Unfunded promises and common citizens: slum rehabilitation in Mumbai
In the second of three articles examining Mumbai's housing market, Sharmeen Contractor and Shilpa Rao record the history of the city's slum rehabilitation schemes, and make a stand for seeing slum residents not merely as economic assets to the city but as common citizens as capable of self-management and as deserving of appropriate assistance as any other segment of society.
Sharmeen Contractor and Shilpa Rao
Every election has given birth to different creative promises of slum rehabilitation in Mumbai. In recent times this started with the Prime Minister's Grant Project in 1985, which granted a onetime contribution of '1 billion rupees' (22.5 million US dollars) to the Maharashtra state government to 'improve housing conditions in Mumbai'.
Yet this represented only 15% of the project cost — the rest was to be acquired through individual contributions from slum dwellers and through loans. This financial insufficiency, coupled with the multiplicity of actors — the government, the market, the non-profit sector — and the incorporation of many ineligible slum dwellers ensured the scheme's early demise.
In the liberalising atmosphere of 1991, the political alliance in power decided to implement a very unwise and populist promise in the form of the Slum Rehabilitation Development scheme, the first to introduce the concept of 'free housing for all'. But this time the government wasn't going to fund it; homes would be funded by 'cross-subsidisation' through a market mechanism driven by speculators and developers themselves. To incentivise them, the government provided land free of cost, and eased floor space ratios on slum plots to allow construction to go higher than what was normally permitted. Builders could build more homes for the open market to finance the construction of rehabilitation tenements from the extra profits.
A key restriction was included — the profits that the developer could earn from the free sale component was capped at 25%. Not surprisingly, developers did not take well to this cap, which ignored all the realities of finance mechanisms, such as interim interest payments and gearing. In addition, slum households were obliged to make a token contribution of Rs. 15,000 (340 US dollars), approximately 23% of the estimated cost per home. These conditions, along with administrative quagmires and conflicts amongst stakeholders — developers, residents and the government — caused unnecessary delays in implementation that the scheme rather fell flat.
An expert committee was instituted to examine the failure of these policies. One suggestion raised was that increased government control of the scheme was essential for more transparency and accountability. A new government body, the Slum Rehabilitation Authority, was created to oversee and monitor the scheme's progress. It was also estimated by the committee that 1 million dwelling units would 'permanently' address the housing needs of the city's slum population, estimated to be 4 million at the time. The philosophy of cross-subsidisation was kept intact but the cap on profits and the token charge to slum households were done away with.
Two other important reforms were brought in. Only families who had been residing on slum land in the year 2000 were eligible to become owners of a 25m² home absolutely free of cost. And to ensure that slum dwellers are fully involved in the entire process, it was mandated that a minimum of 70% of residents must consent to a redevelopment scheme, without which the project would not be sanctioned.
How these reforms solved the real problems observed in the previous schemes remains unclear. In the meantime, Mumbai continues to witness the stunningly consistent proliferation of 'slums' in every pocket in the city, from 17% in the 1970 to 62% today. After all these 'good intentions', how can we explain this?
A World Bank report in November last year observed that "contrary to the conventional view, the existence of slums is not necessarily a sign that markets cannot provide housing to low-income households. The existence of slums demonstrates that the private informal sector is able to devise housing solutions for even the lowest income groups."
This illustrates that growth in the informal market is merely a response to the lack of formal options for these income segments. Mumbai's slums are a symptom of the city's highly dysfunctional real estate market. Whereas all these policy responses have often treated slums as the 'disease' itself, to be 'cured' by market forces.
Citizens like any other
At this point we would like to state that we hate the word 'slum'. As far as we are concerned, they are neighbourhoods like any other, full of everyday people dealing bravely and often extremely well with acute shortages of basic necessities. Home to bustling economies and strong communities, they are truly representative of Mumbai's local identity. As an activist from one of the cities' biggest community organisations puts it, "anyone can come to Dharavi from anywhere, with nothing, and never go hungry again." So why rehabilitate them at all? Why change everything?
Because they want to do better for themselves. For starters, they don't want to live in unsafe and unhygienic conditions. Slum rehabilitation is not about beautifying Mumbai or 'remaking' it into a 'world class city'. It is about fulfilling these people's right to choose decent and affordable housing of their liking, and ensuring that they don't face the constant risk of eviction or demolition.
More importantly, it is about moving beyond a narrow lens of perceiving 'slum' dwellers as something the city 'depends on', and start thinking of them as active citizens who have made the legitimate choice to move to a city for a better life. They are no different from anyone else in being fully capable of taking care of themselves with a little appropriate help from the government and market actors.
Last week we explored how land regulations were responsible for forcing millions of Mumbaikars into the informal market, and next week we will challenge the hollow promises made in the name of 'free housing for all'.
