Mumbai slums worth Rs 1 lakh cr

Housing more than half the city's population on a third of its area, they have become a golden goose for builders

It is a potential gold mine, if only it wasn't seething with life and people.

In a city that makes you pay like no other for the space you need to live, the sprawling acres of slums, breaking the monotony of shimmering concrete high-rises and gleaming complexes, are the only land left in the city to exploit.



From the tip of the island city, these globs of squatty shacks on the land extend far up to the northern suburbs, eyesore to its rich inhabitants, a given they have come to accept and ignore.

But their potential has dominated the imagination of three major groups, pretty much ever since they began burgeoning - the politician, the builder and the activist - and for reasons far removed from each other.

But before we dilate on the reasons, there's a fact that pounces from the pages of research papers across the world, on the deeply-studied modern phenomenon that is the slum: sitting on 30 per cent of Mumbai's total area, it houses double its population.

And from all this land, the builders smell money. And MiD DAY's decided to find out just how strong the reek is. After considerable research, the estimated real estate value of Mumbai's slums, works out to be over Rs 1 lakh crore. That is 1 followed by 12 zeros.

Mind it, this is only the estimated value of the present land acquired by the slums. If the floor-space index (FSI) of 2.5, allotted to the slums, is taken into account, the cost would multiply that many times. And except for a few, most can avail of this FSI.

1 lakh crore, really?

The juggernaut of a figure was arrived at after groundwork based on inputs from various parties.u00a0
According to the coordinator of the National Alliance of Peoples' Movements, Simpreet Singh, there are nearly 2,000 slum clusters spread across the city, which have between 100 to several thousands of shanties.

The figure were calculated on the basis of the approximate number of shanties in a slum, supposing each shanty is 10 by 10 sq ft, and multiplying it with the current property rate of slums in the market.

Pankaj Kapoor, MD, Liases Foras, a real estate rating firm, said, "The prices of slums in the island city would vary between Rs 25-30 lakh, because of the high redevelopment returns.
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The rates of slums in central and western suburbs may vary between Rs 8-10 lakh. It could be up to Rs 12 lakh for Dharavi. Also, around Rs 16 lakh for Golibar slum sounds legitimate".

Tot up

When the aggregate for all these above slums is taken out, it comes nearly Rs 83,000 crore.
But there are many other small slum clusters of which no records exist.
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These clusters include the slums in Borivli, Andheri, Jogeshwari, those on the fringes of Goregaon, and the Koliwada slums in the western suburbs.
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Ashutsoh Limaye, local director, strategic consulting, Jones Lang LaSalle India, an international real estate consultancy firm had mentioned in his blog, "In Mumbai, there exists no authentic and acceptable record of slum dwellers for planning authorities to work with."

If the rate of this entire small cluster is considered, which is about Rs 20,000-25,000 crore, the total figure would cross the Rs 1 lakh crore mark.

The builders' affinity
The popular perception is that staying in a slum is cheap, for the pocket at least. But because of the astronomical real estate rates in the city and the worsening paucity of land, property prices have been steadily climbing up. Not one builder in Mumbai would shy away from redeveloping a slum, insiders say.

And whenever anything goes wrong in the slums - an example from recent memory would be a fire breaking out - the first one under the shadow of doubt is the builder.

For builders, these slum pockets are virtually gold mines above the ground. Does that explain the frequent "accidents" that occur here? Activists leave that open for interpretation.

"Name any builder and they wouldn't shy away from admitting that they have any interest in slum land. Builders want to rake in profits and they are aware that slum pockets are goldmines. They don't mind paying a lot to shanty owners to get the land as they know that they can make much more money by exploiting it," said Simpreet Singh.u00a0

There's more

Some think that the figures are much higher than the estimated Rs 1 lakh crore.
Said Kapoor, "More than 30 per cent of Mumbai is covered by slums. If we calculate it for property prices, it would cross the Rs-1 lakh crore mark hands down. People prefer slums because it's on land that is ideal to suit their convenience. There are many who would choose to stay in a slum rather than go a far distance, as most of the slums are centrally located."

Sunil Mantri, president, Maharashtra Chambers of Housing and Industry, the representative body of leading developers in the state, aggress that the figure would be above Rs 1 lakh crore. "There is no authentic figure to establish the real estate value of the slums. But it would be above Rs 1,00,000 crore. Every year, extra slums get added to the city.
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"Currently our target is to construct 1-2 lakh houses every year. But in the last 10 years we have constructed only 1.10 lakh houses. Our target would go high, only if policies for slum redevelopment are made friendly for builders. We need to clear the slums because it's the only source of greenfield land development available," Mantri said.

He understands the unsubstantiated claims of builder play behind every mishap in the slums. "It is not true that builders are behind every accident in the slums.

But there does exist this perception among people. We need to change it and if the polices are favouring the redevelopment, I am sure we would be able to make Mumbai slum free in 10 years," said Mantri.

Cui bono?

Another builder, who didn't wish to be named, claims that it's obvious for people to point fingers at builders. "Who benefits from slums? It's not the government. It's either the slum dweller or the builder. Hence, accusing builders in case of mishaps is a norm."

According to Mihir Dhruva, MD, Habitat Group, a real estate company, "There is an acute scarcity of land in the city and slums acquire a huge chunk of land.

Today the developer has limited options because of the scarce availability of greenfield projects. Hence the slums play a vital role in the development of the city and that's the reason why slums become an integral part of the real estate."

A local broker from Malad who didn't want his name to be revealed said, "I can get you a shanty in this area for Rs 10 lakh with a commitment that soon the slum would go for redevelopment and within a year and half you will be staying in a flat which you can sell for nearly 15 lakh and more."

Rajan Thevar, a resident of Dharavi, said, "A small shanty bought now would cost you not less than Rs 12 lakh."

Why so significant?

Slums have always been lurking in the city's background, like a permanent fixture, ugly but so entrenched that it forms part of the scenery. Coming back to the three parties most interested in slums, politicians like them because it is almost a cachement area for them to derive voters from.

For developers, it's the only remaining source of land in the city to cash in on. For the government, it reduces the burden on the city's infrastructure. For activists, it's a platform to raise their voice for the disadvantaged and the marginalised.

The first and the foremost importance of the slums are for politicians. Slums have been a major vote bank for politicos. It is said that a person staying in slum wouldn't have electricity, water and proper sewerage facilities. But they would have a voter ID card.

Said a real estate expert said, "About 60% of Mumbai lives in slums that acquire 30% of its land. This reduces the burden on the city's infrastructure. As these people stay in slums, their source of income also comes from slums, taking a lot away from the public services which otherwise the government would have to bear the cost of."

He claims that if the slums are not developed, then it will burden the infrastructure. "If the slum dwellers are moved out of city limits, our infrastructure would collapse. If all of them come to work in the city using public transport, already overburdened, it won't be able to handle the extra load."

Slums, Shanties and Moolah

Brace yourselves for the mind-boggling math based on geography below.
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Dharavi, the biggest slum in the country, alone accounts for half the slums in the city. Spread across 535 acres, with nearly 2.33 lakh shanties, its current market price of a shanty in this area is up to Rs 12 lakh. This gives us a figure of nearly R27,965 crore.

Kandivli is another area, which is now populated with slums. The two prominent slum sectors over here are Lalji Pada and Hanuman Nagar. The total number of shanties here would be 45,000. When calculated with the present rate of Rs 8 lakh for a shack, the cost aggregates up to R3,600 crore.

The slums at Dharavi (aerial view) are part of the international tourist iternary and attract over a million visitors annually

Malwani has nearly 60,000 shanties and the ongoing rate for a small shanty would be nearly Rs 10 lakh per shanty. Which calculated comes to nearly R6,000 crore.

Antop Hill is another area notorious for its slum presence. There are nearly 25,000 shanties here and the price is up to Rs 10 lakh for a small shanty. The total value of the real estate in this slum would come nearly R2,500 crore.

Mankhurd-Govandi slums, which also include Cheetah Camp, Shivaji Nagar and other important slums of central Mumbai, has nearly one lakh shanties, and the prices vary between Rs 7-8 lakh for one. This figure when calculated comes to nearly R8,000 crore.

Behrampada has nearly 3,500 shanties and the rates Rs 15 lakh per shanty. The total real estate value over here would go up to Rs 525 crore.

Golibar Naka, one of the most controversial slums in the recent past has nearly 25,000 shanties and here the rate can go as high as 16 lakh per shanty. The value would be nearly R4,000 crore.

Kurla (Nehru Nagar, Vinoba Bhave Nagar) There would be more than 50,000 shanties spread in Kurla and the adjoining areas. The ongoing market rate here would vary from 8-10 lakh per shanty. Thus when calculated the amount comes to nearly Rs 5,000 crore.

Gareeb Nagar the slums that caught fire, are to the count of nearly 2,000 shanties and valued at nearly 16 lakh per sqft. The real estate value is R320 crore.
Areas like Juhu and Versova, which have a sizeable number of shanties, would cross the mark of 5,000 shanties but the rates are pretty low, about Rs 10 lakh per shanty. Hence, the total real estate value comes to nearly R500 crore.

Ghatkopar-Vikhroli, the Parksite-Vikhroli area has a famous slum on the LBS Marg stretch. It is said that there are more than 30,000 shanties in this stretch and the rate here is nearly 7-8lakh per shanty. The value is R2,400 crore

According to activists working in the slums, there are nearly one lakh shanties spread across the adjoining areas of the airport. This includes Jhari Mari, the fringes of Sakinaka, and other areas on the boundary of the airport. Each shanty measuring 100 sq ft would mean an area of one crore sq ft. The going rate for a shanty here is nearly Rs 14 lakh, which makes the total worth of the area about R14,000 crore.

Slums of Bhandup-Powai-Mulund belt are mostly on the hills. There are nearly 70,000 shanties. The real estate value of this area could go as high as 6-7 lakh a shanty as most of the shanties are located on the hills. The value of this area would be nearly R4,900 crore.

There are nearly 40,000 shanties in Asalpha and the surrounding region. The rate over here is not less than Rs 10 lakh per shanty. The value comes to R4,000 crore.

The other important slums of Mumbai is Ramabai Nagar and the adjoining area, there are nearly 18,000 shanties. The real estate value of this land goes to, Rs 1,440 crore. A shanty can cost here up to Rs 8 lakh.

The Posh Slums

City's Costliest
South Mumbai, with its sophisticated gentry and exorbitant properties, also tops the charts one of the costliest slums in Mumbai. Few in numbers, this developed area has little space available, hence the extortionate rates.

According to activists, there are nearly 3,500 shanties in Worli and, counting the ones strewn about, there would be 2,000 more. This would include the Geeta Nagar slums of Colaba, the Machimaar Nagar, slums in Napeansea Road and the Banganga area. On an average, the rate over here varies between Rs 30,000 and Rs 25,000 per sq ft. So the money at stake is nearly R1,500 crore.

The other spread is in Tardeo slums, with its 3,500 shanties, costing nearly Rs 25 lakh each. The total property value comes to Rs 875 crore.

Public vs Private
For the most part, the value of the slum depends on the land it is on. Builders are most interested in slums that are on government land. The interest goes down when it's on private land or footpaths. For, owners of shanties on state government land are entitled to a free house under the SRA scheme, but only if they have been staying there from before January 1, 1995. Thus a shanty on collector's land in Behrampada costs more than a shanty on the footpath of Mahim, as it assures the slum dweller of a house even if the slum is demolished.

Slum Watch

2,33,000: Slums in Dharavi

1,00,000: Mankhurd, Shivaji Nagar, Cheetah Camp

1,00,000: Airport fringes, Jhari Mari, Sakinaka

70,000: Shanties in Mulund, Bhandup, Powai

60,000: Shanties in Malwani

50,000: Slums in Nehru Nagar, Vinobha Bhave Nagar