Re-development: The Politics of Slums in Mumbai Metro Region

Dk Osseo-Asare5201: Paper 2

Mumbai is the largest city in a country, India, whose population has just crossed the one billion mark (one-sixth of the world’s population). The city’s population is at least 12 million (more, if we include the growing edges of the twin city, New Mumbai, that has been built across Thane Creek). This means a population totaling 1.2 per cent of one-sixth of the world’s population…

…About 40 per cent of the population (about 6 million persons) live in slums or other degraded forms of housing (the term “slum” is a formally defined settlement category in India and its use here follows that designation). Another 5-10 per cent are pavement dwellers. Yet, according to one recent estimate, slum dwellers occupy only 8 per cent of the city’s land, which totals about 43,000 hectares. The rest of the city’s land is either industrial, middle- and high-income housing or vacant land in the control of the city, the state (regional or federal) or private owners. The bottom line is 5-6 million poor people living in sub-standard conditions in 8 per cent of the land area of a city smaller than the two New York City boroughs of Manhattan and Queens. (Appadurai, 2001: 27).

This paper investigates the urban politics of Mumbai slums post-1991. Throughout the

second half of the 20th century, international development policy has deployed various

strategies to address the slum problem in cities of the former colonies post-

independence. Mumbai is today India’s industrial, commercial, financial and

entertainment hub; and yet 5-6 million Mumbaikars live in slums and on the streets,

about half the total urban population. If political participation is understood as the joint

capacity and willingness of individuals and groups to communicate personal preference

and to collectively pressure for personally-beneficial change, then the issue of equality is

uniquely charged in Bombay. Despite citizens, businesses and institutions operating

variously along a spectrum of formal to informal economies, i.e. within hybridized zones

of legality, nearly all maintain a voice within party-based electoral politics. In addition, a

broad array of social movements continuously challenge the dominant regimes of power.

By exploiting both tracks of participation, slum-dwellers have emerged as a non-trivial

political lobby within a city dominated by powerful real estate interests.

2

Beginning with the question of how much power slum-dwellers have in Mumbai, this

paper seeks to understand the dual relationship of slum-dwellers’ collective influence on

official government policy, versus the impact of official policy on the welfare of slum-

dwellers. Mumbai’s decades-long shift in policy from Slum Clearance to Slum

Upgrading and ultimately to Slum Redevelopment suggests a positive valuation of the

rights of illegal slum-dwellers compared to conventional private property rights. However,

slum-dwellers remain at a critical disadvantage in realizing their particular objectives: the

economic trajectory of Bombay increasingly marginalizes the slum workforce; a half-

century of urban development agendas have failed to improve opportunities for slum-

dwellers; and the responsibility delegated to successive administrations has not

generated results on the ground commensurate to those promised by campaign slogans.

The issue of housing rights, and the related debate over living conditions more generally,

remains central to the struggle for control over both the city and the power to regulate it.

// Outline

The first section outlines an historical sequence of international development policy with

respect to substandard housing stock and low-income settlements. The second section

highlights key issues concerning housing and the politics of poverty unique to Mumbai.

The third section considers a slum redevelopment case study project in Mumbai, the

Markandeya Cooperative Housing Society. The fourth section in conclusion tests the

political agency of Mumbai slum-dwellers against the global power structure.

3

//1 Politics of Slums

In his 2006 book Planet of Slums, Mike Davis argues that the planning problem for the

21st century will be accommodating the rise of a new urban proletariat, situated in

informal settlements. The statistics he cites propose that the “global countryside” will

contract demographically after 2020 and that cities alone will drive expansion toward a

maximum population of 10 billion in 2050. “Ninety-five percent of this final buildout of

humanity will occur in the urban areas of developing countries, whose populations will

double to nearly 4 billion over the next generation.” (Davis, 2006: 2). While the number

of people living in Chinese, Indian and Brazilian cities is today equivalent to that of

Europe and North America, projected urbanization in developing countries will outpace

by several orders of magnitude the historical development of first-generation modern

urban geographies. Although observations regarding this trend predate Davis’ work (see

Hay, 1977: 74), the contemporary discourse is increasingly divergent in its view of the

new urbanization as a process completely outside the West.

How, then, does and might planning operate outside “developed” cities? That is to say,

if the discipline of planning, as practiced in the cities of the so-called First World and

taught according to a general pedagogy formulated in schools of the northern

hemisphere, derives from issues that confronted Western society immediately following

World War II—what is the parallel narrative within urban conglomerations of the Global

South? Whereas 20th-century housing policy in Europe moved from state-organized

reconstruction to urban micromanagement, and in the United States sponsored nation-

wide suburban sprawl, the issues confronting “developing” cities are historically different:

higher rates of natural population increase contributed a basic stress on planning

strategy; urban migration mirrored a struggle for power between rural and urban

4

constituencies over limited government financial investment; newly independent

countries sought to revamp administrative and bureaucratic structures according to

postcolonial logics; unchecked urbanization without adequate land policy reform failed to

impede patterns of slum settlement. The dependence of developing countries on

international aid and lending agencies ensured that policy debates were neither local nor

national, but rather linked at any given time to an on-going debate regarding

international development planning. If the global condition of slums today was born of

the developing world, the developed world—in joint capacity of economic advisor and

financier—was the midwife.

This “history of ideas” begins with the default policy of slum clearance adopted by most

developing countries in the middle of the 20th-century. Slum clearance involves

relocation of slum-dwellers to publicly-financed housing off-site in order to accommodate

new for-profit development. Projects at this large scale were entirely consonant with not

only grand nationalistic visions of Western-style industrialized progress, but also urban

renewal schemes initiated during the same period by city planning boards in the United

States and Europe. Razing urban blight was deemed a necessary step toward modern,

high-density, high- and mid-rise construction. However, this model of public housing

failed to be cost-effective in the context of developing countries especially.

Simultaneous with skepticism on the part of Western lenders, as well as borrower

governments’ disillusionment with a purely Western model, a new group of scholars

offered a revised approach to dealing with the slum problem. Inverting the conventional

wisdom regarding the spatial and economic systems of squatter settlements, the new

paradigm proposed that instead of degrading the urban environment, informal

communities could represent a constructive resource for development, or to use Lisa

Peattie’s emblematic term, “slums of hope.” (Peattie, 1969).

5

The alternative framework put forward by the likes of Peattie, Colin Ward, Charles

Abrams, John Turner, John Habraken and a host of others, led initially to slum upgrading

and later to sites-and-services schemes. The premise of slum upgrading is that

providing slum-dwellers with legal title to their land will, as a direct result of secure land

tenure, facilitate incremental, self-financed improvement. This process maintains social

networks and proximity to location-based jobs, and avoids placing slum-dwellers into

culturally-alienating apartment blocks. Sites-and-services projects usually entail

relocation of slum-dwellers to cheaper peri-urban land, allowing nominal savings in

construction costs since the government funds only basic utilities and infrastructure,

while residents are responsible for building their own units. Turner, who became the

most influential leader of this school in terms of his direct impact on international

development policy, typifies his philosophy of “housing by people” in his favoring of the

“supportive shack” over the “oppressive house.” (Turner, 1976: 54-59). During the final

decades of the 20th century, alongside participatory planning, the general principle of

“enablement” emerged as the major trend within international development policy. A

corruption of Turner’s argument for locally-sensitive process, the new enabling strategy

rejected his social understanding of housing (use-value) for the economic model of

housing as commodity (exchange-value), emphasizing decentralization, deregulated

housing markets and demand-driven housing delivery. (Hamdi, 1991).

//2 Power Relations and Mumbai’s Housing Policy

Evolving strategies of slum management in the Mumbai metropolitan region are jointly a

function of externally-induced international development policy and of localized urban

politics. During the 1970s official policy in the city moved from Slum Clearance to Slum

6

Improvement, in keeping with the 1976 endorsement of human rights and community

empowerment at the UN conference in Vancouver, and as ideas like those of Turner and

of Peattie’s “slums of hope” began to gain currency. In 1985 the Maharashtra

government offered slum-dwellers legal title to land and assistance with housing finance

and infrastructure under a World Bank-funded Slum Upgrading Program (SUP). When

international development agencies later advocated a shift from provision of low-income

housing to enabling, the central government of India drafted the 1988 National Housing

Policy (NHP). The NHP aimed to re-invigorate privatized housing delivery through land

and regulatory reform, to support improved options for housing finance, and to partner

with community-based NGOs. Two successive versions of Mumbai’s slum

redevelopment housing policy, the 1991 Slum Redevelopment Scheme (SRD) and the

1995 Slum Rehabilitation Scheme (SRS), gave increasing incentives for private

developers to cross-subsidize new on-site housing for slum-dwellers. While the direction

of housing policy over these three decades mirrors trends in development planning

globally, the specific politics of the Mumbai context played a key role in the city’s slum

redevelopment policy.

Economic re-structuring over the last half of the 20th century polarized Mumbai’s political

and cultural geography between the interests of global business and of the urban poor.

Collapse of the textile industry, which established modern Bombay and at one point

employed three-quarters of the population, led to more diversified manufacturing and

significant growth in commerce and the financial sector. At the same time that the

formal economy fought for a business-friendly environment of deregulation, the lower

classes struggled against marginalization. Analysis of urban policy during this period

suggests that slum-dwellers retained collective agency largely through the democratic

electoral process. The interrelationship of communalism, class and party politics also

7

indicates that the slum-dweller demographic is not homogenous and operates more

complexly in the urban power dynamics of Mumbai.

Bombay has always been a city of commerce. Unlike British-built Calcutta, construction

of 19th century Bombay was principally financed by a non-British, “native” merchant

class. During this period, the city’s economic base expanded from maritime trading to

include a robust textiles and related manufacturing sector. Textiles became the primary

engine of industrialization and economic growth in the 1860s, when the U.S. Civil War

limited access to American cotton, and the opening of the Suez Canal in 1869

consolidated Bombay’s role in intercontinental trade. By the 1930s the textiles industry

employed nearly three-quarters of the urban population. Decline of the textiles industry

began toward the end of the 1970s; instead of updating obsolete manufacturing

technologies, the established class of textile moguls alternately mismanaged finances or

reinvested in emerging industries such as engineering and pharmaceuticals.

Diversification of Bombay’s industrial economy throughout the middle half of the 20th

century together with modernization of the city’s financial services marked a shift from

labor-intensive to capital-intensive production. However, the robust trade union lobby,

inherited through the organization lineage of earlier independence movements and

political activism, contested any reduction in jobs or pay. The State propped up

unprofitable mills until the unsuccessful 1982-83 union strike phased in mass downsizing

and unemployment. From 1976 to 1991, jobs in the textiles industry fell by half to 12.5

percent of total workforce, or 400,000. Some research credits this reduction with

increasing undocumented textiles-related work and the rise of Bombay’s informal

economy overall. (Patel, 2003: 19). Between 1961 and 1991, the informal sector grew

from half to two-thirds of the city’s total employment. (Joshi, 2006: 155).

8

Disintegration of the textile industry had major consequences beyond large-scale flux

from employment in the formal economy to the informal. The highly organized mill

workforce lost its monolithic political voice; unions persisted piecemeal in the factories

that remained operational, and resurfaced in advocacy movements and social

cooperatives but with atomized power. Also, the mills had been required by law to

provide worker housing (known as chawls, the typology of modest apartments arranged

around 3-4-story courtyards is unique to Bombay); the decline of the mills left a vacuum

in low-income housing delivery. Although the squatter presence predates

independence, the flood of rural immigrants in search of jobs increased Bombay’s slum

footprint. During the wave of migration between 1941 and 1971, two-thirds of the urban

population were migrants (Patel, 2003: 8); by 1981, 70 percent were more than 10 years

resident (D’Monte, 2002: 59). Analysis of the 1991 census suggests that a slight

majority (55 percent) of Mumbai’s population were slum-dwellers at that time

(Panwalkar, 1996). More generous estimates which include chawls within the settlement

category of slum range as high as 70 percent (Sundaram, 1989). More than half of slum

households earn above the poverty-line. (Joshi, 2006: 155).

Such a high proportion of slum housing is a response to incredibly expensive real estate

and lack of affordable housing—Mumbai land values multiplied seven-fold in the period

1966-1981 (Mukhija, 2003, 28) and three-fold between 1986-96 (Tiwari et al, 1999:

1784). Several laws and planning guidelines have exacerbated the interrelationship of

real estate, housing availability, and land-use in metropolitan Bombay. The Bombay

Rents, Hotel Rates, and Lodging House Rates Control Act of 1947, or Rent Act,

stabilized the rents of certain properties at 1940 rates. Although planned as short-term

legislation to counter postwar speculation, it has been extended to the present day.

9

Because heirs to a property retain the legal right to extend the lease (independent from

landlord consent) at the same original rate, owners are unable to profit from these

properties. Consequently, thousands of buildings without landlord maintenance are in

disrepair; and as many as 400,000 units are held vacant by owners to avoid dispute over

tenant occupancy. (Mehta, 2004: 115). India’s national policy of liberalization

introduced in 1991 further aggravated Bombay’s housing crisis. When the country

plunged into the global market economy, the annual rate of growth jumped from 5.6

percent during the 1980s to 7.5 percent in the mid-1990s (Das, 2000: 29); Bombay was

the epicenter. Before the shock of structural adjustment peaked in 1995, bloated

corporate portfolios and forex reserves inflated the city’s property values to levels higher

than Manhattan and downtown Tokyo (Patel, 2003: 21).

Another national policy which has precipitated negative results locally in Mumbai is the

Urban Land (Ceiling and Regulation) Act of 1976 (ULCRA). In India, land use falls under

state jurisdiction, not that of the central government. Passed instead as a constitutional

amendment (No. 44), ULCRA extended government control over private property rights,

in theory as a preventative measure against land monopoly. In Metropolitan Bombay,

the Maharashtra state government could re-allocate vacant parcels over 500 sq-m to a

public land trust for redevelopment in the public interest. (Desai, 1995: 125). The

Mumbai Housing and Area Development Board utilized a quarter of one-percent, or 65

hectares, of the total 26,000 hectares made available, building 4,500 flats and using 10

hectares for the Bombay Urban Development Project, a sites and services scheme

sponsored by the World Bank. Private parties abused the system whereby they were

eligible for exemptions if they incorporated low-income housing on-site. A chief

minister’s quota (10 percent of government-appropriated units) was exploited for political

favors. (Narayanan, 2003: 183). After the ULCRA amendment was repealed in 1999,

10

current plans are to replicate the bill at the state level, despite the fact that in contrast to

the purportedly egalitarian intention, large landowners, developers, and politicos were by

far the main beneficiaries.

Lastly, the expanded scope of the regional plans issued by the Mumbai Metropolitan

Region Development Authority (MMRDA) between the period of 1973-74 and that of

1996-2011 put in place a policy framework for Greater Mumbai. The 1973-74 MMRDA

Regional Plan set a precedent for de-concentration, seeking to direct labor-intensive

industries outside the city center via an incentive-based approach for the private sector.

This strategy of de-concentration, although not entirely successful, did begin a decades-

long trend of spatial reorganization—less a complete transfer from central city to the

suburbs than engulfment of the suburbs by the Island City. The 1996-2011 MMRDA

Regional Plan additionally calls for a foundation of public-private partnership:

“[objectives] cannot be achieved through sole reliance on public investment, achieved through sole reliance on public investment, regulations and controls. It calls for an approach that would facilitate increased investment by private sector in infrastructure and other developments, enable appropriate structural changes in the region’s economy and permit adoption of land-use policies that respond to market potential.” (MMRDA, 1995)

This recommended policy of enabling suggests both the influence of latest-generation

international development policy as well as recognition of the fiscal challenges inherent

in the MMRDA trying to operate independently in the cost-prohibitive environment of

contemporary Mumbai. The plan also notes that emerging trends in the metro region,

such as inverse rates of growth between manufacturing and financial services jobs,

require more office space and could increase Bombay’s global share in offshore

technical and financial support. Today Bombay is one of world’s leading centers for

Business Process Outsourcing (BPO), and 32 percent of India’s software engineers

work along the Bombay-Pune “Knowledge Corridor.” (www.maharashtraitparks.com).

11

Proposed measures such as reforming the Rent Act and providing for more flexible land-

use planning were not fully realized; however, the revised policy of de-congestion via a

polyvalent regional network of business districts is now under implementation.

The island geography of Bombay’s urban core problematizes the comparative

distribution of housing and jobs. Historically, the Central Business District (CBD)

developed adjacent to the port, located at the southernmost tip of Bombay Island.

Despite regional dispersal of textile mills and the industries that followed, the CBD and

Bombay Island provide 55 percent of employment while two-thirds of the total population

live in suburbs to the north. (D’Monte, 2002: 21). The 1996-2011 MMRDA Regional

Plan seeks to re-direct job growth to new business districts across the harbor in the

Belapur CBD of Navi Mumbai and in the inner suburb of Bandra-Kurla. Controversal

legislation separate from the MMRDA directive allowed mill owners to develop former

factory sites, originally ceded in the public interest of rapid industrialization, through

privately-funded adaptive re-use. Much like the flagrant abuse of ULCRA exemptions for

the “rehabilitation” of low-income housing, new office and market-rate high-rise projects

on redeveloped mill lands yield huge profits for private builders; it is of course no

surprise that laid off workers do not share in the financial gains of redevelopment.

Apart from the Rent Act, the primary focus of these policy initiatives is top-level

economic development. The patterns of their implementation demonstrate the

composite priority of policy-makers with respect to power dynamics in the city. The lack

of housing affordable to low- and middle-income Mumbaikars has been abundantly clear

for decades. At the same time, re-orientation of Mumbai’s economy from the textiles

industry to a diversified commercial and financial sector has warranted considerable

attention in terms of regional policy. What is particularly revealing is the systemic failure

12

to execute those measures that specifically address the housing needs of citizens, as

opposed to the regulation of industry or the demands of the formal business community.

Post-liberalization, government policy changed from provider to facilitator. However, in

both the previous period and in the decade and a half since, the rhetoric of planning has

not translated into improved conditions on the ground. The defeatist attitude would be

that Bombay is such an extreme geography of disparate economic circumstances that

planning can be only marginally effective. The argument that official policy objectives

are perennially compromised because of an all-powerful nexus of big business, real

estate and government has long moved past conspiracy theory to become a widely-held

attitude amongst Mumbaikars. (Mehrotra et al, 2006).

In contrast to regional issues of economic development (MMRDA, etc.), policy strategy

regarding Mumbai’s informal settlements, beginning with the 1971 Slum Area

(Improvement, Clearance and Rehabilitation) Act and the 1976 slum area census,

bracketed subsets of the slum-dwelling population as a quasi-legitimate demographic

and acknowledged their collective development interests. Previous tactics of wholesale

demolition of illegal hutments under the 1956 Slum Clearance legislation had proved

unsuccessful; such basic structures can and were rebuilt within hours after the

bulldozers left, and bureaucratic inefficiencies hindered proposed resettlement in public

housing elsewhere. Slum-dwellers also unified as a significant political pressure against

displacement and the new policy of Slum Improvement recognized that the informal

socio-economic systems that support slum settlements preclude their wholesale

uprooting from the urban landscape.

Unlike the standard perception of slums according to the literature, Mumbai slums are

embedded in the city itself, not the periphery, and are generally irregular in their layout

13

with small plots. (Mukhija, 2003: 98). This translates to added costs and difficulty in

introducing improved infrastructure and public amenities. Partly for these reasons,

World Bank intervention re-organized the first round Slum Improvement policy into one

with decreased government investment in infrastructure; the 1985 Slum Upgrading

Program required participants to pay in full for improvements to existing slum housing

stock, although long-term lease agreements involved cooperatives of slum-dwellers (no

individual property rights or permanent ownership).

Illustrating the competing agendas of international aid groups and indigenous party

politics, the Central Government of India sponsored an alternative model for slum

redevelopment during the same year, the Prime Minister’s Grant Project (PMGP) of

1985. The PMGP addressed slum redevelopment by combining state-awarded subsidy

grants with 20 percent bonus FAR for private development, in order to make it possible

for slum-dwellers to self-finance purchase of new housing built in higher density on

former slum sites. Following the lead of the Prime Minister of India, a Congress Party

member, the Congress-controlled Maharashtra state government rolled out this strategy

at a larger scale through the 1991 Slum Redevelopment Scheme (SRD). SRD allowed

private developers to build additional FAR on sites where they paid to re-house existing

slum-dwellers in new housing on-site (2.5 maximum FAR); it also capped profits to 25

percent return on investment.

The 1995 Slum Rehabilitation Scheme (SRS) followed the SRD as a program for slum-

dwellers with even higher political expectations; the Shiv Sena political party exploited

the proposed policy during campaigning to consolidate power at both state and

municipal levels. SRS increased incentives for private developers by eliminating the

profit cap and opening a new market for selling un-used FAR with Transfer Development

14

Rights (TDR) certificates; slum-dwellers, no longer responsible for any payment toward

their new “rehabilitation” housing, received property tax breaks from the government and

both new housing and payments toward maintenance from the private developer. Once

elected, the Sena created a special state agency, the Slum Redevelopment Authority, to

fast-track SRS slum redevelopment projects; and in 1998 founded Shivshahi

Punarvasan Prakalp Limited (SPPL), a state government-run slum redevelopment group

charged with hiring private developers as contractors under SRS. In time, this attitude

toward slum redevelopment became reflective of the broader enablement strategy, given

its dual potential for enabling both private housing delivery as well as improved

opportunities for slum-dwellers.

// Slum Redevelopment: Policy

The correlation between elections and policy demonstrates that slum-dwellers in toto do

affect policy and are not entirely disenfranchised politically. Mumbai slum-dwellers

actually vote far more than wealthier demographics; some slum areas have as much as

88 percent voter turnout, compared to 12 percent in Malabar Hill. Thug-enforced high

voter turnout in some slums, quasi-sanctioned by political parties, suggests that slum-

dwellers constitute a vote bank easily manipulated by politicians. (Mehta, 2004: 68).

However, as constituents slum-dwellers do not represent a homogenous political block,

given the myriad divisions along religious, ethnic, caste, linguistic-cultural and even

economic lines. (Das, 2003: 227). A general distinction may be possible between class-

based experiences of modernity in the Mumbai: a nationalist movement of upper-class

elites versus a regionalist working-class of native Marathi-speakers. (Patel, 2003: 4).

15

However, inter-party political competition illustrates more fluid and layered affiliations.

The politics of slums in Mumbai also depends on relationships between socio-political

communities of the metro region: South Indians, especially from Tamil Nadu, who were

among the first slum-dwellers (6 percent); North Indians, representing the latest wave of

migrants during the 1980s, mainly from Bihar and Uttar Pradesh (15 percent); Muslims,

although historically a major presence in the city but increasingly targets of religious

animosity (17 percent); scheduled-castes (6.5 percent) and Dalits (12 percent), who

despite high profile activism such as the Dalit Panthers Movement during the 1970s

have now returned to mainstream party politics. (Vora and Palshikar, 2003).

For the first decades after independence, the Congress Party administered at all levels

of government under a nationalist banner of secularism and unification. The Congress

Party of India formed from the Indian National Congress, a body founded in 1885 that

spearheaded India’s independence movement. The party attracted its Mumbai base

from within organized mill labor; the communist unions endorsed its social democratic

platform and shared common roots in the independence movement. In 1985, the Prime

Minister of India, a Congress Party member, introduced the Prime Minister’s Grant

Project in part to win back low-income voters who were defecting to the Shiv Sena.

The Shiv Sena party gained control of the Mumbai municipal council the same year; its

slogan was, “Mumbai for the Maharashtrians.” The Sena descended from the Samyukta

Maharastra Movement that championed the 1960 split of what was then Bombay State

into Maharashtra and Gujurat. Central to its Hindu-centric, regionalist agenda was

combating alleged discrimination against Marathi-speakers, 42.6 percent of Bombay’s

population in 1987-88. (Vora and Palshikar, 2003: 162). After the Sena’s anti-slum,

anti-immigrant campaign revealed that slums housed their largest vote block, they

16

pledged instead to improve the Congress Party’s policy of slum redevelopment. With

the mantra “free housing for all,” the Shiv Sena-Bharatiya Janata Party alliance captured

the Maharashtra state government in 1995. The Shiv Sena is often blamed for stoking

the communal fires, leading to flare-ups such as the 1992-93 Hindu riots and retaliatory

Muslim bombings. The Shiv Sena lost in the 1999 elections—when the “free housing”

never materialized.

// Slum Redevelopment: Performance

The failure of slum redevelopment to live up to its political hype implies that victory at the

polls may bring about policy initiatives favorable to slum-dwellers but does not

necessarily cause positive benefits for slum-dwellers on the ground. This disconnection

between policy and policy performance is readily apparent under the Shiv Sena

government: while the Shiv Sena promised 200,000 new private developer-financed

apartments for slum-dwellers by the year 2000, the actual number of SRS units built by

the new millennium was 3486. Clearly, the nature of competitive electoral politics in

Mumbai motivates government administrations at both the state and municipal level to

pass legislation favorable to slum-dwellers, in order to reinforce party loyalty and political

support. However, the subsequent ouster of the same political parties because of

underperforming policy reveals not only performance-based accountability, but also

fundamental breakdowns of the planning structure.

There are several explanations for the poor performance of slum redevelopment policy

in the period 1985 to 2000. As a policy family, all slum redevelopment initiatives sought

to capitalize on the inherent value of urban land: developers have the greatest incentive

to participate in slum redevelopment when land values in Mumbai are at the highest

17

levels (i.e. 1993-1995); and developer incentive is predicated on the implicit attraction of

the opportunity to build to FAR higher than the artificially low zoning regulations in

Mumbai (1.33 in Bombay Island). Thus regulation of development rights is critical to the

foundational logic of slum redevelopment; the lack of FAR regulation pervasive in

Bombay (i.e. builder’s routinely building higher than permits allow) compromises the

viability of incentivized slum redevelopment.

A second aspect of slum redevelopment is that location matters: prime real estate is

more likely to be redeveloped because it will generate larger profits for the same

investment. Consequently there is wide range in terms of slum location and therefore

the appeal of slum redevelopment, from a developer’s perspective. The conventional

view of Bombay’s slums is that they occupy undesirable and unhealthy sites, e.g. “low-

lying areas…on marshy lands, on garbage dumps, near cemeteries, adjacent to railroad

tracks, and under high tension wires.” (Swaminathan, 2003: 92). There are also

relationships between private developers who may sanction “official” slums to house

workers and subsequent accretions of “illegal” slums, such as with the World Trade

Center projects and Colaba. It is not fair to argue that a policy such as either SRD or

SRS applies equally to all slum-dwellers when there are marked distinctions between

slum communities based on pre-existing spatial geographies of the city—some slum

locations appeal far more to developers, whereas others are unlikely to justify developer

expense in financing new slum-dweller housing, despite increased FAR allowances.

A final factor central to the performance of slum redevelopment policy can be termed

“social dynamics.” (D’Monte, 2002: 45). The overarching goal of the slum

redevelopment project—i.e., government support for demand-driven mechanisms to

replace slum housing, through the combined deregulation of housing markets, revising

18

private property rights, and restructuring mortgage finance—ultimately depends on

cooperation between private developers, contractors, builders on one hand, and slum-

dwellers, and community-based organizations which may represent them, on the other.

However, the contested history of Mumbai’s slums and the land they occupy justifies the

reluctance on the part of many slum-dwellers to trust developers (or government, for that

matter). That is to say, the very process of decentralization, which was intended to

restore productive partnership between stakeholders, was instead limited under

unresolved disequilibria of power.

//3 Squatters as Developers

This section shifts from policy at a regional or city-wide level to that of community at the

neighborhood scale: focusing on processes of public-private cooperation under slum

redevelopment, the concept of “social dynamics” will be explored as a critical interface in

the delivery of low-income housing in Mumbai. The most thoroughly documented case

study of a single Mumbai slum redevelopment project is Vinit Mukhija’s analysis of the

Markandeya Cooperative Housing Society (MCHS). (Mukhija, 2003). This section will

first describe the history of the MCHS redevelopment program according to Mukhija’s

findings; at that point, it becomes possible to evaluate the larger political dimensions of

slum redevelopment policy in this context.

Mukhija's argument that slum redevelopment—in which a given site is redeveloped at

higher density and squatters are re-housed on-site—is a viable alternative to both slum

clearance and slum upgrading requires active, sustained and flexible government

leadership. The 12-year MCHS project became possible after the Maharashtra state

government revised land development regulations in order to jointly increase land values

19

and developer profit. Under what Mukhija terms a “differentiated view of property rights,”

which expands the more limited conventions of private property rights to include

common property rights, slum-dwellers are able to leverage their existing housing stock

as equity toward new, developer-sponsored housing on-location, and to benefit

financially as a community through profit-sharing. However, this enabling strategy

demands that government play the role of mediator between competing interests of the

private sector and re-housed slum communities.

The Markandeya Cooperative Housing Society originally formed in response to the

opportunity for redevelopment under the Prime Minister’s Grant Project (PMGP) in 1987.

The PMGP was to provide 30-year, renewable leases to cooperatives of slum-dwellers,

established with assistance from the PMGP housing authority. These leases could then

become the platform for cooperatives to receive housing financing from third party

lenders. The Markandeya neighborhood within Dharavi, the largest slum in Mumbai and

arguably Asia, was among the areas slated for first-phase redevelopment: 92 of the 250

families in residence organized the Markandeya Cooperative Housing Society (the other

families were all part of the padmashali caste and formed a separate group).

The next year, the MCHS opted to retain the basic fiscal support of the PMGP (15

percent grant and 20 percent interest-free loan) but to develop their properties

independently, in collaboration with the Society for the Promotion of Area Resource

Centers (SPARC). SPARC, an established Mumbai-based NGO with substantial

international ties, was already contesting the PMGP approach and by joining forces with

the MCHS was able to mount a direct challenge to the housing authority. The PMGP

scheme at first called for displacing 20,000 families from Dharavi in order to house the

remaining 35,000 families in mid-rise apartment blocks. SPARC subsequently carried

20

out an intensive census of the Dharavi slum and determined that the PMGP plan would

more likely displace 65,000 families. SPARC’s alternative proposal, strategically titled

the “People’s Plan,” sought to accommodate all Dharavi residents without relocation in

self-managed 1-2 story units. Given this new political pressure (slum-dwellers

collectively feared they would be among those displaced), the PMGP scaled back the

initiative to redevelopment of 3,800 units; the majority of the area would be eligible only

for a more modest policy of slum upgrading.

The partnership between SPARC and MCHS began as mutually-beneficial. SPARC

sought a demonstration project as proof of concept to legitimize their planning advocacy.

SPARC made several key claims about their alternative model: beginning with the

assumption that unlike middle-class preferences, mid-rise living was inappropriate for

low-income groups, and that slum-dwellers were more comfortable with communal

bathrooms and associated lifestyle, SPARC argued that slum-dwellers could achieve

larger unit size through the joint cost savings of building lower apartments (1-2 stories

instead of 4-5 stories), and by self-managing the project avoid the surcharge of

bureaucratic inefficiency and corruption. SPARC’s core mission is to promote self-

sufficiency; consequently, the organization maintained a stance against for-profit

developers who might compromise the cooperative’s egalitarian effort. MCHS served to

benefit from SPARC’s leadership through both the NGOs administrative expertise and

political connections.

However, the back story of SPARC intervention (i.e. highly-visible public opposition to

the PMGP) led to an antagonistic relationship between the MCHS project committee and

government decision-makers. Mukhija goes so far as to say that, “The MCHS became

the battleground for the next phase of struggle between the PMGP and

21

SPARC.” (Mukhija, 2003: 48). Although the PMGP did not rescind its partial subsidy, it

did refuse to extend either any direct housing loans or to guarantee third party financing.

Similarly, the PMGP declined to recommend a formal land-lease from the Mumbai

Municipal Corporation (which owned the land), on the grounds that the PMGP was not

responsible for the MCHS-SPARC joint venture. In order to move construction forward,

SPARC became increasingly responsible for project financing. SPARC used its own

funds on an assumed temporary basis to provide a bridge loan and partial bank

guarantee. When the Housing and Urban Development Corporation, an Indian public

lending agency, suspended its line of credit, SPARC orchestrated a new bank guarantee

from Servicio Latino American Asiatico Vivienda Popular (SELAVIP), a Belgian

development fund, and the Bank of Liechtenstein. SPARC took on added liability, but

the new funds were disbursed to the MCHS. When the PMGP and Municipal

Corporation finally granted the land-lease, the MCHS balked at the increased debt

burden of a mortgage, the original financing strategy; SPARC subsequently held the

land-lease as collateral until the conclusion of the project.

At this juncture, five years after SPARC signed onto the MCHS project, and with

construction still at the first-floor level, MCHS shifted allegiance to a private developer.

SPARC claims that the new arrangement emerged solely from talks between the MCHS

and the contractor-developer, Shyambhai Patel. Regardless, SPARC was in effect “cut

out” of negotiations, since Patel offered to finance the remaining construction himself if

the project proceeded according to the new Slum Redevelopment Scheme (SRD)

legislation of 1991. When the Maharashtra state government re-structured SRD as the

Slum Rehabilitation Scheme (SRS) in 1995 the contractor and MCHS agreed to upgrade

the project status accordingly. The new terms of the SRS—the Shiv Sena’s “free

housing” plan—stipulated that slum-dwellers receiving “rehabilitated” housing had no

22

financial obligation. The developer could build to twice the zoning standard (FAR of 2.5

instead of 1.33) and could also opt to make use of Transfer Development Certificates to

build the bonus square footages elsewhere in the city, or to sell that right on the open

market. Over a decade after the project began, MCHS finally moved into the bottom

three floors of a 5-story development. The top two floors were market-rate units for the

developer, who also acquired Transfer Development Rights for the un-used FAR.

Counter to the SRS mandate of “free housing,” MCHS residents paid Rs.35,000 each for

apartments with a market value over ten times higher, and the cooperative also received

a slush fund toward future maintenance paid for by the developer, and property tax relief

from the municipal government. After government arbitration, SPARC was awarded a

number of units to sell as compensation for SPARC’s earlier expenditures.

Mukhija’s study compares the behavior of the various players (the local and state

government, slum-dwellers, NGOs and private developers) against those anticipated

according to international development literature. The government, which was the land-

owner of most sites scheduled for redevelopment, had the civic and legal authority to

evict slum-dwellers (although in some instances, slum-dwellers were entitled to partial

compensation); instead, the State granted perhaps disproportionate benefits to the same

informal communities who are usually considered the least empowered. Slum-dwellers,

who are generally assigned a preference for slum upgrading (i.e. receiving land titles to

their existing properties), in this case favored slum redevelopment. NGOs, often

idealized as community-based and process-oriented, rather than power-hungry and

profit-driven, demonstrated clear political and financial self-interest. Private developers,

despite being a species motivated by the bottom-line, voluntarily entered into

development strategies that compromised potential profit.

23

These actions, which may deviate from expected patterns, nevertheless are not

inconsistent under more considered analysis. Although the government forfeits

immediate profits by selling land essentially for free, the SRS procedure increases

property values and therefore property tax revenue. At the same time, the government

is able to appease two opposing constituencies; slum-dwellers receive new, more

valuable housing for free, in the same location, and builders access new land for

development, generating profits that would not be possible without bonus FAR from the

SRS arrangements.

The collective decision-making of the MCHS reveals several attitudes relevant to

Mumbai slum-dwellers overall. It is quite apparent that members of MCHS perceived of

their (new) housing not primarily as shelter, but as real estate. (Mukhija, 2003: 98).

Similarly, SPARC decided, on behalf of the slum-dwellers and supposedly taking their

lifestyles into account, that mid-rise living was not appropriate for low-income residents,

and that slum-dwellers preferred communal bathrooms. However, Mukhija records that

the most sought-after housing in the new building was on the upper levels, and that

when the developer tendered the option of paying for private bathrooms, most MCHS

who could afford opted to do so. Both of these decisions were prompted by a clear

understanding of real estate markets, and demonstrate the MCHS slum-dwellers’ ready

appropriation of hugely subsidized housing as their individual private asset. It is too

easy to oversimplify slum-dweller preferences or to idealize the social networks and

relations within slums.

The process that took a decade to finally lead to housing for the MCHS could have been

derailed at several points along the way. This unstable and conditional set of

institutional relationships is perhaps the fundamental problem with Mumbai’s slum

24

redevelopment policy: decentralization, especially given such a high-stakes and volatile

project as housing in Mumbai, invariably results in conflict; the process itself is one of

continuous conflict resolution. At the same time that slum redevelopment, as part of the

larger enabling agenda, seeks to exchange a highly visible and proactive government

with liberated market forces, the inherent murkiness of property rights under schemes

such as SRS demands direct involvement of government. Successful implementation of

slum redevelopment policy requires a trusted, impartial body to serve as mediator. Also,

given that there is limited window for redevelopment—as housing supply increases,

costs will decrease until the value of cross-subsidy through slum redevelopment is no

longer sustainable—powerful government authority should be leveraged to

systematically resolve “turf wars,” enforce benefit-sharing according to that prescribed by

the legislation (developers are likely to shortchange slum-dwellers), and maintain a

realistic scope of projects through flexible policy and hybrid redevelopment scenarios.

Das has noted that one of the unfortunate outcomes of the SRS process is the tendency

of “self-styled leaders” from among the ranks of slum-dwellers to collude with builder-

developer interests for personal gain. (Das, 2003: 228). Held as representative of slum-

dwellers, these parties instead compromise the integrity of slum-dweller organizations

more generally. Mukhija also observed that over the course of the MCHS project, there

was likely corruption of the building committee. The main decision-making body of

MCHS was a managing committee, organized as per government regulations. When

this committee initially formed, SPARC benefited from a good working relationship with

two of the members; the rest were less interested in the details of a self-managed

project, and more willing to entrust the entire process to their local politician. There were

no elections. As the process diverged from SPARC’s original model of community-

empowerment to a program of direct partnership or even reliance on the developer, the

25

building committee realized its relative control over decision-making. Acting in a rational

manner, but without concern for the larger implications of the MCHS project (i.e.

precedent-setting for other Dharavi slum-dwellers), the MCHS leadership reflects the

implicit conflict in placing a group of elected or unelected individuals in charge of a larger

collective process. Similarly, a direct movement of slum-dweller self-organization is

preferred, but NGOs, even if an at times helpful interface between slum-dwellers and

policy initiatives, are not necessarily any more democratic or representative a system.

In the 1960s, the bazaar swept across Bombay, sprawling along transport lines, on slopes, underutilized land, undefined or unpoliced pavements, and on any other interstitial space it could find and occupy. In the process, it blurred beyond recognition the physical segregation inherent in the colonial city structure that had survived until then. (Mehrotra, 1997: 40)

//4 Deep Democracy

The current geography of slum infill throughout the Mumbai metro region reflects the

opportunistic growth of the informal sector, the ubiquitous and ambiguous "bazaar."

Simultaneous with divergence of the formal and informal, the underlying economic

structure of the city is fused and interdependent, with increasingly blurred boundaries:

the Dharavi slum is leather manufacturing center with global distribution; many of

Bombay's large corporate banks outsource back office support to slum areas; policemen

and teachers who aspire to the middle class are slum-dwellers, while some slum-

dwellers own proper apartments elsewhere which they rent out instead of occupy.

26

The on-going power struggle in Mumbai is spatial—access to land and its embodied

value means control over the city's major resource for development. On one hand, the

urban poor, including slum-dwellers, are preoccupied with securing jobs and basic

amenities; concern over the quality of housing, of lifestyle, or of the image of the city is a

luxury they cannot afford. On the other hand, the middle- and upper-classes of the city

share the vision of Bombay First, efforts on the part of the business community to re-

make Bombay as a "global city," India's Singapore; from this perspective, slums once

again become urban blight that together with the bazaar culture that chokes the streets,

must be excised. This particular approach toward legitimacy on the global stage is

supported by the expanded field of Bombay's real estate interests and capital: new

production facilities for large corporations and headquarters for multinationals symbolize

the potential gains, for some players, for an alternate urban geography cleansed of the

messiness of slums and their inhabitants.

Contemporary superimposition of globalizing economic systems onto and above the

democratic structure of the nation state has profound implications for Mumbai. Arjun

Appadurai has offered the term "deep democracy," to the efforts of certain NGOs (such

as the partnership between SPARC, the National Slum-Dwellers Federation, and Mahila

Milan, a women's cooperative) to catalyze self-organization of the urban poor. Key

tactics of such groups include capitalizing on the expertise of the poor, exercising

political neutrality to safeguard against exploitation of slums as vote banks, and the

emphasis of precedent-setting to affect change over a long time horizon. But

revealingly, when SPARC attempted to use the MCHS project as a precedent—

encouraging the building committee to mortgage the collective lease of the housing

27

cooperative in order to secure construction financing independently—that effort failed.

While from the viewpoint of SPARC, the MCHS became less empowered through their

dealings with a private developer, it is also important to recognize that MCHS slum-

dwellers were demonstrating that they were already empowered, and market-savvy.

There is a critical conflict of interest whenever slum-dwellers opt or are legislated to

delegate organizational control to a third party, either government, NGO or private

company. This transfer automatically devolves to a loss of power for the slum-dwellers

themselves. In a political arena in which collectively the urban poor should be able to

enforce majority rule, slum-dwellers need to first build lateral networks; only on such a

unified and deeply rooted base, can slum-dwellers challenge vertically the power

structure that globally seeks their disempowerment.

28

References

Abu-Lughod, Janet and Richard Hay, Jr., eds. Third World Urbanization. Chicago: Maaroufa Press, Inc., 1977.

Appadurai, Arjun. 2001. Deep Democracy: Urban Governmentality and the Horizon of Politics. Environment & Urbanization, 13, 2, October 2001, 23-44.

Banerjee-Guha, Swapna. Urban Development Process in Bombay: Planning for Whom? Pp. 100-120 in S. Patel and A. Thorner, eds. Bombay: Metaphor for Modern India. Oxford and New York: Oxford University Press, 1995.

Banerjee-Guha, Swapna. Bombay Urban Development Project: Solutions to the Housing Problems of the Urban Poor. Pp. 327-36 in A.K. Dutt et al, eds. The Asian City. Rotterdam: Kluwer Academic Publishers, 1994.

Brillembourg, Alfredo, Kristin Feireiss and Hubert Klumpner, eds. Informal City: Caracas Case. London and New York: Prestel, 2005.

Clark, David. Urban World, Global City. London: Routledge, 1996. Das, Gurcharan. India Unbound: From Independence to the Global Information Age.

New Delhi: Penguin Books India, 2002.Das, P.K. Slums: The Continuing Struggle for Housing. Pp. 207-234 in Patel, Sujata

and Jim Masselos, eds. Bombay and Mumbai: The City in Transition. Oxford and New York: Oxford University Press, 2003.

Davis, Mike. A Planet of Slums. London and New York: Verso Books, 2006.Desai, Vandana. Community Participation and Slum Housing: A Study of Bombay.

London and New Delhi: Sage Publications, 1995.D’Monte, Darryl. Ripping the Fabric: The Decline of Mumbai and its Mills. Oxford and

New York: Oxford University Press, 2002. 2005 ed.Gilbert, A. Urban Development in a World System. Pp. 14-32 in A. Gilbert and J.

Gugler, eds. Cities, Poverty and Development. Oxford and New York: Oxford University Press, 1992.

Hamdi, Nabeel. Housing Without Houses: Participation, Flexibility, Enablement. New York: Van Nostrand Reinhold, 1991.

Hay, Richard. 1977. Patterns of Urbanization and Socio-Economic Development in the Third World: An Overview. Pp. 71-101 in Janet Abu-Lughod and Richard Hay, Jr., eds. Third World Urbanization. Chicago: Maaroufa Press, Inc., 1977.

Hosagrahar, Jyoti. Indigenous Modernities: Negotiating Architecture and Urbanism. London and New York: Routledge, 2005.

Hosken, Fran. The Functions of Cities. Cambridge, MA: Schenkman Publishing Company, 1973.

Johsi, Pankaj. ‘Slums’: A Solution to the Housing Problem. Pp. 155-161 in Mehrotra, Rahul, Pankaj Joshi, Prasad Shetty and Benita Menezes, eds. Mumbai Reader for the 10th International Architecture Exhibition/ Venice Biennale. Mumbai: Urban Design Research Institute, 2006.

Maharastra Industrial Development Corporation. <www.maharashtraitparks.com>Mehrotra, Rahul. 1997. One Space, Two Worlds. Harvard Design Magazine,

Winter/Spring 1997, 40-41.Mehrotra, Rahul, Pankaj Joshi, Prasad Shetty and Benita Menezes, eds. Mumbai

Reader for the 10th International Architecture Exhibition/ Venice Biennale. Mumbai: Urban Design Research Institute, 2006.

29

Mehta, Suketu. Maximum City: Bombay Lost and Found. New York: Vintage Books, 2005.

Mumbai Metropolitan Region Development Authority. Draft Regional Plan for Bombay Metropolitan Region: 1996-2011. Mumbai: MMRDA, 1995.

Mukhija, Vinit. Squatters as Developers? Slum redevelopment in Mumbai. Burlington, VT: Ashgate Publishing Co., 2003.

Narayanan, Hirini. In Search of Shelter: The Politics of the Implementation of the Urban Land (Ceiling and Regulation) Act 1976 in Greater Mumbai. Pp. 183-2006 in Patel, Sujata and Jim Masselos, eds. Bombay and Mumbai: The City in Transition. Oxford and New York: Oxford University Press, 2003.

Panwalker, P. Upgradation of Slums: A World Bank Programme. Pp. 121-42 in S. Patel and A. Thorner, eds. Bombay: Metaphor for Modern India. Oxford and New York: Oxford University Press, 1996.

Patel, Sujata and Jim Masselos, eds. Bombay and Mumbai: The City in Transition. Oxford and New York: Oxford University Press, 2003.

Patel, Sujata. Bombay and Mumbai: Identities, Politics, and Populism. Pp. 3-30 in Patel, Sujata and Jim Masselos, eds. Bombay and Mumbai: The City in Transition. Oxford and New York: Oxford University Press, 2003.

Peattie, Lisa. Social Issues in Housing. Pp. 15-34 in Bernard Frieden and William Nash, Jr., eds. Shaping an Urban Future. Cambridge, MA: MIT Press, 1969.

Roy, Arundhati. The Cost of Living. New York: Random House, 1999.Sassen, S. The Global City. Princeton: Princeton University Press, 1991.Sundaram, PSA. Bombay: Can It House Its Millions? New Delhi: Clarion Books, 1989.Swaminathan, Madhura. Aspects of Poverty and Living Standards. Pp. 81-110 in Patel,

Sujata and Jim Masselos, eds. Bombay and Mumbai: The City in Transition. Oxford and New York: Oxford University Press, 2003.

Tarrow, Sidney. Power in Movement: Social Movements, Collective Action and Politics. Cambridge, UK and New York: Cambridge University Press, 1994.

Tiwari, Piyush, Kirit Parikh and Jyoti Parikh. 1999. Effective Housing Demand in Mumbai Metropolitan Region. Urban Studies, 36, 10, 1999, 1783-1809.

Turner, John. Housing by People: Towards Autonomy in Building Environments. London: Marion Boyars, 1976.

Vora, Rajendra and Suhas Palshikar. Politics of Locality, Community, and Marginalization. Pp. 161-182 in Patel, Sujata and Jim Masselos, eds. Bombay and Mumbai: The City in Transition. Oxford and New York: Oxford University Press, 2003.

30