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Can squatters be developers?

In the mid 1990s the Indian state of Maharashtra introduced an innovative strategy for slum redevelopment in Mumbai. In a slum area, instead of demolishing or upgrading, the authorities built medium-rise apartment blocks for the original dwellers. This is a rare example of a developing country government using the private sector to provide low-income housing.

A book from the University of California examines the role of the Markandeya Cooperative Housing Society (MCHS) in Dharavi. Mumbai has pioneered an approach which will be useful for those still committed to clearing slums and displacing residents to maximize the potential of valuable inner-city land. Most of such schemes, argues the author, have failed to provide public housing and have destroyed existing housing stock.

Mumbai’s housing strategy changed in the 1990s as a result of electoral competition and soaring property values – the cost of land was a high as 90 per cent of the total cost of housing in the highest value areas. The state government devised a strategy to share property values between slum-dwellers, landowners and private developers.

The strategy was acceptable to the squatters, as they would receive more valuable housing in return for giving up their dwellings and becoming partners in the redevelopment. Landowners and private developers anticipated profits while non-slum residents welcomed the removal of an eyesore. The state government anticipated additional revenue from collecting more property tax.

Many Mumbai slum-dwellers live in small, irregularly laid-out property-lots. Such settlements make delivery of basic infrastructure and amenities very difficult. It is difficult for slum-dwellers to capitalise on the potentially high land values on which they sit without a complete physical transformation of the settlement.

To facilitate slum redevelopment the state government revised many land development regulations, changed land use plans and removed some building requirements. Profit limits on private developers were removed. The state set up a housing finance corporation to help private developers who found it difficult to raise development finance for construction.

Better housing demands recognition of at least three conditions and their relationship with one another: property rights, property values and the physical structure of properties.

The Mumbai experience demonstrates that it is important:

not to underestimate the potential role of the private sector in housing delivery and the scope for governments to leverage their skills
to realise that because the private sector can be risk-averse they need institutionalised incentives to become involved in upgrading and transforming slums
to allow scope for hybrid schemes involving unconventional combinations of redevelopment and traditional upgrading
to be realistic about timetables: MCHS members had to wait ten years between giving up their dwellings and moving into flats
to undertake more research to evaluate housing projects from the perspectives of multiple stakeholders.

Enabling slum redevelopment through market mechanisms requires a different type of state involvement, not less state involvement. There is no reason to believe the prevailing conviction that deregulation, decentralisation, privatisation and demand-driven development will somehow provide affordable housing for the urban poor.

Source(s):
‘Squatters as developers? Slum redevelopment in Mumbai’ by Vinit Mukhija, King’s SOAS studies in Development Geography, Ashgate Publishing, May 2003

id21 Research Highlight: 1 April 2005

Further Information:
Vinit Mukhija
Department of Urban Planning
School of Public Affairs
University of California Los Angeles
3250 Public Policy Building
Box 951656
Los Angeles, CA 90095-1656
USA

Tel: +1 310 7944478, x44478
Fax: +1 310 2065566
Contact the contributor: vmukhija@ucla.edu

School of Public Affairs, University of California Los Angeles

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