Not Enough Land To House 1.25 Billion People? Think Again

If you are an omnivorous reader, the books you can access over the Internet are limited, but vast. While the number of books available over the Internet is rapidly increasing, you will still have more books than you would be able to read, say, in many lifetimes even if the process comes to a standstill tomorrow. This is just an example showing that certain things are finite, but vast, including land.

But, considering the ever-growing population densities of Indian cities, this might sound surprising. In Tamil Nadu capital Chennai city proper, there are 25,854 people per sq km; in Delhi, it is 25,535 and 20,694 in Mumbai. With the existing floor space index (FSI) levels, it is very difficult to raise the amount of space consumed by people in these cities. This still does not mean that there is a scarcity of land.

Contrary to popular belief, in India, there is sufficient land to fulfill all human wants and needs. Economist Ajay Shah once pointed out that if you placed 1.2 billion people in four-person homes of 1,000 sq ft each, and two workers of the family into office/factory space of 400 sq ft, this requires roughly one per cent of India's land area assuming an FSI of 1.

What stops the vertical growth then?

Human beings need different amenities and facilities to survive. They would live in a place which would provide them the best of such services. We would need transportation networks that make such proximity possible on a large scale, while minimising risks that come with proximity. This is why people live in tiny rooms in large cities where they are productive enough to satisfy their needs the best they can. To be closer to people, they sacrifice space. More importantly, to be closer to people, they risk their lives. Slums are breeding grounds of diseases because water supply and sanitation are insufficient.

Managing the crowd

India, the 33rd densest country in the world, has population density of 368 people per sq km. However, it is not exceptionally dense, by world standards. Countries such as the Netherlands, South Korea, Singapore and Hong Kong are far denser. Even Vatican City, which has a population of 826 people, is five times as dense as India. In US' Manhattan, the population density is 25,846 people per sq km, higher than the population density of 20,694 people per sq km in Mumbai city. But, latest estimates show that the average sq ft consumption is 48 in Mumbai, while an average citizen had a 230 sq ft size studio apartment for himself in Manhattan in 2012. This was four times the space an average resident of Manhattan enjoyed in 1910. A vastly population does not necessarily mean that a city is dense. More importantly, if a city is dense, this does not mean that it is crowded.

Singapore, for example, is denser today than it was 65 years ago but far less crowded. When the city-state's population grew to 5.47 million in 2014 from 1.7 million in 1960, average floor space grew, too. It became far less crowded and denser at the same time. This is done by building more floor space, though the city-state is spread over 719 sq mt land. In Singapore, land is in short supply, but this did not lead to crowding or congestion like it did in Indian cities.

In Shanghai, the most populated Chinese city, floor area per person in 1984 was merely 3.6 sq mt. But, it had risen to 34 sq mt per person in 2010. During this period, Shanghai's population had grown from over 12 million to 23 million. The fact is that when population grows, floor space consumption often grows. Even in Mumbai, floor space consumption grew since independence. 

For all practical purposes, the land we have is virtually infinite.  The only limits on floor space that can be built on land are the level of technological progress, expertise and political freedom. Safe elevators run on electric power, for example, allowed people to build skyscrapers with greater floor space on limited land. Railroads and automobile, for example, allowed people to build greater floor space in the suburbs. With better transportation networks, people were able to develop land from the city. In ancient cities, people used to cluster together near city centres, which made these extremely crowded. Elevators, automobiles, railroads, modern construction methods and intellectual progress allowed people to enjoy proximity while enjoying more space.

In India, this has not happened to the extent it should have because:

In large Indian cities, FSI is in the range of 1-2. If the floor space index or FSI is 3, this means that on a plot, you can build floor space that is thrice the size of the plot. In most large cities, FSI is in the range of 5-15. In the CBD of Singapore, it is 25. 

There is a shortage of skilled workers in the construction industry. 

Transportation networks are not well-developed. Mass transit does not exist in many parts of the country. High population density in Indian cities also hinders widespread automobile usage. Trains and buses are overcrowded. 

There is very little data on real estate or home prices in India. Again, this implies a shortage of “people”.

Urban planning is often done without taking into account real estate prices. Across the world, FSI regulations and other real estate regulations are made considering market prices. 

Regulations restricting building in coastal zones constrain the supply of land. Even though it was repealed, laws like the Urban Land (Ceiling and Regulation) Act, 1976 put an upper limit on the urban land one can acquire. Even today, uncertainty governing the implementation of such laws hinder real estate development. 

Real estate developers, firms and home buyers often find it difficult to anticipate how the regulatory framework may change. For example, the uncertainty governing the Mumbai Draft Development Policy has halted development in many parts of the city. This is also true of the environmental zone regulations along the Okhla Bird Sanctuary in Noida. 

The value of land improves when there are more offices, hospitals, parks, schools and other amenities nearby. But, Indian cities are more monocentric than American cities. This means that amenities are more concentrated in city centres, making suburban living difficult. 

The value of land will rise when there are clear property titles to it, and when courts and police stations function well. Similarly, land is more valuable when there is proper infrastructure, like roads, water supply and sewage systems. For instance, Dharavi is near the Bandra-Kurla complex. But, for land in Dharavi to be prime property, there should be secure property rights and better infrastructure.

Even the supply of land itself is increasing. The government has been clearing more land for development ever year, and reclaiming wasteland. With a rising agricultural productivity, land usage for this purpose is also declining. Similarly, lesser land is needed today for real estate development because our ability to build greater floor space on limited land is rising.  Even vast tracts of idle government land are increasingly being put to more productive use. Economist Paul Romer expects world population to reach a peak of 11.3 billion in 2210. Much of this population growth will happen in countries such as India and China. But, even then, we would have more than enough land to house everybody. After all, the entire world population of over seven billion people may fit into Texas.