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APRIL 2014A Cushman & Wakefield Research Publication
CHALLENGES &OPPORTUNITIES FORTHE HOUSING SECTORIN URBAN INDIA
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Contents
INTRODUCTION 2
URBANIZATION AND ITS IMPACT ON
HOUSING 5
DOMESTIC CASE STUDIES 12
INTERNATIONAL CASE STUDIES 17
RECOMMENDATIONS & CONCLUSION 22
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Urbanization Facts
Indias rate of urbanization was last recorded at 31.1%; much lower than China,
Indonesia, Brazil and Mexico
Presently, urban India is home to 377 million people
Urban India is expected to house 600 million people by 2031, an increase of 59% from
2011
Indias urban housing shortage is around 19 million as per C&W Research's estimates
India ranks 134th among 137 countries; has the worlds most unclean air
In India, slum population in 2011 was 66 million; projected to be 105 million by 2017Indian cities are deficient in basic amenities such clean drinking water, sanitation and
lighting facilities
Public transport accounts for 27% of urban transport in India. Indian roads are already
choked. Journey speeds in India is set to reduce by more than 50% by 2040
Source: Census Data 2011, Planning Commission, World Bank
1
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INTRODUCTION
Urbanization plays a crucial role in the economic development of
any nation. History bears testimony to the fact that urbanization,
in most cases, has accompanied economic growth because it is
characterized by modernization, industrialization and sociological
development. Because of these linkages, it is believed to be a
precursor to economic prosperity. It is a well acknowledged fact
that India and China (two countries with the worlds largest
population), backed by strong economic development and growth
will drive shifts in the world economy. If India has to live up to
this expectation, there is little room for error from here on.
Planned urbanization strategies will have to be core focus and
plans must be executed.According to the 2011 census, India hasa population of 1.2 billion citizens; 31.1% of the population or
around 377 million people reside in urban agglomerations; this is
not as high as some other developing countries and leaves
significant headroom for rapid migration in the future.
India: Rural Urban Share
89% 83%72% 69%
11% 17%28% 31%
1901 1951 2001 2011
Source:Census 2011
Urbanization: India vs. Other Developing Nations
45%
54%
31%
78%
87%
China Indonesia India Mexico Brazil
Source:12th Planning Commission
India: Population Growth Trend
1.211.03
0.85
18%
22%
0%
5%
10%
15%
20%
25%
0.00
0.50
1.00
1.50
2011 2001 1991
Billions
India -Population % Change
Source:Census 2011
Although the % share of urbanization is gradually increasing, India
ranks low as compared to other developing nations.
APRIL 2014
A Cushman & Wakefield Research Publication
Rural Urban
According to the Planning Commission, urban India is going to be
home to 600 million people by 2031; an increase of 59% from
2011. Clearly, India is a country on the move, but the question is
whether Indian cities will be prepared to accommodate such an
influx of population whilst providing basic and quality amenities
to its dwellers.
The core problem with Indias urbanization lies in the fact that it
has barely paid attention to urban transformation so far.
Urbanization has taken place in a largely unplanned fashion. Life
in metropolitan cities means wading through congested roads
and heavy traffic, suffering from pollution and compromising on
living standards. Studies conducted so far on urbanization in India
reveal alarming facts; evidences which exemplify the truth that
India must now wake up and take measured steps towards
sustainable urban development.
According to a McKinsey report titled Urban Awakening,
India fails to meet basic standards of quality living when
judged by parameters such as available water supply, public
transportation, open spaces and parks, sewage and solid
waste treatment.
Rapid urbanization has caused wide spread environmental
degradation in the country.Yale Center for EnvironmentalLaw & Policy presented a study at Davos recently which
stated that among 132 countries, Indias air is the worlds
unhealthiest, beating China, Nepal and Bangladesh.
India has failed to provide urban dwellers basic needs such as
housing. In 2012, the Ministry of Housing and Urban Poverty
Alleviation (MHUPA) stated that there is an under-supply of
18.78 million housing units in urban India, of which, nearly
10 ALARMING FACTS ABOUT URBANIZATION IN
INDIA
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Drainage Connectivity Drinking Water Source
Lighting Source Latrine Facility
Closeddrainage : 45%
Opendrainage : 37%
No
18%
drainage :
Best Practice: 100% Closed Drainages
Tap Water : 71%
Well : 6%
Hand-Pump : 12%
Tubewell/Borehole : 9% Other Sources : 2%
Best Practice: 100% from Tap Water
Electricity :92.7%
Kerosene : 6% Other Sources : -1%
Best Practice: 100% Electricity
Within
81%
Premises :
Not Within Premises : 19%
Best Practice: 100% Within Premises
Source:Census 2011
CHALLENGES &
OPPORTUNITIES FOR
THE HOUSING SECTOR
IN URBAN INDIA
Source:Census 2011
Source:Census 2011 Source:Census 2011
95% affects the Economically Weaker Sections (EWS) and
Low Income Group (LIG) of the urban population.
People who belong to the EWS and LIG sections have no
access to formal housing finance. Several of them earn daily
wages and live in slums. The 2011 Census enumerated that
nearly 65.5 million people reside in slums in Indian cities
(13.9 million households). Slums proliferate in almost all
metropolitan cities in India.
As per 2011 Census, 70.6% of urban population is covered by
individual water supply connections, compared with 91% in
China, 86% in South Africa and 80% in Brazil. Duration of
water supply in Indian cities ranges from 1 hour to 6 hours,
compared to 24 hours in Brazil and China and 22 hours in
Vietnam.
There is a coping cost for inadequate infrastructure. For
instance, due to inadequate supply of water, consumers often
end up paying significantly more than the average price of
water. In a MoUD (Ministry of Urban Development) study in
2010, none of the 483 cities studied had healthy and clean
drinking water.
The MoUD study in 2010 stated that based on a sample of
87 cities, under business-as-usual circumstances, in 20 years,
the expected average journey speeds would decrease from
17-26km/hr to 6-8km/hr.
Rapid population growth and urbanization will also have a
dramatic effect on our environment. In January 2014, the Yaleth
Environmental Performance Index ranked India 174 out of
178 countries on air pollution. This report was presented in
the Davos Economic Forum. India beat China, Sri Lanka,
Nepal and Pakistan to become the country with the worldsmost unhygienic air.
According to Indias Central Pollution Control Board, in
2010, particulate matter in the air of 180 Indian cities was six
times higher than World Health Organization standards.
More people die of asthma in India than anywhere else in the
world.
A BMC (Brihanmumbai Municipal Corporation) report in
2012 said that air, noise and water pollution is at an all time
high in Mumbai.
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4
Moreover, cities should be able to provide basic services and
amenities to migrant workers and economically vulnerable
sections of society. India is visibly deficient in providing even basic
services to its existing urban population. Basic requirements such
as drinking water and sanitation fail to meet best practice
standards by a huge margin.
Urbanization in India today, is mired in issues of gigantic
proportions. If we fail to attend to these issues, our urbanization
will lead to urban decay rather than urban development.
Our cities have grown in an unplanned and haphazard manner
due to rapid urbanization and lack of planning. Cities are
overcrowded because of natural population growth and migration
of people from the countryside to industrialized cities in search
for employment opportunities. This has put pressure on the
natural resources of cities; hence, more consistent efforts have to
be made to replenish resources so that people can meet basic
standards of living. In absence of habitation, the poor are driven
by necessity to live on footpaths or in slums having unhygienic
sanitary conditions. The pressure of increasing population has led
to construction of sky-scrapers to accommodate maximum
number of people within minimum space. But this has created
other issues such as fire hazard, lack of civic amenities such as
parks, open spaces and playgrounds.
India must rise and respond to the challenge of urbanization; it
will shape the future of the nation and its people. Moreover,
Indias urbanization is a subject of global interest and can
potentially attract billions of dollars as investments. Typically,
urbanization boosts industries such as transportation,
communications, food, healthcare and education and presents
lucrative opportunities for investment. Rapid development will
provide higher returns to investors than investments made in
developed countries. But in order to attract investments, higher
efficiencies must be built into the process of urbanization; our
cities must be run better.While India has underinvested in itscities, its toughest competitor - China paid heed to the demands
of urbanization and tackled it via appropriate funding, governance
and planning.
Its not that India has never taken a step in the right direction.
Almost a decade back, the Government launched the Jawaharlal
Nehru National Urban Renewal Mission (JNNURM). According
to March 2012 data from the Ministry of Urban Development
(MoUD), the JNNURM has approved projects worth $11.2
billion. But has it really helped transform Indias urban landscape?
Policies and plans must be supported by sound execution.
Urbanization needs vision and necessary capabilities to be built
over a period of time. Current projects that can potentially alter
the urban landscape in India are facing execution delays because
of bureaucratic and regulatory bottlenecks.The mandate now isto transform and increase the use of land, expand infrastructure
at the same time and speed up execution. This has to be a
constant effort. Daunting as it may seem, in each unique
challenge, also lies an opportunity.
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URBANIZATION AND ITS
IMPACT ON HOUSING
One of the biggest pitfalls of Indias unplanned urbanization is the
under-supply of housing units.According to the Ministry ofHousing and Urban Poverty Alleviation (MHUPA) in 2012 there
were 18.78 million units housing units short in urban India; nearly
95% of this shortfall was in the economically weaker sections
(EWS) and low income group (LIG) housing.
The urban housing shortage is closely linked to the creation of
slums in each major metropolitan city in India, which are
detrimental for the urbanization agenda.
According to Cushman & Wakefield Research, demand for urban
housing will scale up by nearly 12 million units by 2017 based on
just the current growth of population. Around 23% of this total1
demand will be generated in the top eight cities of India . By 2021,
the urban population is expected to increase to nearly 500
million, totaling to about 35% of the total population of India.
Hence, the total housing demand in the country by 2017 could be
as high as 88.78 million units.
Source:Cushman & Wakefield Research, National Housing Board (NHB),
Ministry of Housing and Urban Poverty Alleviation
Housing Shortage Units in Mn
Total Demand 88.78
Urban shortage in 2012 18.78
Rural shortage in 2012 43.67
Additional demand due to population
growth in 2012-2017 26.33
65
105
2011 2017
Slum Population in Urban India (In Mn)
Source:Census 2011
3.1
1.9
1.3 1.3 1.3 1.2 1.1
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
UttarPradesh
Mahar-ashtra
WestBengal
AndhraPradesh
TamilNadu
Bihar Rajasthan
InMillion
Housing Shortage : Top Seven Indian States
Source:Ministry of Housing and Urban Poverty Alleviation (MHUPA), 2012
Total Housing Shortage Projection
House Condition Urban Households
64% 69%
32% 29%
4% 3%
2001 2011
Good Livable Dilapidated
Source:Census 2011
CHALLENGES &
OPPORTUNITIES FOR
THE HOUSING SECTOR
IN URBAN INDIA
5
1. Top eight cities of India include Ahmedabad, Bengaluru,
Chennai, Hyderabad, Kolkata, NCR, Mumbai, and Pune
The 2011 Census enumerated that 13.9 million households with
a total population of nearly 65.5 million people reside in slums in
dilapidated.
The census definition of Good Housing is, Houses which do not
require any repair and are in fairly good condition.Although the
situation has marginally improved from year 2001, the overall
scenario is still depressing. Specific action plan towards migration
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How can Indias Urban Housing Crisis be Addressed?
Boosting affordable housing
Building integrated townships
Providing impetus to redevelopment
Increasing FSI limits and building vertical cities
In a country where millions of people are homeless, the importance and relevance of affordable housing can hardly be exaggerated. No one
can argue that there is a huge unmet demand, which, if tapped, will result in high velocity of sales. Majority of reputed developers in India do
not build affordable housing projects. They are mainly focused on mid to high-end and luxury projects. As mentioned, Indias urban housing
shortage is led by EWS and LIG sections but the upcoming supply in urban centres is beyond the reach of the people who belong to such
sections.
Integrated townships are built in places where a large tract of land is readily available. These townships essentially contain retail, housing as well
as commercial developments. Such townships also have hospitals and schools; so every amenity is in close proximity. Several states in India are
promoting the concept to ease pressure on big cities.
Slums are unfortunately a part of Indian cityscape. Majority of the people who belong to the EWS and LIG groups work in unorganized
sectors and live in slums for lack of better options. The problem can be resolved by demolishing slums, temporarily housing dwellers in
another locality and creating better quality housing to replace the slums. Similarly existing old buildings can give way to vertical cluster
development. Slums and old buildings are a part of central business districts and city centric locations at the moment. Unfortunately
redevelopment is a much politicized subject in India; tenants often do not agree to move to temporary houses in far flung locations. However,urbanization mandates effective land-use and redevelopment is an intrinsic part of that process. It needs to be streamlined in a manner that
benefits all stakeholders.
There is a strong pitch to increase permissible Floor Space Index (FSI) in Indian cities considering the space crunch in the city. Higher FSI
brings in more supply into the market, creating more homes. But vertical growth must be planned.Without the required infrastructuralupgradation, higher FSI will result in extra load on the already congested and chaotic roads. It must be noted that India lags behind in FSI
norms compared to top cities of the world. Cities such as New York, Tokyo, Hong Kong and Shanghai offer FSI limits between 10 and 15.
Comparatively in Mumbai, the permissible FSI ranges between 2.5 and 4 for redevelopment projects and between 1.33 and 4 for non-
redevelopment projects. Interesting anecdote - Mumbai is perhaps the only city where FSI limit has been downscaled; FSI limit was set as 4.5 in
Mumbai when it was introduced in 1960s.
ESSENTIAL PILLARS THAT CAN REDUCE THE URBAN HOUSING CRUNCH
of all housing stock to, Good Housing definitely needs to be
chalked out.
CURRENT REGULATORY APPROVAL PROCESSES
The table below provides a select list of the various legal and
Why Affordable Housing has not Worked in India
Land cost in urban city centres are high, often constituting more than 50% of the project cost for developers; this makes affordable
housing projects unviable.
Building affordable housing entails buying raw material at a cheaper cost so that the benefit can be passed on to the end-user or home
buyer. Land is the most important raw material for real estate developers. In order to build affordable homes, land can mainly be
purchased in peripheral areas of the city since cost in city centres are high. But peripheral areas of the city lack infrastructure facilities
such as good connectivity to city centres, water supply and sanitation.
Typically, in India, the process of acquiring necessary construction approvals for each project takes anywhere between 18-24 months. Such
a long holding period leads to additional cost escalation for developers.
People who belong to LIG and EWS segment have little access to organized finance.These people often do not have documents such as
proof of address, salary slips, etc.The housing finance industry is hence not geared towards providing finance to those who need it themost.
There is lack of sound government policies that enable and incentivize the affordable housing segment such that developers are geared to
build affordable housing projects.
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APPROVALS MUMBAI CHENNAI GURGAON
AUTHORITY TIME REQUIRED AUTHORITY TIME REQUIRED AUTHORITY TIME REQUIREDFOR APPROVAL FOR APPROVAL FOR APPROVAL
Ownership Revenue 15 days Chennai Metropolitan 12 months Revenue 3 days
Certificate/ Extract Development Authority Department
(CMDA)/ Taluka Office
Building Layout Development 1 month CMDA 3 months Directorate of Town 6 months
Approval Authority/ and Country Planning
Municipality (DTCP)
Non-Agricultural Revenue Minimum CMDA 2-4 months DTCP 6 months
Permission Department of 3 months
Tree Cutting Tree Authority 30-60 days Forest Department 2 weeks Forest Department 2-3 month
Approval Committee ofMunicipal
Corporation
NOC from the Municipal 15-30 days NA NA NA NA
Storm Water and Authority
Drain Department
NOC from the Municipal 15-30 days NA NA NA NA
Sewerage Department Authority
NOC from the Municipal 15-30 days NA NA Haryana Electricity 6 months
Electric Department Authority Board
NOC from the Municipal 30 days Traffic Department 30 days NA NA
Traffic and Coordi- Authority
nation Department
NOC from the In Mumbai, 30 days Fire & Rescue 2 - 3 Months Fire Department 3 months
Chief Fire Officer buildings above Services Department
24 meters in (DFRS)
height require
Chief Fire
Officer clearance
Environment MOEF/State 3 months to MoEF & Tamil Nadu 4-8 months MOEF 1-2 years
Clearance Environment Impact 1 year Pollution Control
Assessment Authority Board (TNPCB)
(SEIAA)/ State level
expert AppraisalCommittee
Ancient Monument Archaeological 6 months NA NA Archaeological (ASI) 2 months
Approval Survey of India Survey of India
7
regulatory permissions and approvals required from various
government bodies by anybody willing to develop a real estate
project. It also shows the time-frame mandated/suggested for all
permissions and approvals. However, most developers or
individuals undertaking any real estate construction have had to
submit various documents for approvals and comply to different
regulatory processes; often these mandated permissions take
longer than expected.
The above shows, the complexity of meeting all regulatory
approvals and gives us an idea of the exhausting time period and
Regulatory Approvals for Real Estate Projects
CHALLENGES &
OPPORTUNITIES FOR
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APPROVALS MUMBAI CHENNAI GURGAON
AUTHORITY TIME REQUIRED AUTHORITY TIME REQUIRED AUTHORITY TIME REQUIREDFOR APPROVAL FOR APPROVAL FOR APPROVAL
NOC from Airport Civil Aviation 3-4 months Airport Authority 1-2 months Airports Authority 3 months
Authority of India Department of India (AAI) of India (AAI)
Commencement Municipal 15-30 days NA NA NA NA
certificate Authority
Bore Well Registration Central Ground 60 days Central Ground NA Central Ground According to
Certificate(Outside Water Authority Water Authority Water Authority the nature
Municipal Limit) of project
NOC if near Coastal Coastal Zone 6 months NA NA NA NA
Area Management 1 year (+)
Authority
Permission for Collector & Executive 15 30 days Revenue Department 1 Month NA NA
Excavation / Royalty Engineer in the Ward
Payment Office (under the
Mines & Minerals
Act, 1957)
Road Access NHAI/PWD 60 days NHAI/PWD 3 Months NHAI/PWD 12 months
Highway /
Expressway
Lift Escalator Public Works Dept. 30-45 days Central Electr ical 2 Months Chief Inspector Lifts 30 Days
Installation Approval Authority(CEA) & Escalator
(PWD / CPWD)
Electric Substation Electricity 15 days Central Electrical 2 Months Electricity 2 months
NOC for all Distribution Authority(CEA) Distribution
Substation Authority Authority
Transformers in
Building (Electric
Service Provider)
Building Completion Municipal Aauthority 30 days CMDA 3-6 months DTCP 6 months
Certificate
Occupancy Municipal Authority 60 days Municipal Authority DTCP 6 months
Certificate
Permanent Power Municipal Authority 30 days Tamil Nadu Electricity 60 - 90 days NA NA
Connection Board (TNEB)
Permanent Water Municipal Authority 45 days Chennai Metro Water 60 days NA NA
Connection Supply and Sewage
(with inspection) Board (CMWSSB)
Permanent Sewerage Municipal Authority 30 days NA NA NA NA
Connection
Non Encumbrance NA NA Registration Department 7days Registration Department 3 days
Regulatory Approvals for Real Estate Projects
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APPROVALS MUMBAI CHENNAI GURGAON
AUTHORITY TIME REQUIRED AUTHORITY TIME REQUIRED AUTHORITY TIME REQUIREDFOR APPROVAL FOR APPROVAL FOR APPROVAL
NOC from Water NA NA CMWSSB 30 days NA NA
Supply & Sewerage
Board
NOC from Indian NA NA Indian Air Force (IAF) NA NA
Air Force (IAF)
NOC from the NA NA Central Ground Water 6 months NA NA
Central Ground Authority of India
Water Authority (CGWAI)
of India (CGWAI)
Structural Stability Municipal Authority NA if required by CMDA, 30 days NA NA
Certificate has to be furnished by
the building company
on request
Bui lding Permit Municipal authority 30-45 days Local Body (Corporation 30 - 120 days Haryana Urban 30 days
of Chennai) Development
Authority
Explosive Substances NA NA Ministry of Commerce 3 months NA NA
Gas Petroleum & Industry, Petroleum and
Approval Explosives Safety
Organization (PESO)
DG Sets Installation NA NA CEA 2 months Pollution Control 1 month
Approval Board
Lift Escalator NA NA CEA 2 months NA NA
Operation License
Submission of NA NA NA NA DTCP 6-9 months
Licence Application
Demarcation / NA NA NA NA DTCP 6 months
Zoning Plan
Approval by DTCP
Site Office Approval NA NA NA NA DTCP/Development 3 months
Authority
Damp Proof NA NA NA NA DTCP 2 weeks
Certificate
Swimming Pool NA NA NA NA District Magistrate 3-6 Months
Operation License after approval fromabout 4-5 Departments
like Police, HUDA, Fire,
District Deputy
Commissioner,
Municipality
Regulatory Approvals for Real Estate Projects
CHALLENGES &
OPPORTUNITIES FOR
THE HOUSING SECTOR
IN URBAN INDIA
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efforts required to be put in by developers and even individuals
seeking to construct a real estate project. This is further
compounded by the financial costs involved in getting the
requisite documents and approvals. Informal surveys conducted
by Cushman & Wakefield with developers have shown that it can
take up to two years from the planning stage to actual launch of
the projects by developers as they navigate the regulatory
processes. During this time, market dynamics can and do change
and expose the developers to unnecessary risks that affect the
viability of the projects. It is to guard against such risks that there
is a pressing need to ensure that regulatory processes are simple,
efficient and easy to implement.
One of the key issues for providing housing in urban areas
revolves around the availability and costs associated with
developable land. Depending on the city and location, land costs
can have a major chunk in the cost of housing and hence, issues
related to the availability of land have been difficult to resolve as
there are multiple facets linked with it. The Government has alsoplayed a big role in facilitating the acquisition of land for various
purposes including for various urbanisation projects that also
included land for housing. In a recent move, the Central
Government replaced the archaic Land Acquisition Act of 1894
with the Right to Fair Compensation and Transparency in Land
Acquisition, Rehabilitation and Resettlement Act 2013 to tackle
various long standing problems associated with the previous law.
This is the first Act that has attempted to address both
Acquisition and Rehabilitation & Resettlement (R&R).
The Act defines public purpose more definitively than before,
thereby reducing scope for misinterpretation. The Act also
forbids any change to the land-use after it has been acquired.
Further, objections to the purpose will be considered at an
appropriate government level.
Developers will need the consent of 80 percent of persons
whose land is acquired for private projects and 70 percent of
land owners in case of PPP projects. Moreover it provides for
compensation four times higher than the practice now in
rural areas and two times higher for urban areas.
The Act prescribes little on the governments involvement in
acquisition for private purposes; there is flexibility for the
The Right to Fair Compensation and Transparency in Land
Acquisition, Rehabilitation and Resettlement Act 2013
Salient Features
states to formulate their policy in this regard including the
area of land and percentage consent.
The Act is retrospective in nature; applicable to cases where
land was acquired earlier and no compensation had been
paid.
The procedure for acquisition and R&R will include a Social
Impact Assessment(SIA) which will cover the investigation of
public purpose, minimum extent of land required thereof,
estimation of displacement and social impact on affected
families apart from the overall cost versus benefit analysis for
the proposed project.
Timelines have been defined; 6 months for SIA, R&R package,
public hearings & enquiry into any objection; R&R should be
awarded within 12 months of public declaration; the Act also
incorporates penalties; 9 percent of the unpaid sums for
delays of one year and 15 percent of unpaid sums for delays
over one year.
To safeguard food security, the Act restricts acquisition of
irrigated multi-cropped land but for exceptional
circumstances. An equivalent area of culturable wasteland orland value has to be deposited with the government in case
of such an acquisition.
The archaic Land Acquisition Act of 1894 had to be replaced and
in our view the new Land Acquisition and R&R Act is a step in
the right direction. It addresses both acquisition and settlement
and also assesses the socio-economic impact on land owners and
farmers.
The implementation of this Act will provide an impetus owing to
the clarity of process and associated costs.
However cost of development will escalate as companies would
also need to budget for the compensations. Co-developing
projects is probably an option developers could consider. It must
also be noted that typically, developers acquire less than 50 acres
in urban areas and less than 100 acres in the rural areas. Hence,
the provisions would not apply to them. The Act caters to the
requirements of land for infrastructure projects and large
commercial projects such as SEZs.
The Act proposes to fix the compensation to be paid to the
Impact of the Act
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landlords. However, the method for calculation of fair market
value of the land is flawed as its provisions will work favorably
only in areas where there is an active land trading market. This is
because the market value of the land is to be derived from
records of land transactions in the last 3 years.
Some of the main issues that the Act has failed to address from
the landlords perspective are related to the irregularities in land
records and multiple land titles. In the absence of proper
ownership records, identifying the true owners and beneficiaries
of the compensation and R&R becomes a prolonged and difficult
task.
CHALLENGES &
OPPORTUNITIES FOR
THE HOUSING SECTOR
IN URBAN INDIA
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DOMESTIC CASE STUDIES
In order to approach urbanization in a planned manner, building
satellite townships is a must; such townships are the necessary
outcome of rapid urban development. Similarly integrated
developments promote higher quality of life, work-life balance
Manik
Baug
Sanghvi
Dapodi
Khadki
Army Area
Mula River
Khadki
Bazaar
SindhiColony
Sus Gaun
Ganesh Kindh
Adarsh
Nagar
Viman
Nagar
Phulenagar
Parvati
Kalyani
Nagar
Wadgaon
Sheri
Cavalry
Line
Magarpatta
City
GhorpuriKoregaon
Park
WanowriSasane
Nagar
Hadapsar
WanwadiMaharshi
Nagar
Navi Peth
Sangamvadi
Wadervadi
Parvati
Darshan
Kothrud
Bavdhan Goklalenagar
DattavadiHingne
BudrukhVittalvadi
Pune
Cantonment
PUNE
Rakshak
Society
Kavadewadi
Case Study 1 - Magarpatta City, Pune
MAGARPATTA CITY, PUNE
POSITIVE FEATURE : Innovative ownership model where
120 farmers came together to monetize their land asset
and created one of Indias most successful townships.
NEGATIVE FEATURE : Infrastructure around the
township remains a challenge.
Timeline of Development: Magarpatta City, Pune
Land underPune
Municipality
Since
19601982 1995 2000 2006
Land markedas Future
urbanisable
zone
MagarpattaCity wasapproved
Constructions
starts
Approvalreceived for
SEZdevelopment
12
and cleaner and greener environment. In India, the number of
integrated townships, business hubs and townships are on the
rise. In this section, we analyze three major initiatives that were
designed to sustain urbanization.
Fact Sheet
Magarpatta City is located 9 kms away from Pune's city center and covers a land area of 430 acres.
It is a unique case study in the real estate history of India because of its ownership dynamics; the entire development is owned by 120 farmers
and 800 beneficiaries.
In 1993-94, the owners (farmers) decided to form their own development company called the Magarpatta Township Development and
Construction Company in order to develop the land.
The farmers became shareholders of the company to the extent of the land they individually held; all shareholders would get a percentage of the
sale proceeds (revenue share).
It took the development company seven years to build the township; it promotes the walk to work theory in unprecedented measures. The
township also has faci lities such as a mall, commercial office hub, an educational institution, a hospital, power substations, library and petrol pump
within the campus.
The city was built on the foundation that seven amenities will be provided to its inmates; a clean and sustainable environment, good living
standards, a modern educational system, state of the art working conditions, and reliable security.
The township is environment friendly with large gardens, 25 lakh square feet of green cover, rain water harvesting and solar power.
Magarpatta Citys corporate occupiers include Accenture, Patni, Amdocs and WNS Global services; The Seasons mall has also opened with anchor
tenants like Shoppers Stop, Westside, Croma and Cinepolis.
The city provides employment to over 60,000 people directly and about 20,000 people indirectly.
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The township's Walk to work philosophy has helped occupiers
tackle the problem of attrition to a large extent. Despite the fact that
Magarpatta City charges its occupiers a marginally higher rental than
other commercial hubs in the vicinity, according to Cushman &
Wakefield Research, its vacancy is as low as 7.4%. Magarpatta City is a
Grade A development and such a low vacancy is testimony to the
quality of services and infrastructure facilities that the development
allows its occupiers.
Magarpatta City provides housing to over 35,000 people, absorbing
70% of its employees' housing needs; thus decongesting Pune and
ensuring planned urbanization.
Development in Magarpatta City also led to development in the
surrounding areas such as Hadapsar, Mundhwa, Manjri and
neighbouring Kharadi.
No degradation of the environment was one of the guiding principles
with which Magarpatta Township was built. It is an example of how
meticulous planning can go a long way in ensuring a clean environment.
The management adopted measures such as creating large gardens,
disposing waste in a scienti fic manner, using solar energy emission
control measures and value engineering products.
It took 7 years for the vision of Magarpatta city to materialize. In India,
approval process is one of the core issues that ail the real estate industry.
In the case of Magarpatta City, it was a double whammy as it was a
project that was first of its kind. Authorities had to be convinced that it
was a viable idea. There is a critical need to develop satellite townships;
Magarpatta city has opened channels of thought among land owners
who want to monetize assets; Government must be innovative and
encourage such developments.
More than 20,000 people who work in Magarpatta city do not live there.
Workers have to battle a high level of traffic congestion.
Financiers must also support such projects. Magarpatta Township
Development and Construction Company had no financial institution
until HDFC Bank decided to pitch in.
Project Management today is a specialized expertise and it could be
possible that the Magarpatta Township Development Company,
despite its path breaking initiative, is not equipped to handle all
aspects of the real estate business.
POSITIVES LEARNINGS
Case Study: Magarpatta City, Pune
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Fact Sheet
Mahindra World City is spread across 1,500 acres.
It is located about 50 km away from the main city of Chennai.
It was planned and promoted in association with the Tamil Nadu Industrial Development Corporation (TIDCO) via a Public Private Partnership
(PPP) model.
It became operational in 2006.
It connects directly with the National Highway (NH) 45 or the Grand Southern Trunk Road (GST) which is part of the Golden Quadrilateral
project, connecting the 4 metro cities Delhi, Mumbai, Kolkata and Chennai.
Along with the 4 metro cities, it also connects major Tier II cities such as Pune, Ahmedabad, Bengaluru and Vishakhapatnam.
It contains three sector specific economic zones dedicated to IT, auto ancillaries and apparel & fashion accessories along with a Domestic Tariff
Area (DTA).
The residential conclave within the township is about 77 acres in size and consists of two housing developments: Aqualily & Sylvan County.
61 companies currently operate in Mahindra World City.
Within its premises, it also has educational infrastructure, medical facilit ies, recreation centres, shopping mall and a multiplex.
It is surrounded by green cover which consists of hills, natural lakes and forest reserve, highlighting the importance given to preservation of
natural environment at the planning stage.
MAHINDRA WORLD
CITY
POSITIVE FEATURES :
Successful development mix;
world class infrastructure
provided; capable of attracting
global big wigs & providing
them with cutting edge
facilities.
NEGATIVE FEATURES :
People working in Mahindra
World City have to commute
long hours in overcrowded
public transport; no support
infrastructure is provided.
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Tiruttani
Walajapet
Arani
Kalavai
Nagari
Pulicat Lake
Puttur
Ponneri
Walajabad
Kakinada
Kanchipuram
Tiruvallure
NH4
NH45
NH205
NH205
NH5
CHENNAI
Sriperumbudur
Mahindra
World
City
MambakkamOragadam
Industrial
Corridor
Case Study II : Mahindra World City, Chennai
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It has successfully created a development mix ideal for global brands.
Braun, BMW India, Capgemini, Infosys, Wipro, etc. have set up shop, in
world class facilities. In the absence of such a development, these
companies would either not have an option to establish in Chennai or
choke in already crowded business districts.
The green infrastructure at Mahindra World City highlights the
importance given to preservation of the natural environment during
the land-use planning and design process and it would not be wrong to
state that this project, in totality, has managed to deliver a self
sufficient model with a high-end infrastructure enabling companies'
and investors' ease of operations.
The construction of Mahindra World City attracted several other
companies to set up operations in the vicinity. Hence it acted as an
impetus and put GST Road on the economic map of Chennai;
propelled demand for housing in pockets such as Gudavancheri,
Maraimalai Nagar, Singaperumal Koil and Potheri, which have now
emerged as prominent micro markets on the GST industrial corridor.
According to Cushman & Wakefield Research, as many as 1,100
residential units were launched in these pockets in 2013 and catered
to both the affordable and mid-income groups. The mushroomingresidential developments on the GST Corridor is indicative of how
urban planning can help decongest city centres and lead to balanced
regional development.
Mahindra World City consists of a Lifestyle Zone aimed at providing
housing and other social infrastructure to improve the quality of life of
its residents. The residential conclave in the Lifestyle Zone is about 77
acres in size and consists of two housing developments; this is a step
forward in the direction of planning initiatives which is a pre-requisite
while developing new urban areas to accommodate the growing
population and decongest city centres.
Whilst Mahindra World City provides the requisite infrastructure to
its occupiers, it fails to do the same for the workforce those
occupiers employ. For one, majority of the workforce do not have an
option to buy/rent houses within the premises. Moreover, they have
to spend many valuable man-hours commuting to and fro every single
day.
The infrastructure in and around the township is poor. Presently, this
site is connected by both road and rail links. However the number ofbuses running between Tambaram (a major hub, also known as the
gateway to Chennai) and Mahindra World City are always
overcrowded. It is estimated that workers take at least 1.45 to 2
hours to reach the nearest bus stop.
In 2009, Mahindra World City Developers (MWCD) redesigned the
nearest railway station to World City (approximately 5 km away). This
station is maintained by a PPP between MWCD and the Indian
Railways. It serves more 20,000 commuters daily; 40% of who are
Mahindra World City's workforce. Redesigning the station was
positive. However number of trains need to increase; introduction of
faster monorails is recommended. Improved transportation network
will only go a long way in attracting more people to take up
employment opportunities in Mahindra World City and will alsoattract more investors and global companies.
Residential developments have been planned keeping in mind the
crme-de-la-crme of the society or the High Net Worth Individuals
(HNIs) at the top of the economic pyramid who can afford the sky
rocketing prices for these housing options inside the premises. These
developments are aimed to cater to professionals like C-Level
executives. Thus, the housing options cater to very small strata of the
society and the general populace are left with no housing option
within the premises.
POSITIVES LEARNINGS
Case Study: Mahindra World City, Chennai
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KOLKATA
South Dumdum
Rajarhat Gopalpur
New Town
Science City
Salt Lake City
Phool Bagan
Park Street AreaTangra
Taltala
Dharmatala
Paikpara
Bagbazar
Sovabazar
Maniktala
Manchuabazar
Keshtopur
Hatiara
Pitha Pukuria
Anantapur
Sikharpur
Patharghata
Dhapa
Sinthi KaikhaliReekjoyoni
SRCM Rd
Bishnupur
MohishathanNabapally
Kulia
Rajarhat
Case study III : Rajarhat, Kolkata
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Fact Sheet
Rajarhat is located 30 kms from the main city of Kolkata and about 8-10 kms from the airport. It was planned by Kolkata Metropolitan
Development Authority in 1994 as a satellite township of Kolkata.
Rajarhat has some of the best real estate developments of Kolkata; it offers quality grade A office space with large floor plates and scalabilityoptions at competitive cost. It has one IT park and two IT SEZs which are operational.
Major MNCs and IT companies have set up their operations in Rajarhat. Some of these companies include IBM, TCS, Accenture and Genpact. TCS
is also building a 50 acre IT SEZ and it is slated to be operational in 2015.
Rajarhat houses about 7.8 msf of office stock, which is around one-third of the total office stock in Kolkata. About 72% of the stock in Rajarhat iscurrently occupied.
Rajarhat is not just an attractive destination for companies who want to set shop in the city but also for residential real estate developers. The
township has a host of major local and national level real estate companies launching projects.
Rajarhat also has malls, educational institutions and hospital facilities for the needs and recreation of residents.
Rajarhat has brought Kolkata back on the economic map of India. It
has helped the city position itself as an IT hub. Because of its proximity
to the airport, it has emerged as a business destination. Traditionally
business activities in Kolkata were defined by family-owned businesses.
But today a development such as Rajarhat has opened up the
professional arena.
Rajarhat provides an alternative, smoother connectivity to the airport.
Traffic is largely decongested; quality of road is better than available
alternatives and it provides a direct connect to the international
airport rather than a long winding, congested road.
Rajarhat provides housing; local and national players have flocked to
Rajarhat and there has been interest from buyers.
Rajarhat is not well connected by public transport system. Most
people drive to work. Bus routes have been channelled; metro rail
links have also been planned. The two metro links; Garia-Airport and
East-West metro corridor, which once they become operational,
would further improve the connectivity to Rajarhat. But both the
projects are delayed and mired in land acquisition and cost escalation
issues.
While housing stock may be available, Rajarhat is largely unoccupied
because of lack of support infrastructure. There are issues of
amenities such as water and power supply. As a result, high launches
are often met with lukewarm response.
In the absence of inhabitants, Rajarhat's million square feet mall space
is under pressure. Vacancy levels of about 20% are on the higher side
mainly due to lack of catchment in the area.
POSITIVES LEARNINGS
Case Study: Rajarhat, Kolkata
RAJARHAT
POSITIVE FEATURES : It made
Kolkata an IT hub; networked the
airport and created housing
alternatives to the main city.
NEGATIVE FEATURES : Lack ofinfrastructure and slow
implementation has worn off the
initial exuberance and derailed
potential.
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The skyway in Singapore is a spectacular example of
innovation. It achieves the optimal mix of high class
planning and design on one hand and public usability
on the other hand. The 18 giant trees collect
rainwater, generate solar power and allow hot air to
be released from the conservatories below, in a kind
of urban ecosystem.
Global Case Study I, Singapore
INTERNATIONAL CASE STUDIES
China and Singapore have mapped their urbanization journey
almost alongside India and in certain ways, have outdone India
too. The differentiating factor is that these countries have been
successful in pre-emptive measures (building for upcoming
demand); India on the other hand needs to manage the crisis that
LEARNINGS FROM SINGAPORE
Singapores biggest achievements in urban development
include public housing and transport infrastructure
supported by holistic planning approach from various
government agencies.
Planned as a compact city with high-density residential
and commercial developments integrated around various
transportation networks.
17
urbanization has brought with it; it has much to learn so far as its
ability to plan and implement is concerned from economic
powerhouses such as Singapore and Pudong.
Fact Sheet
Located on the southern tip of Malay Peninsula, it has one of worlds five busiest airport
Global commercial hub supported by diversified economy through trade, mainly manufacturing
As of 2011, total population of 5.18 million, out of whom 63% are citizens while the rest are Permanent Residents or Foreign Workers
At 2.1% per annum, the resident population growth rate is low but highest population density in Asia
Developed one of the worlds best planned and integrated public transport infrastructure; only 16% Singaporeans own cars
As per UN-Habitats Quality of Life and Urban Prosperity Policy Survey 2011, Singapore features as the only country which is committed to
promoting quality of life of its citizens.
As per Urban Redevelopment Authority (URA), Singapore has a total of about 1.2 million housing units, out of which 0.9 million are Housing
Development Board (HDB) flats, with plans to develop 110,000 more public housing units by 2016.
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In 1990, Singapore's Public Works Department instituted a quota limit
for vehicles called the Certificate of Entitlement (COE) to curb the
growing vehicle ownership because a small city-state like Singapore
had limited resources and traffic conditions had started to worsen. As
a result, Singapore does not have traffic congestion and its government
encourages people to use high quality public transport.
Singapore's Housing and Development Board (HDB) activelyconstructs low-cost public housing towns. Initially started in 1960
during a housing crisis, HDB has built more than 21,000 flats in less
than three years and rehabilitated people living in slums and squatter
settlements. By 1965, it had built 54,000 flats and more than 82% of
Singaporeans live in HDB flats currently.
Singapore has been focused on sustainable long term urban planning
by Urban Redevelopment Authority (URA) to battle land shortage and
poor infrastructure since as early as 1960s.
Singapore has a green cover on 50% of its surface area and over 450
public parks and gardens. It has four nature reserves to preserve its
biodiversity which cover more than 3,000 hectares.
Strong emphasis on creating resource-efficient policies and
investments in achieving environmental sustainability to improve
quality of life. Water shortage is a phenomenon which is practically
unknown in Singapore.
In India, total vehicle population is 40 million units, growing at an
annual rate of over 5%. 2.6 million passenger-vehicles were added in
2012-13 alone. Vehicle emissions are the top reason for pollution in
India, according to the Yale study presentation in Davos. Urban
dwellers battle congested and choked roads. People prefer personal
vehicles because Indian public transport system is not as
sophisticated as Singapore.
Comparatively, every major study done on urbanization in India haspointed out the dearth of government actions and schemes to
provide housing for LIGs; in fact affordable housing is the most
recurrent recommendation in all studies and reports, including ones
conducted by the Planning Commission of India. As per MHUPA, India
has a shortage of 18.78 million housing units in urban areas.
In India, slum rehabilitation and redevelopment lacks political
gumption; it also lacks private sector participation to the extent that
will make a discernible difference. Major rehabilitation schemes as
MIAL (Mumbai Airport Authority Limited) and Dharavi
redevelopment plan have gotten stuck, mired in controversies and
unprecedented delays.
India's current forest and tree cover is estimated to be 78.29 million
ha, constituting just 23.81% of the geographical area of the country
(ISFR, 2011). As per the estimates of the Forest Survey of India, forest
cover has increased marginally from 64.08 million ha in 1987 to 96.2
million ha in 2011.
As per the Ministry of Water Resources, urbanization and
industrialization have led to a severe water crisis in India; as per
census data, the per capita availability of water has reduced from
1,816 cubic meters in 2001 to 1,545 in 2011. Moreover, water quality
data of 150 river stretches has revealed that Bio-chemical Oxygen
Demand (BOD) has exceeded the desired levels in 120 rivers.
CRITICAL LEARNINGS TAKEAWAYS FOR INDIA
Case Study: Singapore
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Pundong
New Area
Yellow Sea
Huangpu
Shanghai
Pudong in 1990 (across the river)
Pudong in 2010 (across the river)
PUDONG
POSITIVE FEATURES : Effective policies, successful
infrastructural development, short time taken for
development.
NEGATIVE FEATURES : Lack of inclusion of Chinese
tradition, rising inequality, high carbon emission, rapidland subsidence.
19
Global Case Study II, Pudong : Urbanization from Scratch
Location: East of Huangpu River, Shanghai, China
Fact Sheet
2 thArea - 1,210 km (about 1/5 of Shanghai Municipality
Area) (2010)
thPopulation - 5 .04 million (2011) (about 1/5 of Shanghai
Municipality Area)
Density - 11,000 /sq. mi. (2010)
GDP - USD 57 bn (2010)
Development of Pudong
In 1993, Chinese Government set up a Special Economic Zone at Chuansha, in erstwhile farmland and countryside, creating the Pudong New
Area. Conceived as excellent model of planning, it has influenced the development of other Chinese cities
Pudong was underdeveloped area with only 8% of urban area and concentration of most polluting industries. So to create an urban centre,
relocation of industries and associated housing had to be done to make way for new construction.
Landmarks: Lujiazui Finance and Trade Zone, the Shanghai Stock Exchange, Oriental Pearl Tower, Jin Mao Building, Shanghai World Financial Centre
and Shanghai Tower, Disney Park (under construction)
Infrastructural plan for Pudong included, a core of 3 ports: Shanghai Pudong airport, Waigaoqiao deep water port and information port, 3
networks: rail network, urban highway network and cross-river transport network and 3 systems: power supply, natural gas and district heating.
Water plant, new water resources, district drainage system and sewage system were established. Pudong was designed as a telecommunication
hub and was connected to a new national fibre optic network. Shanghai Metro servicing airport and other areas were built. 5 major tunnels and 4major bridges connect Pudong to west Shanghai (Puxi), 2 more tunnels are under construction.
Pudong has emerged as Chinas financial and commercial hub; it also boasts manufacturing and export economy. Jinqiao Export Processing Zone,
Zhangjiang Hi-tech Park and Waigaoqiao Free Trade Zone were also created to boost the economy of Pudong and create employment avenues.
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2
Preferential policies not allowed in other SEZs were allowed here.
Apart from reduction/elimination of custom duties and income taxes,
foreign investors were granted right to open financial institutions and
run tertiary industries. To increase foreign investment property, tax
subsidies were given on houses bought by foreign investors.
Shanghai was permitted to set up a stock exchange and allowed
foreign banks to engage in business using local currency.
Land ownership is not allowed in China. Only renting is allowed and
the length of the lease varies depending on the zoning status. Land
leasing was used to attract FDI to restructure the city and generate
capital for infrastructure projects and funding new housing for existing
residents, especially in suburban locations. For example: Land-use
rights of 137 pieces of land were transferred by tender in the 2000s.
A series of laws and policies were established on local, district and
national levels.
Pudong preferred to attract private investment rather than PPPs by
giving a lot of flexibil ity. PPP were done in land development, urban
renewal projects and infrastructure development. The development
process was broken into a number of smaller tasks and assigned to
subsidiary or joint ventures set up by development companies. Largely
development companies sold land-use rights on raw/developed land as
per the land-use and permitted high FAR (upto 8 initially), learning
from development model of Hong Kong. Considering the high
expected gains, many of the land development companies themselves
provided for infrastructural development like provision of drainage,
power station and roads.
Pudong dealt with both expropriation and relocation and so created
job centres for providing a variety of training to re-skill the jobseekers.
The people were relocated from old public housing to new facilities
with proper drainage, water, power, better equipment and facilities.
Thus relocation received local support despite corrupt officials trying
to retain compensation. Pudong is promoting welfare housing called
'indemnificatory housing', rental housing for low income families and
management services of the same to provide healthy residential
quarters and ease housing demand and surging housing prices. Pudong
has harnessed the vast internal migration, attracted armies of workers
who built the infrastructure, provided a pool of labour for its factories
and filled its apartments. 2 million people moved to Pudong in 10
years and reportedly 60 lakhs square meters of indemnificatory
housing is present and new construction of approximately 39 lakhs
square metres of housing is being targeted.
SEZs have been set up in India; however, instead of focusing on
creating self sustainable SEZ units, India has licensed a large number
of SEZs; thus the focus was missing. So, SEZs could not gain
prominence as locations for state-of the art technology and
infrastructure. Faulty policies like offering incentives under the foreign
trade policy to exporters outside of SEZs and certain disincentives
arising out of free-trade agreements (FTA) have worked against Indian
SEZs. Schemes like duty drawback scheme, and focus market and
focus product schemes etc. were offered to those companiesoperating outside SEZs but not to those inside.
Land ownership is allowed in India but the titles are extremely
unclear. The land-use patterns in master plans were not changed in
tandem and mostly the implementation takes too much time. The
Right to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act, 2013 has come recently to guide
India's industrialization drive. DIPP has very recently proposed that
Indian companies with FDI be allowed to buy agricultural land as
most of the land available for township projects is agricultural in
nature; currently FDI is allowed in construction development and
serviced housing plots only and requires approvals from a number of
authorities. The laws related to land are very primitive in India.
Restrictive FEMA guidelines stop the foreign money from flowing into
real estate.
PPPs in India involve a single entity/consortium for the entire process
which causes delays in resource deployment and is financially
burdensome. Involving local, public and private entities in
infrastructure development by breaking each task into small piece
provides simultaneous and faster growth model. In India, the approval
process may vary largely from city to city and takes on an average 12-
15 months for approval process from land-use conversion to
completion, provided all documents are in place without any
ambiguities. FAR regulations are low with a maximum of 4 in select
areas of cities in select asset classes like Bengaluru, Mumbai, and
NCR.
Urbanization has brought about large scale rural migration and led to
proliferation of slums in India; currently almost 65.5 million people
reside in them. The high population density is wreaking havoc on the
present infrastructure of the cities. 3.5 slum dwellings across Mumbai
are not being legalized because of the fear of exerting further
pressure on the city's infrastructure. Infrastructure in Mumbai has
not kept pace with the population. The worrisome outcomes of the
current and projected slum population growth are an acute water
shortage, poor hygiene and even an epidemic.
Currently India does not have any rental housing schemes, which are
commonly found in other countries to cater for the low income
segment.
CRITICAL LEARNINGS TAKEWAYS FOR INDIA
Case Study: Pudong
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Environmentally, massive population growth and rapid urbanization has led to spike in carbon emission from transportation, household and industrial
activities. Shanghai has the highest carbon dioxide emission density. Land-use change has contributed to creation of urban heat islands and climate
change.
Over extraction of groundwater has led to land subsidence and Shanghais urban and peri-urban areas, i.e. Pudong have reached the highest land
subsidence of 2630 mm. Land subsidence brings a number of problems like flooding, damage to drains, sewers, roads, canals and bridges and even to
buildings.
Key Problems
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RECOMMENDATIONS &
CONCLUSION
Urbanization in India has occurred more slowly than in other
developing countries. The pace of urbanization is now likely to
accelerate as the country follows a more rapid growth trajectory.th
According to the 12 Planning Commission report, it took about
40 years for Indias urban population to rise by 230 million people
but it will take half that time to add the next 250 million. SinceIndia has so far not paid attention and built cities in a systematic
fashion, its urbanization plan now has to find remedies to existing
problems whilst building capacities for projected growth in
different verticals.
As learnt from the global case studies, urbanization is always
backed by policy measures. It is not as if India has not taken any
steps towards urban planning; only that these measures have
been grossly inadequate.
The Jawaharlal Nehru National Urban Renewal Mission
(JNNURM) was launched in December 2005. JNNURM
renewed the focus on urban renewal, taking a number of
initiatives such as sanction of Bus Rapid Transit System
(BRTS).
Swarna Jayanti Sahari Rozgaar Yojana (SJSRY) was launched in
1997 to enable urban poor to get gainful employment. Since
inception, about 12.3 lakh persons have received training
under this scheme.
Rajiv Awas Yojana was launched in 2011 to make India slumfree.
Employment of Manual Scavengers and Construction of Dry
Latrines (prohibition) Act 1993. Under the Integrated Low
Cost Sanitation Scheme (ILCS) 2.5 lakh dry latrines have been
converted into sanitary ones and about 1.55 lakh new toilets
have been sanctioned.
Extension of Metro rail network in Delhi, Mumbai, Chennai,
Bengaluru & Kolkata has been a major achievement that has
led to a transformational change.
Some Key Policy Measures Undertaken
12TH PLANNING COMMISSIONS OBSERVATIONS
ABOUT JNNURM
Some of the key inadequacies noted during implementation of the
programme included failure to mainstream urban planning,
incomplete reforms and slow progress in project implementation.
Delay in securing land for projects and obtaining approval from
various regulatory authorities also led to delay in implementation of
some of the projects. Another major shortcoming was the limited
success in leveraging of JNNURM fund by allocating non-budgetary
financial resources including funds under PPP framework.
What the Urban Picture should Look Like?
How can India Tackle Rapid Urbanization?
House for all
Quality & affordable public transport
Cleaner Environment
High penetration of basic amenities such as water &sanitation
High quality of life for urban dwellers
Political will, action and implementation are the most important
factors so far as urbanization in India is concerned.
Developments must be assessed, resources must be deployed
and timeline must be set and adhered to.
Following enablers are required to tackle rapid urbanization:
PLANNING
Land is a scare resource. How well a country does in
urbanization depends on how innovatively land is used.
Revamping FSI guidelines and redevelopment are important
measures but more important is to first prepare
infrastructure such that additional floors do not increase
additional traffic load.
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housing. Incentivize projects that need to be developed on
priority with measures such as tax or commercial benefits.
By 2030, Indias cities will be bigger than several countries!
Urban governance needs an overhaul. Global cities have
empowered mayors or personnel who are clearly
accountable for the citys performance. Dedicated
metropolitan authorities in every city with well defined roles
are a must for the management of large Indian cities.
IMPLEMENTATION
Affordable housing is an abused term in the Indian real estate
industry. It is often a marketing gimmick! The government
must define and incentivize houses that are truly affordable
so that urban centres have housing for all. The demand and
potential can hardly be understated.
Encourage micro mortgage financing schemes so that people
who are actually needy can afford homes. As stated above,
people who belong to EWS or LIG category work in
unorganized sectors and do not have formal documents to
access credit.Execution of projects is one of Indias main weakness; it truly
fuels the culture of slower implementation. India must move
towards a single window clearance so that 18-24 months are
not spent on getting permissions.
23
Pre-investing and effective planning must be adopted. This can
be applied in a number of ways. For instance, in peripheral
city limits, houses are sold without good connectivity to the
city centres. Infrastructure facilities must be laid before it
becomes a residential or commercial hub, otherwise it
creates chaos and not convenience. Similarly, Tier II cities
must be ready to handle a boom or a spill-over of urban
population.
FUNDING
Urban development needs funding in unprecedented
measures. Monetizing land assets could raise funds; land sales
in upcoming hubs & promoting PPP (Public Private
Partnership) models will generate funds for urban
development.
India should bring in reforms such as the GST (Goods &
Services Tax), which is meant to incentivize growth. The
implementation of GST will unify taxes and make India a
stronger economy.
GOVERNANCE
Do away with archaic laws such as Rent Control Act and
bring in progressive measures such as the concept of rental
CHALLENGES &
OPPORTUNITIES FOR
THE HOUSING SECTOR
IN URBAN INDIA
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About Cushman & Wakefield
Cushman & Wakefield is the world's largest privately-held
commercial real estate services firm, The company advises and
represents clients on all aspects of property occupancy and
investment, and has established a preeminent position in the
world's major markets, as evidenced by its frequent involvement
in many of the most significant property leases, sales and
management assignments. Founded in 1917, it has approximately
250 offices in 60 countries, employing more than 16,000professionals. It offers a complete range of services for all
property types, including leasing, sales and acquisitions, equity,
debt and structured finance, corporate finance and investment
banking, corporate services, property management, facilities
management, project management, consulting and appraisal. The
firm has nearly $4 billion in assets under management globally.
Cushman & Wakefield established operations in India in 1997 and
was the first international real estate service provider to be
granted permission by the Government of India to operate as a
wholly owned subsidiary. We are a strong team of over 1,500
employees, operating across New Delhi, Gurgaon, Mumbai, Pune,
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addition, we service over 40 other cities such as Nagpur, Cochin,
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Coimbatore amongst others.
A recognized leader in local and global real estate research, the
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www.cushmanwakefield.com/knowledge
For more information about Cushman & Wakefield in India, contact:
Sanjay Dutt
EMD - South Asia
Cushman and Wakefield
sanjay.dutt@ap.cushwake.com
For more information about Cushman & Wakefield, contact:
Sitara Achreja
Director - Marketing & Communication
Cushman and Wakefield
sitara.achreja@ap.cushwake.com
For more information about C&W Research, contact:
Siddhart Goel
National Head - Research
Cushman and Wakefield
siddhart.goel@ap.cushwake.com
Authors of the report:
Disclaimer
This report contains information available to the public and has been relied upon by Cushman & Wakefield on the basis that it is accurate and complete. Cushman & Wakefield accepts no responsibility if thisshould prove not to be the case. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors,
omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals.
2014 Cushman & Wakefield.
All rights reserved.
Siddhart Goel
National Head - Research
siddhart.goel@ap.cushwake.com
Priyanka Ghosh
Research Analyst
priyanka.ghosh@ap.cushwake.com
Virendra Joshi
Senior Manager - ResearchVirendra.Joshi@ap.cushwake.com
Sarbani Chatterjee
Manager - Research
sarbani.chatterjee@ap.cushwake.com
Divya Grover
Deputy Manager - Research
divya.grover@ap.cushwake.com
Vineet Sharma
Associate - Research
vineet.s@ap.cushwake.com
24
APRIL 2014
A Cushman & Wakefield Research Publication
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www.cushmanwakefield.co.in
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