Mumbai, one of India's most dynamic urban centres, is undergoing a transformation as redevelopment projects surge across both the island city and the suburbs.
Despite one in every three residential launches now coming from redevelopment efforts, a key issue remains unresolved—slum rehabilitation. Conducted largely under the Slum Rehabilitation Authority (SRA), slum redevelopment remains dominated by smaller, local developers.
Large real estate companies, with greater financial capacity, tend to shy away, citing the complexity of dealing with slum dwellers, political interference, and unresolved land issues as major hurdles.
Mumbai’s branded developers, such as Rustomjee, Mahindra Lifespace Developers, Godrej Properties, and Raymond Realty, have focused primarily on redevelopment projects in non-slum areas.
The incentive for developers lies in the “free-sale component”, which allows them to sell a portion of the project in the open market. However, despite this incentive, large developers mostly remain hesitant to engage in slum rehabilitation.
"We have been very cautious about taking on slum rehabilitation projects," said a managing director of a major developer in Mumbai, speaking on condition of anonymity.
"There are too many non-monetary risks, including local disputes, land acquisition problems, and political interference. While we recognise the importance of providing proper housing for slum residents, we are unwilling to navigate the issues that come with such projects," he said.
Slum clusters across Mumbai
According to SRA data, Mumbai's urban landscape is dotted with around 2,600 slum clusters. They stretch from the southern tip of the city in Colaba to Dahisar in the north-west and include major slum areas in the central and eastern suburbs of Sion, Ghatkopar, Kanjurmarg, and Mulund.
The SRA lists roughly 1,700 ongoing rehabilitation projects, with over 500 believed to be stuck at various stages of development, as per industry estimates. Since SRA's inception in 1995, more than 2,300 slum rehabilitation projects have been completed, housing more than 2.5 lakh families.
The challenge is enormous. More than half of Mumbai’s population lives in slums or slum-like accommodations, including the historic chawls, group housing built in the early 20th century for factory workers. However, exact data on the number of slum dwellers is unavailable, as the most recent Census was conducted over a decade ago.
Challenges persist
One of the most significant challenges to slum rehabilitation is political interference. Politicians often see slum dwellers as a vote bank, leading to a reluctance in redeveloping these areas.
Parag Shah, non-executive chairman emeritus of real estate firm Man Infraconstruction Ltd and sitting MLA for Ghatkopar (East), recently acknowledged that slums continue to exist largely because of the political benefits they offer.
"Political involvement is a big factor in slum rehabilitation projects not taking off," said a Mumbai-based real estate expert. "Slum dwellers are often treated as vote banks, and different parties have different inputs on how projects should proceed. This creates delays."
Compounding the problem further is the recent regulatory changes. In late 2023, the SRA mandated that developers should deposit transit rent worth two years for slum residents who are temporarily housed during redevelopment.
This move was intended to protect slum dwellers from developers who failed to pay their rental dues, but also had unintended consequences. Many developers, already under financial strain, found themselves unable to meet this requirement. As a result, several projects were halted, creating more mistrust among slum dwellers who were reluctant to move.
"Some residents refuse to leave due to a lack of trust," said Jayesh Rathod, director and co-founder of The Guardians Real Estate Advisory. "They see other projects that have been stuck for years, and this makes them hesitant to vacate their homes. The SRA’s circular mandating two years of transit rent has also affected the financial viability of many projects."
The financial burden on developers has grown significantly, with market sources estimating unpaid rent dues for displaced residents at nearly Rs 1,000 crore.
Policy intervention
Acknowledging the difficulties surrounding slum rehabilitation, Maharashtra’s Deputy Chief Minister Devendra Fadnavis has proposed that stalled SRA projects be taken over by state agencies such as the Maharashtra Housing and Area Development Authority (MHADA), the Mumbai Metropolitan Region Development Authority (MMRDA), and the City and Industrial Development Corporation (CIDCO).
These agencies have the necessary infrastructure development experience to push forward projects that have been stuck for years.
MHADA has already started assessing 17 such projects, representing approximately 25,000 housing units. Recently, the MMRDA and SRA signed a deal to redevelop the Ramabai Ambedkar Nagar slum in Ghatkopar (East), marking the MMRDA's first involvement in slum rehabilitation.
Despite the challenges, many believe that slum rehabilitation can still succeed, if larger developers collaborate with local ones. Local developers often have a better understanding of the ground realities, including the complex relationships required to clear slum lands, while larger developers have the financial capacity and professional resources to execute large-scale redevelopment projects.
"Slum redevelopment is largely about relationship building," said Rathod. "Local developers have the connections and can help clear land, but if needed, joint ventures with larger companies can bring in the financial muscle needed to complete these projects."
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