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A closer look at Mumbai redevelopment

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Redevelopment is a process of urban renewal. The potential benefits of redevelopment in a city are many. It not only reduces urban sprawl but also improves the economic competitiveness of city’s prime precincts.

In addition to this redevelopment can be an economic engine that unlocks land parcels for development in prime precincts in the city which otherwise are in urban blight, characterised by dilapidated buildings and inadequate and deteriorated amenities and services. This helps in creating additional, better quality housing or other real estate and helps in boosting property values. Consequently, this creates more jobs and business opportunities while improving the overall urban fabric.

Most Indian metros are more than a century old, and have witnessed tremendous population inflow – which, in turn, gave rise to unplanned developments in prime precincts of these cities. Key Indian cities such as Delhi and Mumbai have many such pockets within their prime locations, which have limited land available for development while the existing real estate and amenities in these precincts have run down. In such a scenario, redevelopment is a good solution to address the issue of urban blight, and for improving the overall security of the city.

Mumbai has, for many years now, been a subject of redevelopment to catalyse urban renewal and improve the quality of real estate and infrastructure. A fast-growing population’s demand for space amidst limited availability of developable land has forced the redevelopment of old properties into brand new structures. One key activity on this front was the development of the city’s old mill lands into high-rise residential or commercial buildings.

However, redevelopment can and should also be extended beyond development of old mill lands – to redevelopment of old residential colonies and complexes to create more efficient spaces. This will not only improve the economic value of these properties but also improve the quality of living of the residents.

The Government of Maharashtra has taken a major step towards addressing the issue of urban blight by the initiative of ‘cluster development’. Cluster development is another name for redevelopment of a group of structures within a specified area. Unlike the standard practice of redevelopment of cessed or other old buildings, cluster development is much more complex.

The Government of Maharashtra, via Government Resolution (GR) notification, has increased the floor space index (FSI) for cluster developments this year. This is expected to encourage private developers to participate more in the cluster development process in Mumbai. These projects are coming up in locations which are densely populated and defined by myriad commercial activities. In the city side of Mumbai, cluster developments are coming up at Crawford Market, Bhendi Bazaar, Mohammed Ali Road and similar areas.

Under Maharshtra’s cluster development scheme, a developer needs to prepare a master plan for the area, making adequate provisions for supportive infrastructure. Further, the developer needs to provide free-of-cost tenements to all original and genuine occupiers. A total FSI of 4 is granted for cluster developments, and the developer is entitled to utilize the unused FSI as a free-sale component which he can develop and sell on the open market.

However, the biggest challenge for cluster developments is the identification of beneficiaries. For instance, getting the majority of stakeholders on board is a major task. Also, it is a long and capital intensive process.

Redevelopment may involve relocating businesses and people. However, it must produce tangible economic benefits so that the trouble and expense of redevelopment is justified. On a cautionary note, redevelopment sometimes involves the use of eminent domain as a legal instrument to take private property for city-initiated development projects. This is sometimes seen as a means for regulatory bodies to acquire control on behalf of influential developers or developer cartels.

If carried out in a non-consultative manner, redevelopment can result in an excess of high rises that compromise existing infrastructure, reduce the possibility of new infrastructure and increase the crime rate in a location. In order to be genuinely democratic, the process of redevelopment must be consultative at all levels. It should enable local citizens to have greater control and ownership of the direction of their community. Community participation, sustainability and trust are important watchwords. The Government must act as advocate and ‘enabler’, rather than as an agency that enforces command and control.

Finally, redevelopment should not be only about improving existing structures. There should also be a focus on incorporating of historic structures into new and rehabilitated development. In cities like Mumbai, it is important to preserve and enhance cultural, historical and community assets. The cultural fabric of the community must not be compromised.

The article is written by Anuj Puri, chairman & country head, Jones Lang LaSalle India

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