Quick Take: Why Unauthorized Colonies Continue To Mushroom In Delhi

The Municipal Corporations of Delhi had recently said in an affidavit before the High Court that many live in unauthorised colonies in Delhi because approved plots in Delhi, existing flats and upcoming properties in Delhi are expensive. Economists who have been studying residential property markets have long been maintaining that people live in illegal colonies or slums and not in approved properties to forge affordable home solutions in cities where approved properties are beyond their means. Complying with regulations is so prohibitively costly that 80% of the buildings in Delhi have been erected without complying with the regulations, including norms on structural stability. The Delhi government, however, is keen on on regularisation of unauthorised colonies in Delhi.

The regulations and controls that exist in the residential property market have forced many people to live in illegal colonies. The government has frozen large tract of land by setting it aside for planned development. The supply of land being limited, the development of property in Delhi is slow. This is a major cause of homelessness among low-income urban Indians. 

Rent controls restrict the supply of regularized homes that landlords can rent out at reasonable rates. When the government lowers the rental rates through legislations, not many land lords will be willing to rent out their premises at low rates. This lowers the rental residential property stock and the stock of homes in general. When the residential property stock is lower, the price of homes will certainly rise. Therefore, low income people who cannot afford private apartments in Delhi or do not have access to public homes are forced live in unauthorized colonies. 

Moreover, regulations such as those that make it mandatory for home buyers to consult registered architects or structural engineers have also contributed to the increase in the prices of residential property in the national capital. Complying with various government regulations is expensive and inefficient. But, construction of homes in illegal colonies, many academics have noted, is more responsive to demand and efficient. This is a major reason for the shortage of residential properties and the proliferation of illegal colonies in Delhi.