CITIES ALLIANCE PROJECT

ON PRO-POOR SLUM UPGRADING

FRAMEWORK FOR MUMBAI, INDIA

 

DRAFT REPORT

 

SUBMITTED

 

TO

 

CITIES ALLIANCE

 

AND

 

UNITED NATIONS (HABITAT)

 

BY

 

SOCIETY FOR PROMOTION OF AREA RESOURCE CENTRES

 

(SPARC)

 

October 2003
List of Acronyms

 

BUDP   Bombay Urban Development Project

CBO                 Community Based Organisation

CLIFF              Community-Led Infrastructure Financing Facility

CRZ                  Coastal Regulations Zone

EWS                 Economically Weaker Sections

FSI                   Floor Space Index

GOI                  Government of India

GOM                Government of Maharashtra

LIG                   Low Income Group

LISP                 Low Income Shelter Programme

MHADA            Mumbai Housing and Area Development Authority

MMRDA            Mumbai Metropolitan Regional Development Authority

MOEF   Ministry of Environment and Forests

MUIP                Mumbai Urban Infrastructure Project

MUTP   Mumbai Urban Transport Project

NDZ                  No Development Zone

NGO                 Non Government Organisation

NSDF   National Slum Dwellers Federation

NSDP   National Slum Development Programme

RSDF   Railway Slum Dwellers Federation

SDI                   Shack Dwellers International

SJSRY Swarn Jayanti Rojgar Yojana

SPARC             Society for the Promotion of Area Resource Centres

SRA                 Slum Rehabilitation Authority

SRD                 Slum Redevelopment Scheme

SUP                 Slum Upgradation Programme

TDR                  Transferable Development Rights

VAMBAY          Valmiki Ambedkar Yojana – a housing subsidy programme

Foreword

 

This draft report is a sequel to the first report submitted in June 2003 on pro-poor slum upgrading in Mumbai, India. Readers who remember the first report will notice that there is some repetition. The reason for this is that we wanted this document to be a ‘stand-alone’ one as well.

 

As in all our writings, even if authorship is attributed to the persons named below, this document represents an articulation of the shared and collective experience of Society for Promotion of Area Resource Centres (SPARC), National Slum Dwellers Federation (NSDF) and Mahila Milan. The ideas and views of Sheela Patel, Director, SPARC, A.Jockin, President, NSDF and Slum/Shack Dwellers International (SDI), and Celine D’Cruz, Associate Director, SPARC, all find resonance in the contents.

 

We hope that this report throws some light on the complexities of the Mumbai context.

 

 

Sundar Burra and Devika Mahadevan

   Society for Promotion of Area Resource Centres (SPARC)

 

Khetwadi Municipal School Building

Khetwadi Lane-1, Girgaon, Mumbai 400 004

Telephone Nos.: (91 22) 2386-5053 / 2385-8785 / 2380-1266

Telefax Nos.: (91 22) 2388 7566

Email: sparc@vsnl.in

 

TABLE OF CONTENTS

EXECUTIVE SUMMARY.................................................................................................... 5

1. INTRODUCTION........................................................................................................... 6

Overview.................................................................................................................. 6

Urban poor in India – status................................................................................ 9

About Mumbai........................................................................................................... 9

2. CONTEXT................................................................................................................... 11

A History of Slum Policy in the city of Mumbai.............................................. 11

An Introduction to the Alliance........................................................................ 12

The Society for the Promotion of Area Resource Centres (SPARC).............................. 12

The National Slum Dwellers Federation (NSDF).......................................................... 13

Mahila Milan (Women Together)................................................................................ 13

Mobilisation Strategies............................................................................................. 13

3. SLUM UPGRADING POLICY AND FINANCIAL FRAMEWORKS..................................... 17

Introduction.......................................................................................................... 17

A brief introduction to the city’s Slum Upgradation Institutional Framework          17

Case Studies of Slum Upgradation and Resettlement................................ 20

The need for large scale public finance....................................................... 26

Community-Led Infrastructure Finance Facility............................................ 27

4. COMMUNITY MOBILISATION, PRECEDENT SETTING & ENGAGEMENT WIH THE STATE 29

Introduction.......................................................................................................... 29

Community Mobilisation....................................................................................... 29

Federating Slum Dwellers under SRA........................................................................ 29

Precedent Setting................................................................................................ 30

Engagement with the state............................................................................... 31

5. LEGISLATIVE CHANGES AND POLICY REFORM......................................................... 33

Legislative Changes............................................................................................ 33

Changes in Central Government Policy...................................................................... 33

Coastal Regulations Zone (CRZ)............................................................................... 33

No Development Zones (NDZ)................................................................................... 34

Freeing up Salt pan Lands........................................................................................ 34

The Rent Control Act and the Urban Land Ceiling Act................................................. 35

Increasing the rental market..................................................................................... 35

Reducing TDR generated.......................................................................................... 36

Policy Reform....................................................................................................... 36

Different models...................................................................................................... 36

Innovative use of FSI............................................................................................... 37

Realistic Standards.................................................................................................. 38

6. ACTION PLAN............................................................................................................ 39

ANNEXURE I – RAJIV INDIRA......................................................................................... 42

ANNEXURE II – BHARAT JANATA................................................................................... 45

ANNEXURE III – MILAN NAGAR...................................................................................... 48

ANNEXURE IV – OSHIWARA.......................................................................................... 50

EXECUTIVE SUMMARY

 

This paper is a part of the 3 Cities Project that documents the experiences, frameworks and practices in slum upgradation in the cities of Mumbai, Manila and Durban. The aim of this project is to share lessons, challenges and methodologies that emerge from city-wide slum upgradation efforts and support those initiatives where local and national governments work in partnership with groups of the urban poor.

 

In fact, this document is being written at a very exciting time for the city of Mumbai. In August 2003, the Government of Maharashtra made a presentation to the Prime Minister of India suggesting policy and legislative changes that would result in massive slum upgradation in the city. Around the same time, Bombay First, a citizen’s initiative, along with McKinsey, a private consulting company, produced a report called Vision Mumbai: Transferring Mumbai into a world-class city. This report has generated much interest and a Task Force has been set up by the state government to scrutinize and examine how Bombay First-McKinsey’s recommendations. Both these very welcome initiatives are representative of a genuine will to improve the face of Mumbai, of which making the city slum-free is an important component. However, these are top-down approaches, and the authors believe that unless the urban poor are organised, they will be unable to benefit from policy and legislative change in any significant way. This document illustrates a number of grassroots examples that demonstrate how communities can be involved in the upgrading of their slums and presents a bottom-up perspective to scaling up city development.

 

The first chapter reviews the main arguments of the paper and provides some statistical data on the urban poor in India, and specifically, in Mumbai. The next chapter discusses the history of slum policy in the city and introduces the Alliance of the Society for the Promotion of Area Resource Centres, the National Slum Dwellers Federation and Mahila Milan. The third chapter discusses the regulatory and financial framework of current slum redevelopment policy in Mumbai, presents some case studies and discusses the critical shortage of large-scale low interest loans to the poor. The fourth chapter discusses the importance of community mobilisation and of demonstrating and testing “pro-poor” models and engaging and negotiating with state agencies to produce solutions. The fifth chapter suggests legislative changes as well as policy reforms that are needed for massive slum redevelopment. Finally, the document ends with a City Action Plan, again, from a grassroots perspective. Financial details of four of the Alliance’s projects are illustrated in the Annexures.

 

In conclusion the authors maintain that there is much to be optimistic about. What is important is the city’s genuine will to support organisations of the urban poor, nurture private-public-NGO partnerships, and ensure that the market is truly friendly to the poor.

 

1. INTRODUCTION

Overview

 

The 3 Cities Project documents the experiences, frameworks and practices in slum upgradation in the cities of Mumbai, Manila and Durban. Supported by Cities Alliance, the aim of this project is to build upon the lessons and challenges that have been faced in the effort to strengthen policy and practical approaches within each city and also to develop horizontal exchanges across the cities. The goal is to critically understand various slum upgradation frameworks and methodologies and support those initiatives where local and national governments work in partnership with groups of the urban poor. The success of each city model is judged in terms of the actual deliverables and the capacities that were created in the process of implementing policy.

 

The partnership of the Society for the Promotion of Area Resource Centres (SPARC), the National Slum Dwellers Federation (NSDF) and Mahila Milan, elsewhere referred to as the Alliance, have been working in Mumbai on urban issues for nearly two decades. The Alliance works with and has detailed information for over 200,000 households. The Alliance is actively involved with the following projects:

1)       The Mumbai Urban Transport Project (MUTP) where we have been given the responsibility of resettling 20,000 households living along the railway tracks. Of these, some 12,000 households have already been resettled either in permanent accommodation (4000) or temporary accommodation (8000). The Alliance actually got 2500 transit tenements constructed.

2)       The Mumbai Urban Infrastructure Project (MUIP) where we have been tasked with resettling 35,000 households affected by road construction projects.

3)       The Slum Redevelopment/Pavement Dwellers projects where we are in the process of constructing some 1500 tenements in about 20 buildings.

4)       The Slum Sanitation Programme where we have nearly finished constructing 5000 toilet seats in slums through community participation. If 50 people use a toilet seat a day, this will benefit 250,000 persons living in slums.

It is out of our twenty-year history of community organisation and working with the city that we present our insights.

 

This paper is the second part of the documentation of slum upgradation financial and legislative frameworks in the city of Mumbai, and it builds upon our previous work. The first paper described the experiences of Mumbai’s urban poor and analysed the institutional and legal framework for slum upgrading in Mumbai today. It examined the historical relationship between the centre, state and local governments and slum communities and discussed, in detail, the evolution of slum policy in Mumbai, with special emphasis on the city’s current slum upgradation policy. The paper also introduced the work of Society for Promotion of Area Resource Centres (SPARC), National Slum Dwellers Federation (NSDF) and Mahila Milan, presenting some of its projects, as well as the various mobilisation tools that this alliance has developed to organise communities of the poor to engage with their local authorities and access better housing and infrastructure. The author also considered the difficulties that NGOs and CBOs encounter in the area of financing and underlined the need for different forms of finance. Lastly, the paper made the point that although the Slum Redevelopment Authority’s policy of granting free housing for the city’s poor has been extremely problematic, and largely unsuccessful, it has been the only available slum upgradation option available in Mumbai other than public infrastructure projects. Moreover, the alliance of SPARC, NSDF and Mahila Milan, by involving slum communities in the redevelopment of their area, have sought to explore innovative approaches under this scheme which are affordable to the poor and can be scaled up considerably.

 

This paper takes a detailed look at the financial, legislative and policy models that are available for slum upgradation in the city of Mumbai. Moreover it examines the changes that are necessary to strengthen the existing models in the short term as well as elucidates the more substantial changes that are critical for slum upgradation to be actually be scalable, pro-poor and sustainable in the long term. The paper is divided into 6 sections. The first section briefly presents the context of slum policy in Mumbai, introduces the Alliance of SPARC, NSDF and Mahila Milan and illustrates its mobilisation and engagement strategies while working with the urban poor. In fact, these topics have been discussed in great length in the previous paper, but are reviewed here in our effort to make this a stand-alone document. The second section examines the current slum upgradation policy framework provided by the SRA and looks at its implications on the ground. The various financial models that emerge from this policy are examined and examples are presented of each of them. The main insight of this section is that for such a policy to be close to reaching its projected housing targets, large-scale private and public sector institutions must provide low-interest housing finance to the poor. Unfortunately this has not been the case because there are few examples of successful partnerships between financial institutions and the poor. This section concludes with illustrating the Alliance’s attempts to actually demonstrate a financially viable and pro-poor model. The third section discusses some reforms that are necessary to strengthen the ability of the poor to access housing under the SRA policy. It discusses the problems that builder-driven incentives create and explores ways of countering this. A recent initiative by the SRA to federate slum dwellers who participate in SRA projects so that they are well aware of their rights and benefits is presented. The fourth section examines a variety of regulatory and legislative reforms that have been introduced by the state and considers why they have not fulfilled their obligations to the poor. The thrust of this section is that land markets and real estate prices in Mumbai are distorted and one way to address this is for the city to open up and redevelop large tracts of unused or restricted lands. This will increase land availability by 40%. The fifth section critically examines the substantive changes that are necessary in slum upgrading policy for Mumbai to truly move towards a slum-free city. The main point that emerges is that the financial instruments in the SRA scheme are unviable and the city must create more innovative market based incentives to improve housing and infrastructure in the city. Such mechanisms are illustrated. The final section presents a city action plan. It discusses various suggestions that have been made, especially in the past few months, to change the face of Mumbai. 

 

Four points emerge strongly from our research and run throughout this paper.

 

First, that government legislations, regulation and controls that aimed to limit the amount of land in the hands of the rich and redistribute it to the poor have failed. Furthermore, government subsidies are neither adequate nor sustainable. Over half the city continues to be unable to access cheap, safe and secure housing. Therefore, formal financial institutions must be deeply involved in lending to the poor.

 

Second, a variety of development partners must be drawn into and engage in the process of creating a larger housing stock for the city.  Financing models based upon innovative and various market incentives must attract the private, the public as well as the NGO sector, not to mention organised groups of the poor, to create a number of large-scale affordable housing options.

 

Third, although different stakeholders in the arena of housing and urban development have different priorities, there are many areas of overlapping consensus. Moreover, focussing on these common interests will ensure that the city will be able to move from having a majority of its population living in slums to actually providing its population with secure housing rights. Creating housing for the poor does not simply fulfil the welfare and social objectives of the state, but results in important gains in financial, economic and capital efficiency for the entire city. An improvement in the quality of the lives must be seen as benefiting the entire city, and indeed the country as a whole. Moreover, working on these common issues brings a variety of talents and strengths together, builds on their comparative advantages, creates new relationships and becomes an incubator for more innovative policies, strategies and initiatives for city wide development. 

 

Finally, markets must be made to work for the poor. Therefore, the inadequacies and distortions of the housing policy and land markets of the entire city must be addressed. The paper finds that the current situation effectively makes housing unaffordable to the poor. Ultimately, the urban development of Mumbai is intimately tied up with slum upgradation in general. Thus, tools such as increasing Floor Space Index must be used in creative ways to boost economic growth and housing stock while keeping environmental and public health safety concerns in mind.

 

This paper points to many ways forward. The core of its analysis is guided by two key questions – will these suggested models deliver housing that is practical, just and sustainable? And do these models create the conditions for the participation of the poor? We find that different groups of the urban poor must be presented with different upgradation and financing models – there is no across the board solution. Moreover, the poor must be involved in the envisioning of the future of the city, i.e. in the creation of solutions and not simply seen as a problem that needs to be managed and solved. We conclude that if a variety of financial, legislative, regulatory mechanisms and instruments are developed and followed, there is much to be optimistic about.

 

In fact, this research is being presented at an extremely opportune time. In August 2003, the Prime Minister of India visited Mumbai and asked the Maharashtra government to form a committee that will map how to provide 100,000 slum families with proper housing in the next two to three years. Various departments and authorities are deeply involved in formulating how Mumbai can emulate Shanghai! The insights that have emerged in this second 3 Cities Project report can go a long way towards assisting in this very ambitious task.

 

This paper has been a collaborative process – incorporating a variety of perspectives from government, NGO, private sector and representatives of the poor. Insights have emerged from discussions with Mr. UPS Madan, Vice President and Chief Executive Officer of the Mumbai Housing and Area Development Authority (MHADA), Jockin Arputham, President of the NSDF and V.K Mr. Phatak of the Mumbai Metropolitan Regional Development Authority (MMRDA). The paper draws heavily from two reports - Vision Mumbai: Transferring Mumbai into a world-class city, which was prepared by Bombay First and McKinsey, and a policy paper written by a former Additional Municipal Commissioner, Mr. Subodh Kumar, entitled City Management: An Outline Plan for Mumbai. Finally, discussions from the meetings of the Urban Policy Forum – a group that the Alliance initiated in 2003 which brings together some very well respected and diverse people who have been involved in city development for the last few decades – have also influenced the ways in which the authors approached this research project.

 

Urban poor in India – status

 

The 2001 census of India revealed that out of a population of over 1 billion people, the urban population is 285.4 million (nearly 30%) and rising. A rapidly urbanising population and the inadequacy of city governments to meet its demands have meant a critical housing and infrastructure shortage.  Although information on the number of the poor within this urban population is approximate, it is estimated that there are roughly 100 million slum dwellers in the country. In Maharashtra, the state in which Mumbai is located, 26% of urban dwellers fall below the poverty line. [1] However, since poverty has long been associated with rural areas, little investment has been made in improving the lives of the urban poor. Moreover, political leaders, bureaucrats and the middle classes subscribe to a 'fortress' mentality that sees migrants as a threat to the city's survival. The contributions of slum dwellers to the city’s economy – as industrial workers, construction labour, domestic servants, rag-pickers and in a whole range of petty trades like vegetable and fruit-selling – are unacknowledged by the administration in general. Instead, the urban poor are seen as free-riders, as encroachers on valuable land and as entirely undeserving of the most basic of rights. Such prejudices, along with an anti-urban bias in planning, have led both to the neglect of urban poverty and a refusal to envision cities as engines of economic growth.

 

About Mumbai

 

Mumbai is the commercial and financial capital of India contributing over Rs. 40,000 [2] crores or 1/3^rd of the entire country’s annual taxes. It generates over 20% of the state’s Gross Domestic Product and 5% of the entire country’s Gross Domestic Product, handles over 1/3^rd of the country’s total foreign trade and has the largest airport in the country. These figures sound extremely impressive and one would expect that the city’s citizens enjoy a high quality of living. However, in return, the city only gets back between 1%-3% of its revenue generated toward its development. [3] Over half of Bombay’s twelve million people live in 3000 slum pockets. [4] These slums are characterised by the inadequacy of the most basic of necessities including water, sanitation, electricity and drainage. One estimate puts it that the slum population lives on only 16% of the land area, a statistic revealing of existing inequities and prompting of the question as to whom the city belongs.

 

The last fifty years have seen a number of institutional and legal frameworks come and go that have variously sought to prevent the proliferation of slums or to provide the poor with secure housing – and these have been explored in great detail in the previous paper. However, the policies have been an overwhelming failure and the percentage of people living in slums has grown exponentially. And although the latest slum upgradation policy has been touted as the most progressive to date, as this paper will reveal, much financial and regulatory reform is necessary if things are to improve in any substantial way. The problems are complex and land markets are extremely distorted making real estate prices the highest in India.

2. CONTEXT

 

A History of Slum Policy in the city of Mumbai

 

Until the 1970s, the Government of Maharashtra and the Municipal Corporation of Greater Mumbai followed a policy to unilaterally demolish slums and clear land of encroachments. However, this strategy did not work because people simply re-built their huts after some time at the same location or, if there was too much harassment, at another unoccupied location nearby. Moreover, land-owning agencies were just not equipped to police their lands and their lower officials often connived with middlemen to allow encroachments.

 

Even when the state government did try to resettle the poor, they were unsuccessful. [5] Resettlement proceeded erratically according to the whims and fancies of local municipal officials and the poor were completely excluded from any decision-making. As a result, more often than not, because they had been forcibly relocated without concern for their social and economic networks, the poor returned to their original locations or to nearby ones. 

 

In the 1970s, however, legislation and policy changed. [6] Slums began to be viewed as housing solutions and the state began to provide water, sanitation, electricity and other amenities in these areas. Furthermore, the state started to recognise that when slums were demolished, some form of resettlement was needed. In 1976, a census of huts on public lands was conducted and photo passes [7] issued to all those found eligible according as to whether they could establish that they were living in the slum at the time of census. This was the first time that slum dwellers were given any form of security. However, none of these programmes ever involved the poor in any stage of planning or implementation. Furthermore, slums on central government and privately owned lands – which accounted for the largest chunk of land in the city – were entirely excluded.

 

In the middle-eighties, the World Bank funded Bombay Urban Development Project (BUDP) came into being with two programmes -- the Slum Upgradation Programme (SUP) and the Low Income Group Shelter Programme (LISP). The SUP consisted of giving a thirty-year renewable lease of land to cooperative societies of slum dwellers (where the lands were not needed for public purposes), providing civic amenities on a cost-recovery basis and giving loans to upgrade people’s houses. Under the LISP, the state provided subsidized land to the Economically Weaker Sections (EWS) and Low Income Groups (LIG) to build their own homes in accordance with a type design.  Although 85,000 families benefited from both these programmes, conditions on the ground did not change significantly. The most progressive feature of SUP was the introduction of the concept of land tenure but its most retrogressive feature was that it left existing inequalities in size of holding untouched. The most positive aspect of LISP was that there was a shift in the role of the state from provider to facilitator but its most negative aspect was that it probably did not reach the really poor. Both programmes also suffered from an absence of genuine community participation. And again, the SUP could not be implemented on central government or private land.

 

The nineties saw the state formulating two major programmes for slum dwellers. The first was known as the Slum Redevelopment Scheme. This program aimed to provide enough incentives – such as increasing the Floor Space Index (FSI) allowed in slum areas and the ability to transfer development rights to other areas of the city - for private developers and builders to redevelop slums. The theory was that by selling the extra space in the open market, tenements for slum dwellers would be cross-subsidised and made affordable to them.

 

But the programme did not take off in any significant manner and when a new government came to power in Maharashtra in 1995, one of its main election promises was to provide 800,000 free houses for 40,00,000 slum dwellers in the city of Mumbai. This eventually formed the basis for the current slum redevelopment policy of the city and is described in more detail in the next chapter.

 

An Introduction to the Alliance

 

The Society for the Promotion of Area Resource Centres (SPARC)

 

SPARC is an NGO established in 1984 by a group of professionals who had previously worked with more traditional and welfare-oriented NGOs in the neighbourhood of Byculla in central Mumbai. Previous to forming SPARC, much of the work of the founder group was with the pavement dwellers of the Byculla area, and once established, the women pavement dwellers became SPARC’s main constituency. These women had repeatedly born the brunt of demolitions of their homes and loss of their meagre belongings, and observing the failure of welfare-oriented NGOs to deal with the demolitions, SPARC instead began to work with the women pavement dwellers to better understand the effects of the demolitions and how they could be countered. Training programmes were then established so that the women could learn how to survey their own settlements and start to use the data generated to campaign for land. When SPARC and the National Slum Dwellers Federation (NSDF) met, one product of their alliance was Mahila Milan. NSDF and Mahila Milan are described in greater detail below. Within this alliance, the role of SPARC is to design and develop strategies to enable its partners to meet with and make demands of government agencies. In addition, it also performs administrative tasks and raises funds needed for its work. Currently operating in more than 50 cities in 9 States and 1 Union Territory in India, the SPARC, NSDF and Mahila Milan Alliance now works with similar NGOs and CBOs in Asia and Africa, helping to build up effective networks in 15 Asian and African countries including Cambodia, Thailand, the Philippines, South Africa, Namibia, Kenya, Nepal, and Indonesia. This network is known as the Slum/Shack Dwellers International.

 

 

The National Slum Dwellers Federation (NSDF)

 

NSDF is a CBO whose membership was largely made up of male slum dwellers. Established in 1974, NSDF has a history of organising the poor against demolitions, as well as attempting to secure the basic amenities of water, sanitation and such like for the urban poor. While the Federation was initially a male slum dwellers organisation, in 1987 it began working in partnership with Mahila Milan and SPARC, and since then the number of women members has grown, with around half of NSDF’s community leaders now being women. Within its alliance with SPARC and Mahila Milan, NSDF is mainly responsible for the organisation, mobilisation and motivation of slum dwellers, as well as working abroad to strengthen similar federations of slum dwellers and homeless families in Africa and Asia. Membership of NSDF remains restricted to slum dwellers, and currently the Federation spans more than 50 cities in 9 States and 1 Union Territory in India.

 

Mahila Milan (Women Together)

 

MM is the third partner of the SPARC/NSDF alliance and is a CBO made up of collectives of women pavement and slum dwellers whose central activity is the operation of savings and credit activities. Set up in 1986, as a result of SPARC’s work with the Muslim pavement dwelling women of the Byculla area of Mumbai, the rationale behind the formation of Mahila Milan lay in the recognition of the central role of women in the family as well as the enormous potential that women’s groups had in transforming relations within society and in improving the lives of poor families. Mahila Milan now conducts informal training and support activities, as well as saving and credit groups, and aims to empower women to play a greater role in community management and to work with NSDF on broader policy issues at state and city levels. Mahila Milan thus represents both an opportunity to satisfy the credit needs of poor women and a strategy to mobilise them towards taking a more pro-active role in relation to their own poverty. The stress of the organisation lies not so much on concrete achievements and outputs, but instead on the learning process and the building of confidence among poor women. In the Byculla area, approximately 600 women are members of Mahila Milan, but together with NSDF, Mahila Milan now has a total of over 300 thousand households as members across the country.

 

Mobilisation Strategies

 

The alliance aims to create the institutional arrangements which mobilise large numbers of the urban poor and to support and strengthen their organisations. The overall goal for these community-driven organisations is to become an important part of the city system so that the poor can directly participate in how the city is managed.

 

The Alliance works in various ways towards expanding and building the capacities of the NSDF and MM.  This involves facilitating peer exchanges between poor communities and their leaders, encouraging community-led enumerations and surveys and supporting and advocating for community-initiated and driven projects and programmes. Furthermore, the alliance works on pro-poor policy changes and strengthening dialogues, relationships and discussions between the poor and their local, regional and national authorities.

 

Enumerations and surveys of slums are critical to the process of community mobilization. The activity of collecting and processing data by and for a community generates self-knowledge and helps to develop the understanding that many problems can be dealt with only through collective effort. Thus, data gathering and analysis are not detached, mechanical exercises done by third-party professionals. Slum dwellers themselves decide what information is needed and for what purpose and in this process, survey and enumerations become powerful tools in strengthening group bonds.

 

Moreover, communities discover the power of this information which they own. Very often, until that point, no agency of government, neither State nor Central, has any systematic data on the actual situation on the ground. Consequently, communities find themselves in a stronger position to negotiate for their rights with the government. In fact, this has been the Alliance’s experience several times. For instance, for more than ten years, the Railways Slum Dwellers Federation (RSDF), a unit of NSDF, has been systematically collecting data on slum-dwellers living along the railway tracks. The publication of Beyond the Beaten Track in 1988, when a joint survey was made with Indian Railways and the State Government, was a milestone. Detailed cadastral maps showing encroachments at each location along the entire suburban rail system were prepared. This information was collected by slum-dwellers themselves and processed by SPARC into a report. The possession of this information was a source of power and credibility for the Alliance. At one level, it strengthened the communities and helped to mobilize them to articulate their situation and consider alternatives approaches to changing it. At another level, state agencies were forced to contact the Alliance, if for no other reason than that it was the only body with information on the number and extent of railway land encroachments and complete and up-to-date maps of their location. The conventional order of the control of knowledge had been reversed.

 

 

3. SLUM UPGRADING POLICY AND FINANCIAL FRAMEWORKS

Introduction

 

This chapter presents the institutional, regulatory and financial frameworks for current slum upgrading policy, which is governed by the Slum Rehabilitation Authority, for the city of Mumbai. The two models that emerge are in situ development, where families are rehabilitated in apartment blocks that are built at the same location, and resettlement, where communities are shifted into secure housing at another location, because the land they have been squatting on is reserved for a public purpose. Using case studies to illustrate how these policies are translated into practice, the authors stress that without large scale, pro-poor and low interest loans, none of the SRA schemes can be successful on any substantial scale. The last section describes the Community-Led Infrastructure Financing Facility, an initiative that has been developed to demonstrate the viability of lending to the poor and providing bridge finance, guarantees and so on.

A brief introduction to the city’s Slum Upgradation Institutional Framework

 

In 1995, a political party came to office largely on the promise of providing free houses for the poor. An institutional and legal framework for implementing this slum upgrading policy Mumbai was developed by a Committee under the chairmanship of D.K.Afzalpurkar, a senior bureaucrat, in 1995. The group had amongst its members, government officials, representatives of the housing industry, architects as also the Director of SPARC. Assuming family size to be 5, this meant building 800,000 -1,000,000 houses (including transit tenements) over a period of 5-6 years. The study group was set up to devise a framework to implement the election promise.

 

A Slum Rehabilitation Authority (SRA) was set up by amending the Slum Area (Improvement, Clearance and Rehabilitation) Act of 1971. This was to be the single coordinating authority while there would be multiple executing agencies like developers, public bodies, NGOs, cooperative housing societies of slum dwellers and the like.

 

All slum and pavement families who could establish that their names were on the electoral rolls of 1/1/95 were to be held eligible to get a free 225 sq.ft. tenement. In addition, the developer was to pay a sum of Rs.20,000 ($445) per family which was to go into a corpus fund, the interest upon which was to help defray monthly outgoings for maintenance as well as municipal taxes. It was expected that the developer would make sufficient profits from sale of extra tenements to provide both a free tenement and the corpus of Rs.20,000 ($445) per family mentioned above. Municipal taxes were pegged at 20% of the existing rates to lessen the burden on the slum family, with a provision to increase them gradually over a period of time. Commercial areas like shops and restaurants would also be given floor space equal to the existing area or 225 sq.ft., whichever was less, free of cost. The redevelopment of slums in situ was to be the guiding principle and main strategy of the programme. During redevelopment of the slum, the families living there could either find alternative accommodation on their own or be regrouped on the site itself or be accommodated in transit camps to be provided by the developer. Where relocation was inescapable, care was to be taken to see that as far as possible, the new sites were on the same railway line (Mumbai has three rail corridors that service the city).

 

Funding from the state government was not envisaged: in any case, no government would have been able to afford the cost of construction of 1,000,000 houses. The Committee therefore devised a formula to raise money from the market through the grant of additional Floor Space Index (FSI) or Floor Area Ratio (FAR). FSI is the ratio of the area that can be built upon a particular plot of land to the area of the plot. Thus, for example, if the FSI of a plot is 1 and its area is 1000 sq. metres, it is permissible to construct an area up to 1000 sq. metres. This mechanism already existed in the Slum Redevelopment Scheme (SRD) but the incentive given was small (20%) and each case was decided on merits, with a cap on the profitability of the scheme.

 

The basis of the financing mechanism was that the developer would make profits by selling tenements in the open market and these profits would cover the costs not only of the saleable flats but also the rehabilitation tenements. The question before the Committee was as to how to fix a realistic incentive that would cover all costs and still be profitable. They argued that if individual transactions were to be scrutinized, then there would be delay and also arbitrariness in deciding incentive FSI. Therefore, they worked out a general formula for the island city of Mumbai, its suburbs and as a special case, Dharavi, the largest slum in Asia.

 

The existing FSI in the city is 1.33 and 1 in the suburbs and extended suburbs. Dharavi, being in the city limits, also has an FSI of 1.33. For slum areas, the SRD scheme had permitted a maximum FSI of 2.5 both in the city and the suburbs. Any sanctioned FSI beyond 2.5 could be taken as Transfer of Development Rights (TDR). [8]   TDR is made available in the form of a certificate issued by the Municipal Corporation of Greater Mumbai and can be used like a negotiable instrument. The owner can use the TDR either for actual construction or sell it in the open market but the only restriction is that TDR can be used only north of the plot where it was generated, so that southern areas of Mumbai do not get further congested. Prices of TDR fluctuate according to market conditions. The following examples will make this clearer.

 

Take the case of a 1000 sq.mts plot. Since slum area FSI is 2.5, it is possible to construct 2500 sq.mts on the plot. For the sake of example, suppose the developer has to accommodate 50 slum dwellers and give each of them a 30 sq.mts flat. (In point of fact, the slum dweller is entitled to a 21 sq.mts tenement). He then has to construct 1500 sq. mts (50x30) of rehabilitation area. The Committee recommended that .75 of the rehabilitation area be given in the island city, an equivalent amount (1:1) in the suburbs and extended suburbs and 1.33:1 in Dharavi as a difficult area, by way of incentive FSI. 

 

 

 

 

 

 

a) City example

 

Rehabilitation Area   Incentive FSI (.75:1) for 1500 sq.metres of rehabilitation area   Total FSI generated                                                                        The developer can construct only 2500 sq.metres on site so deduct   FSI in the form of TDR (iii - iv)

1500 sq.metres   1125 sq.metres   2625 sq.metres     2500 sq.metres     125 sq.metres

 

In the island city of Mumbai, property prices are high and so smaller incentive FSI is given.

 

b)   Suburbs and extended suburbs example

 

Rehabilitation Area   Incentive FSI (1:1) for 1500 sq.metres of rehabilitation area   Total FSI generated                                                                              The developer can construct only 2500 sq.metres on site so deduct   FSI in the form of TDR (iii - iv)

1500 sq.metres   1500 sq.metres   3000 sq.metres     2500 sq.metres     500 sq.metres

 

In the suburbs and extended suburbs, land prices are lower than in the city and so higher incentive FSI is given.

 

c)         Dharavi: difficult area example

 

Rehabilitation Area Incentive FSI (1.33:1) for 1500 sq.metres of rehabilitation area   Total FSI generated                                                                              The developer can construct only 2500 sq.metres on site so deduct   FSI in the form of TDR (iii - iv)

1500 sq.metres   1999 sq.metres   3499 sq.metres     2500 sq.metres            999 sq.metres

 

Land prices in Dharavi are comparatively low so an even higher incentive FSI is given.

 

SRA policy did not apply to the vast tracts of land owned by Central agencies which were populated by dense slums. The Railways, the Airport Authority and the Port Trust were such instances. The committee urged dialogue with these agencies so that the latter could take a pragmatic view of matters and part with those of their lands not needed for operational purposes and allow slum redevelopment in situ. If dialogue failed to yield results, then it was recommended that a slum reservation be placed on the relevant land. If that was done according to statutory procedures, then the land-owning agency could be compensated either by paying a mutually agreed price or by giving alternative buildable area through Transfer of Development Rights (TDR).

 

Case Studies of Slum Upgradation and Resettlement

 

Thus, there are essentially two models for slum upgradation in the city – slum upgradation at the same location, and slum resettlement at an alternate location. Builders, NGOs, housing societies of slum dwellers or city authorities, can spearhead both models. The financial mechanisms for these are slightly different and are presented in this section.

 

A.      In situ

 

This is where the land where the families live is redeveloped and families are rehoused on site itself. Below we present three examples of this kind of redevelopment.

 

Rajiv Indira

 

The Rajiv-Indira housing society of Dharavi is the first SRA project of its kind in the city. Unlike other SRA schemes which are builder-driven, this project has been initiated and led by community members themselves. It is innovative because it represents a three way partnership between SPARC, Dharavi Vikas Samiti (which means Dharavi Development Committee and is a member of the NSDF) and a housing society of the slum dwellers that live on the concerned land. In fact, the project, which began in 1999 with one society, has grown today to include two other housing societies as well. Moreover, this project is a trailblazer insofar as it will be for the first time that a multinational bank in Mumbai is getting involved with the housing of the poor. In 2000, Citibank approved a loan towards financing of this project. Homeless International, a UK funding agency, stood as guarantor for this loan.

 

This is a Rs. 8.5 crore (just over $1.5 million) project and 5 buildings are being constructed -- of which 2 are five stories high and the other 3 are seven stories high. As per SRA guidelines, the 217 families of slum dwellers will be provided with free 225 sq. ft tenements and all remaining tenements will be sold on the open market. Profits will also be generated by the sale of Transfer of Development Rights. For a more detailed look at the financing figures, please look at Annexure I.

 

An important point to mention at this point is that the success of the SRA model – because it is linked to real estate prices is greatly affected by the location of the slum. If slums, as in the case of the Rajiv Indira society, are located along the main road, they are more likely to attract developers.  However, the majority of slum dwellers live on lands that are in the middle of large slums. Therefore a reliable financing model needs to be explored and developed to encourage in situ redevelopment for this category of slum dwellers. One such precedent-setting project is known as the Bharat Janata Housing Society project.

 

Bharat Janata Housing Society

 

The area of the plot, occupied by the members of the Bharat Janata Cooperative Housing Society, is 2,507 square metres, which originally contained 142 structures.  The development will consist of 5 ground-plus-7-storey buildings - two for rehabilitation units, one for sale units and two for a mix of rehabilitation and for-sale units.  All 142 of the households within the plot area will receive rehabilitation units with floor space of 225 square feet.  A further 14 rehabilitation units have been earmarked for Project Affected Persons who are willing to vacate their existing plots to enable the development of toilet blocks or other infrastructure within the Dharavi slums.  The development will also contain a welfare centre, community hall and balwadi.

This project is also very important for the Alliance for a number of reasons. It is in the "middle" of Dharavi, and has none of the special roadside "edge" advantages of Rajiv Indira. In fact, it is more characteristic of Dharavi's slums and when successful, will go a long way to demonstrate that slum redevelopment can really be successfully scaled-up. Moreover, it tests the Alliance's hypothesis that Dharavi has a "market" within itself and flats can and will be sold to people from neighboring slums. For a more detailed look at the financial figures for this project please refer to Annexure II.

2. Resettlement under the 3.11 Scheme of the SRA

 

When the land where slum dwellers live is needed either for vital public purposes (for instance to construct a road, park, transport, school or to lay infrastructure) or the site itself is dangerous or development is restricted, the area cannot be redeveloped in situ. In this case, families are resettled on another piece of land. This especially applies to pavement dwellers.

 

This model, known as section 3.11 of the SRA, creates TDR incentives for land owners – whether private or government - to provide their open lands for slum redevelopment projects. Under this clause, the owner can convert his land to TDR (where the ratio is determined by the zonal FSI of that locality) and sell the latter in the open market. Moreover, the developer gets incentive FSI (which has been explained in the previous section and is used to build tenements for sale) as well as construction TDR (1:1.33).

 

To date only one society of pavement dwellers has been able to take advantage of the 3.11 scheme. This is primarily because it requires a huge financial investment at the initial stage of construction as TDR is only generated – and sold – against completed stages of construction. However, in an effort to prove that this is model is actually financially viable, the Alliance is supporting the Milan Nagar project. Spearheaded by the Alliance’s oldest members – the Mahila Milan of Byculla – this project involves SPARC redeveloping land that has been allotted by the Maharashtra Housing And  Area Development Authority, a government body.

 

Milan Nagar

 

Women pavement dwellers, who formed the core of the Indian Alliance’s [9] drive for community-led rehabilitation and resettlement, currently live on 6 pavements around the Byculla area of Mumbai.  536 households have pioneered the process of enumeration, production of ID cards, daily savings and loans, house model exhibitions, and engagement of city authorities.  They have inspired, trained and supported other communities in India and internationally, as a result of which they can claim that the processes they initiated are now central to Federation-led development in many countries.

 

In 1987, the Byculla pavement dwellers were offered 100 plots to demonstrate their ability to develop a site.  However, because there was no resettlement or rehabilitation policy for pavement dwellers in place at that time, they felt there would be no opportunity to scale-up the process to benefit other pavement dwellers.

 

After decades of being ignored by public policy, the Slum Redevelopment Authority (SRA) of Maharashtra finally included pavement dwellers as slum dwellers whose rights to relocation and/or resettlement should be protected.  In 1998, the Chief Executive Officer of the SRA and Mumbai Housing and Area Development Authority (MHADA) agreed to give the Byculla pavement dwellers a plot of land to undertake an SRA project.  It took nearly 3 years for the land demarcation to be done, as the site was illegally occupied by a commercial establishment to set up a factory in the nearby area.  The factory was not set up and more government land was encroached by these commercial predators.

 

By the time the land was actually retrieved, it could not be used for construction as it adjoined a natural drain.  As a result, the land measured 4710 sq. metres and the project could only accommodate 356 (out of the 536 households that were originally identified for resettlement) in 5 three-storied buildings.

 

The Byculla pavement dwellers have decided to go ahead because the SRA policy is now in place, and discussions are taking place with the Municipal Corporation of Greater Mumbai (MCGM) to rehabilitate the other 23,000 households that are estimated to be residing on pavements around Mumbai.  Most pavement dwellers are expected to go into a scheme where a commercial developer will provide the land and tenements to MCGM, in order to take the Transferable Development Rights (TDR).

 

In this context, demonstrating how pavement dwellers’ relocation and rehabilitation needs to be done, and building precedents out of a process that is not led by developers, is vital.  Therefore, the Alliance feels this project is very important. For a more detailed analysis of financial figures, please refer to Annexure III.

 

C.      Public Infrastructure Projects

 

When lands are needed by local, state or central authorities for public purposes – such as the construction of roads, railways, drainage  - all eligible slum dwellers who are affected by this project (i.e. who are living on the land which is needed for the public amenity) must be provided alternate accommodation following SRA 3.11 principles.

 

For instance, in 2001, the Alliance resettled more than 1800 families living on airport land (which is central government land) in Mumbai. These communities lived very close to the runway, forcing planes to travel longer distances before taking off. After much negotiation with the Alliance, the Airport Authorities agreed to buy permanent tenements at a nearby location where the slum dwellers could be resettled. Everybody benefited from this initiative – the airport saved a lot of money in terms of fuel and taxi-ing charges and the slum dwellers moved into safe and secure homes.

 

Two recent examples of large-scale resettlement are the Mumbai Urban Transportation Project (MUTP) and the Mumbai Urban Infrastructure Project (MUIP). The MUTP involved the expansion of rail networks throughout the city. Initiated by the Railways (a Central government body) it affected approximately 20,000 households.  The Alliance was given a sole-source contract to conduct baseline socio-economic surveys, prepare resettlement implementation plans and resettle and rehabilitate these families. At the time of writing this paper, some 12,000 families have already been resettled.

 

The MUIP is a joint venture between the state of Maharashtra, the Municipal Corporation of Greater Mumbai (MCGM) and the Mumbai Metropolitan Regional Development Authority (MMRDA) to expand the road networks in Mumbai. It is expected that this project will cost about 2000 crores of rupees [10] – 1000 crores [11] coming from MMRDA, 300 crores [12] from the MMC and 700 crores [13] from GOM – and improve 57 roads, mainly in the suburbs and extended suburbs of the city.

 

It is estimated that about 35,000 poor families will be affected by the MUIP. These families are to be provided with an alternate accommodation of 225 sq. ft. carpet area under section 3.11 of the SRA. The Alliance has been asked to resettle all these families.

 

The MUTP and MUIP are different in terms of the criteria to determine eligibility of slum dwellers as well as the financing methods involved.

 

In the case of MUTP, the government invited private builders to construct 225 sq. ft. tenements for Project Affected Families. Apart from providing the builders with TDR incentives, the government also offered additional payments of Rs. 1,20,000 [14] or Rs. 54,000 [15] or Rs. 50,000 [16] or Rs. 34,000 [17] per, depending on the bid. Naturally this worked out to be a huge investment, even though the project was supported by a World Bank loan.

 

In the case of MUIP, bids have been invited by the government and in this case the government has even made money. Lands are being available by both public and private owners in return for TDR. If the land belongs to a public agency, the MMRDA invited developers to bid for construction under SRA. If the land belongs to a private agency, the MMRDA insists that the owner either redevelop the land himself or approach the MMRDA in partnership with a developer, who is willing to take construction TDR.

 

In April 2003, the Alliance was approached by a private land owner to develop his land to house families that would be affected by MUIP. This is known as the Oshiwara Project and is described below.

 

Oshiwara

 

This project involves the construction of 5 seven-storied apartment buildings for over 700 households in an area called Goregoan, in the north west of Mumbai. Before the Alliance was involved in the project, the landowners - Deshmukh Builders -  submitted the layout and building plans to MMRDA. However, they were unwilling to actually develop the land themselves and were referred to SPARC.  When the Alliance became involved, it was found that the layout and building design had been produced from the builder’s perspective and was not very ‘people-friendly’.  An alternative layout was prepared in accordance with the SRA [18] guidelines, and exhibited at an inauguration day on 23^rd June 2003.  Unfortunately, the MMRDA Project Director and the landowner were concerned about possible delays in scrutinising the revised layout and so insisted that the approved layout be used.  The Alliance reluctantly accepted the approved layout in the interest of kick-starting the project, but negotiated for changes in the building plans to include the integration of the ‘Mahila Milan’ style apartment design.  These designs include better house plans, providing space for a loft that increases the floor-space available and wider corridors. 

 

SPARC involved a team of experienced architects, planners and structural engineers as consultants to work on the project. They prepared detailed layouts, architectural and structural drawings, specifications and tender documents. The plot has been divided into 3 segments, with different civil contractors responsible for construction work in each segment. At the time of writing this report, construction is well underway – in fact, the Alliance is working hard at sticking to its 15-month deadline. A special feature of this project is that SPARC has selected contractors who have deep enough pockets to fund construction initially from their own funds. Since TDR is released according to different stages of construction, the builders will be compensated as and when the TDR is released and sold by the Alliance. Such an arrangement frees the Alliance from huge initial investment.

 

For a more detailed look at the financials of this project, please refer to Annexure IV.

 

Although the Alliance had already been given the sole source contract for surveying and shifting all 35,000 families affected by MUIP, the Oshiwara experience encouraged the Alliance to bid for similar construction projects. In fact, SPARC was already involved in constructing 15 apartment buildings [19] in other parts of the city. Moreover, as its experience in building transit accommodation for MUTP PAPs indicated, revealed that its involvement in construction set new standards and practices.

 

In April 2003, the Alliance bid to construct 1712 tenements for MUIP affected households in another part of Mumbai. The next month, SPARC lost the bid. This was because a private developer approached the Mumbai Metropolitan Regional Development Authority (MMRDA) and offered this authority over a crore of rupees [20] for this project. In fact, the Alliance saw this as a tremendous victory in affecting construction standards because the usual practice (as was the case in MUTP) is for builders, driven by getting as much profit as possible, to demand monetary incentives to construct housing for the poor and to design poor quality buildings. In this case, however, the fear of losing money to an NGO made the builder actually pay the MMRDA to build these homes! Moreover, costs were such that no bribes and additional pay offs could be included.

 

Why MUTP and MUIP are so important

 

The Alliance’s participation in both MUTP as well as MUIP changed the way it is being viewed by external institutions such as banks, governments and private land owners.  First, without the assistance and willingness of poor communities, neither project would be able to take off the ground. This represents a forced acknowledgement of the participation and partnership that must be developed between the poor and the city. Moreover, the federation is being seen as a credible development partner – who assists landowners get value for their land without making further investments. Secondly, financial institutions and contractors are also beginning to recognise that the Alliance can help them fill in gaps in their own portfolios, namely in areas of slum development. Third, SPARC sees these as a precedent setting projects. By keeping costs low and quality high, by moving the system without doling out large bribes, and by including communities in the construction of their new homes, a standard will be set for future construction of PAP’s housing. Finally, the fact that the Alliance has been given the sole source contract for R&R of MUIP PAPs reveals the changing nature of the city’s relationship with its urban poor populations. It is organised groups of the poor that gather, maintain, own and use information about themselves and for their collective benefit.

 

What projects like MUTP, and more specifically MUIP, reveal is that it is physically possible – and financially feasible – to house tens of thousands of poor households. The question is not one of the lack of land, but of the lack of will. From the point of view of the Alliance, whose core constituency are pavement dwellers, such projects show that resettling pavement dwellers (for 70% of those affected are pavement dwellers) – who are only about 23,000 households strong – far less than the households in the MUIP – is not an impossible task. The very fact that the Alliance has agreed to do the Basic Socio-Economic Survey for MUIP free of cost is to prove its commitment to the issue of pavement dwellers and to build its relationship with the city, so that their resettlement can become a reality. Moreover, the state can not only make money from their relocation (since builders are now ready to pay to take over this project) but will also get back vast tracts of land, which will improve the entire city’s infrastructure and public assets. Therefore, an insight that emerges is that it is important to look at various categories of the poor – pavement dwellers being the poorest and most vulnerable – and examine which models work best for whom.

 

The need for large scale public finance

 

There are a limited number of government sponsored programmes to assist the urban poor. In 2001 the Government of India (GOI) came up with a scheme of subsidy for housing the urban poor in India - the Valmiki Ambedkar Yojna (VAMBAY) - and the budgetary provision made for it was rather small. This provision also includes a component as subsidy for public sanitation.

 

Other than VAMBAY, the GOI has only two major schemes to address the needs of the urban poor:  the National Slum Development Programme (NSDP) and the Swarn Jayanti Swayam Rojgar Yojana (SJSRY). The NSDP offers a modest grant to States to provide basic amenities in slums and the SJSRY is a bank loan-related self-employment programme for the urban poor and has a subsidy component as well. Even the limited funding under these programmes is not usually spent. There are also a few other schemes offering subsidies to particular groups of workers in specific occupations.

 

However, there are three main problems with these schemes. First, when we consider the size of India's urban population, the amount of money earmarked for the urban poor - who constitute between 30% and 55% of the population of towns and cities - is rather negligible. Second, VAMBAY allocations are used by politicians to benefit their supporters and do not involve the participation of the poor in any way. VAMBAY, since it has strict quotas linked to caste and class, results in the haphazard upgradation of individual units rather than as working with communities as a whole. Thus, it is neither sustainable nor desirable as a long-term solution.

 

This section also illustrates the kinds of finance that are needed to support and strengthen organisations of the poor so that they can demonstrate their solutions to their problems. One such facility is called the Community-Led Infrastructure Financing Facility (CLIFF), which has been initiated by the alliance of SPARC, NSDF and Mahila Milan in partnership with Homeless International and Cities Alliance.

 

The SRA policy – although full of limitations, which will be explored in detail in following sections – does provide opportunities for communities of the poor to actually participate in, lead and design the upgrading of their houses. However, for this to happen, communities need access to low-interest, long term, affordable housing finance.

 

Neither public nor private financial institutions have worked in any substantial capacity with the urban poor. For instance, the Housing and Urban Development Corporation of India, a public sector concern, is unable to reach the urban poor because it requires them to hold land, which, since they are slum dwellers, they cannot. Moreover, formal financial institutions, because of the lack of successful institutional and financial precedents, do not have had the confidence to lend to and work in conjunction with communities of the poor. Thus, the Community-Led Infrastructure Finance Facility, which aims to understand, test and articulate these partnership models, was developed.

Community-Led Infrastructure Finance Facility

 

Community-Led Infrastructure Financing Facility (CLIFF) is an alternative financing facility that was a concept that emerged based on the findings of the research project, “Bridging the Finance Gap.” This study was undertaken by SPARC, other members of the Slum Dwellers International and Homeless International. It sought to articulate how some organisations of the poor had actually managed not only to develop interesting and diverse project portfolios but also access funds to implement them. Furthermore, it analysed why the incentive created by financial experts to pull formal and commercial financial institutions into pro-poor lending had been largely unsuccessful. The insight that emerged from these findings revealed that, in reality, mainstream institutions understand very little about housing and infrastructure investment and finance for the poor.  In fact, what tends to happen is that the urban poor have both the capacity and entrepreneurial aspirations to undertake such projects and do so at a great risk to themselves (and which they bear alone). However, once poor communities’ initiatives are successful, other institutions and organisations, which have until then been waiting at the sidelines, jump in to derive insights and learn from these processes. 

 

CLIFF findings and research emerged from the grassroot experiences and learnings from different countries in the Slum/Shack Dwellers International (SDI). As mentioned previously, the Rajiv Indira Housing Society SRA project was the first time a formal financial institution like Citibank had been involved in lending money to slum dwellers for the upgradation of their homes. It was the challenges and lessons of the institutional arrangements, guarantee mechanism and feasibility studies that emerged from this partnership that contributed to the idea of CLIFF. In fact this Citibank loan also assisted the Alliance in 2001 to win a bid to construct 6400 community toilet seats as part of a World Bank-funded Slum Sanitation Project in Mumbai. In this instance, the Alliance entered into a partnership with Unit Trust of India Bank (UTI Bank), which provided a required financial guarantee. The alliance had previous experience of working with the Chairman and Managing Director of the Bank when he was working as Executive Director of the Unit Trust of India (UTI), a mutual fund in the public sector. He had devised a scheme in that capacity to channelize savings of the urban poor into mutual funds keeping in mind their needs for security and liquidity as also the limited amounts they could invest at one time. That relationship helped establish a ‘comfort factor’. Moreover, he was also aware of our engagement with Citibank. Homeless International provided an additional letter of support for this guarantee.

 

Thus CLIFF was firmly grounded in the experiences of the urban poor. In its first phase, it will provide grants, guarantee and bridge funds to local communities to help strengthen and scale up what the federation is already doing.  A global CLIFF facility is managed by Homeless International and SPARC hosts the first “local” CLIFF for the Alliance in India. It is also important to note that the CLIFF is not simply an instrument to demonstrate how SRA can be successfully implemented. It is a model that essentially shows how the poor are creditworthy. Therefore, no matter what the financial model, its reach is much wider and the capacities it develops long lasting.

 

CLIFF has three main strategic goals. First, to develop new ways that international donor agencies can understand and support communities of the poor and share the risks of exploring new financial investments and innovations. Furthermore, it is hoped that this process will also challenge the existing financing procedures within these organisations which inhibit real risk taking and are consequently unable to produce substantial social change.

 

Second, to develop innovative, realistic and sustainable strategies that communities can own and which can be scaled up to upgrade slums. Therefore, the aim of CLIFF is to take on a wide spectrum of activities and simultaneously create opportunities for the poor to learn from these processes so that they can leverage these experiences to seek greater ownership of future projects.  Documentation throughout this process is given great importance so that all aspects of learning can be captured, and what is gained in knowledge, insights, skills and organisation, is not usurped by the financials.   

 

And lastly to develop new partnerships with city governments by demonstrating that community-managed projects are more effective and workable. Furthermore it is hoped that documenting non-utilisation, un-strategic utilisation or mis-utilisation of subsidies will strengthen dialogues with state government for better access to their funds. Finally it will provide a contract to those projects presently being undertaken for the poor in which the poor and their organisations are consumer whist in these projects they are driving development.

 

Currently, CLIFF includes four slum upgradation projects in Mumbai in its portfolio – the Rajiv Indira-Suryodaya Housing Society, the Bharat Janata Housing Society, Oshiwara Project and the Milan Nagar Housing Society. All these projects have been described earlier and financial details are presented at the end of this paper.

 

We are happy to note that CLIFF is already demonstrating that the organised poor are credible and dependable partners. As mentioned previously, in April 2003, the Alliance bid to construct tenements for over 1700 families that were affected by the Mumbai Urban Infrastructure Project. Tender requirements called for the bid to be accompanied by a bid security equivalent to one percent of the proposed project cost.  To fulfil these bid requirements, SPARC approached the Bank of Baroda, which furnished the required bank guarantee of Rs. 34,60,000.  Bank of Baroda also agreed to furnish an additional performance guarantee of Rs. 3,46,00,000 in the event that SPARC was awarded the contract.  The actual time and investment made in winning this guarantee was negligible in comparison to SPARC’s previous experiences with Citibank and UTI Bank. It is clear that once rituals and models of private-NGO-poor community partnerships are established, accessing finance becomes a regular routine.

4. COMMUNITY MOBILISATION, PRECEDENT SETTING & ENGAGEMENT WIH THE STATE

 

Introduction

 

The previous chapter discussed the critical need for large-scale low-income loans for Mumbai’s poor. This chapter maintains that alongside pro-poor housing finance, community mobilisation and engagement with the state are key tools for slum upgradation schemes to be successful. This is because unless the urban poor are organised, large portions of them will either remain ignorant of how exactly they can improve their housing situations or will be hoodwinked by many a private builder trying to make more profit. Moreover, as illustrated in section one, strong organised communities are in a much better position to negotiate for their rights with local, state and central government authorities.

Community Mobilisation

 

Federating Slum Dwellers under SRA

 

Private builders have many ways of cutting costs and getting around pro-poor provisions under SRA. For instance,

 

1. They collude with officers to construct more than is allowed on the approved plans.
2. While selecting, demarcating and finalising the plot size, they collude with officers to include more open space than what is actually meant for slum redevelopment.
3. They try and get the number of slum dwellers increased and add bogus names so that additional tenements can be constructed and then sold.
4. While preparing the building plan, they include a lot of amenities such as corridors, balwadis, society offices and health centres, and increase their size.  These amenities are FSI free but are included in the Built Up Area (BUA). This increases the incentive FSI (because this depends on BUA for rehabilitation) that is allowed for sale and TDR. However, these areas are actually used by the builders to construct additional spaces and sold. In this manner, they construct and sell 30% more than they are officially allowed.
5. In a majority of cases, they do not register the slum dwellers as a housing society. However, since land ownership is dependent on this registration, poor communities are denied their tenure rights. 
6. They collude with officers to allow the sale of tenements that should actually be handed over to the SRA for the resettlement of poor families that are affected by ongoing public projects.

 

To counter many such problems, the Alliance negotiates with builders on behalf of poor communities. For instance, a private trust owned land in an area called Khar Danda Road. This land is reserved for fisherfolk and about 300 poor households are living here. Some years ago, when a prominent builder in the city along with the private trust decided to redevelop this land, the local community was not involved in the discussions and families were bullied to give their consent to the project. It was only when the Alliance finally got involved that the community was able to voice and satisfy its concerns. Eventually, a Memorandum of Understanding was signed, to the satisfaction of the residents, the landowner as well as the contractor, with the terms and conditions regulated by the Alliance.

 

Therefore, since builders do everything possible to cut costs and it is very difficult for communities to handle these individual problems, a proposal to deal with this problem has been made by the Chief Executive Officer of the SRA. He suggested to the Alliance that all slum dwellers participating in SRA projects be federated or linked up so that they are organised and educated about their rights, and they can collectively negotiate with builders.

Precedent Setting

 

It is important to keep in mind that even if the government allows for vast tracts of its lands to be redeveloped by freeing up more land, slum upgradation can only be successful if large numbers of poor people are organised to benefit from these initiatives. As city, state and central authorities make moves for scaling up infrastructure for the city, the Alliance explores how community participation, awareness building, negotiations and mobilisation can also be scaled up. It is the marrying of these top-down and bottom-up efforts that will result in a slum-free Mumbai.

 

The grassroots testing of policy and regulations, along with deriving innovative solutions to encountered problems, is a well-defined strategy of the Alliance known as precedent setting. The Alliance focuses on precedent setting activities for urban upgradation in two ways. The first is by demonstrating the value of particular initiatives that work for the poor, the entire city and the state, and that can become the basis of new policy. The Alliance also tests existing policy and demonstrates how it does or does not work for the poor. In the latter case, it breaks existing rules and demonstrates more workable and realistic alternatives. Indeed, it is this philosophy of trial and error that forms the basis for any understanding of what changes and arrangements need to be in place before substantial numbers of the poor can successful access housing or other infrastructure.

 

An example is the resettlement of 900 families that lived along the Railway tracks at an area called Kanjur Marg, which formed the basis for the resettlement of 20,000 similar families. The Alliance organised this community at Kanjur Marg, built transit housing and moved them safely. Unlike all other previous, state-led resettlement initiatives to resettle slum dwellers in Mumbai, no force was used. In fact, this was so impressive that it convinced many in government and the World Bank of the appropriateness of the strategy. The main point about Kanjur Marg was that it represented a solution that worked for the poor and, in doing so, worked for the state as well. Officials came, saw and were convinced. Moreover, Kanjur Marg set a precedent for all future resettlement in the city of Mumbai – in the Mumbai Urban Infrastructure Project (MUIP) the Alliance has been given the sole source contract for the resettlement of all 35,000 Project Affected Households.

 

Another example is the Rajiv Indira society, which has been discussed in the previous section, and is the first SRA project where an NGO has played the role of a developer. It is also the first time that a community has been so intimately involved in developing its land, supervising the construction, obtaining various licenses and permits, and negotiating with state authorities for land tenure. Moreover, this project has set a number of construction quality and design standards. Compared to privately developed SRA schemes, the plinth of this building rises one full floor above neighbouring constructions, the corridors and passage ways are double the standard width, and a number of apartments have 14 foot ceilings with extra loft space. This site has seen hundreds of visitors from across the city, country and world, all eager to speak to and learn from the community leaders, and has given similar communities in other areas and other cities the confidence to lead their own redevelopment projects.

Engagement with the state

 

We have noted in the earlier paper of this series that one of the main reasons to engage with the State is the fact that it either owns, controls or regulates most of the commodities that the urban poor need: land, water, sanitation, secure tenure, electricity and housing finance, to name a few. For non-state actors to go to scale on slum upgrading, there is no alternative but to engage with the State and its institutions.

 

Apart from these pragmatic considerations, we feel that the practice of only denigrating the State is not useful. It does not produce houses or water or sanitation in the here and now. Perhaps it contributes to ideological debate: we do not know. But one danger of concentrating only upon critiquing the State is that people become cynical about State action and may turn to wholesale alternatives like the market. At least the State is accountable in principle in democratic theory, however weak the mechanisms to hold it accountable might be. An unfettered market could well be a worse option from the point of view of the urban poor. If one is able to influence the State and compel it to adopt pro-poor measures, such reform promotes inclusive democracy and counters tendencies towards extremist politics, whether of the left or right variety. Our belief is that changing the orientation of the State depends on community mobilization (“I must listen to you because you speak for large numbers”) as also upon strategic alliance with key elements of the State apparatus.

 

Even if much of the bureaucracy is venal and wayward, it would be simplistic and unfair to tar all of them with the same brush. Our experience has been that there are good people in every walk of life and one must search them out, develop partnerships with them and thereby impact State policy and programme. Such persons then become champions of progressive causes and movements. Another important insight we have gleaned is that we are welcomed warmly when we go armed with solutions rather than problems. The founding of partnerships is smoothened. It is obviously more difficult to deal with corrupt officials but if they control the policy and the goods that poor people want, there is no alternative but to work with them.

 

The Alliance of SPARC, NSDF and MM has consistently shied away from party political processes. It has shunned “politics” in this narrow sense of the term. In fact, as community mobilization proceeds apace and as people find solutions by aligning with the alliance, political parties are sitting up and beginning to take notice. Innumerable requests have been made to A.Jockin, head of NSDF, to attend party meetings and the federation is being cultivated by many party interests. Yet, the alliance is clear that as organizations, they will never enter the political fray or electoral arena. Individual members have the right to participate in these processes but they are unequivocally told that they cannot use the organization’s name or resources. Apart from being based upon the principle that people’s movements should ringwall themselves against party political processes, this ethic commends itself because the alliance is not seen as a competitor in electoral politics. Its credibility and performance remain untouched by the ups and downs of electoral fortunes and misfortunes. Such is the approach of the alliance towards different elements of the apparatus of the State.

 

 

 

 

 

5. LEGISLATIVE CHANGES AND POLICY REFORM

 

Change land market and reduce all price distortions – reduce real estate prices by freeing up land for development (CRZ, NDZ, salt pan, privately owned), create incentives for construction (FSI, 4 diff models, land assembly), tie up social objectives and economic gains (land TDR discussions with central govt), rescind useless policies, create large rental market, make changes in SRA. Also, make more investments in urban infrastructure – increase percentage in central budgets for urban development.

 

If people have access to cheap and secure housing, then the question of cut-off dates – which is needed if one thinks of free homes  - is substantially eliminated.

Legislative Changes

 

Changes in Central Government Policy

 

One of the reasons why the State Government’s slum redevelopment policy has been so unsuccessful is that it does not apply to central government lands. In fact, large tracts of land in the city such as the railways, airport and port areas, belong to the central government. According to unofficial estimates about 30% of the cities slum dwellers live on central government land and some of these communities have been living on these lands for over 30 years. [21]

 

Although a draft Slum Development Policy has been in circulation in the central government for some time now, so far, the central government has refused to recognise the rights of slum dwellers. Not even the most basic of amenities such as water, sanitation facilities, drainage and electricity are provided to slum dwellers on central government land. However, the reality is that once these lands are encroached, there is very little authorities can do to regain their land. Thus an eternal stalemate results – the government refuses to grant land rights or basic services or alternate land to the urban poor, and the slum dwellers continue to live there – in unhygienic and difficult conditions.

 

MUTP and airport relocation are exceptions to the rule. It is necessary for central agencies to become flexible and forward-looking.

 

Coastal Regulations Zone (CRZ)

 

The genesis of CRZ can be traced back to a letter written by Prime Minister Indira Gandhi in 1981 to Chief Ministers expressing her concern over the lack of environmental protection provided to coastal areas.  On 19^th February 1991 the Government of India’s Ministry of Environment and Forests (MOEF) issued a notification to all coastal states introducing the concept of Coastal Regulation Zones (CRZ) under Section 3(i) and 3(2)(v) of the Environmental Protection Act 1986 and Rule 5(3)(d) of Environmental Protection Rules 1986. This restricted all development within 500 metres from the high tide line. There were three zones.

 

CRZ I – which was the area between the high tide line and the low tide line, and where no development was allowed. 1.33 sq. kms of Mumbai fall within this zone.

 

CRZ II – where substantial development had already occurred within 500 metres from the high tide line, but further development was controlled. This is the zone that particularly affects a large number of Mumbai’s slum dwellers. 96 sq. kms fall into this area.

 

CRZ III –which covered areas where little development has taken place and is in a No Development Zone. Here, only repairs to existing structures are allowed. Another 23 sq. kms fall within this zone.

 

Almost 25% of Mumbai’s land area is under CRZ II and III. Naturally this severely restricts the land available for increasing the supply of housing and keeps real estate prices prohibitively high.

 

42 SRA approved schemes have been held up for want of MOEF clearance, depriving 8500 families of their homes. Of these 1000 families are living in transit camps. It is necessary to relax CRZ norms in a city starved for space.

 

No Development Zones (NDZ)

 

No Development Zones act as the city’s land corpus that has been set aside as a last resort when all other available lands have been developed and that need to be protected because of environmental reasons. However, although on paper this land is unoccupied and without any infrastructure, much of it is occupied by slum dwellers that have electricity, cable and other amenities. For instance, 38 hectares of land in Powai, which falls into NDZ, has been encroached.

 

Thus an argument against development and protecting the environment fails to reflect the ground realities. It would be more realistic to allow development on these lands and new habitations will protect against haphazard encroachment.

 

Freeing up Salt pan Lands

 

There is a total of 2177 hectares of salt pan land in the city of Mumbai of which a mere 1%-2% is actually used to make salt. The rest has been bought up by private builders. [22] Of this, 1363 hectares or approximately 57% is affected by CRZ and NDZ and of this another 286 hectares is in Kanjur Marg, owned by the government of India.

 

In a recent move by the Central government, 86 hectares in Kanjur Marg is in the process of being freed up for development. Moreover, the central government has agreed to give half of this land to the state government to use for rehousing slum dwellers. However, if the government relaxed CRZ III restrictions as well, a total of 122 hectares would be freed up.

 

The state government is exploring various financing options. Although SRA is preferred since it is the most financially viable, the land available for rehabilitation will be minimised to make space for the sale component. Another option is to spend some government money and use the whole area for rehabilitation. The third option is for central agencies like the Railways and Airport to pay for the relocation of slum dwellers on those lands which are needed for expansion projects. The last option is to charge a modest amount to slum dwellers for these flats. So far, no decisions have been made. Whatever is decided, it is expected that about 70,000 families will be rehoused here.

 

The Rent Control Act and the Urban Land Ceiling Act

 

The Rent Control Act of 1947 froze rents for the city as of 1.9.1940. This has led to a situation where nearly 20,000 buildings are deteriorating – due to lack of funds for maintenance – and 10,000 buildings are extremely dangerous or near collapse. [23] Though modest increases in rents are now permissible, the Rent Control Act inhibits the growth of rental housing and makes it impossible for owners to maintain their properties. Clearly, reform is needed.

 

The Urban Land Ceiling Act, a Central law, was enacted with the laudable objective of preventing a concentration of land ownership in cities and redistributing surplus lands to the urban poor. In reality, it has led to enormous corruption because land-owners sought exemptions from bureaucrats and politicians. Moreover, the tenements meant for the poor are distributed not on the basis of need but either through patronage of in exchange for hard cash. The Act has also restricted land from moving freely into the market. Many State Governments have repealed the legislation but the Government of Maharashtra has not done so. This state of affairs benefits politicians in power as also builders and developers because prices of land remain artificially high. At the same time, there are huge tracts of land in the names of private trusts who use muscle, money and litigation to retain their holdings. Clearly, the Act needs to be repealed.

 

Increasing the rental market

Apart from reforming the Rent Control Act, the state also needs to construct a large-scale rental housing market for low income families.  However, considering that the monthly income of 30% of households in the city is Rs. 6000 [24] or less, apartments must be available for as low as  Rs. 750- Rs. 1000 [25] per month. Otherwise, the poor will be unable to actually benefit from this. [26]

 

Reducing TDR generated

 

A criticism that has often been levied against the SRA policy is that it generates too much TDR. This in turn strains an already burdened infrastructure. A solution to this problem emerges from the work of the Alliance. In the late 1980s, while considering various housing options, Mahila Milan leaders built homes that included a 100 sq. foot loft. This allowed poor families – where two or three generations live under one roof – a modicum of privacy in their new homes. Moreover, a couple of the Alliance’s SRA projects (i.e. Rajiv Indira Housing Society currently and Markhandeya Housing Society previously) included these loft-styled houses. And although the Alliance has been pushing for this style of homes to become standardised for slum dwellers, the builder’s lobby has been firmly against it. This is because it consumes too much FSI and reduces the profits generated. However, this type of housing truly takes into consideration the needs of the poor.

 

Policy Reform

 

Different models

 

As of now, the SRA scheme is rigid and does not allow for the flexibility needed to take the particular needs of poor communities into account. Uniform standards do not allow a cafeteria choices that reflect different levels of affordability.

 

According to the NSDF, all slum and pavement dwellers can contribute something towards their housing. What should be at the core, along with financial viability, is the very practical question – can communities continue to afford their homes? Will maintenance costs be so crippling that they will be forced to sell and return to slums?

Therefore, for housing to be affordable, the cost of a house must not exceed 3-4 times annual household income. And long-term (i.e. approximately 25 years) low interest loans must be available.

 

Moreover, the move from informal to formal housing is often difficult as charges for water, electricity, and other services rise. Therefore, it is important to keep maintenance costs in mind when approaching the issue of housing for the urban poor.

 

According to the Alliance the best option for the poor – and especially pavement dwellers – is to develop low rise, high-density tenements such as ground plus one, two or three storied structures. And to offset maintenance costs innovative income generation ideas could be explored such as allowing advertising rights on the face or roofs of buildings that are in prime or busy localities.

 

An example is provided by families that were resettled by Rajni Builders on Khar Danda Road.  Since there were a large number of slum dwelling families in this SRA project, cable operators were keen to service the new society. Taking advantage of this, the society charged cable operators Rs. 20 [27] per family it supplied with cable, and used this money to supplement building costs!

 

Innovative use of FSI

 

Former Additional Municipal Commissioner Subodh Kumar emphatically argues in his paper that land pricing, land zoning, building codes and safety regulations have effectively priced the poor out of the real estate market. What is critically needed are the right market based incentives for landowners and developers to construct large-scale low-income housing.

 

First, he argues that FSI norms in the city need to be changed. In fact, this point is also supported by a number of authorities, including Mr. Phatak at the MMRDA. Current FSI norms reflect a history where planners were trying to prevent congestion within the island city. The fear of the lack of open spaces, roads and public amenities, resulted in a situation where FSI was set at 1.33 for the island city (with the exception of Bandra Kurla Complex where FSI is 2) and 1 for the extended suburbs. Slum redevelopment projects were granted 2.5 FSI. However, this standardisation is counterintuitive because its restricts development in a variety of areas – business districts, areas surrounding railway stations, central city locations – where FSI should be increased to absorb high growth. In practice, areas like Andheri, Bandra, Sion and Ghatkopar, which have already become focal points in the city, remain unexploited in their potential. As a result, low FSI fails to fulfil its objectives to prevent congestion because, due to high land prices, informal settlements develop in these areas – because the poor cannot afford the land prices but need to live close to their places of work – and the middle class spend long hours commuting to work. Moreover cities like Hongkong and Singapore where FSIs are 17 and 10 respectively are dense but not congested. This evidence indicates innovative planning rather than limited FSI. Kumar makes three suggestions regarding FSI. First, that authorities should provide private land owners with bonus FSI incentives as high as 10 if they not only redevelop their lands to provide low cost housing but if they also use the freed up land space to construct public amenities like roads, hospitals and schools. Moreover, landowners should be encouraged to consolidate their fragmented land holdings by pegging the bonus FSI to the amount of land developed for public purposes. Finally, developers should be invited to bid for the amount of bonus FSI needed that will enable them to construct a public amenity with the least cost to the municipality. Kumar even suggests privatising the public amenity – such as a library, park or dispensary – to cover costs of maintenance. Thus, he concludes, that increasing FSI in the city, and especially for low income housing, if done with the intelligent use of the market, could even result in more public spaces and amenities!

 

Apart from preventing congestion, another argument that has been made against increasing FSI has been the inability of infrastructure to support additional construction. Water supply and sanitation and drainage facilities are already choked. For instance, in some places in Dharavi, people need to dig three feet to find water. If the area was redeveloped and a standard seven storied building constructed, how will water reach all seven floors? In this case, it is essential for large amounts of government monies to be generated – through land TDR or, as Phatak suggests, charging higher income groups more for infrastructure or the issue of tax-free municipal bonds.

 

Realistic Standards

 

Concepts of low uniform FSI, standardised policies across all sections of the urban poor, plans and regulations need to be adapted and customised within the overall and realistic parameters of health, safety and affordability. Although it might not be desirable for people to live in high rises that are close to each other, it is much less desirable to live in slums that are overcrowded, lack adequate natural light and basic sanitation. Lessons from the informal settlements – the use of cheaper building materials and mixed use of land (i.e. residential as well as commercial) – as well as new cheap technologies that reduce construction time – and therefore construction costs - must be explored.

 

 

 6. ACTION PLAN

 

It is worth restating here that the Alliance is involved with slum upgradation and resettlement on a significant scale in the city of Mumbai. Under the Mumbai Urban Transport Project, we are involved with the resettlement and rehabilitation of 20,000 families living along the railway tracks. Of these, some 12,000 families have already been relocated in permanent or transit accommodation. Of these, the Alliance constructed 2500 tenements. Under the Mumbai Urban Infrastructure Project, the alliance has been tasked with the resettlement of 35,000 families and the process of community mobilization and conducting of base-line socio-economic surveys is well under way. So far we have resettled nearly 2000 families living on airport lands n collaboration with the Airport Authority of India and the State Government. Other projects including slum redevelopment at Dharavi and pavement dwellers’ resettlement account for another 1500 families and these projects are at different stages of development. Moreover, we are involved with a $10 million project, funded by the World Bank, to construct public sanitation in slums in the city through community participation. Besides, we have several projects in incubation. The aim of describing this portfolio of projects is to underline that the changes to be recommended in law, policy and programme emerge from our practical experience in the field.

 

The Government of Maharashtra (GOM) made a presentation to the Prime Minister of India in August, 2003, on the initiatives needed for Mumbai’s revival. The consulting firm of McKinsey collaborated with Bombay First (an organization representing commercial and industrial interests) to prepare a document titled ‘Vision Mumbai’ on what needs to be done to transform Mumbai into a world class city. This report has cited both documents extensively. Though the scope of both documents is wider than the focus of this report, many of the recommendations regarding housing for the poor are relevant for our purposes. Even if the viewpoint of the alliance is different from both governmental and corporate perspectives, there are many areas of overlapping consensus.

 

Specific actions to be taken, some of which are recommended both by the Bombay First-Mckinsey Report and the Government of Maharashtra are:

 

1)       The Government of India (GOI) should relax the Coastal Regulation Zone (CRZ) regulations and if the State Government relaxes No Development Zone (NDZ) regulations, 1363 hectares of land could be released for slum rehabilitation.

 

2)       Vacant lands under salt pans should be released by the GOI for public housing after relaxing CRZ. More than 70,000 households could benefit.

 

3)       All lands occupied by slum dwellers in areas belonging to the Airport, the Railways, the Port Trust, the Navy and other Central agencies should be cleared of slums by redevelopment and resettlement through cost-sharing and land-sharing.

 

4)       All pavement families (about 23,000) should be resettled using the SRA scheme.

 

5)       The Slum Rehabilitation Authority schemes should be made flexible so that different options are available depending on contexts and circumstances. Today, there is an insistence upon high-rise structures, the maintenance of which may not be affordable to the urban poor.

 

6)       The practice of free housing should be stopped and some payment should be compulsory for all, though the extent of payment could be linked to affordability.

 

7)       All communities seeking benefit of the SRA scheme need to be mobilized organized and educated so that community-driven development becomes the norm rather than builder-controlled development.

 

8)       The Rent Control Act needs to be amended to promote more rental housing.

 

9)       The Urban Land Ceiling Act needs to be repealed (in its present form) but some legislation is needed to prevent concentration of ownership in the hands of a few. Transparent procedures need to be adopted to avoid patronage and corruption.

 

10)   The tool of FSI must be flexibly used to bring more land into the market.

 

11)   Instruments need to be devised such that funds become available from the market to finance the infrastructure that will be needed as more land enters the market.

 

12)   Regulatory authorities should be set up by law to regulate land markets and must be free from political control or bureaucratic manipulation.

 

13)   Some public or semi-public agencies that hold huge vacant tracts of land – that they are unlikely to need for several decades – must be compelled to surrender them for housing for the poor.

 

14)   The GOI and GOM should invest more money in the construction of transit housing which is in short supply.

 

15)   Ways and means must be found to restore dilapidated buildings by giving incentives to tenants’ associations and transparent procedures followed.

 

16)   Public financial institutions must provide long term, low interest loans for housing to the poor.

 

17)   Urban poor funds need to be created for loans for income-generation and crises through partnerships between government, NGOs and CBOs.

 

18)   Initiatives to upgrade slums or resettle them must always be channeled through partnerships: of the organized poor, the market and the State.

 

Our experience on the ground suggests that unless there are organized communities of the urban poor, the benefits of development will not reach them. The development programmes of the State are hijacked by its elites and a corrupt bureaucracy while the working of the market tends to ride rough shod over the poor, as we have seen in the case of private developers under the SRA schemes. The task before us is to hold the State accountable to the poor while at the same time playing a watchdog role over the operation of market forces. We need to reform the State and make markets work for the poor.

 

In conclusion, we might mention that the Government of Maharashtra has appointed two committees to look into the problems of Mumbai and the alliance will make presentations before both. Currently, the Alliance is considering presenting before these committees concrete plans to resettle all families living on pavements, on Railway and Airport lands as also on Mumbai Port Trust lands.

 

The outcome of these presentations will be incorporated into the final version of this draft report.

ANNEXURE I – RAJIV INDIRA

				Sq. ft.	Sq Metres
	Plot details
1	Rajiv Indira	CRZ affected plot area (FSI ratio -1.33)		3,730	347
2		CRZ non-affected plot area (FSI ratio - 2.5)		15,809	1,469
3		Sub-total		19,539	1,815
4	Suryodaya	Suryodaya CRZ affected plot area (FSI ratio -1.33)		18,498	1,719
5		Ganga CRZ affected plot area (FSI ratio -1.33)		4,714	438
6		Sub-total		23,212	2,156
7		Total plot area (3+6)		42,751	3,972
	Buildings design details
8	Rehabilitation flat units	No. of units		209
9		Average size of units		258	24
10		Total area of rehabilitation flat units (8*9)		53,992	5,016
11	Rehabilitation utility units	No. of units		8
12		Average size of units		258	24
13		Total area of rehabilitation utility units (11*12)		2,067	192
14		Total rehabilitation area (10+13+area requirement for passages)		56,059	5,208
					-
15	Saleable flat units	No. of units		34
16		Average size of units		384.88	36
17		Total area of saleable flat units (15*16)		13,086	1,216
			RI I - No of units	7
			Average size of units	258	24
			Total area of saleable flat units (15*16)	1,806	168
			Rate per sq ft	1,938	180
			Suryo A+C - No of units	27
			Average size of units	418	39
			Total area of saleable flat units (15*16)	11,286	1,048
			Rate per sq ft	2,200	204
18	Commercial sales	Total area of commercial unit		765	71
19		Total sale area (17+18)		13,851	1,287
	TDR and other SRA-related calculations
20		Free sale component permitted		94,010	8,734
21		TDR available (20-19)		80,159	7,447
	Construction and related costs
25	Piling	Rajiv Indira	Phase I	4,400,000
26			Phase II	2,600,000
27			Additional - to be done	1,500,000
28		Suryodaya		5,000,000
29		Sub-total		13,500,000
30	Building construction	Rajiv Indira	Phase I - A - 19400 @ 635	12,319,000
31			Phase I - B - 13170 @ 535	7,045,950
32			Extra	2,300,000
33			Phase II - 23700 @ 535	12,679,500
34		Suryodaya	Rehab - 14255 @ 535	7,626,425
35			Basement - 2127 @ 805	1,712,235
36			Stilt - 1208 @ 320	386,560
37			Superstructure - 13851 @ 535	7,410,285
38		Sub-total		51,479,955
39		Total construction costs		64,979,955
40	Other related costs	Transit accommodation ([15,000 Rupees]*8)		3,135,000
41		Development charges ([14 Rupees]*7)		598,510
42		Extra water charges ([22.11 Rupees]*7)		500,000
43		Cost of electric supply ([2,000 Rupees]*(8+11+15))		514,529
44		Sewage charges ([7.43 Rupees]*(14+19))		627,096
45		Cost of water supply ([5.47 Rupees]*7)		238,298
46		Various expenses for approvals		100,000
47		Assessment tax		500,000
48		Supervision - 2% of total construction costs		1,299,599
49		Escalation - 2% of total construction costs		1,299,599
50		SRA costs ([20,000 Rupees]*(8+11))		4,340,000
51		Infrastructure costs		4,741,760
52		Sub-total		17,894,391
53		Total construction and related costs		82,874,346
	Sales
54		Flats ([2,000 Rupees]*17)		28,329,228
55		Commercial ([3,000 Rupees]*18)		2,295,000.0
55a		Comm. Basement Area=2127ft *2000		4,254,000
56		TDR ([811 Rupees]*21)		65,008,744
57		Total		99,886,972
	Financing calculations
58		Total construction and related costs (53)		82,874,346
59		TDR sales effected		18,506,760
59a		TDR expected app.Dec03		9,300,397
60		Total financing required (58-59-59a)		55,067,189
		31/05/2003
61		Funds being requested from CLIFF		30,000,000
			Received from Cliff	30,000,000
			Balance expected from Cliff
		Loan from Citi/FI
62		Loan already taken from Citibank		8,000,000
63		Additional loan being requested from Citibank (60-61-62)		612,680
64		`
61		Funds expected from SPARC Bfunds		28,643,974
			Utilised from SPARC Bfunds	28,643,974
			Balance expected from SPARC Bfunds	-
		Interest Accumulated to Date on Cliff		207,716
		Balance Interest expected to accumulate for Cliff		4,718,407
		Interest Accumulated to Date on Citi Loan		2,534,886
		Balance Interest expected to accumulate for Citi Loans		1,327,935
		Interest Accumulated to Date on SPARC Bfunds		497,533
		Balance Interest expected to accumulate for SPARC Bfunds		196,171
			76,739,300.10	9,482,646
69		Overall financial position of scheme (57-58-65-66-67-68)		7,529,980
				107,571	GPB
				167,333	US

All figures are in Rupees unless indicated ($1 = Rs.45 and 1 pound = Rs.70) 

ANNEXURE II – BHARAT JANATA

	Plot details
				Sq. ft.	Sq Metres
1	Bharat Janata
2		Plot area (FSI ratio - 2.5)		26,989	2507.38
7		Total plot area (3+6)		26,989	2507.38
	Buildings design details
8	Rehabilitation flat units	No. of units		147
9		Average size of units		260	24.143
10		Total area of rehabilitation flat units (8*9)		38,202	3549.021
11	Rehabilitation utility units	No. of units		5
12		Average size of units		260	24.143
13		area of rehabilitation utility units (11*12)		1,300	120.772599
		Passage		4,086	379.58
14		Total rehabilitation area		43,587	4049.3736
15	Saleable flat units	No. of units		50
16		Average size of units		600	55.7413601
17		Total area of saleable flat units (15*16)		30,000	2787.068
	Commercial sales	No of Units		8
18		Total area of commercial unit		1,712	159.048681
19		Total sale area (17+18)		31,712	2946.11669
	TDR and other SRA-related calculations
20		Free sale component permitted		58,102	5397.81501
21		TDR available (20-19)		26,390	2451.69832
	Construction and related costs
25	Piling	Bharat Janata	Phase I - Rehab	4,982,046
26			Phase II   Sale-	3,624,682
29		Sub-total		8,606,728
30	Building construction	Bharat Janata	Phase I - Rehab	22,695,989
33			Phase II   Sale-	16,512,438
38		Sub-total		39,208,427
39		Total construction costs		47,815,155
40	Other related costs	Transit accommodation ([20,000 Rupees]*8)		2,940,000
41		Development charges ([14 Rupees]*7)		377,852
42		Extra water charges ([22.11 Rupees]*7)		500,654
43		Cost of electric supply ([2,000 Rupees]*(8+11+15))		294,063
44		Sewage charges ([7.43 Rupees]*(14+19)) Total Bu Area		559,639
45		Cost of water supply ([5.47 Rupees]*7)		150,443
46		Various expenses for approvals		100,000
47		Assessment tax		500,000
48		Supervision - 2% of total construction costs		956,303
49		Escalation - 2% of total construction costs		956,303
50		SRA costs ([20,000 Rupees]*(8+11))		3,040,000
51		Infrastructure costs		3,142,732
52		Sub-total		13,517,989
53		Total construction and related costs		61,333,144
	Sales
54		Flats ([2,000 Rupees]*17)		60,000,000
55		Commercial ([3,000 Rupees]*18)		5,136,000
56		TDR ([811 Rupees]*21)		21,402,355
57		Total		86,538,355
	Financing calculations
58		Total construction and related costs (53)		61,333,144
59		TDR sales		18,000,000
60		Total financing required (58-59)		43,333,144
61		Funds being requested from CLIFF		43,317,483
			Received from Cliff	-
			Balance expected from Cliff	43,317,483
		Loan from Citi/FI		-
62		Loan already taken from FI		-
63		Additional loan being requested from FI (60-61-62)		-
64		Approximate HI guarantee required on additional loan being requested from Citibank ((63*20%)/70 Rupees)		50,000
61		Funds expected from SPARC Bfunds		9,448,472
			Utilised from SPARC Bfunds	1,369,660
			Balance expected from SPARC Bfunds	8,078,812
		Interest Accumulated to Date on Cliff		0
		Balance Interest expected to accumulate for Cliff		7,545,313
		Interest Accumulated to Date on FI Loan		0
		Balance Interest expected to accumulate for FI Loans		-
		Interest Accumulated to Date on SPARC Bfunds		67,848
		Balance Interest expected to accumulate for SPARC Bfunds		247,626
		Total		7,860,787
69		Overall financial position of scheme (57-58-65-66-67-68)		17,344,424
				247,777	GBP
				$385,432	US

All figures are in Rupees unless indicated ($1 = Rs.45 and 1 pound = Rs.70) 

 

 

ANNEXURE III – MILAN NAGAR

 

	Plot details
				Sq. ft.	Sq Metres
1	Milan Nagar
2		Plot area (FSI ratio - 2.5)		50,698	4,710
7		Total plot area (3+6)		50,698	4,710
	Buildings design details
8	Rehabilitation flat units	No. of units		327
9		Average size of units		275	26
10		Total area of rehabilitation flat units (8*9)		90,002	8,361
11	Rehabilitation utility units	No. of units		9
12		Average size of units		275	26
13		area of rehabilitation utility units (11*12)		2,478	230
13a		Passage		18156	1,687
14		Total rehabilitation area		110,636	10,278
					-
	TDR and other SRA-related calculations				-
					-
20		Free sale component permitted **		0	-
21		TDR available (20-19)		147,477	13,701
	Construction and related costs
25	Piling	Milan Nagar	Phase I	12,645,649
30	Building construction	Milan Nagar	Rehab - 110636*615	57,607,955
39		Total construction costs		70,253,603
40	Other related costs	Transit accommodation ([15,000 Rupees]*8)		-
41		Development charges ([14 Rupees]*7)		-
42		Extra water charges ([22.11 Rupees]*7)		500,000
43		Cost of electric supply ([2,000 Rupees]*(8+11+15))		654,009
44		Sewage charges (7.43Rupees]*(14+19))		822,264
45		Cost of water supply ([5.57 Rupees]*7)		282,600
46		Various expenses for approvals		100,000
47		Assessment tax		500,000
48		Supervision - 2% of total construction costs		1,405,072
49		Escalation - 2% of total construction costs		1,405,072
50		SRA costs ([20,000 Rupees]*(8+11))		6,720,000
51		Infrastructure costs		10,790,790
52		Sub-total		23,179,807
53		Total construction and related costs		93,433,410
	Sales
		Community Contribution *		1,635,000
56		TDR ([700/per sq.ft Rupees]*21)		103,234,074
57		Total		104,869,074
	Financing calculations
58		Total construction and related costs (53)		93,433,410
		Community Contribution		1,635,000
60		Total financing required (58-59)		91,798,410
61		Funds being requested from CLIFF		53,282,879
			Received from Cliff	-
			Balance expected from Cliff	53,282,878.56
		Loan from Citi/FI
62		Loan already taken from FI		-
63		Additional loan being requested from FI (60-61-62)		-
64		Approximate HI guarantee required on additional loan being requested from Citibank ((63*20%)/70 Rupees)		50,000
61		Funds expected from SPARC Bfunds		25,733,539
			Utilised from SPARC Bfunds	5,371,010
			Balance expected from SPARC Bfunds	20,362,529
		Interest Accumulated to Date on Cliff		0
		Balance Interest expected to accumulate for Cliff		5,772,312
		Interest Accumulated to Date on FI Loan		0
		Balance Interest expected to accumulate for FI Loans		-
		Interest Accumulated to Date on SPARC Bfunds		745,757
		Balance Interest expected to accumulate for SPARC Bfunds		473,651
		Total		6,991,719
69		Overall financial position of scheme (57-58-65-66-67-68)		4,443,944
				63,485	GPB
				$98,754	US
*	This is totally Community based Project meant for community.
**	There is no sale component proposed.

All figures are in Rupees unless indicated ($1 = Rs.45 and 1 pound = Rs.70) 

 

ANNEXURE IV – OSHIWARA

	Plot details			Sq. ft.	Sq Metres
1	Oshiwara District Centre/Goregaon Plot
2		Plot area (FSI ratio - 2.5)		105,749	9,824
5		Less 15% Recreation Ground		(15,862)	(1,474)
7		Total plot area (3+6)		89,887	8,351
	Buildings design details
8	Rehabilitation flat units	No. of units		655
9	R1+R2+R3in X2	Average size of units		607	56
10	&R4 in X4	Total area of rehabilitation flat units (8*9)		197,948	18,390
8a	Rehabilitation flat units	No. of units		53
9a	R5 in X4	Average size of units		288	27
10a		Total area of rehabilitation flat units (8*9)		15,259	1,418
	Rehabilitation Utility units	No. of units		15
13	R1+R2+R3in X2	area of rehabilitation utility units (11*12)		30,786	2,860
	&R4 in X4				-
	Rehabilitation Utility units	No. of units		3	0
13	R5 in X4	area of rehabilitation utility units (11*12)		2,841	264
		Total rehabilitation area		197,948	18,390
	TDR and other SRA-related calculations
20		Free sale component permitted
21	R1+R2+R3in X2  &R4 in X4	TDR available (20-19) @1.33		304,216	28,262
	R5 in X4	TDR available (20-19) @1.00		18,100	1,682
24		Total TDR available (21-23)		322,315	29,944
	Construction and related costs
25	Piling	Goregaon	@100 per sq ft	24,683,333
				-
30	Building construction	Goregaon	@ 515 per sq ft	127,119,166
34	*****	Incl Piling	Rehab - 110636*615	-
				-
39		Total construction costs		151,802,499
				-
40	Other related costs	Transit accommodation ([15,000 Rupees]*8)		-
41		Development charges ([14 Rupees]*7)		-
42		Extra water charges ([22.11 Rupees]*7)		1,000,000
43		Cost of electric supply ([2,000 Rupees]*(8+11+15))		1,346,000
44		Sewage charges (7.43Rupees]*(14+19))		1,833,972
45		Cost of water supply ([5.57 Rupees]*7)		501,042
46		Various expenses for approvals		200,000
47		Assessment tax		1,000,000
48		Supervision - 2% of total construction costs		3,036,050
49		Escalation - 2% of total construction costs		3,036,050
50		SRA costs ([20,000 Rupees]*(8+11))		14,520,000
51		Infrastructure costs		22,595,530
52		Sub-total		49,068,643
				-
53		Total construction and related costs		200,871,142
				-
	Sales			-
				-
56		TDR ([700/per sq.ft Rupees]*21)		225,620,771
	Financing calculations
58		Total construction and related costs (53)		200,871,142
60		Total financing required		48,665,743
				-
61		Loan being requested from CLIFF		48,665,743
				-
62		Loan already taken from RF		-
63		Additional loan being requested from RF (60-61-62)		-
64		Approx HI guarantee required on additional loan being requested from Citibank		-
				-
65		Interest on CLIFF loan requested (61*6%)		2,919,945
66		Approximate interest accumulated on loan already taken		-
67		Interest on total loan to be pd to Citibank ((62+63)*10%)		-
68		Approximate interest accumulated so far on funds borrowed from SPARC		-
		Total		2,919,945
69		Overall financial position of scheme (57-58-65-66-67-68)		21,829,685
				311,853
				485,104