Slum rehabilitation is a business, not social service

No exhaustive explanation is needed on how Mumbai loves slums. People want cheap labour for household chores or commercial units; it comes from slums. The political class wants votes, and slums are an assured vote-bank, because a larger section of society that comes from the upper middle-class and middle-class, doesn't vote.

A small section of the society abhors slums, and because their heart goes towards the ‘betterment' and a clean-up of Mumbai - once known as a disciplined, beautiful business hub on the west coast of India, whose foundations to sustain burgeoning growth were laid by British.

Thanks to the limitations due to its geographical boundaries - originally a city of seven islands - Mumbai kept on adding people, but did not add adequate, affordable housing stock. People had money but no decent and affordable homes to buy. There have been efforts to accommodate people - such as BDD chawls, spread on 92 acres and built by the British, and the MHADA colonies, developed by the state agency mandated to create a housing stock.

But, with the disproportionate growth in terms of housing stock or its quality, and expectations of buyers, Mumbai added slums in thousands, thanks to minimum or no efforts to check or regulate them. No political party - be it ruling or in opposition - speak on effectively checking the growth of shanties, or oppose efforts to protect them. The administration, be it the Brihanmumbai Municipal Corporation (BMC) or the central and state governments, rarely takes any concrete efforts to control it.

It's not that demolitions didn't happen; political parties demanding alternate accommodation always opposed them. And thus, the concept of ‘legalisation' of slums was invented. The present concept of slum rehabilitation was mooted by the Shiv Sena, when it promised to rehabilitate 40 lakh slums dwellers during the 1995 elections.

And the fact is, more than 18 years since the Slum Rehabilitation Authority (SRA) was created, not more than 6.7 lakh people have been accommodated. The figure of 40 lakh has now gone way beyond 65 lakh in 2,031 slum pockets in the metropolis.

Of the 1.5 lakh plus tenements constructed under SRA, hardly any structure meant to rehabilitate people can be said to be ideal, in terms of architectural design and facilities. But, the commercial structures built in the name of recovery of cost to rehabilitate slum dwellers are architectural marvels.

How is this possible? It's because an SRA project gets a floor space index (FSI) of more than 3, whereas it is 1 and 1.33, for normal projects in Mumbai city and suburbs respectively. In addition, the state has allowed a profitable deal to developers.

The SRA rule says that an FSI of 3 will be given for projects where 500-650 slums exists on a 1-hectare plot, and an FSI of 4 will be given in case more than 650 exist on a 1-hectare plot. In a bid to exploit the maximum FSI, slum records are fudged. Cases fought in courts are testimony to it.

Significantly, slum rehab projects require less investment, as slum land comes at dirt-cheap prices. A slum at a prime location easily doubles profit margins. The developer in SRA is allowed to maintain very little open space as compared to a normal housing project. In simple terms, a developer in SRA is allowed construction of 2,700 sq ft on a 1,000- sq ft plot. Besides, the premium payable to BMC for this is just 10 per cent of the existing rate.

Most importantly, the transfer of development right (TDR) generated at SRA projects offers astronomical returns to the builder. Today, the market rate of slum TDR is the highest - it was Rs 4,000 per sq ft some time back. The TDR of a recreational ground (RG) or a public ground (PG) comes with high premium rates payable to the BMC, but slum TDR is merely 10 per cent of the normal premium rate.

Above all, the slum TDR is allowed to be utilised in corridor areas i.e. areas falling within the vicinity of Mumbai railway tracks and Express highways. It is Swami Vivekanand Road in the western suburbs and Lal Bahadur Shashtri Road in the eastern suburbs, where property rates are always high. Other types of TDRs are not allowed in these areas. Given the market rates of commercial and residential properties in Mumbai, an SRA developer earns mind-boggling profits.

Given these facts, slum rehab projects are hot cakes in the Mumbai property market, involving developers and their godfathers sitting in the corridors of power. No developer worth his salt can say he does business without political patronage (read: involvement). So, here comes the legalisation of maximum of slums. It will be on till the day the city crumbles downright.

- The writer is Political Editor, MiD DAY