Full Text | What Is Wrong With Mumbai's Housing?

Mumbai seems to be in the grip of a craze to construct luxury towers everywhere. At the same time, the city’s municipal corporation appears to be handing over every available space to developers. What’s going on? In a recent episode of The Wire Talks, urban researcher Hussain Indorewala broke down the real picture for The Wire's founding editor Sidharth Bhatia. 

The following is the full text of the conversation, transcribed by Sharmina A, an editorial intern at The Wire.

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Sidharth Bhatia:  Hello and welcome to The Wire Talks. I'm Sidharth Bhatia. In recent days, residents of Mumbai, suburban Mumbai and Bandra have been fighting the Municipal Corporation over a football ground. In short, the civic authorities want to take it over and build a convention centre where the locals have been playing football for years, generations have played football there and really enjoyed themselves. They are resisting as can be expected. One might think that everyone would want to preserve a green space in a city that is covered in concrete already. But that's not so. Mumbai and Maharashtra's policy makers and politicians look like they are out to grab every available space to hand over to builders. Laws have been changed to make things easier for them. The lack of infrastructure to support this does not seem to bother them. This is really a troubling prospect.

Today I have Hussain Indorewala who has been writing about all these for some time in his newspaper column. He is an urban researcher and an assistant professor at the Kamala Raheja Vidyanidhi Institute for Architecture and Environmental Studies (KRVIA). His works critically analyses real estate, political economy, public housing and urban infrastructure projects and his column is quite sharply observant and critical of what is going on in Mumbai. Hussain Indorewala, welcome to The Wire Talks.

Hussain Indorewala: Thanks Sidharth, happy to be here.

Sidharth Bhatia: Hussain, let's start with an overview. If you had to sum up what's happening in Mumbai today what would you say? I know what I would, but what would you say? 

Hussain Indorewala: Well, lots of people have been saying this for a while. Is Mumbai for sale? is all public land in the city being sold to builders?, and to some extent that is what it appears as, but there's a slight nuance in that, take the Neville D'Souza ground or the recent announcement to monetise the 22 BEST depots as a way of generating revenue for the for the BEST (Brihanmumbai Electric Supply and Transport)  to run buses. a few decades ago  we have seen how the mill lands were monetised, recently the BMC has decided to lease century mills to a builder. It would seem that the city is being increasingly sold. The nuance really is that much of asset transfer to developers is actually based on a devaluation of those assets. It's not necessarily a sale in that sense. So for instance, even the normal land transfer to the developer for slum rehabilitation projects is at a lower rate than the market value of land. The Neville D'Souza ground for instance was not necessarily for real estate; it's for a convention centre but the context is important because that entire area is going to be developed as Bandra Bay- a very extravagant real estate district. So what the trend of land monetisation suggests is that the revenue gains to the authorities from these sale of assets is the way of funding infrastructure projects. At least that is what the argument is. But a lot of this argument is overstated, because the assets are being transferred at less than their real value. So it is more accurate to say what is happening in Mumbai is not necessarily a sale of public authorities are actually facilitating private speculation and enabling developers to make profit from real estate.  

Sidharth Bhatia: that's an interesting nuance, because what that suggests is that while the face of the public authorities seem to say ‘okay this money will come in and we'll be able to contribute to the infrastructure project such as roads’, as though taxes were not doing it and this is yet another excuse but these assets are being handed over at less than market value which is actually  more troubling. Now let's get into it.

So this devalued land which belongs to state authorities, take the bus depots; the bus depots belong to the state authority. Is it to improve the bus service, even though there is no evidence that there is any effort to do that. So apart from this what are the more egregious changes that you have seen in recent years?

 Hussain Indorewala: two things about this. One is, take the example of Bombay's public bus service- BEST depot. The problem which BEST is facing is actually a problem which was created when the electricity division was privatised way back in 2003. Since then BEST always worked as a cross subsidy model. The electricity division cross subsidised the transport division. The utility was designed in that way. What happened is that once the electricity sector division was privatised, the funding from electricity was discontinued. So now it is obvious that the transport division is going to accumulate and the deficits of the transport division are going to accumulate. Now the only way to address that would be if the BMC – the owner of the entire utility – would provide funding to BEST like any other municipal service. But it has refused to do it since the 2016 and 2017s. When the deficits began to mount they said that they’ll bring private operators and that will address the problem. Of course that didn't. In fact the deficits continue to mount and so now the new solution is to monetise land which was from the beginning end game of what privatisation was led to. the problem is that monetising land will probably create some revenue for BEST and maybe they'll buy some buses but the revenue problems that the BEST faces are not going to be addressed by monetisation of land. that can only be addressed if the BMC finds a source of revenue for operating buses like every other authority in the world – which it refuses to do of course. So we all understand that all of these are just pretexts for doing what they wanted to do from the beginning, which was to monetise or hand over BEST depots to land builders which is what they're planning to do now. Of course, commuter groups and unions have expressed opposition to this.

Now the other point that I wanted to make regarding this revenue which goes into funding infrastructure projects is maybe It's true that some of the revenue does fund infrastructure projects but the point is what kind of infrastructure?  So the BMC may make some money by transferring its assets. but for the past 15 years it has been very interested in funding projects like the coastal road, now there's a north extension of the coastal road which is essentially for people who use cars. but the key to understand here is whether it's road projects like the coastal road or the metro system, a very large part of that infrastructure planning has to do with increasing land prices. and that increase in land prices is then captured by the real estate sector when these lands are privatized or in case of private lands whoever when the developers go for re-development projects. So even infrastructure planning is linked to real estate. Ideally if you wanted to plan a metro system you would create a lot of east-west connections in the region, in Mumbai. but that's not how the metro system is planned. It is planned along existing transport routes which suggests that in the end the main objective seems to be to increase in real estate value so that then they can be captured by private developers.

Sidharth Bhatia: So you're saying all these things, whether handing over public lands to developers in the name of collecting cash and which by the way will be a one-time sale because you are not going to get revenue from that. the building the coastal road or building the metro because both of them allow air rides, which allowed property development along the way and increased prices of real estate. All of these that we have mentioned are real estate plays.

Hussain Indorewala: Exactly.

Sidharth Bhatia: So anyway, as we go along, we will see that real estate is the name of the game. I'm going to bring in a relatively new regulation which is for the sake of our listeners who are not in Mumbai, I'll explain the Development Control and Promotion Regulations (DCPR) which have liberalised construction to such an extent with higher floor space index which allows taller buildings, which also permits all buildings to be erected on narrow streets which cannot take even relatively shorter buildings. That means the streets which are already crowded and have no parking, no place to drive, no place to walk will now have to bear a load of traffic that comes out of tall buildings.

Is that a correct premise? And what do you make of it? 

Hussain Indorewala: Well, technically speaking higher Floor Space Index (FSI) does not directly correlate with high-rise buildings. Of course that can happen and that usually does happen. But for instance, if you look at Nariman Point, it has high-rise buildings, but the FSI of Nariman Point is the same as the FSI of Ballard Estate, which is ground plus three, ground plus four story buildings. so you can have higher FSI with a mid-rise kind of development. But what is more important here is that in Mumbai the FSI regime is very interesting. Because on paper the FSI is low. If you look at the Development Control Regulations (DCR) the base FSI for the Island City is two. The FSI for the suburbs is a little less than that. But the idea is that on paper the FSI is low but then for every kind of project you have additional FSI. So effectively the FSI is high when you undertake a project. How has this happened? This has happened because in Mumbai there are various types of schemes. you mentioned the Development Control Regulations. There is one section of that regulation called Regulation 33, which is the key regulation in Mumbai. In fact when in '91 this regulation was introduced as an exceptional exception chapter in certain cases we will provide extra FSI. What has happened over 20 years is that this section has enlarged to become the entire planning of Mumbai. by today it is planned through exceptions not through the normal development control rules. So for instance, if you want to do MHADA, you have special rules. You want to do Slum Rehabilitation Authority (SRA), you have special rules. You want to do Cooperative society redevelopment, that is another subsection of 33. And you know you go on up to 24-33 subsections within the regulation 33. 

Sidharth Bhatia: So what for me as a lay person, what's the end result?

Hussain Indorewala: The end result is that you have higher FSI for all of these projects which are provided on a scheme by scheme basis. So if tenants of rent control buildings ask for building repair, large homes, the government announces an increase in FSI. So for the government FSI is a magic wand and every time there's a demand from the residents or from citizens you wave the magic wand and  increase FSI and that becomes a way to address it. Of course every increase in FSI actually benefits whoever is going to undertake the development or redevelopment project. Now the issue is that when you increase FSI without thinking about larger planning considerations, whether it's open spaces, schools, hospitals, transportation, water supply and so on. What happens is, there is a stress on infrastructure – that's one matter but the other matter is that many of the plots in the city are not large enough to accommodate that additional FSI. So, you start having higher intensity construction on smaller plots and the road widths are not sufficient. So there will be a built environment where you have very narrow streets with very high buildings. From a planning perspective or a design architecture perspective, the problem is that it severely degrades the quality of the built environment. There is nothing wrong with high-rise buildings. it's perfectly fine.you can have high-rise buildings but the point is are you planning the city to accommodate this kind of built environment. American cities which have probably the most famous skyscrapers in the world, do have street widths which are appropriate to that kind of building heights. What is happening in our city is that we are adding FSI but we are not doing the planning for the increase in FSI which is where all of the problems arise.

Sidharth Bhatia: I have to ask you a very basic question as a citizen, as an observer about as you said a tall building by itself is not the issue, but I'm a citizen I see the tall buildings as something going to add a lot of stress to the street and to the infrastructure where I may be living in a short building of five stories and I see 33 stories, that ejecting on a daily basis something like 40 cars,let us say. My question is why can't the civic authorities work on expanding the infrastructure even ensuring water supply, traffic or a bigger better street? Now the streets are packed with hawkers and so on and so forth. Why can't they work on it so that the tall building and I, the old resident both feel comfortable and happy? It's a simple basic question which a citizen might ask.

Hussain Indorewala: one of the reasons why this doesn't happen is because in Mumbai planning is implemented by  private developers. The plan is prepared by the Municipal Authority of course but implementation happens through the agency of developers. So in the earlier planning system if you want to build a school the government would acquire the land, pay compensation to the land owner and then build the school or hospital or whatever it was or even open space. Today the system is, giving developers incentives for creating that amenity and then giving them more air rights on their plot. So what happens is that if the developer is not interested in doing a real estate project the amenity doesn't get built. So you are in a way dependent on real estate development for implementation of development planning. That is one thing. The second thing is that the development plan does have road widening and so on for certain kinds of projects. Now what they've done  recently is that they have linked FSI to road widths but then they went ahead and also diluted the 2018 plan, which was sanctioned the FSI was linked to road widths – an attempt by the municipal authority to ensure that the roads become wider as the buildings become taller. of course The problem is the infrastructure is not built by the authorities.. There is a lot of infrastructure being built in Bombay.

The problem is the nature of the infrastructure that is being built. You can have as many wide roads as you want, but just imagine if 50% of the city relied on cars for commuting; it would be basically impossible to move no matter how many roads you provide, because the city's density is fairly high. In a way, in Mumbai 20% to 25% of the population using cars is mathematically impossible. What you need is investment in affordable public transport, which we had earlier still have partly with the suburban railway. but unless you invest and fund BEST and provide other modes of public transport you're not going to be able to address the problem of traffic congestion and so on which generally then gets blamed on street vendors or encroachments, whatever you want to call it. I mean recently somebody was complaining that auto rickshas cause congestion. Well, if you don't have buses, people are going to move to autos. And if you don't have autos, how will people travel, so public transport is where the focus should be. But the urban authorities have only focused on car oriented infrastructure or metros. You can see that the ridership in these are very low because they are not affordable. So there is a kind of an imagination in the planning authorities that they are catering to a population which income-wise is very different from the reality of the city. They are planning for an imagined citizenry not for the people who live in the city. The people who live in the city can afford buses and suburban rail. They can't afford metros, Olas and Ubers. but infrastructure planning is largely focused on these modes and not affordable transport modes.

Sidharth Bhatia: So you've actually condensed it right down to the core. It is clear that when planning authorities sit down at a drawing board, they envision a citizen who owns a car or can easily afford daily metro rides, high tolls on the Atal Setu, and ride-hailing services like Ola or Uber. At worst, they assume everyone owns a car but might take public transport like cabs or carpool on occasion. They operate on these kinds of fantasies. What they fail to consider is the person reliant on the Central Railway, where ticket prices are actually affordable for the general public.So clearly there has been a mental shift among planners and they seem to have lost touch with the common Bombay person. 

Hussain Indorewala: It's either that the planning authorities imagine a middle class citizen as the general  citizenry or they don't care and the latter is worse. If you're planning a city you have to think about who lives in the city and what is the most appropriate way for the people to be able to commute to live and so on. but that doesn't seem to be the focus of much planning for instance even housing.

Sidharth Bhatia: When do you think this shift happened? Because Maharashtra and Mumbai had begun with thinking of housing like a public good and many of these services were laid down and in fact Bombay's bus service was excellent, the suburban railways were crowded but cheap. When do you think these so-called elitist fantasies become common?

Hussain Indorewala: That's an important point. just to tie up with something, I was saying before 1991, planning in Mumbai was focused on preventing speculation. That was the overall framework with which state planning operated. One can criticise top down planning and so on, that is true. but still  there was a clear understanding that if you do not curb the speculative intent of real estate developers, you're going to make the city unaffordable for the people who live here very quickly.  It started changing with liberalisation where the new concepts  in planning started to emerge. For instance, in the 1991 development plan which was a strange mix of pre-liberalisation top- down-bureaucratic planning along with these market oriented tools like higher floor space, transfer of development rights and other land based planning instruments. So that is when the shift began. And it started slowly but now it has really become the default mode of the thinking around urban development takes place. 

Sidharth Bhatia: Coming to housing. I think we should look at that in some detail. The idea that housing was a public good and that the state would give houses to people is  slowly gone and now housing is left to real estate development with the blessings of the policy makers and the politicians. As you mentioned earlier, either they have these fixed notions of who a Mumbai citizen is, or they have stopped caring altogether. Let us assume they still care in some abstract way. But the net result today is twofold: housing slum dwellers is one issue, and the fact that there are still poor, homeless people living on the streets is another. But if the middle class family cannot afford an apartment in any part of either the island or the suburbs and has to go to the distant suburbs which actually then further adds to their troubles. They have to now commute an hour and a half to get here. So housing is now the wild west, because if you were to open a newspaper on any day, it's full of ads showing luxurious housing. The question is Who are these buyers? Have we just completely thrown it to open for the developer and forgotten the citizen?

Hussain Indorewala: The thing is, if you are a developer, you are going to think where I have the best chance of making a profitable project and profitable not only in terms of a cost plus margin of 20% or something, but the normal expectation of the real estate industry. Most real estate development in Mumbai is focused towards the premium and luxury development and the reason for that is very simple but it's also extremely concerning. The demand for housing in Mumbai is largely a global demand but the capacity of the average citizen in Mumbai to purchase real estate is very low. so you have this huge gap between incomes and real estate prices. So for instance, Bandra Bay is being developed as a premium real estate zone in the city. The brochures which advertise Bandra Bay are very clear about who they are targeting. They're talking about high worth individuals, NRIs, business tycoons and so on. They're not talking about ordinary residents of Mumbai. If you look at these real estate ads or if you try to look for housing in Mumbai, in greater Mumbai it is very difficult to find a small apartment for less than 75 lakhs. How many people can afford it? it is completely out of reach for maybe 90- 95% of the population.

We have to understand why this has also happened. The incentives for the real estate industry are largely geared towards this kind of development. In defence the authorities will say they have an affordable housing scheme but there are no takers for it because builders don't find that profitable at all. Obviously Mumbai is not the only city which has some kind of inclusionary housing. If you think of slum rehabilitation as an inclusive concept. What has happened in Mumbai is all of the new stock that is created is luxury but the rest of what is being constructed is replacement stock. So for instance, if a cooperative society decides to go for redevelopment, the builder will build houses for the existing residents and then build some new apartments to sell for the cost of rehabilitation and create a profit for the developer. So already the developer is automatically going to think to make money most in terms of margins rather than in terms of number of houses. So you're creating very small increments of new housing stock which is premium stock and then you have replacement units whether it's MHADA, Slum Rehabilitation, Cooperative housing societies and rent control all of that.

Let’s not go into the quality of replacement housing, because that’s another topic. You are not creating sufficient units in the first place – especially small, affordable ones. That’s already a problem.

But when it comes to schemes like Slum Rehabilitation, you have an additional issue: every scheme destroys more homes than it builds, because cut-off dates divide residents into 'eligible' and 'ineligible' categories. You displace a whole group of people while providing housing to only a few. Because slums serve as informal affordable housing, this process actually creates a net deficit of affordable stock.

There are a series of distortions in the housing market. For instance, cities around the world use inclusionary housing. In Spain, developers must set aside roughly 50% of floor space for inclusionary units. The government reimburses the construction costs while strictly enforcing quality standards, rather than telling developers to cross-subsidise by selling luxury units on the open market.

That doesn’t happen here. Here, all the risk falls on the developer, so developers constantly lobby to dilute standards – which they’ve been doing for 20 to 30 years. While we can blame the real estate industry, the focus should really be on improving policy. A good policy that enforces construction standards for small, affordable units – complemented by a solid public housing scheme – creates true affordability. Right now, we basically have only two tiers: basic replacement housing and luxury housing, with nothing in between. 

Sidharth Bhatia: So now, to have a grand overview of what's coming in the future, one of the things that the government is most excited about at this moment – and politicians have been going on and on about – is Mumbai 3.0.

So, you already have Mumbai. Then you have Navi Mumbai, which started out as a bedroom suburb, but now is beginning to have its own personality, with many businesses moving there. However, it's still a commuting place, even though there has been some improvement in commuting facilities.

Now, if you were to tell somebody completely alien to this city what Mumbai 3.0 is, what would you say?

Hussain Indorewala: First of all, Mumbai 3.0 is a brand name. The actual, official name is the KSC New Town, which is a very large notified area of about 324 square kilometres for developing this new city to the south of Navi Mumbai.

The way in which the government has been talking about this is very interesting. It says that this is going to be a new economic hub that will feature data centres and other new types of industries. However, to link it to our earlier discussion, much of this has a lot to do with the development of the new airport, the Atal Setu infrastructure project, and the land holdings of certain companies – like Reliance, for instance. Reliance had earlier begun to acquire land for the Navi Mumbai Special Economic Zone, though they were only able to acquire about 13% of the land because farmers resisted. Nevertheless, they still hold a considerable amount of land there. With all of this new infrastructure now built, the government has been advertising this as a new city that will help solve a whole range of Mumbai's problems.

Of course, the issue is that Navi Mumbai was originally planned to solve many of South Mumbai's problems, and the approach it took was very sensible. Some of the key proposals were not implemented – for instance, moving the Mantralaya or the stock market to Navi Mumbai, which they failed to do. People often say that the important thing for developing any new city is not to create housing, but to create jobs. Jobs are what attract people to a new city; people do not move simply because housing is offered, but because there are opportunities for livelihoods. Any urban planner worth their salt understands this well.

Yet, if you look at the literature around the KSC New Town, there is very little information about what kinds of jobs are going to be created, how many will be generated, or what capacities and skills people will need to secure them. Navi Mumbai was different: it first developed an industrial area and then built housing based on demand.

Another important factor is the connection with Mumbai 1.0 and Mumbai 2.0. Mumbai 2.0 is in close proximity, but if you look at the connection between Mumbai and this so-called Mumbai 3.0, you have the Trans Harbour Link. If you want to develop a new town with affordable housing, the first step should be creating an affordable transit system so that people can affordably live in Mumbai 3.0. I have not come across any plans for that. They mention metro lines, but an effective solution requires a robust railway or bus network.

It is clear that Mumbai 3.0 is an exuberant, speculative project being envisioned. As with other projects in Mumbai, the MMRDA website states that they will generate significant revenue through land monetisation to fund the infrastructure. This aligns with my earlier point: state authorities are creating conditions for private speculation rather than focusing on developing a city for the people who will eventually live there, work there, and need affordable housing and transit.

 Sidharth Bhatia: Clearly, to put it simplistically, it is more of the same. Although they talk about data centres and other industries, these produce very few jobs, to be honest. The effort to create jobs is missing.

It is somewhat pessimistic. There used to be a lot of talk that, given the direction Mumbai is going, it would not last long because young talent would start moving out. While I have no statistics to prove that, I can say from personal observation that young talent has found other options. It used to be Pune or other places that attracted people who previously moved here. Now, you can be a finance professional sitting anywhere. Furthermore, many industries are going to face job losses anyway. For example, a lot of talent in the IT industry has moved to Bangalore because they have that option.

The city is clearly proving difficult to navigate for most people. Existing citizens are finding housing increasingly out of reach. Yet, the speculation and policies geared toward a specific segment – in this case, developers – have not stopped.

So, thank you, Hussain. I cannot say with any conviction that I am thanking you for providing us hope, because I do not know if there is much hope. However, for a young person or a middle-class couple, this is going to be an extremely tough city in the coming years. Thank you for laying it out and telling us what the situation is.

That is Hussain Indorewala. He's a columnist, a professor and he's an urban researcher who has written about what is happening in Mumbai and its many failures in terms of policy planning.

We'll be back once again next week with another guest from me Sidharth Bhatia and the rest of The Wire Talks team. Goodbye.

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