Dharavi's real estate threat

Dharavi's real estate threat

Poised on the northern edge of south Mumbai is a piece of real estate developers would love to get their hands on. Rubbing shoulders with upmarket Bandra, Dharavi is known as Asia's largest slum, but it's actually much more than that--it's a settlement in which people live and work, producing a wide array of goods and services. The government's plan to 'redevelop' Dharavi is threatening a huge number of livelihoods.

Predictably, discontent is brewing. "Who says Dharavi does not belong to us? Our forefathers from Saurashtra came to south Mumbai in the early 1890s. In 1933, the government allocated us land, but our entire colony was burnt down. Then some powerful Gujarati traders pressured the government and 12.50 acre [approximately 5 hectares, ha] of land in Dharavi was allocated to us against a payment of Rs 1 lakh to a Parsi landlord. So the land on which Dharavi's kumbharwada (potters' settlement) is located belongs to us... Suddenly, outsiders have started showing an interest in our land and well-being. But any development scheme that takes away our land or threatens our livelihoods will meet with stiff resistance," says Raju Chauhan, owner of Sunita Chauhan Pottery and head of Sorathiya Prajapati Development Association, an association of potters in Dharavi. Kumbhars (potters) have already petitioned the Bombay High Court, Municipal Corporation of Greater Mumbai and the Maharashtra Housing and Area Development Authority (mhada), arguing that kumbharwada is not a slum and kumbhars should be allowed to redevelop it themselves. The kumbhar families argue that they have land deeds to show they have 999-year leases, but proponents of the redevelopment plan say the colonial law under which these leases were given has been repealed, invalidating them.

Up for grabs
With existing claims on the land at a discount, Dharavi has become prime property with international developers bidding to 'redevelop' what was once known as a 'difficult area' that warded off all resettlement schemes. Spread over 223 ha, Dharavi went up for grabs on June 1 this year when the Maharashtra government invited expressions of interest (eois) for its Rs 9,250- crore Dharavi Redevelopment Project (drp), involving rehabilitating 57,000 families, by the government's tentative estimates. Prospective developers must have completed a 40-ha township with a minimum built-up area of 7 million sq ft (around 0.65 sq km), have a gross net worth and average annual turnover over three years equalling 30 per cent and 25 per cent of the project cost for one sector (about Rs 1,800 crore). "Over 100 companies participated in the bidding process and within a month we will declare the final five bidders," Sanjay Ubale, secretary, special projects, Maharashtra, told Down To Earth .

Conceived in 1995 by Mukesh Mehta of Mumbai-based M M Consultants, drp offers a 'win-win' solution--slum dwellers will be provided 225-sq ft (21-sq m) flats free of cost in highrise buildings and freed up land will be sold. Developers will have to maintain buildings for the first 15 years. Of Dharavi's 223 ha, 144 are up for redevelopment. The state government's Slum Rehabilitation Authority (sra) says builders stand to make a total of Rs 14,004 crore from the sale component of the developed property, which works out to a profit of Rs 4,754 crore. But experts claim this is a gross underestimation. Chandrasekhar Prabhu, former chairperson, mhada, says his calculations show that builders stand to make Rs 21,000 crore.

Though the state government hopes to finish the project by 2013, drp is facing delays. Before it can take off, a detailed socio-economic survey of Dharavi is needed. For instance, the figures for total population or families are purely ballpark. "Nobody has a reliable estimate of Dharavi's population," says Matias Sendoa Echanove, a researcher at University of Tokyo , who has conducted a survey of Dharavi along with the Mumbai-based Society for the Promotion of Area Resource Centres (sparc) and Kamla Raheja Vidyanidhi Institute for Architecture (krvia), Mumbai. krvia and the Ahmedabad-based Centre for Environmental Planning and Technology have prepared an alternative master plan with sparc's help. The plan, submitted to the state government in March this year and publicly released in May, proposes low-density rehabilitation for slum dwellers in four- or five-storeyed buildings, to avoid further congestion. It proposes to throw open only 14 per cent of Dharavi's land for 15-storey structures for sale. The plan also has designs to accommodate businesses--buildings with wide outer corridors connected by ramps or buildings on high stilts to provide space for working and community activities. Though the government promised to get back, it hasn't.

Given that reliable statistics for Dharavi's population do not exist, sra has hired a Pune-based ngo, Mashal, to conduct a gis-based biometric survey. "We are using gis. By November 12 we will finish mapping the structures and by December 12 we will know exactly how many families live in Dharavi and who are drp's real beneficiaries. The study should be complete by February 2008," says Sharad Mahajan, head of Mashal (see box: Intrusive methods).

But the survey has sparked a controversy. "How can sra advertise for a biometric survey after inviting bids? This means that the international tender is illegal since it is not based on facts and correct figures. We will challenge the bidding in a court of law," says Raju Korde, president of Dharavi Bachao Samiti, a local ngo.

Others are also questioning drp's bidding procedure. "What if the new biometric survey finds that more than 57,000 families need to be rehabilitated? The entire project will have to be planned all over again. Is this how international projects are handled?" asks Jockin Arputham, president of National the Slum Dwellers Federation, Mumbai.

Eligibility criteria have been contested as well. Those who figure in the 1995 voters' list--on the basis of a January 1, 1995, cut-off--are eligible. Going by the rolls about 57,000 families are eligible, but people in Dharavi dismiss this figure. "The government has decided there are 57,000 households to be resettled. Yet in 1987, when the Prime Minister's Grant Project was being implemented, the number was 55,000 households. Even if only those who have lived in Dharavi before January 1, 1995, are eligible, it is impossible to believe that the population has remained static for a decade," says Kalpana Sharma, author of the book Rediscovering Dharavi.

Working spaces
Livelihood is also a crucial parameter. "Dharavi is not really a slum. It is a business district where every household has some business. Any project that does not address the issue of livelihoods is bound to fail," says Korde. The problem is that most of these businesses don't have the necessary licences--they won't find a place in the new 'organised' Dharavi.

Potters, for instance, say the government just doesn't listen to their grievances. The kumbharwada is spread over 5 ha in which 2,000 families reside. "We are facing an acute space crunch. A number of families cannot work because they don't have space to make pots and dry them. Moreover, we burn cotton, waste oil and cloth, which emit harmful gases.

We need lpg cylinders, but no one is ready to address this problem," says Arvid B Wadel, a potter.

There are about 20 leather-processing units on which another 5,000 downstream units depend. The processing units have an annual turnover of over us $20 million (Rs 80 crore). Because leather processing is associated with acute pollution, the new Dharavi will have no space for them. "We do not know what drp says. No one has told us whether we will have to shut shop or be relocated in Dharavi," says Sanjay Khandare, owner of M S Leather.

Recyclers are also angry. "sra is demanding proof of original ownership for our godowns. They have exchanged hands many times, how can we produce the original owners? If we are sent to the outskirts of the city our transportation and recycling cost will increase tremendously. Dharavi is a Nandigram in the making," warns Anjum Sheikh, former chairperson of Dharavi Business Welfare Association, who owns a recycling unit.

"We support the idea of developing Dharavi, but the way the present scheme is conceptualized, no business will stay in Dharavi. Businesses are running there because they are unorganized. No factory acts or labour laws or environmental rules apply, so the production costs are low. We do not support illegalities, but then why is the state government not working towards improving conditions, providing people with better technology and legalizing occupations?" asks Korde.

According to sra, the government has agreed to rehabilitate industrial units within Dharavi provided these are "non-hazardous and non-polluting". But Korde says this rider will ensure that most businesses--leather processing, pottery, recycling--will have to shut shop.

Urban planners question the basis of drp. "Planning is about dealing with people, not money. Dharavi has a completely capital-driven strategy in which the architect is looking at land as an economic resource and trying to maximize on that," says A G K Menon, a New Delhi-based urban planner.

Builders' benefits
Menon's argument lies at the heart of the problem. drp, as it is developing, seems to be tailor-made for the building lobby. Under sra 's existing slum rehabilitation scheme, for every square foot of land developed for rehabilitation, the builder gets 0.75 square foot to sell--this ratio changes in the case of Dharavi, with builders slated to get 300-sq ft flats to sell for 225-sq ft flats for rehabilitation. "The share of slum dwellers remains 225 sq ft only, whereas that for the free market sale has been raised in drp," says Korde.

The government has worked out a formula for providing more space to dwellers. Those with an accommodation from 251 sq ft (23.32 sq m) to 1,000 sq ft (93 sq m) will get a 225-sq ft flat free (like smaller homeowners) and can buy another 675 sq ft (62.7 sq m) at a rate decided by a committee. A similar arithmetic has been conceived for people with houses above 1,000 sq ft. "First, the government is taking away our land from us and then telling us to buy at market rate from builders (See map: Mumbai's property prices). Secondly, the government has not finalized the committee that will decide the rate for buying additional space and has not said what the market rate will be," complains Naushad Khan, a recycler. But there are doubts about this extra space as well. Under sra's existing redevelopment schemes, the market component is 85 per cent residential and 15 per cent commercial. For Dharavi, the entire sale component will be commercial, says Korde. There is a widespread feeling that this will indeed be the case. No wonder property prices are skyrocketing. The going rate for 1 sq ft of land is Rs 25,000-30,000 for commercial use and Rs 5,000 for residential use. As drp gets under way, this is sure to rise: in the adjacent Bandra-Kurla complex the going rate is over Rs 50,000 per sq ft for commercial purposes.

Exclusionary logic
The logic that is driving the project spells exclusion for the poor. "As per drp, only 15-20 per cent of houses will be for the economically weaker sections, the rest will go to the middle-income group," says V Suresh, former chairperson and managing director of the Housing and Urban Development Corporation (hudco). But sra says 65 per cent will be for rehabilitation and 35 per cent for sale.

Menon claims drp will just create another huge slum on Mumbai's outskirts because multistoreyed structures are not amenable to maintenance and livelihoods. "The best flats are on the ground floor plus three additional floors at the most. Beyond that, one requires an elevator which is not easy to maintain. It has to be a low-rise, high-density development from where people can carry out supplementary economic activities," says Suresh, echoing the logic of the alternative plan submitted to the government.

Slumbay
More than half of Mumbai's 12 million population lives in slums, without secure tenure, adequate water, toilets, drainage systems and roads. A 2003 paper, 'Changing the rules: Guide-lines for the revision of regulations for urban upgrading', published by sparc, says over 6 million slum dwellers occupy barely 16 per cent of Mumbai. A study by the Bangalore-based Alternative Law Forum (alf) and Pune-based Indian Law Society (ils) claims Mumbai's 6 million slum dwellers occupy only 12.5 per cent of the city's land, worth Rs 80,000 crore.

Various policies have been designed to tackle the problem of growing slums, but none have made a dent (see timeline: Slum policy). In his book Bombay: Can it house its millions, P S A Sundaram says the housing board, mhada's predecessor until 1986, had supplied about 100,000 fully built ownership dwellings of which 75 per cent were for economically weaker sections and low-income groups. However, after 1985 the proportion earmarked for high-income groups rose and weaker sections were left out. Against the annual increase in housing needs for 46,000 dwellings in the 1960s and 60,000 dwellings in the 1970s, the supply of official housing by the public and private sectors was only 17,600 and 20,600. Between 1984 and 1991, supply rose by about 47,400 units per annum mainly because of private sector activity. But speculation and hoarding led to artificially raised prices and the poor didn't gain. "The real irony is that in a city where thousands are homeless, about 100,000 flats are lying vacant," says the alf study.

Experts claim it is a myth that land is not available in Mumbai to house the poor--land is available, but is owned by a powerful elite, which ensures that vacant land is not freed for slum dwellers. The National Commission on Urbanisation reported in 1987 that 91 people in Mumbai owned 55 per cent of vacant land. This concentration of ownership, in fact, is a widely known phenomenon, accepted by government officials as well. "It is not that houses are not available in Mumbai, but these are unaffordable to the poor. There are a few developers who control Mumbai housing sector. We need to break this jinx and deregulate the housing sector," said S S Kshatriya, principal secretary, state housing department, during the recent Urban Age conference in Mumbai.

Hand in glove
Mumbai's slum problem is the government's own creation. It has powers under the Urban Land (Ceiling and Regulation) Act (ulcra), 1976, to acquire land to house the poor. Instead, the state government has said it would repeal ulcra, a pre-condition for receiving funds under the centre's Jawaharlal Nehru National Urban Renewal Mission (jnnurm) (see 'Bad plan for 63 cities' , Down To Earth, August 31, 2006).

ulcra put a ceiling of 500 sq m on vacant urban land in Mumbai that could be held privately. Excess land was to be returned to the government. Owners could seek exemptions on the condition that a portion of their land would be used to build one-room tenements for weaker sections. This provision is a dead letter. Some of the major owners of vacant land were charitable trusts set up by industrialists who took exemptions and sold land in the free market. The state government has managed to acquire barely 40 ha in the past 26 years.

According to the alf/ils study, Mumbai-based builders Hiranandani Constructions have misused the law on over 200 ha in Thane and Mumbai, of which it had to allocate 140 ha for one-room tenements for weaker sections. Not one has been built. Similarly land has been reserved for housing the homeless in Mumbai's development plan, but it has been illegally used for commercial purposes, as with Worli's Atria shopping mall. The poor have also lost out on 200 ha of mill land. "About 12,500 ha in excess of the ceiling specified by ulcra could have been acquired in Mumbai at a cost of Rs 150 crore. Their current market price stands at about Rs 100,000 crore," says Sudhir P Badami (see 'Check the realtor fiscally', Down To Earth, June 30, 2007).

Builders claim real estate prices will fall if ulcra is repealed and locked-up land brought into the market. Property dealers don't buy this. Since there is a dearth of commercial space in Mumbai, once Dharavi opens up, prices there will rise as those who can't afford space in Bandra-Kurla will head there. Housing for the poor will remain a mirage.

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Special economic zone

Dharavi is not just a slum. It is an economic hub churning out a variety of goods, from pottery to branded snacks. It also provides essential services, like recycling waste. But it is all in the informal sector that gives it a competitive edge. It is also why the government does not recognize it. Instead of sops, this SEZ is getting marching orders

Pottery

"My great grandfather Bhagwan Poona came here from a village in Gujarat in 1918. Since then we have been here. This is our fourth generation in Dharavi and we know no other place. But for the past one year or so we are hearing rumours of redevelopment by private developers. Government says it will give us free 225-sq ft flats but do you think potters can work out of such small flats? At present, we live in a 500-sq ft double-storey house in which upper floors are used to dry pots," says Arvind B Wadel, a potter in Dharavi's kumbharwada. Pottery is a family business. Wadel's wife and two daughters help him make pots.

Wadel's is one of the 2,000 families in Dharavi's kumbharwadas--and most of them echo his predicament. Govindbhai BParmar's forefathers moved to Mumbai around the same time as Wadel's. He lives and works in Dharavi with his family of eight. "How can we do business in a 225-sq ft area? The bhatti in which we bake pots alone occupies a bigger area, forget the first and second floor of our house where pots are dried," he says.

Recycling

Dharavi is today known as the recycling capital of India--dealing with waste from all over the world. Almost everything gets recycled here, from toothbrush and refrigerators to polybags, metals, cardboard and paper.

Soon all this will change because Dharavi's recycling industry is located in an area notified as sector 1 under the state government's redevelopment plan. There is no place for the 'polluting' recycling industry in this sector. Dharavi's recycling business is also illegal as no unit/godown has a trade licence. "The government does not want recycling to take place, therefore, in spite of our repeated demands for trade licences, these have never been issued to us. We are responsible for keeping Mumbai clean but rather than rewarding us and upgrading our units, the government is throwing us out of the city. I am not sure whether Mumbai can ever become Shanghai, but it will surely become a large Dharavi if we are not allowed to work," says an angry recycler.

There are 4,000-5,000 recycling units and warehouses in Dharavi, each occupying 1,000 sq ft (93 sq m) to 3,000 sq ft (279 sq m). On an average, 15 people work in a unit or warehouse. Each day 4,000 tonnes of waste is recycled, with a daily turnover of over Rs 1 crore, says Naushad Khan, chairperson of Dharavi Recyclers Association.

Food processing

In 1970s and 1980s when tanneries in Dharavi were closing down, people started diversifying into other occupations. Food processing emerged as a favoured option. At present, there are over 5,000 such units in Dharavi that make a variety of products such as chakli, farsan, namkeen and wafers. A food-processing unit usually employs five or six workers. They range from 150 sq ft (14 sq m) to over 1,000 sq ft (93 sq m), usually with a mezzanine floor. Some of the best brands of processed food are actually made in Dharavi, but almost the entire industry is illegal because it does not have the mandatory food-processing order licence.

"Dharavi's food processing industry has a cutting edge as the cost of production is low. But we are in the unorganised sector because we cannot meet the stringent conditions specified under various food laws. This means that we are vulnerable to raids and have to bribe officials around Diwali to carry on with our business," says a member of the Bombay South Indian Adi-Dravida Mahajan Sangh, whose members are mostly engaged in food processing.

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Leaky roof

Housing policy not driven by welfare

Real estate prices have hit the roof largely because of a lack of regulation in a housing sector ruled by speculators. Faced with a crisis, the centre wants to facilitate private-sector housing initiatives for the urban poor, without doing anything itself. This, the alf study notes, is an unsuccessful strategy.

No purposive thinking has been devoted to housing the poor. "All building bye-laws till now were only for middle-income and high-income groups. The national building code also talked about an ideal house with a minimum of 600 sq ft (56 sq m), but a poor person cannot afford bigger than a 250-sq ft house. It is only in the National Building Code-2005 that the concept and details of housing for the economically weaker section were introduced," says hudco's V Suresh.

Drifts and drafts
The centre has regularly come up with draft policies on slums and housing, but they have either remained on shelves or had no impact. It started making a national slum policy in 1997 that favoured improving infrastructure in slums. But the policy remains a draft (see 'Slum today, gone tomorrow' , Down To Earth, January 15, 2004).

Questioned by Down To Earth, D P S Negi, director, Ministry of Housing and Urban Poverty Alleviation said: "The policy is in advanced stages of approval and was sent to the cabinet a week ago." But even now the policy is being opposed because it is based on public-private partnerships. "The policy doesn't talk at all about land rights for the poor. And like most policies in India, even this one is in line with the World Bank policies of public-private partnerships. They intend to recover the entire cost of land from the poor, so where is the concept of social welfare?" asked Kshithij Urs, regional manager of ActionAid, Bangalore.

In 2005, the Union Ministry of Urban Employment and Poverty Alleviation also released a draft national urban housing and habitat policy (nuhhp) to create 'housing for all'. It said: "The total requirement of urban housing during the 10th Plan period (2002-2007) works out to 22.44 million dwelling units in urban areas consisting of urban housing backlog of 8.89 million dwelling units at the beginning of 10th Plan (2002) and additions of new housing of 13.55 million dwelling units." It valorizes public-private partnerships and their "fairly positive results" and promises jnnurm will tackle the urban housing crisis. Under jnnurm, slum dwellers are entitled to a minimum floor area of 25 sq m, contributing a minimum of 12 per cent of the cost. Researchers say it is anti-poor because its funds have strings attached in the form of questionable reforms (see 'Bad plan for 63 cities' , Down To Earth, August 31, 2006). Even this policy is awaiting cabinet approval.

nuhhp has other recommendations, which only sound good. For instance, it recommends earmarking land for housing economically weaker sections and lower-income groups (ligs) which "could be 20-25 per cent in any new housing colony in public/private sector". Such allocation has not happened. Take Delhi. According to the capital's 1962 master plan, the government had to provide 400,000 plots of 25 sq m to slum dwellers by 2001. Instead, land is being given to private contractors for highrise buildings and entertainment plazas. "Delhi is facing a tremendous shortage of housing. Land mafia is developing slums in unauthorized areas where there are no basic amenities," Sheila Dikshit, Delhi's chief minister, acknowledged at the Urban Age India meet.

Her government recently announced a scheme for 100,000 houses for the weaker section in Bawana on the outskirts of Delhi. Experts say it is bound to fail. "A house for Rs 1-2 lakh is a wonderful idea, but relocating people 20 km from the city is not a good solution. Slum dwellers will buy these houses, sell them and squat closer to their work places," says Menon.

Subject to state
Land and housing are state subjects and most states have dismal records. On November 1 last year, the Maharashtra government announced its draft state housing policy, acknowledging that the real estate boom and easy availability of finance had not translated into affordable housing for economically weaker sections and lower- and middle-income groups. The draft policy said slum areas above 40 ha would follow the Dharavi model and within three years 500,000 lig houses would be built (see 'Shelter skelter', Down To Earth, December 31, 2006). "The draft policy has been forwarded to the legislature and will come up for discussion during the winter session," says S S Kshatriya, principal secretary, housing department, Maharashtra government.

West Bengal is banking on jnnurm, under which it has been allocated about Rs 5,400 crore, of which Rs 3,018.40 crore is for slum infrastructure and housing. Most of the work is still in the planning stage. In slum areas within Kolkata municipality's jurisdiction and the greater metropolitan area, 5,068 and 49,483 low-income dwellings have been planned by relocating residents temporarily, razing structures and building four-storey tenements which will be signed over to the female adult of families at 20 per cent of cost, the rest being paid by the state and centre. Officials say the scheme recommends not moving people more than 2 km to save livelihoods. They also say there is talk of legislation ensuring all development work, whether public or private, will reserve 15 per cent land for the urban poor (see box: Big deals).

Way ahead
There are a multitude of views on how to deal with the present crisis. Common to them are the arguments that housing for the poor must be welfare-driven and rehabilitation schemes must provide security of tenure. Some say setting up an independent regulator for real estate would standardize norms and ensure quality. Others recommend fiscal instruments. But the Union Ministry of Urban Development is yet to react.

The bottom line, however, is that public housing is the way out. Singapore has shown the way. "Since World War II, the Singapore government's control over total land has increased from 45 per cent to 90 per cent, which it is using to develop public housing. In 1959 only 8.8 per cent population used to live in such houses, but now the share has gone up to 85 per cent," says Heng Chye Kiang, dean of the school of design and environment, National University of Singapore. "Production and supply of affordable housing can happen only through state intervention," says P K Das, a Mumbai-based architect.

Bogota, the capital of Colombia, is following another successful housing model. The government has acquired land around the city and is developing it for the urban poor. "Private developers are involved, but they cannot sell a house for over us $15,000. We have also cross-subsidized services like water, power and piped gas for the poor. The Maharashtra government should learn from us and ensure that land around Mumbai is publicly not privately owned," says Enrique Penalosa, former mayor of Bogota. The Maharashtra government is in fact going in a diametrically opposite direction.

Another model suggests giving slum dwellers land with services like toilets and water connections. "Since the slum dweller would have the land and facilities, he would want to take a loan and build his own house. And once he has invested in the house, he will not sell it easily," says Menon.

The problem can be handled creatively. "Authorities can give ground floors and first floors to different families, with the land shared by them," says Suresh. Co-operative slum housing, with land being controlled by the community, is another option. "Even if people sell their plots, they have to pay a fee to the co-operative. The land will remain in the community," says M L Khurana of the National Co-operative Housing Federation of India. Two localities in Delhi--Prayog Vihar and Ekta Vihar--have been following this model since 1987. Dikshit has announced four more co-operative projects.

When it comes to the crunch, there is no one-size-fits-all solution. But a starting point has to be the implementation of a workable national slum policy.

With inputs from Maureen Nandini Mitra and Ravleen Kaur