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Finance and empowerment for slum upgrading in Mumbai

Indian policymakers have been slow to address poor urban residents’ housing needs. Despite a national slum development programme, the central government is reluctant to allow slum upgrading or support resettlement. In the city of Mumbai, however, civil society actors are forging alliances to empower slum communities.

A paper from the Society for the Promotion of Area Resource Centres (SPARC) argues that only when poor communities learn and are collectively supported to engage with the state, the private sector and the World Bank can they successfully challenge the power of property developers and self-serving politicians. On the other hand, only when these institutions are ready to engage with poor communities will they be able to achieve positive change.

Since the mid 1980s SPARC and its partners, the National Slum Dwellers Federation and Mahila Milan, have:

strengthened the organisational capacity of slum and pavement dwellers
stressed the need for community contributions to housing improvements through savings: poor people cannot persuade authorities to assist them without making their own contribution
persuaded city and state authorities as well as external agencies that urban poor people are able to design and manage housing projects: interaction with the World Bank has made officials more appreciative of poor people’s organisations.

In 1995 a new government came to power in the state of Maharashtra committed to providing free housing to four million slum dwellers in Mumbai. Government agencies on whose land many slums are situated were urged to allow slum development. The scheme has had only limited success because it applies to state and city government land but not central government land. Although central government authorities have permitted some resettlement, these have been exceptions, in keeping with their policy against resettlement, slum upgrading or granting tenure.

Financial incentives are also offered to guarantee that poor people’s houses are built in schemes from which developers profit:

Developers that build free apartment blocks for existing slum dwellers can develop the land that is freed up to build other apartment buildings to sell on the open market. They are able to make a profit because real estate value is high in Mumbai.
Developers are also given Transfer of Development Rights (TDR): for each housing unit they construct for slum dwellers the builders are given an incentive Floor Space Index (FSI) to construct houses for sale on the open market. They can either use this incentive FSI to construct houses on the site itself (up to a certain limit) or sell it like a land certificate to cross-subsidise the free house.

Successful slum upgrading requires a combination of good policy, mobilisation and financial support. Since the state influences all the goods and services that urban poor people seek, developing productive partnerships with government agencies is the only viable alternative, particularly as the state is able to facilitate private provision of public housing.

Reorienting the state and its agencies towards servicing poor people must remain a central goal. The author recommends:

acceptance of a national slum policy and increasing the supply of serviced land to bring down prices through a variety of urban land reforms
raising funds through financial reforms to provide infrastructure to currently unserviced land
capacity building of community organisations and supporting urban poor groups develop supportive networks
community organisations learn more about architecture and design, construction, materials and the complex procedures of different government departments
making government subsidies and loans more accessible
facilitating private sector banks to develop a housing loan product for urban poor people
developing a variety of approaches that allows slum dwellers to choose a range of housing options that differ in size, affordability and locations.

Source(s):
‘Towards a pro-poor framework for slum upgrading in Mumbai, India’, International Institute for Environment and Development, Environment & Urbanization, 17:1, pages 67-88, by Sundar Burra, April 2005 Full document.
‘Cities Alliance Project on pro-poor slum upgrading: framework for Mumbai, India’ by Society for Promotion of Area Resource Centres (SPARC), June 2003

Funded by: UN-Habitat

id21 Research Highlight: 2 December 2005

Further Information:
Sundar Burra
Society for the Promotion of Area Resource Centres (SPARC)
PO Box 9389
Mumbai 400 026
India

Tel: +91 22 2386 5053
Fax: + 91 22 2388 7566
Contact the contributor: sparc1@vsnl.com

Society for the Promotion of Area Resource Centres (SPARC), India

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