How Mumbai Can Make Homes Affordable By Utilising Idle Land

Mumbai's Island City faces a severe shortage of land. Mumbai's central business district (CBD) , Nariman Point, is in the Island City. This imposes severe constraints on the city, and the development of real estate in Mumbai becomes difficult.

Private property rights are not clearly defined, and the people who own informal settlements in the Island City are not able to enter formal transactions, though their dwelling units may fetch them even up to Rs 1 crore or more.

As much of the land area around Island city is covered by water, it is difficult to get the maximum value out of the existing space because private firms and institutions in the island city cannot be accessed by a larger population.

Much of the built-up area of Mumbai, hence, is spread over a larger area which makes the average commute in Mumbai longer.

The FSI (floor space index) in much of the Island city is 1.33. This is exceptionally low. Urban planning experts think that this is the single-biggest constraint that Mumbai faces.

However, a significant fraction of the land in Mumbai is unused. So, even if all other constraints persist, Mumbai still can do much better by putting such land to use.

For instance, Mumbai will soon have India's largest tower that costs over Rs 10,000 crore on land owned by Port Trust. This 130-storey building will house many private firms. This project was not done at the expense of the government, but from funds they received from private firms and public firms that pre-booked units in this tower. Though the Ministry of Shipping is yet to finalise the location of the tower, it would be near Nariman Point, Mumbai's de facto CBD.

How can Mumbai utilise such land better?

According to a draft plan prepared primarily by Alain Bertaud, Robert Buckley, and V.K. Phatak, if the government puts 1,800 acres of the Port Trust, 400 acres of mills that are no longer functional, 300 acres of Indian railways and 800 acres of land to use, the Brihanmumbai Municipal Corporation (BMC) can earn over a billion dollars per year. This is nearly 66 per cent of the BMC's budget.

As a large portion of land in Mumbai is unused, the squatters in the city impose great costs on infrastructure here. Bertaud, Buckley, and Phatak estimates that this imposes a cost of millions of dollars on the government. This is unnecessary because if the unused land is put to use, encroachers would be able to live in formal settlements without exerting pressure on the city's infrastructure.

This is true not just of Mumbai, but for India as a whole. Many of India's slum-dwellers encroach on government land, lying idle for long. It is estimated that it includes 1,198 acres of land of Indian railways, 2,876 acres of Ministry of Railways, 5,800 acres of Department Of Public Enterprises, and 5,000 acres of Ministry of Steel, and the land owned by Heavy tries and Port Trusts. The government can do an inventory of unused land, and calculate whether the benefits of government agencies holding such land outweigh the costs.