Re New Mumbai by Arshad Balwa


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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.


  • Hi, Mr. Arshad, i saw your ppt it is very nice. can u pls send me your report on because i m working on Urban decay & i m searching different different case study regarding this. Thanking you
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  • Hi Arshad Its interesting. Most of the content examined are still relevant. Will you please share the Report on All the Best. Regards
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  • Asalamualaikum Mr.Arshad, will you be able to send me a downloadable link please? Many thanks
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Re New Mumbai by Arshad Balwa

  1. 1. About the AuthorMy name is Arshad S. Balwa and I am currently studying at the Dhirubhai AmbaniInternational School, Mumbai, India in the 11th Grade of the IB Diploma. My family hasbeen in the real estate business for many decades and as such I have grown up in a “brickand mortar” world. I have travelled around the world including the United States ofAmerica, Europe, Africa, etc. However every time I returned to Mumbai, I wasoverwhelmed by the lack of infrastructure, lack of civic amenities and generally the urbandecay prevalent in Mumbai. While, I was always fascinated with the Real Estate businessmy fascination turned into intrigue, leading to this report. Through this report, I have madean effort to highlight the urban chaos and made some recommendations.This report is by no means an exhaustive all-encompassing solution to the urban decayprevalent in Mumbai. A study in much greater detail is required to be carried out acrossMumbai and other urban centers in India. However, I am hopeful, this report willencourage others including the Municipal Corporation and the State Government toundertake a detailed study and take measures to reverse the urban decay in Mumbai andother urban centers.I have taken due care to give due credit to the authors of articles I have referred in myreport. If for any reason, any of the article referred to, has not be given due credit, thesame 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 andencouraging me throughout the entire process.ARSHAD BALWADATE : 9th June 2012 1
  2. 2. AbstractThis 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 addressingurban decay but also in emerging as a growth driver for the economic development of thecity. The study examines the socio economic pressures of urbanization, the causes of urbandecay and the various approaches to urban renewal with reference to internationalexperiences. The study illustrates and highlights the tremendous potential of urban renewaland the need for government policy, which can benefit millions of people. The report alsopresents an opportunity for renewal of Kamathipura and other precincts in MumbaiThe report highlights that a mere rethink on the role of the government from a regulatory tofacilitative approach can ensure success of urban renewal, which in turn can throw open thepossibility of revitalizing hundreds of such inner city clusters, leading to all roundsustainable economic growth and overall improvement in socio-economic conditions ofpeople.The report highlights the urgent need for Urban Renewal projects to be taken up acrossMumbai which can lead to broad based economic development and impact millions in apositive manner. 2
  3. 3. ContentsIntroduction …………………………………………………………………………………………. 5-7Urban Renewal ……………………………………………………………………………………… 8-9The Inevitable Urban Sprawling and its impact on the city of Mumbai ….. 10-12Brief History of Mumbai ……………………………………………………………………….. 13-15Socio Economic Costs of the Urban Sprawl ……………………………………………. 16-19Urban Sprawl and Urban Decay ……………………………………………………………. 20-27Government Apathy – Catalyst to Urban Decay of Mumbai ………………….. 28-31Government Policy, Initiative and Regulatory Framework (Past andPresent) - 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)) 37Urban Renewal over other schemes ……………………………………………………… 38City Planning in Mumbai – Plan exists only on Paper !!………………………….. 39-42Urban Renewal – Can it be a catalyst to transform Mumbai ? ……………….. 43-44Case 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
  4. 4. 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 CommitmentConclusions 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 71Epilogue 72 4
  5. 5. Introduction[1] Fact Sheet : Urban India : Understanding in the Maximum City – Uncovering the myth of urban development in Mumbai – S.Parasuraman-page 39 S.ParasuramanThe 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 informalsector, as opposed to 83 percent in the country as a whole. Through the long years of India’scommand and control economy, its cities appeared as frozen in time as the elderly Ambassadorcars built with production lines shipped from Britain” - DeyanSudjic, Director of the DesignMuseum in London[2] 5
  6. 6. This describes the state of affairs in Mumbai. The city and particularly the Island City seemsto be frozen in time with little or no change since Independence. The state of Maharashtrahas one of the largest urban population in the country. Mumbai – the capital city ofMaharashtra has seen a tremendous rise in its population due to the continuous influx ofmigrants from the hinterlands attracted by the job opportunities. The city’s infrastructurehas 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 Thesign of dynamism – they also reflect the problems associated with increasing inequalities,declining rural economies and inadequate employment generation that affect many parts ofrural and urban India”.[3] [4] Four Indian Cities –Urban Age City Data page 19 [5] Cities and Region – Urban Age City Data page 20Much of the population of Mumbai comprises of migrants, who have migrated to the city in msearch 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
  7. 7. [6] Urban India – Understanding in the Maximum City – The Future of Indian Cities Dr. Amitabh Kundu – page 6Urban Population continues to grow unchecked across India and the story is no different inMumbai. The mismatch between increasing population and Mumbai’s inconsistent urbanplanning and governance impeded by archaic legislation and the bureaucratic machinery,has resulted in a quagmire of urban poverty, housing shortage, slums, deterioration ofexisting buildings, overburdened public and social infrastructure (roads, schools, hospitalsetc), 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 asthe critical housing issues and slums are key challenges facing Mumbai. Some projectionsstate 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 effortswould be required by all stakeholders for Mumbai to reach its destiny !! 7
  8. 8. Urban RenewalThe Encyclopedia Britannica defines Urban Renewal as a comprehensive scheme to redressa 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. Earlyefforts usually focused on housing reform and sanitary and public-health measures,followed by growing emphasis on slum clearance and the relocation of population andindustry from congested areas to less-crowded sites.Each country approaches urban renewal according to its means and its political andadministrative systems. One of the chief components of urban renewal is redevelopment,which is achieved through the clearance and rebuilding of deteriorated or obsoletestructures. Other aspects of urban renewal involve the reuse of land for new purposes,rehabilitation of structurally sound buildings that have deteriorated or lost their originalfunctions, and also conservation.As is known, the concentration of populations with lesser purchasing power and greatersocial 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 andhousing market, different social groups tend to become separated in urban areas. As thecapacity to choose a place to live depends on both personal and household income, thosewith greater income obviously have greater liberty when it comes to choosing where theywant to live, while households of lesser financial means are generally pushed to placeswhere prices are lower. Hence, social groups with lower incomes and higher social needstend 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 greaterdifficulties in maintaining them. Moreover, the concentration of rather problematic socialsituations in such areas reduces expectations as to property values and this influences landowners when considering engaging in possible renewal projects. 8
  9. 9. 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
  10. 10. The inevitable urban sprawl and its impact on the city ofMumbaiThe website of the Brihan Mumbai Municipal Corporation (BMC), the local body that umbaigoverns Greater Mumbai has a large map marking Dahisar and Mulund as the borders of its468 sq km jurisdiction. On the web website of the Mumbai Metropolitan Region Development etropolitanAuthority (MMRDA), the organization responsible for development of 4355 sq km MumbaiMetropolitan 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’seconomy. 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, Khopolior Panvel. [8] Map of Mumbai – Metropolitan Region (MMR)The railway lines have provided the blueprint for Mumbai’s growth, observed noted observearchitect Charles Correa in his perceptive essay Public Transport as DNA. “The urbanstructure of Mumbai was not ordained by any city planner”, he wrote. It was “really 10
  11. 11. determined by the railway engineers” who laid down the Western and Central Rail Railway locallines. Since the end of the nineteenth century, Mumbai has grown in the direction the traintracks led. [9] Mumbai Rail NetworkStatistics show that of the 3.8 million people who moved to the city between 1991 and 82001, roughly half have settled in the suburbs. The 1991 census shows that the populationof Kalyan (a satellite town) on the Central Railway exploded by 645 % in the ‘80s and theMira Bhayander (another satellite town) region along the Western Railway expanded to 583% during the same time. 11
  12. 12. [10] Uncovering the myth of urban development in Mumbai – S.Parasuraman – page 39These statistics confirm that Mumbai in the recent past has had one of the largestpopulation growth in the World. The growth of Mumbai’s population has to be seen in thebackground of the fact that Mumbai City (excluding MMR) has probably one of the smallestland 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 toundertake Urban Renewal. However the challenges also have several opportunities as thisreport highlights. 12
  13. 13. Brief History of MumbaiMumbai is the Capital of Maharashtra. Before it became the capital of Maharashtra it wasthe most important city in the British Empire and in terms of economic importance wasconsidered more important than the Capital of the British Raj i.e. New Delhi. Mumbai’s onsideredpopulation of 20.5 Million makes it the most populous city in India and the 4th mostpopulous city in the world[11]. Situated on the Western Cost of India, Mumbai has a deepnatural harbour and is surrounded by water on almost all sides. Pre – Independence Map of Mumbai [12] [13] Map of Portuguese MumbaiOriginally Mumbai comprised of 7 islands, which were gifted by the Portuguese to theBritish. In the mid 18th Century the 7 islands were reshaped by a massive reclamationproject 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 Mumbaiseaport and a trading center. Mumbai as it exists today is the Commercial andEntertainment capital of India and generates about 5% of India’s GDP.[14] gen 13
  14. 14. The pre-eminence of Mumbai can be known by the fact that important Financial Institutionslike the Reserve Bank of India, The Bombay Stock Exchange, the National Stock Exchangeand the Corporate Head Quarters of several Indian and Multinational Corporations are Corporationsituated in Mumbai. [15] Reserve Bank of India Bombay Stock Exchange [16] 14
  15. 15. [17] National Stock ExchangeSince 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 postNariman Point and Cuffe Para Parade was reclaimed and developed . [18] The BombayMetropolitan Region Development Authority (now known as MMRDA) was set up in 1975 by anthe Government of Maharashtra as an apex body for planning and co ordination of co-ordinationdevelopment in metropolitan region lopment [19] . Since the 1960, no reclamation of any kind hasbeen undertaken by the Government and as a result, the land mass of Mumbai, which owes akenits existence to the reclamation, has remained unchanged. The issue of reclamation isimportant for the simple reason that stringent Coastal Regulation Laws do not allowreclamation of land into the sea. With continuous influx of migrants and rising population onthe only way therefore to accommodate the residents of Mumbai is to renew Mumbai Mumbai. 15
  16. 16. Socio Economic Costs of the Urban SprawlWith Mumbai, spreading in all directions, the distance between work place and homecontinues to increase. The Urban Sprawl is evident in all cities and is often presented as thenatural consequence of a high rate of economic growth and prosperity. The eve stretching evercities have led to increasing commutes with millions of people travelling everyday to workand spending precious time and money. The increasing daily commute places a huge burdenon the society in more ways than one. [20] Image from Maximum City – Suketu Mehta – page 43 [21] – Moving in the City – page 30 16
  17. 17. [22] – Moving in the City – page 30On 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 orsleep and relaxation. With little time and energy left for these basic needs, the society ha haswitnessed a lot of negative outcomes like a breakdown of relationships, diminishin health and diminishingfitness profiles, depressed psychological states, alienation from family and a general apathy. [23] Urban Transport in Indian Cities – Dr. Geetam Tiwari – page 9 17
  18. 18. As communities get disconnected thanks to the ever stretching city limits, the Indian way oflife has given way to a “modern” existentialistic way of life. The Indian youth is left grappling lifewith little social connect which has had far reaching implications on the society. Sectors of Employment in Mumbai [24] The Economy of Cities - Page 32The city has a relatively high rate of unemployment yet it continues to act as a magnet forthousands 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 ofthe society. It is supposed to leave enough room to accommodate the requirements of a ety. 18
  19. 19. society not just for their basic living needs but also for leading a full life. As its residentsmove to a faster world with the growth in technology the expectation of a response fromthe 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 agreat extent attributable to the “Chaltahai”* (meaning accepting status quo) attitude if itscitizen.Urban sprawl and its negative effects now being felt are bringing in focus the possible andoverlooked deficiencies of urban centralization. While the city has been witnessing theurban sprawl, the same urban sprawl is also responsible for the decay of the inner citydistricts as well as the emergence of the distant suburbs.* “ChaltaHai: in Hindi means “anything will do” 19
  20. 20. Urban Sprawl and Urban Decay“It is worthwhile to understand the initial development of suburban areas of Mumbai from ahistorical perspective. Upon the circular issued to the Bombay Chamber of Commerce andthe Municipal Corporation in 1908, inviting suggestions of addressing the problem of acuteshortage of housing for the poor, Arthur Crawford, the then Municipal Commissioner,emphasized the importance of comprehensive urban planning in his “The Development ofNew 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 leadto the demise of the city. World over, suburbs act as feeder to the city, ensuring thesurvival of the city in perpetuity. However, the suburbs of Mumbai have taken over thefunction 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 thecotton mills in Mumbai declined; port and berthing activity near the Bombay Port gotreplaced 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, whichwas virtually the growth engine of the city for over hundred years, was completelyparalyzed subsequent to the huge strike in 1982 also referred to as the “Great BombayTextile Strike” in which nearly 250,000 workers employed by several textile mills across thecity, participated.[27] 20
  21. 21. [28] A View of a defunct Textile MillThis eventually led to the demise of the textile mills and on a conservative estimate couldhave affected about 1 million people. The allied textile activity also died and affected evenmore people. The impact of the demise of the Bombay Port Trust and the Textile Mills onthe population of Mumbai and the resultant urban decay cannot be undermined. Mumbaiwas 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 tileCoimbatore, etc Mumbai lost its place of pre-eminence in the textile business. [29] A view of the Bombay Port Trust 21
  22. 22. The once bustling Bombay Port Trust, became practically empty. It occupies severalthousands 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 otherindustrialist of India today does not even represent the reflection of its past glory. The esentire 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 tradeand with the decline of the trade, the areas in which such centers were located have trade sdeclined. Examples of such decay are prevalent in the Fort Area (an erstwhile Shipping andTrading center), The Crawford market Area (a textile and general trading Center), TheCarnac Bunder Area (a shipping and trading center), The Masjid Bunder Area (a grain tradingcenter), The Null Bazar Area (a Grain Trading center) etc. 22
  23. 23. [31] Once bustling Fort area now houses ramshackle offices FThe Fort Area , which was the Central Business Distinct (CBD) of not only Mumbai but alsothe 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 ofcities 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
  24. 24. [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
  25. 25. The list of areas which have fallen into decline and which once used to be thriving centers oftrade in the heart of Mumbai is endless. Mumbai is divided into wards for decentralizationof 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 ofMumbai extends generally upto the ‘G’ ward. The wards beyond the ‘G’ ward i.e. ‘H’ wardsonwards 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 inthe midst of unending downward spiral. These areas though situated in the most beautifulparts of Mumbai, have decayed due to general change in economic situation and generalapathy by successive governments. Decline in the economic importance of these areas hasresulted in these areas being neglected. The poor generally have congregated in theseareas, which were once the abode of the rich and famous. [35] Google Image of the Island CityMumbai was planned like any other city. The workers accommodations were naturallylocated besides the large factories, mills, ports etc. However with the decline of theseactivities the workers became jobless and redundant. Coupled with aggressive and militanttrade unions, the entire work force remained unemployed for years altogether. Years of 25
  26. 26. impasse between the trade unions and the employers virtually sealed the fa of these employers fateenterprises and its workers.The workers, however continued to live next to the factories and mills which were nowclosed down and defunct. Years passed and as families of the workers out . outgrew theirdwelling units, the new generation was forced to move out to the distant suburbs. The innercity 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 simultaneouslyexpanding to accommodate the offspring’s of the erstwhile factory/mill workers andmigrants from all over India.The term “Urban Decay” is often used to describe the process where a part of the city fallsinto a bad condition leading to high unemployment, bad effect on economy, desertedbuildings and poor families. [36] An example of decaying structures across the city 26
  27. 27. Urban Decay is a continuous process. It never has a single cause and always occurs owing toa combination of interrelated socio economic conditions, which include the planning ofurban cities, physical connectivity to different areas, poverty of the population,depopulation, governmental neglect and overall in-tolerant colonization restrictions. UrbanDecay in Mumbai has lead to overexploitation of the urban resources and unsustainablegrowth. 27
  28. 28. 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 agateway between India and the rest of the world. Unfortunately, it also adopted some of theworst aspects of British urban policy, such as severely restricted building heights, that have buildingmade 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 goodtransport options.” Edward Glaeser in “Triumph of the C City.” [37] Mumbai SkyscrapersInterestingly in India the Government policy as expressed in its legislation from time to timehas led to rapid urban decay. The purpose for which these legislations were enacted has ed ebeen defeated due to skewed interpretation and selective implementation. The role of the hegovernment rather than being an enabler of development has over the years t tendedtowards being prohibitive and development averse, discouraging all attempts of the lcommunity 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 moveto displace the original residents and profiteering by the developers. 28
  29. 29. “India’s administrative complexities and its overlapping systems of state, city and federalpower, mean for example that Mumbai’s city government found it impossible to introducethe plan of vaccinations for all newcomers” – DeyanSudjic. [38]In a country where vaccination cannot be done by consensus, speaks volumes of the level ofconflict between the stakeholders. Urban Renewal obviously is seen as a gravy train and allwant to jump on it. This tainted perception has given rise to successive governmentsassuming a protectionist stance which is reflected in scores of legislations which thoughenacted to protect the rights of the residents have ended up stalling the natural growth andrejuvenation of the city rendering it in a state of stunted disfiguration. Some of thelegislations which have outlived their utility are enumerated in this report.Bombay Rent Control ActOne example of a legislation enacted with the most noble intentions becoming a cause ofurban decay over the years is the Bombay Rent Control Act. The Bombay Rent Control Actwas enacted almost a century back in very different circumstances.Wartime conditions had resulted in unavailability of building materials and consequently anacute shortage of rental housing. The shortage of rental housing led to a rapid deteriorationof the urban neighborhoods and that of the basic infrastructure as also an uncontrolledincrease of rent. In this backdrop the Rent Control Act was introduced. The first rent controllegislation was introduced in Mumbai in 1918 to counter the inflation on the aftermath ofFirst World War. The law was implemented as a temporary measure to provide relief totenants from demands of exorbitant rent and forceful eviction by landlords rampant at thattime. A similar legislation was implemented in Calcutta in 1920, in Delhi in 1942 and by theend of Second World War, in other major cities of India. These laws have been modifiedover time but with no significant changes.The Rent Control Act served in fixing a standard rent on specific housing markets andprovided a ceiling on maximum rent. The Rent Control laws varied from one jurisdiction to 29
  30. 30. another and from one state to another, not only protecting tenants from paying more thanthe standard rent but also protecting them from forceful evictions under certain conditionsdefined in the law such as breach of condition of tenancy, subletting etc. Evictions are a rareevent even for bona-fide self use. Instances of landlords living in slums and tenants living inlarge apartments are not uncommon.While the Rent Control Act served the purpose of controlling the upward spiraling of therentals in the short run, it ended up artificially stagnating rental values and over a period oftime made real estate investments non remunerative. Only a few states allowed theperiodic increase in standard rent. From 1947-1993, as per Bombay Rent Control Act, thestandard rent stands frozen at 1947 levels and there are cases of people paying Rs. 10-20rent 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
  31. 31. Annexure: Indicative State-wise list of Rent Control ActsSl. State Name of ActNo. The Andhra Pradesh Buildings (Lease, Rent and1 Andhra Pradesh Eviction) Control Act, 1960 (Act No. 15 of 1960) Andaman & Nicobar Islands Rent Control Legislation Andaman and Nicobar2 notified on 19.10.1965 is applicable in Port Blair Islands Municipal Area. The State Government is yet to enact a Rent Control3 Arunanchal Pradesh Act in the state. The Assam Urban Areas Rent Control Act, 19724 Assam (Assam Act No. 17 of 1972) The Bihar Building (Lease, Rent and Eviction) Control5 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 and9 Goa and Daman & Diu Eviction) Control Act, 1968 (Act No. 15 of 1968) The Bombay Rents, Hotel and Lodging House Rates10 Gujarat Control Act, 1947 (Bom, Act No. 57 of 1947) The Maharashtra Rent Control Act, 199911 Maharashtra (Maharashtra Act 18 of 2000)In all there are 34 Rent Control Act’s operating across different states of India. 31
  32. 32. 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 BombayCity Improvement Trust (BIT) which, was created on December 9, 1898 in light of the Plagueof 1896. It was created to help Bombay Municipal Corporation in dealing with the problemsof overcrowding, insanitary conditions and other urbanization problems. From 1898 until1920, the BIT took host of measures like promoting co-operative housing, building chawlsfor the working class and building modern thoroughfares. [39]The planned development of some suburbs such as Matunga, Sion, Dadar, etc. is attributedto 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 plansand the project was successfully completed in 1900.However by 1920, Mumbai was again facing rapid urbanization and by 1933 BIT had becomenearly ineffective and was merged with Bombay Municipal Corporation.The 74th Constitutional Amendment ActTip 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 Constitutiondid not make local self-government in urban areas a clear cut obligation and containedinadequate provisions. It resulted in weak and ineffective Urban Local Bodies. To counterthis and to strengthen decentralization of urban governance, 74th ConstitutionalAmendment Act (CAA) came in force in June 1993. The 74th CAA requires the stategovernments 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 asinstitutions of self governance”. 32
  33. 33. 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 railwaynetwork is so overcrowded that commuters who fall off the trains are killed everyday, theprivate sector has been asked to create alternative forms of settlements that c provide cansolutions. All this is occurring in a highly centralized political context where, even though thecouncilors of Mumbai’s Municipal Corporation are locally elected, the state still holdsultimate control” DeyanSudjic.[42 [42]What this effectively means is that since Mumbai is part of Maharashtra, it is g governed byleaders who have no connect to the issues facing Mumbai. The Corporations and Councilorselected by the residents have no power and are mostly indulging in practices unbecoming ofthem. Therefore in effect , the residents of Mumbai are governed by people who have governednever 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 ofwards committees, deciding powers and functions, elections & reservation of seats,deciding on duration of municipalities, finances & finance commission, district andmetropolitan planning committees, etc. The 74th CAA, expects ULBs to assume 33
  34. 34. 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 hasno planning powers or authority.Jawaharlal Nehru National Urban Renewal Mission (JNNURM) – THE BEST OF INTENTIONSBUT HALF HEARTED IMPLEMENTATION“(JNNURM) is seen to suffer from an intrinsic process of decentralization that requiressupport from the national government”[43]Jawaharlal Nehru National Urban Renewal Mission (JNNURM) is a huge city renewal schemelaunched on December 3 2005 by the Government of India under Union Ministry of UrbanDevelopment. Under the scheme approx. Rs.55,000crores (U$11 billion) will be spent duringseven year period of 2005-2012. 65 cities are identified under Urban Infrastructure andgovernance component under JNNURM.[44]Objective of JNNURMThe 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 governancein accordance with the 74th Constitutional Amendment Act, 1992.Note : US $ 1 = Rs.50 34
  35. 35. However the requirement of a city like Mumbai is much greater than the meager allocationit has received from JNNURM. Moreover, as global experience confirms, that theGovernment is only required to play the role of a catalyst. An interventionist role is boundto fail. The JNNURM has no statutory power to actually implement an Urban RenewalScheme and eventually it is the State Government, which wields the authority for suchfunctions.“The incapacity of the state and local governments to make adequate investments toalleviate this crisis has led to a government restructuring and reduction of public expenditurein many Indian cities” Dr. Amitabh Kundu [45] Kundu.Building bye law and population density gMumbai, 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 inscarcity of vacant land parcels (especially in the neighborhood of commercial districts in (especiallyisland city) for development to fulfill the demand from rapidly growing Mumbai population. growingThe 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
  36. 36. “The Population density defines as number of persons living within an area of 1 Kmpresents the most striking feature about Mumbai. In 2001, the average population densityfor Mumbai City was 27,000 people per km . Ward C is one of the most densely populatedareas with a density of 114,001 people per km ”.[47]To solve this problem, the Government of Maharashtra came up with various developmentschemes, most of them specific to the city of Mumbai, like Urban Renewal Scheme (URS),Slum Rehabilitation Scheme (SRS), Mill land development etc. for incentivizing developersby sanctioning a higher than normal Floor Space Index (FSI). It was expected to be a win-winsituation for all. In slum schemes and Urban Renewal Schemes for example, thestakeholders i.e. tenants/slum-dwellers would get better housing/commercial units, thedeveloper would get free sale area in lieu of the redevelopment work, government wouldbenefit with higher revenue collections through Property Tax, VAT, Income Tax, Stamp Dutyetc. and the society would benefits with better Infrastructure and facilities. However redtape bridled any hope of a large scale urban renewal in Mumbai. The URS renewal schemeis 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 3times the plot area against the base FSI of 1.33 in the Island City of Mumbai. In simpleterms for a 1000 sq.mts piece of land as against normally permissible built up area of 1333sq.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 ofthe size of projects being small there is lack of space for parking, playgrounds andupgradation of necessary infrastructure like drainage, drinking water and electrical facilities.According to official statistics, there are 19,642 old and dilapidated buildings in Mumbai andwhich have been declared unfit for living. Out of these, 16,502 buildings were constructedbefore 1940 and are eligible to be redeveloped under the current incentive scheme.[48] 36
  37. 37. Cluster Redevelopment (Development Control Regulation - 33 (9))The scheme is applicable for any plot with a minimum area of 4000 sqmt and which consistsof 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 theplot is allowed up to 4 against the base FSI of 1.33 in Island City. 37
  38. 38. Urban Renewal Over Other Schemes?The transformation of Mumbai, or for that matter any megalopolis, cannot be done byredeveloping 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 dilapidatedbuildings. As per Development Control Regulations of Mumbai, 1991, half the buildingswould come under either road widening or would be reserved for green space or otherreservations required. Buildings affected by such public reservations are of no interest todevelopers and remain in a dilapidated condition for public purpose. Moreover, bydeveloping one building or 2-3 buildings combined together there is no space for parking,playgrounds, upgradation of electrical, plumbing & drinking water facilities and otheramenities. 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 alreadycongested development.This has resulted in the city having 20-30 storey buildings in plots of 100 to 200 sq.mtswith little or no open space. Certainly in the years to come these buildings will also face thesame situation as the buildings they replaced.On the other hand, if the same locality is developed through cluster based developmentwith all buildings developed together, a few tall buildings can be built and ample free spacecan 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 betterliving environment but also increases the value of the neighborhood. Several countrieshave infact made it mandatory to construct highrises so that more open spaces are left forthe residents and the city. However, no such regulatory requirement exists in Mumbai as aresult the development is hap hazard. 38
  39. 39. City Planning in Mumbai – Plan exists only on paper !!One of the reasons amongst many reasons why the various schemes of the Governmenthave failed is the City Planning in Mumbai. A “living space” is more than the mere confinesof 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 ofleading a fuller life. [49] City Planning ??Where are these spaces in the Indian cities of today ? Except for the planned areas inheritedfrom the British, most Indian cities – Delhi, Mumbai, Kolkata, Bangalore have been ,witnessing a “stretched” growth with the city limits being redefined continuously to 39
  40. 40. accommodate an unstoppable influx of people from the hinterlands. The planned cityproviding 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 acity.Mumbai got its first city development policy as early as 1909, a 20 year plan designed to policycontrol landlords and develop homes for the poor. It had a town planning scheme in Bandraand Khar by the 1920s, zoning laws in 1951 that prevented the construction of factories inthe island city and a sprawling colony for the middle income group in Bandra East by the ing1960s.All development in the Mumbai metropolitan region is supposed to be planned by theMMRDA. But the region also has several other entities such as : the Brihan MumbaiMunicipal Corporation (which manages Greater Mumbai), 12 other municipal councils (forThane, Khopoli, Virar, Alibaug etc.), the City & Industrial Development Corporation ofMaharashtra (CIDCO). The CIDCO is responsible for the planning of Navi Mumbai. Mumbai. [50] MAP of MMRDA 40
  41. 41. With several corporations (ULB) and several planning authorities the situation of planningin 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 inMumbai.Effective urban planning requires design and regulation of optimal use of space/area toboost the economic functions and improve the physical infrastructure for a positive impacton society and environment. In most of the cases, the unexpected increase in urbanpopulation and the need of good urban planning is marred by ineffective urban governancedue to lack of resources, capacity, bad municipal management, fund allocation issues andtransparency issues etc.In the context of post independence Mumbai, the first Development Plan (DP) andDevelopment Control Rules (DC) were put in place for the first time in 1967. The DC Rules1967 were superseded by the Development Control Regulations (DCR – 1991) of Mumbaiand the Development Plan (DP) of 1991. However the DP of 1991 was ill conceived andfurther aggravated the urban quagmire with errors apparent on record. [51] Google Image of JSS Road 41
  42. 42. For example a small piece of land of plot admeasuring 5 acres between JSS Road and CavelStreet 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, 1991several land parcels earmarked for parks, playgrounds and road widening are actuallydensely 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 unmindfulplanning 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 lthe people of Mumbai. [52]Hundreds of such examples across Mumbai City, highlight the complete lack of planning by highlithe 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 clearlydepicts the apathy of the Government and the crying need for immediately putting in placea 20 year plan made with inputs of Mumbaikars. 42
  43. 43. Urban Renewal – Can it be a catalyst to transform Mumbai?Urban Renewal presents itself as a possible catalyst for addressing the multiple problems ofUrban Decay in Mumbai. Renewal is the process of ensuring survival to perpetuity. UrbanRenewal assumes many approaches as the community explores ways to accommodate thediverse requirements.Several precincts, like the Mumbai Port Trust Area and the warehouses along the PD MelloRoad in Mumbai can possibility be regenerated with the combination and cooperation ofGovernment policy, the resident community and private enterprise.Urban Renewal is to be seen as more than merely a means to extract well located city landparcels for real estate. Real Estate Development has to be seen as the fuel for the urbanrenewal activity. The objective has to be to achieve full economic development and urbanrenewal certainly presents itself as a viable and an inclusive method for achieving thisobjective of overall development.There have been several successful examples of Urban Renewal across the world. Behindevery successful Urban Renewal project, it is invariably the full might of the Governmentwhich leads to it success. However in India, the complexities of Urban Renewal are muchmore than anywhere else in the World.A legislative framework around this facilitative approach can present India to the world witha great opportunity of building the nation and spurring economic revival and reconstructionwhile 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 thatthe real estate business supports upto70 allied business such as cement, steel, etc. UrbanRenewal 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
  44. 44. The term Urban Renewal in different context has different meanings. For e.g. in China, theterm urban renewal means the unilateral planning by the executive, leading to thedisplacement of hundreds and thousands of often unwilling people and construction ofgleaming skyscrapers in its place.In the context of every country, Urban Renewal, represents different sets of challenges. Inthe Indian context it probably has the greatest challenge. Urban Renewal could be seen asland grabbing by Developers under the political patronage of the ruling class. India thrivesas a democracy and people of this country have learnt to live with the chaos such amultiparty democracy brings with it. As a result every effort to change, is opposed bysections of the political class, and on most occasions it transpires that such opposition wasmindless 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 mostinclusive and democratic fashion. It is a general perception that Developers profiteer at thecost of hapless tenants. This may be true in some cases. However a generalization can leadto alienation of a pivotal player in the entire Urban Renewal Scheme. Having studied someof the Urban Redevelopment projects going on in the city, a unique model of an inclusiveurban renewal project at Mumbai Central stood out which is presented as a case study inthis report. 44
  45. 45. Case study of the Economics of Urban Renewal in the IndianContext – The Umar Jamal Compound – A TransformationThe UMAR JAMAL COMPOUND is an accidental initiative in Urban Renewal undertaken bythe inhabitants of an inner city cluster in Mumbai by leveraging the expertise and enablingfinance of private enterprise and by capitalizing their tenancies to promote a success storyof urban renewal at a micro level. The initiative has revitalized the entire neighborhood andtransformed lives. It is a unique example of the Urban Renewal process where profits of theredevelopment were democratically shared between the resident community comprising ofmainly tenants and the other stakeholders of the development project including thedeveloper. Prime land was used effectively to maximize its utility and in turn increase theoverall 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 earlytenants of the structures. Situated on the bustling Belasis Road, which was once the Centreof the City, the land was originally owned by an English Man. It was part of an undividedlarger plot. In the years 1903, the land was sold to a philanthropist Haji Zakaria Haji AhmedPatel who built stables on the land for horses. The nearby Byculla Club, (which today is alarge bus depot), provided the horses and a steady income to the landlord. With theconstruction of the Royal Western India Racing Club (RWITC) at Mahalaxmi, the BycullaClub soon became redundant. The horses moved to RWITC. Haji Zakaria decided to leaseout 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 totradesmen, workshops, etc. Mr. Jahangir Sorabjee continued to pay lease rent to HajiZakaria who had by now passed away but had created a trust which was the beneficiary ofthe lease accruing from the land. Mr. Jahangir Sorabjee passed on the business to his younglawyer son Mr. Soli J. Sorabjee, who continued with the business of collecting rent through arent collector and paying an annual lease rent to the landlord. Mr. Soli Sorabjee, went on tobecome the Attorney General of India, mostly unaware of the going-on at the Umar JamalCompound. As years passed, the structures grew old and so did the businesses. Both out ofsync with modern times. 45
  46. 46. Umar Jamal Compound comprised of 13,837.06 land in a prime location of SouthMumbai close to the Mumbai Central Railway Station. The property over the years was Stationcompletely occupied by shanties, garages, small scale businesses etc. and was occ occupied by275 tenants. The rent payable by the Tenants was fixed by the Rent Control Act, 1939 and1944 and Mr. Sorabjee had an annual rental income of Rs.26,000/- (US $ 520 per annum) d rent 0from all the tenants.Note : US $ 1 = Rs.50 46
  47. 47. [53] Umar Jamal Compound (Year 2004) before the renewalThe structures in the premises were in a much deteriorated state with Mr. Sorabjeeunwilling and unable to repair and renovate the structures owing largely to the negligiblerental income from tenants. The tenants were not authorized to carry out the renovation oftheir 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 RenewalNote : US $ 1 = Rs.50 47
  48. 48. Types of Structures % 80 70 60 50 40 30 20 10 Types of 0 Structures % [54] Pre Urban RenewalProcess of TransformationIn 2004, Neelkamal Realtors & Builders Pvt. Ltd, a DB Group company (Company) acquiredleasehold 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 HajZakaria Haji Ahmed Patel (Mohamedan Orphanage & Asylum Fund) Trust on payment of (MohamedanRs.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 tooccupation. 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 buildingminimum impact on the socio economic front. pactPost acquisition, the company representatives met with existing tenants to understand theirrequirements. Initially the tenants desired to build an industrial park on the same plot and lywished that they be allotted an equal area so that they could carry on with their current equactivities. However it was apparent from the scale of the establishments that merely re- rehousing them in a new building would not alleviate their impoverished conditions.Note : US $ 1 = Rs.50 48
  49. 49. During the previous decades, there had been a sharp decline in industrial activities inMumbai (esp. in Island City) due to the high cost of production and labour. The costs hadmade industrial activity virtually unviable. The tenants / occupants were carrying on thetrade inherited from their fathers / grandfathers and for want of a better opportunity werecontinuing with the activity passed on to them. Most of the tenants were carrying out theirtrade from their impoverished work sheds and not getting any return from the premisesoccupied by them.Keeping in mind the prime and strategic location of the plot coupled with decline inindustrial activity, the developers felt that the current proposition did not provide for theoptimal use of the site and was not appropriate and beneficial for both the parties involvedi.e. developer and the tenant. The developer therefore decided to explore an alternativemodel and proposed a shared development model to the tenants. The tenants and thedeveloper conceived the idea to build a shopping mall and a residential building. As per thescheme, tenants were to get an equal area in the shopping mall. The developer undertookthe responsibility of leasing the mall on behalf of the tenants. The residential building wasto be sold by the developer to recover the costs and for profit. The tenants committeeactively involved itself in all important decisions that were taken for redevelopment. It notonly increased the faith of the tenants, but also helped in the smooth and quick clearanceof the land.The tenants handed over the premises for redevelopment during Jan 2005 to Feb 2005. Thecompany gave a hardship compensation of Rs. 50/- (US $1) per sq.ft. per month to all thetenants during the period of construction of the shopping centre. The compensation waspaid in proportion to the areas occupied by the tenants prior to development.Note : US $ 1 = Rs.50 49
  50. 50. [55] Umar JamalIn the year 2006, the company completed and handed over the shopping mall – Orchid CityCenter to all tenants on ownership basis. The developer also formed a Mall Owningcompany and the tenants were given shares in the company on a pro-rata basis. The tenantswere also allotted area on a pro-rata basis in the shopping mall. The tenants becameowners 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 bankaccount through Electronic Clearance System (ECS). [56] Umar Jamal after Urban Renewal 50
  51. 51. The redevelopment of Umar Jamal Compound created a Win-Win arrangement benefitingall 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 toincrease 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 ofincome, became owners of the new premises in the shopping mall and beneficiaries of leaserent income from the retail outlet “Pantaloon” providing them with a steady monthlyincome apart from creating a bankable asset. Most of them also continue with their smallscale businesses at other locations in Mumbai. Many of them were able to receive loans asand when required by mortgaging their premises. The tenants who were not part of theorganized business and were accustomed to borrowing from private money lenders, pawnbrokers etc. were now in the mainstream of commercial banking and organized business.The Company (Developer): The Company developed two 55-storey residential towers onthe plot of land and earned a profit on sale of flats in towers estimated to be approx.Rs.2billion (US $ 40miillion).Public Exchequer – The biggest beneficiary of the Urban RenewalHowever in the process the public exchequer emerged as the biggest beneficiary. TheGovernment collected and continues to collect substantial tax and levies from thedevelopment on account of stamp duty, property tax apart from the tax gains like incometax and VAT associated with thriving commercial activity which the shopping centreafforded. 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
  52. 52. Project Economics of Umar Jamal CompoundCurrent 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 authorThe 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
  53. 53. • 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
  54. 54. • 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 DevelopmentAs 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 potentialclusters for Urban Renewal. On a conservative estimate, the Government Revenue fromsuch schemes can touch Rs.15000crores (US $ 3 billion*) without any significant investment 15000crores ntby the Government.Socio – Economic BenefitIn all 990** families today benefit from the rent being paid by Pantaloon. From adilapidated urban mess, today Umar Jam Compound is a shining example of sustainable oday Jamalurban 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
  55. 55. 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 MallIt is also important to highlight that the project was planned as an EnvironmentallySustainable Development as opposed to its earlier avatar. Urban Renewal Projects generallyare far more environmentally sustainable as opposed to the status quo, due to stringentenvironment norms imposed on new construction by the Government.The direct/indirect benefits of the renewal process at Umar Jamal compound are muchlarger 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 severalthousand such opportunities, which are highlighted in the later chapters.The lives of the tenants and their families have changed for good. A few testimonials oftenants 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 RenewalIn Mr. Feroz Papar’s words “I am very conservative by nature. The proposition of shuttingdown my paper factory and accepting space in a retail mall sounded preposterous. 55
  56. 56. However, with some amount of convincing by the Developers, I finally agreed. I todayconsider it the best decision I have ever made. I had been postponing my mother’s by-passopen heart surgery for years. With a 10 fold increase in my income, I was able to affordmedical treatment for my mother. The change is transformational. I continue to operatemy paper factory from Daman while I have steady source of income for my family from themall. “ 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 monthIn Mr. Sayed’s word “I thank God the day I decided to agree to the redevelopment. I couldnot have made a better decision. I encourage everyone to accept change. Change willalways bring good in the long term”. 56
  57. 57. 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’scontext. “Mumbai constitutes a category on its own. The territorial constraints of this island Mumbaicity have created unusually high urban densities. Within the city limits, the average densitysurpasses the mark of 27,000 people per km - a figure that rises to well a above 50,000people per km (if one only takes the built up area into account), a level higher than even built-upthe highest density peaks in New York City’s borough of Manhattan. Furthermore, it is notrare for the densest neighborhoods of Mumbai, such as Dharavi, to accommodate as manyas 100,000 residents per km ”[58]Google image of the C ward of Mumbai paints a story of City’s unbelievable density. Narrow densitycongested streets with virtually no open space. 57
  58. 58. [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 shownabove.These areas were centers of bustling activity once upon a time. Today they are in a state ofurban decay. The picture demonstrates a complete lack of civic amenities. Most of theseareas do not even have a full grown tree to boast, leave alone gardens and open spaces. tThese areas represent the highest density of population per in the South Mumbairegion 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
  59. 59. [60] Morphology of Shanghai and MumbaiThe 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 onthe ground. One which has found place for itself in the world and the other looking to find lookingits relevance in the world. [62] [61] 59
  60. 60. However this by no means indicates that it is the end of the road for Mumbai. There areseveral areas in the city of Mumbai ripe for Urban Renewal i.e. which are “The Low HangingFruit”. 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. 60
  61. 61. Saifee Burhani Urban Improvement Trust – Bohri Mohalla – A Path Breaking InitiativesA pioneering initiative has been undertaken by the Dawoodi Bohra Community in thedirection of Urban Renewal. The Bohras are a rich and educated community who owe theirgrass roots to an area called Bhendi Bazar or Bohri Mohalla.The project has been undertaken by the Trust known as Saifee Burhani Urban ImprovementTrust (SBUIT) and is spread over 18 acres of land entailing Urban Renewal of the entireprecinct. 3500 families spread across 281 dilapidated building and 1500 shops and officeswill be provided world class redeveloped dwelling and plac of work. [63] placesThe project is expected to transform the entire area and will serve as a bench mark forurban renewal in the city. [64] Pre Urban Renewal 61
  62. 62. [65] Post Urban RenewalWhen the project is completed 3500 families will get new self contained larger dwellingunits. Most of the residents will have their workplaces within walking distance from theirhomes. The process of urban renewal will ensure that the quality of life for most of the forpeople changes for the better. Earlier in the report the negatives of urban sprawl and inparticular the impact of long commutes on social life ha been highlighted. Projects such as hasthe SBUIT mitigate the risk of such break down of social ties and could provide for a atewonderful and wholesome living experience. The economic benefits to the society and theexchequer highlighted in the case of the Umar Jamal Compound Development will obviouslybe emulated in the case of SBUIT on a much larger scale. 62
  63. 63. Kamathipura - Another opportunity for the Government to display its commitment.Another low hanging fruit in the list of potential urban renewal precincts in Mumbai isKamathipura. Kamathipura was infamously Mumbai’s oldest and Asia’s second largest redlight 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 theredevelopment 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 are300 land parcels (approx.) ranging in area between 10 sq.meters to 300sq.meters. The landparcels 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 120,000sq.meters (approx.). It is the most appropriate project for the government to declare as anUrban Renewal Precinct pursuant to which the entire area can be re-planned and createdinto a prime residential area with all the civic amenities that one would expect in adeveloped country. The benefit of the urban renewal of this area will be enormousconsidering that all the buildings in the precincts have not only outlived their utility but arealso in a dangerous and dilapidated condition. As in the case study of the Umar JamalCompound, which is adjoining this precinct, it is expected that the economic benefit forrenewing the Kamathipura area will be enormous for all stakeholders. Considering thesame benchmark set by the Umar Jamal Redevelopment Project, it is expected that on anannual basis the government will increase its property tax and other tax collection in thisarea by several hundred folds. A study undertaken by DB Realty Limited, reveals that therenewal can be undertaken with minimum displacement. A pictorial representation of theproject is given in the forthcoming slides. 63
  64. 64. [67] Google Image of Kamathipura 64
  65. 65. [67] Bylanes of Kamathipura 65
  66. 66. Kamathipura TodayStep 1 for Urban Renewal 66
  67. 67. Kamathipura – Step 2 for Urban Renewal Kamathipura – Completion of Rehabilitation in Urban Renewal Scheme [68] Source : All Images DB Realty LimitedA detailed study is proposed to be published on the Kamathipura Urban Renewal Scheme inthe future. 67
  68. 68. Conclusions and RecommendationAs is evident neither the central government nor the state government have taken anymajor initiative to ensure successful implementation of urban renewal schemes exceptpassing some laws and largely, leaving it to the will and determination of the entrepreneurand the tenants to enable Urban Renewal albeit on a much smaller scale. By and large theGovernment 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 willIt is believed that the following recommendations may act as catalyst in the process ofrenewing the city of Mumbai and the improving the lives of its citizens. 68
  69. 69. Strategy for Urban RenewalFor rendering an enabling environment for the community and private enterprise toparticipate in the process of development and urban renewal of the City, there is a need forthe government to initiate constitutional amendments and reforms in governance. Whileconstitutional amendments may be long drawn process rife with the potential of goingastray on political considerations, enough wherewithal is available with the StateGovernment to amend existing laws and set up mechanisms and processes which encouragesuch initiatives rather than frustrate them.Single Window ClearanceCurrently for any Urban Renewal project 56 approvals* are required to be obtained fromseveral different authorities. Urban Renewal Schemes inherently have a long gestationperiod since it involves acquisition of several land parcels from several landlords andnegotiations with several thousands of tenants. Coupled with long process of approval, theentire scheme not only looses momentum but also becomes unviable. Therefore there is aneed to provide single window clearance to large urban renewal projects by bringing in anenabling legislation.Creation of an “Urban Renewal Authority” :In case of Urban Renewal Schemes (URS) in Mumbai, the main reason as explained abovefor slow progress is the requirement of different approvals (as many as 56) from variousauthorities. A tangle of bureaucratic red tape complicates and frustrates the delicateprocess of urban renewal.Whereas the Government of Maharashtra took an important step in slum redevelopmentwith the creation of Slum Rehabilitation Authority (SRA) in 25th December 1995, there is aneed 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 wouldbe designated as the nodal local planning authority to provide all the requisite approvals forUrban Renewal Schemes and act as a facilitating agency. It would result in fast tracking ofapprovals and implementation of Urban Renewal projects in various locations in Mumbai.* Source – Research by Author 69
  70. 70. Encourage Private Participation:Government should act as an enabler for creating an ideal environment for encouragingprivate sector participation both in terms of investment and execution. Various monetaryand non-monetary incentives like tax benefits on investment and execution, additional FSIetc are some of the initiatives that are required to be taken up by the Government bothState and Central Government. Urban renewal projects should be declared as criticalinfrastructure project by the Government of India and further Urban Renewal should bedeclared as a priority sector for lending by banks at lowest possible rate of interest and ifpossible at a subsidized rate of interest. Foreign Direct Investment (FDI) and ExternalCommercial Borrowing (ECB) should be opened up for Urban Renewal Projects.Urban Renewal of Mumbai through cluster based redevelopment with active participationfrom private players and with an enabling environment provided by the Government in awell-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 Act1888 should be amended by the State Government to provide for complete legislativeframework to enable undertaking of Urban Renewal Schemes, enabling the BMC to identifyand declare precincts of minimum 25 acres or above across the city as Urban RenewalPrecincts. The development of such precincts should be undertaken as per a 20 yearmaster-plan with active private sector participation.Dispute Resolution:There has to be a well-defined mechanism for dispute resolution between multipleGovernment agencies, non-consenting tenants, landlords and developers. In this regard theMaharashtra Region and Town Planning Act (MRTP) Act and the Land Acquisition Act alsohave to be amended by the State Government. 70