. It would result in fast tracking of
approvals and implementation of Urban Renewal projects in various locations in Mumbai.
* Source – Research by Author
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71. Encourage Private Participation:
Government should act as an enabler for creating an ideal environment for encouraging
private sector participation both in terms of investment and execution. Various monetary
and non-monetary incentives like tax benefits on investment and execution, additional FSI
etc are some of the initiatives that are required to be taken up by the Government both
State and Central Government. Urban renewal projects should be declared as critical
infrastructure project by the Government of India and further Urban Renewal should be
declared as a priority sector for lending by banks at lowest possible rate of interest and if
possible at a subsidized rate of interest. Foreign Direct Investment (FDI) and External
Commercial Borrowing (ECB) should be opened up for Urban Renewal Projects.
Urban Renewal of Mumbai through cluster based redevelopment with active participation
from private players and with an enabling environment provided by the Government in a
well-calibrated manner can transform Mumbai into a world class city.
Risk Mitigation:
To boost confidence of private developers so as to increase their participation, the BMC Act
1888 should be amended by the State Government to provide for complete legislative
framework to enable undertaking of Urban Renewal Schemes, enabling the BMC to identify
and declare precincts of minimum 25 acres or above across the city as Urban Renewal
Precincts. The development of such precincts should be undertaken as per a 20 year
master-plan with active private sector participation.
Dispute Resolution:
There has to be a well-defined mechanism for dispute resolution between multiple
Government agencies, non-consenting tenants, landlords and developers. In this regard the
Maharashtra Region and Town Planning Act (MRTP) Act and the Land Acquisition Act also
have to be amended by the State Government.
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72. Property Tax:
Property Tax needs to be rationalized as market rates of the properties have seen huge
upward shifts. Property tax rate in South Mumbai is only 0.002% as compared to
international benchmark of 1-2%. A reform in tax rates will not only correct the imbalance
but also generate additional municipal revenues which can be used to improve urban
infrastructure.
Planning and Capacity Building: An efficient and effective municipal management starts
with a vision of transformation of city, setting objectives, strategizing to achieve these
objectives, encouraging civil society participation, financial planning, fund raising and
resource allocation, monitoring, collection of taxes, etc. Implementation of these practices
requires capacity building not only in terms of state representatives but also the
involvement of civil society stakeholders.
The BMC should make a 20 year plan and scrap the existing Development Plan (DP). The
BMC should also scrap all the myriad of schemes and adopt global best practices by
ushering in transparency and best governance, including a complete overhauling of the
process for approval of building plans and Urban Renewal Projects..
While the conclusions have only touched the peripheral issues, greater research is required
to identify the other potential lacunas and opportunities of Urban Renewal and address
them appropriately. It is hoped that the BMC and the Government of Maharashtra will
commission such a study at the earliest and implement it for the benefit of one and all.
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